WEBVTT - Bloomberg Markets Special Simulcast Day One 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanevik. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.600 plus technology, politics, economics, all furnishing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:19.600 analyst in more than one and twenty countries. You can 0:00:19.600 --> 0:00:23.200 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:32.960 YouTube search Bloomberg Clobal News. This is Bloomberg Market Special 0:00:33.000 --> 0:00:36.400 Markets coverage on this day, a special simulcast on Bloomberg 0:00:36.440 --> 0:00:39.040 Television and Radio. We're gonna be here with you every 0:00:39.080 --> 0:00:42.280 day all week, covering the market action throughout the day, 0:00:42.360 --> 0:00:44.120 and of course take a look back on the year 0:00:44.159 --> 0:00:47.000 that was and look ahead. Of course, two Romaine Bostic 0:00:47.040 --> 0:00:50.280 alongside Kritty Gupta and Tim Stanovic, who normally joins me 0:00:50.320 --> 0:00:52.199 for Beyond the Bell. And I'm told Tim that every 0:00:52.240 --> 0:00:54.320 day is going to be beyond the Bill. Yeah, it 0:00:54.360 --> 0:00:56.400 really is. And hey, look we're off to a pretty 0:00:56.400 --> 0:00:58.400 strong start. You know, people have been throwing around the 0:00:58.440 --> 0:01:00.720 term Santa Claus Rally for a few days now, in 0:01:00.760 --> 0:01:03.319 a few weeks, but this is the official start of 0:01:03.320 --> 0:01:06.039 what could be considered a Santa Claus rally. And are 0:01:06.080 --> 0:01:08.440 we off to the races? Yeah, Tim, it'll be this 0:01:08.480 --> 0:01:10.320 week and then a couple of days in January. The 0:01:10.440 --> 0:01:12.920 question is you starting to see that thin volume totally 0:01:12.959 --> 0:01:15.920 traditional from the Santa Rally, but liquidity still higher than 0:01:16.000 --> 0:01:18.840 something the levels you've seen even in October. Does that 0:01:19.040 --> 0:01:21.720 kind of thwart at the Santa Rally that everyone's really 0:01:21.760 --> 0:01:24.400 expecting traditionally a low volume week here, But I guess 0:01:24.400 --> 0:01:25.880 at the end of the day it doesn't matter. An 0:01:25.920 --> 0:01:29.360 SP five hundred right now at and change, that's right 0:01:29.400 --> 0:01:31.480 around the highs of the day, and yes, that is 0:01:31.480 --> 0:01:32.960 going to be a record high. You're looking at the 0:01:33.000 --> 0:01:35.440 NASDAC composite there just a few points away from a 0:01:35.480 --> 0:01:38.040 record high as well, the NAZAC one about twenty three 0:01:38.080 --> 0:01:41.200 points away from its record high. Bitcoin getting slight bit 0:01:41.280 --> 0:01:43.400 here on this day, and the Lira We're not gonna 0:01:43.400 --> 0:01:45.160 talk about it too much today, but certainly something to 0:01:45.200 --> 0:01:47.360 keep an eye on right now. Back at eleven and 0:01:47.400 --> 0:01:48.960 of course, not as bad as what we saw a 0:01:49.000 --> 0:01:53.800 week ago Monday, when you're paying about eighteen lyra per dollar. Here, 0:01:53.840 --> 0:01:55.320 let's bring in Abigail to do a little right now 0:01:55.400 --> 0:01:57.000 to give us a little bit more perspective on what's 0:01:57.000 --> 0:01:59.320 going on here in the US markets, A market that 0:01:59.360 --> 0:02:01.440 started the year where a lot of people thought we 0:02:01.440 --> 0:02:05.200 would rally, but not necessarily this much. It's pretty amazing 0:02:05.240 --> 0:02:06.960 what we have going on here because at this point 0:02:07.040 --> 0:02:08.720 remain as we go into the end of the year. 0:02:08.720 --> 0:02:12.120 The SMP five hundred up about twenty six percent, the 0:02:12.200 --> 0:02:15.080 seventh double digit gain for the SMP five hundred over 0:02:15.080 --> 0:02:18.080 the last ten years. So big, big rally. Of course 0:02:18.120 --> 0:02:21.160 you've had fed support accommodation for much of that time period. 0:02:21.360 --> 0:02:23.080 But it's all about these record highs. We have another 0:02:23.080 --> 0:02:25.960 record high for the SMP five hundred, sixty nine of 0:02:26.000 --> 0:02:30.280 the year, topped only when there were seventy seven for 0:02:30.360 --> 0:02:33.520 some of the other indexes, however, a little bit away 0:02:33.520 --> 0:02:36.080 from the record highs. But Creaty was making that point 0:02:36.120 --> 0:02:39.760 about thin volume. It is below the twenty day moving average. 0:02:39.880 --> 0:02:42.240 It's so interesting though. I was just reading in email 0:02:42.280 --> 0:02:45.120 from Ben Emmons over at Medley Global and He was 0:02:45.160 --> 0:02:48.760 saying that for the official Santa Claus rally, these five 0:02:48.880 --> 0:02:51.560 days plus the first two days of the new year, 0:02:51.600 --> 0:02:54.239 when that gain is around four percent, it typically brings 0:02:54.280 --> 0:02:57.200 on a two percent gain in January. So perhaps we 0:02:57.240 --> 0:02:59.800 are looking at uh some sort of rally going right 0:02:59.800 --> 0:03:01.919 into in a year. Hard to know, especially given the 0:03:01.960 --> 0:03:04.160 fact that the Fed's gonna be stepping back a little bit. 0:03:04.240 --> 0:03:06.919 But the bulls are out today for sure, absolutely right now, 0:03:06.919 --> 0:03:09.320 looking like it's going to book something like gain on 0:03:09.440 --> 0:03:12.320 SMP five D on a year to date basis there. 0:03:12.320 --> 0:03:14.639 Abigail do a little helping us break it all down, 0:03:14.639 --> 0:03:16.840 and we want to bring keep this conversation going right 0:03:16.880 --> 0:03:19.600 now and bringing Michael's any senior vice president and senior 0:03:19.680 --> 0:03:23.960 portfolio manager over at UBS Wealth Management, and Michael, I 0:03:23.960 --> 0:03:26.000 do want to start off with the seven percent number. 0:03:26.000 --> 0:03:27.840 There's gonna be a lot of hay made out of 0:03:27.880 --> 0:03:30.400 some of these full year numbers that we see on 0:03:30.440 --> 0:03:33.240 the doubt, SMP and the NASTAC. Normally, I wouldn't ask 0:03:33.280 --> 0:03:34.880 anyone to look a gift horse in the mouth, but 0:03:34.920 --> 0:03:36.440 I want you to look a gift horse in the 0:03:36.480 --> 0:03:38.600 mouth and tell me does this concern you at all? 0:03:38.720 --> 0:03:43.000 Heading into I think there was a lot of optimism 0:03:43.080 --> 0:03:45.120 about how the first half of twenty two was going 0:03:45.160 --> 0:03:47.760 to go, and a lot of managers had closed up 0:03:47.800 --> 0:03:51.760 their books already, uh, posting in towards the second half 0:03:51.760 --> 0:03:53.920 of December because they had had good years and didn't 0:03:53.960 --> 0:03:57.200 want exposure. And we're concerned about on the cron headlines 0:03:57.720 --> 0:04:00.280 and now I think they're being called a little clasod plate, 0:04:00.400 --> 0:04:02.280 you know, and and want to make sure they're not 0:04:02.400 --> 0:04:04.560 missing out on on any front running of the two 0:04:04.600 --> 0:04:08.040 thousand and twenty two returns. So um no, I would 0:04:08.080 --> 0:04:11.880 say that we kind of eagerly participated um in uh, 0:04:11.920 --> 0:04:14.160 you know, as we anticipated this rally coming up, and 0:04:14.480 --> 0:04:17.240 we've been having good exposure, and you know, I think 0:04:17.240 --> 0:04:19.360 folks are still feeling pretty good about at least the 0:04:19.400 --> 0:04:22.520 first half of twenty two because the pace of earnings 0:04:22.560 --> 0:04:25.760 revision is still pretty strong. Um So, you know, there 0:04:25.760 --> 0:04:28.920 are going to be some additional headwinds, maybe monetary policy, 0:04:29.360 --> 0:04:33.360 fiscal policy, but we think that's still earnings carries the day. 0:04:33.440 --> 0:04:36.560 And we're in this kind of pre earning season now, 0:04:36.839 --> 0:04:38.760 you know, before the big banks begin to print in 0:04:38.760 --> 0:04:41.920 mid January, and and typically the market has anticipated some 0:04:41.920 --> 0:04:44.719 pretty good earnings and and uh and and seeing the 0:04:44.720 --> 0:04:46.680 market rally ahead of those earning prints. But I do 0:04:46.720 --> 0:04:49.560 wonder you mentioned this, Uh, Michael, you mentioned Amicron. We 0:04:49.560 --> 0:04:52.560 made about three minutes into the show without without mentioning it. 0:04:52.800 --> 0:04:55.680 And look, I have to ask if if the headlines 0:04:55.760 --> 0:04:58.680 are derailing any of your optimism at all. Certainly the 0:04:58.720 --> 0:05:01.159 market is not telling us that it is. But we 0:05:01.200 --> 0:05:03.760 have thousands of flights canceled. New York City is saying 0:05:04.040 --> 0:05:06.200 that it's running its subway at a at a different 0:05:06.279 --> 0:05:10.560 schedule because they're trying to deal with short fewer crew members. 0:05:11.320 --> 0:05:13.760 How is this playing into the early part of two 0:05:13.800 --> 0:05:17.120 for you? Yeah, that's a great question. I mean, I 0:05:17.160 --> 0:05:19.960 think it speaks to what we saw for a lot 0:05:20.000 --> 0:05:23.480 of two thousand and twenty one, um, you know, which 0:05:23.560 --> 0:05:26.440 was this back and forth action between the kind of 0:05:26.440 --> 0:05:30.200 prociprocal reopening trade and the stay at home trade, the 0:05:30.240 --> 0:05:33.120 technology and healthcare kind of trade. And and I think 0:05:33.200 --> 0:05:35.960 that back and forth action is going to continue to be, 0:05:36.320 --> 0:05:38.839 you know, the order of the day in two thousand 0:05:38.839 --> 0:05:43.000 and twenty two, um. And so you know, for us, 0:05:42.800 --> 0:05:46.640 it frankly helps maintain kind of a wall of worry 0:05:46.720 --> 0:05:50.080 about the market, because these headlines are concerning, and if 0:05:50.120 --> 0:05:54.760 we see a sufficient caseload to actually overwhelm the healthcare system, 0:05:55.000 --> 0:05:58.400 and I and I get particularly concerned about nursing homes 0:05:58.480 --> 0:06:01.320 and you know, we're seeing some elevating cases there, then 0:06:01.360 --> 0:06:04.560 obviously you could see you know, more of a lockdown 0:06:04.560 --> 0:06:09.680 of economic activity. UM. But the reality is, in some ways, 0:06:09.520 --> 0:06:12.279 as often as been mentioned, you know, the market is 0:06:12.279 --> 0:06:15.159 not always the economy, and there are areas of the 0:06:15.200 --> 0:06:19.000 market that do perfectly fine um in a less high 0:06:19.040 --> 0:06:23.120 cyplical recovery environment. UM. And that's what we saw, you know, 0:06:23.640 --> 0:06:25.640 define kind of a lot of the characterists the market 0:06:25.680 --> 0:06:28.400 in twenty one. And I think if if, unfortunately, if 0:06:28.400 --> 0:06:31.280 there was a more higher degree of severity that wouldn't 0:06:31.839 --> 0:06:35.120 in the coronavirus, I don't think it would necessarily derail 0:06:35.600 --> 0:06:38.960 large sectors of the market that aren't depending on resumption 0:06:39.000 --> 0:06:42.719 of the cycle. Michael, A staple of has, of course 0:06:42.760 --> 0:06:45.160 been the pretty fast and furious commodity rally that you've 0:06:45.160 --> 0:06:48.040 seen eating into the bottom line, eating into the margins 0:06:48.200 --> 0:06:50.200 of a good chunk of corporate America. How much of 0:06:50.200 --> 0:06:53.919 that is the story of two as well. That's a 0:06:53.960 --> 0:06:57.440 great question. Um. Now, we have seen a lot of 0:06:57.480 --> 0:07:01.360 corporate pricing power, I have to say, Um, so we're 0:07:01.400 --> 0:07:07.599 not overly concerned about margin deterioration in two thousand, in 0:07:07.760 --> 0:07:12.960 twenty two, we're mostly seeing um decent ability to pass 0:07:13.040 --> 0:07:17.160 along higher prices, which of course will attract the attention 0:07:17.160 --> 0:07:20.560 of the FED. But um, we're we're not seeing in 0:07:20.960 --> 0:07:24.640 most of the areas we're looking at huge margin compression 0:07:24.760 --> 0:07:28.440 based on those higher prices. And in some areas we 0:07:28.440 --> 0:07:31.480 are you know, and and and and to the earlier point, 0:07:31.880 --> 0:07:34.440 you know, in in the airline industry. I mean, that's 0:07:34.440 --> 0:07:38.440 a real it's a real concern, um. But in many 0:07:38.520 --> 0:07:42.640 areas where there's sufficient pricing power with corporations, we're not 0:07:42.640 --> 0:07:45.120 seeing a lot of margin compression. Yet. Do you worry 0:07:45.120 --> 0:07:47.440 at all about some of the concentration and gains that 0:07:47.480 --> 0:07:51.680 we've been seeing in the equity market? Yeah, I mean 0:07:51.720 --> 0:07:55.520 it is amazing. I mean, we're we're here printing strongly 0:07:55.600 --> 0:07:57.400 new highs in the market. What do we have the 0:07:57.400 --> 0:08:00.240 sixty eight or sixty ninth of the year. If you 0:08:00.320 --> 0:08:02.880 look at the New York struct Exchange New High New 0:08:02.920 --> 0:08:06.160 Low List, and the number of new highs is super small, 0:08:06.440 --> 0:08:08.440 you know, and even the number of stocks about the 0:08:08.520 --> 0:08:11.320 two hundred days for a high such as this are 0:08:11.360 --> 0:08:14.880 super small. So you have had a lot of concentration 0:08:15.200 --> 0:08:18.640 and you have had very very narrow breath in the market. 0:08:18.800 --> 0:08:21.400 And you can interpret that in one of two ways. 0:08:21.440 --> 0:08:24.280 I think you know, you can interpret that that you 0:08:24.280 --> 0:08:27.240 know someday the generals will fall and nothing will keep 0:08:27.240 --> 0:08:30.160 the indexes up. Or I think you can also interpret 0:08:30.240 --> 0:08:33.400 it as a lot of the majority of the market 0:08:33.559 --> 0:08:38.720 has corrected already and you're beginning to see actually UM 0:08:38.920 --> 0:08:41.480 some signs that they're coming off of their bases and 0:08:41.640 --> 0:08:45.320 looking to kind of recapture their highs earlier in the year. 0:08:45.480 --> 0:08:48.959 And and and something we've been focusing on a lot is, 0:08:49.120 --> 0:08:51.959 you know, the sensitivity of some of the more cypical plays, 0:08:52.000 --> 0:08:55.880 particularly things like financials or the Russell two thousand, which 0:08:55.880 --> 0:08:58.120 has a lot of financials in it, and how they're 0:08:58.160 --> 0:09:03.240 reacting to upward movements in the tenure treasury rate and 0:09:03.360 --> 0:09:07.320 in increasing expectations for FED hikes UM. And what you're 0:09:07.400 --> 0:09:11.160 seeing is you really won't see those kind of sectors 0:09:11.640 --> 0:09:15.360 move along too well unless you see both short and 0:09:15.559 --> 0:09:19.160 long long rates pick up. UM and it's not clear 0:09:19.200 --> 0:09:20.920 that they are yet, but I think that those are 0:09:20.960 --> 0:09:23.720 the ingredients for an upward move for some of those 0:09:23.800 --> 0:09:26.839 kind of more interest sensitive sectors. Michael's In, senior vice 0:09:26.880 --> 0:09:30.360 president and senior portfolio manager for UBS Wealth Management, Thank 0:09:30.400 --> 0:09:33.160 you so much for joining us on Bloomberg TV, Bloomberg Radio, 0:09:33.360 --> 0:09:36.839 and of course our YouTube simulcast Roman and Create. Reminds 0:09:36.880 --> 0:09:38.400 me of the note that we got earlier today from 0:09:38.480 --> 0:09:41.720 JP Morgan about concentration not being a sign of any 0:09:41.720 --> 0:09:43.760 sort of market top, any sort of risk. Yeah, I 0:09:43.760 --> 0:09:46.040 mean the concentration. I mean, frankly, if you want to 0:09:46.040 --> 0:09:47.839 be fair about it, has been there now for I 0:09:47.880 --> 0:09:50.120 don't know, eight nine years, So so I guess they 0:09:50.120 --> 0:09:52.360 have a point, you know, if you've gotten this far, um, 0:09:52.440 --> 0:09:55.320 maybe you stick with it. Yeah, and absolutely. Here's the 0:09:55.360 --> 0:09:58.160 question is does that continue into two? Of course, that's 0:09:58.160 --> 0:10:00.920 whatever on everyone's minds. Yeah, all right, Well we gotta 0:10:00.960 --> 0:10:03.520 talk travel, right Tim, Yeah, I'm ready, get me on 0:10:03.559 --> 0:10:07.640 a plane, get one. This is special markets coverage simulcast 0:10:07.720 --> 0:10:11.520 on Bloomberg Television, radio and YouTube. US travel stocks are 0:10:11.520 --> 0:10:14.439 retreating after hundreds of flights were canceled over Christmas due 0:10:14.440 --> 0:10:17.840 to a spike in COVID nineteen cases. Abigail Doolittle has 0:10:17.880 --> 0:10:20.079 more well. Tim It is interesting because we do have, 0:10:20.280 --> 0:10:22.360 course have record highs for most of the market, I 0:10:22.400 --> 0:10:24.599 should say, the SMP five hundred and big games for 0:10:24.640 --> 0:10:27.160 the major averages, but for these travel stocks not so much. 0:10:27.320 --> 0:10:29.719 That said, it's not truly fearful. At this point. You 0:10:29.760 --> 0:10:33.040 have American Airlines down a little bit less than one percent, 0:10:33.160 --> 0:10:35.960 you have the SMP five hundred Hotel index down about 0:10:36.000 --> 0:10:39.079 six tenths of one percent. Uh, and the bigger gains 0:10:39.200 --> 0:10:41.720 or excuse me losses that's in the casino section, down 0:10:41.760 --> 0:10:45.360 one point six percent. As for those cancelations, of course, 0:10:45.360 --> 0:10:48.800 having to do with O Macron yesterday more than undred 0:10:48.840 --> 0:10:53.440 flights were canceled today apparently so far nine so really 0:10:53.440 --> 0:10:56.440 this disruption if we put this into the context though, 0:10:56.520 --> 0:10:59.720 of early at that point, these stocks, though down double 0:10:59.760 --> 0:11:03.200 did its day after day, So today's declines of let's 0:11:03.200 --> 0:11:05.880 call it one percent or so not stacking up in 0:11:06.000 --> 0:11:09.160 such an equal way to that earlier time period. On 0:11:09.160 --> 0:11:11.160 on the year mix action, you have the likes of 0:11:11.200 --> 0:11:15.000 American Airlines and United higher, but Win resorts and some 0:11:15.040 --> 0:11:18.240 of the cruise operators not so much that SMP Airline 0:11:18.280 --> 0:11:21.480 Index overall down just about two percent. All right, Abagail 0:11:21.520 --> 0:11:23.520 doo little, thank you so much for that update. For 0:11:23.600 --> 0:11:25.560 more in the travel sector, let's bring in j Stein, 0:11:25.640 --> 0:11:28.720 the CEO of Dream Hotel Group. The Dream Hotel Group, 0:11:28.760 --> 0:11:31.240 it's a hotel brand and management company. It manages a 0:11:31.240 --> 0:11:33.679 handful of hotels, including the chat Wall here in New 0:11:33.760 --> 0:11:36.400 York on Scripted and Durham. You guys also have Margaritaville 0:11:36.400 --> 0:11:38.720 resort in Times Square and then of course the Dream 0:11:38.760 --> 0:11:41.840 Hotels around the world, here in the US and in Thailand. 0:11:41.880 --> 0:11:43.240 So give us an update, j because you have a 0:11:43.280 --> 0:11:46.080 good pulse on what exactly is going on with reservations. 0:11:46.360 --> 0:11:48.520 How are you seeing cancelations right now due to omicron 0:11:49.640 --> 0:11:52.760 And thanks for having me on. I appreciate it. Um. Yeah, 0:11:52.800 --> 0:11:56.200 I'm a crom has has taken his tone on us. Uh, 0:11:56.240 --> 0:11:58.480 but you know, nothing like what we saw a back uh, 0:11:58.920 --> 0:12:00.880 you know, almost two years ago now at this point. 0:12:01.160 --> 0:12:03.679 So we've seen some dropping reservations over the last ten 0:12:03.760 --> 0:12:06.360 days leading into the holidays. You know, there's a very 0:12:06.400 --> 0:12:08.920 soft time usually for us around Christmas and then it 0:12:08.960 --> 0:12:12.400 starts to build again towards New Year's. We're still holding 0:12:12.400 --> 0:12:16.240 on pretty decently for New Year's. Um, So all in all, 0:12:16.320 --> 0:12:18.720 it's not it's not that stating. Yeah, talk a little 0:12:18.720 --> 0:12:20.679 bit more about I mean, because you're not really I guess, 0:12:20.760 --> 0:12:23.040 uh what I would consider to be a traditional hotel 0:12:23.080 --> 0:12:25.319 in addition to sort of the overnight stays. I mean, 0:12:25.320 --> 0:12:29.080 most of your hotels have restaurants and nightlife attached to it. 0:12:29.120 --> 0:12:32.439 That certainly draws a much, uh, I guess hipper audience there, 0:12:32.480 --> 0:12:34.640 I say here, And I'm curious as to when we 0:12:34.720 --> 0:12:37.400 see it get back I guess to some of those 0:12:37.400 --> 0:12:40.680 pre pandemic levels when you walk by. For example, I 0:12:40.880 --> 0:12:42.960 frequently walked by your your property that you have down 0:12:42.960 --> 0:12:45.960 on sixteen Street here in New York City. I remember 0:12:46.000 --> 0:12:48.840 before the pandemic that place was was hopping like none other. 0:12:49.040 --> 0:12:50.760 And I'm wondering, when do we get back to that 0:12:50.880 --> 0:12:53.480 stage here? Do you have any real insight into when 0:12:53.520 --> 0:12:56.880 we get there now? So on the food and beverage side, 0:12:56.920 --> 0:12:59.960 and and then and the venues in the nightlife, we're 0:13:00.040 --> 0:13:04.400 getting back to regular levels, but primarily more on the Thursday, Friday, 0:13:04.520 --> 0:13:07.360 Saturday nights. Whereas, as you know, New York's really a 0:13:07.400 --> 0:13:11.200 seven seven night operation. And and so the Sunday through 0:13:11.240 --> 0:13:14.200 Wednesdays are are slow and some of the venues haven't 0:13:14.280 --> 0:13:17.880 reopened yet, but the weekends were almost as busy as 0:13:17.880 --> 0:13:20.840 we were a pre pandemic. So on the food and beverage, 0:13:21.000 --> 0:13:23.800 we're also running with smaller staff, so the bottom line 0:13:23.840 --> 0:13:26.760 in those areas have actually been pretty good on on 0:13:26.800 --> 0:13:29.640 the hotel side, on the room side. Still, the business 0:13:29.640 --> 0:13:31.400 travels and I am sure you're hearing that all the 0:13:31.400 --> 0:13:33.880 time has not come back yet. Uh. And a lot 0:13:33.880 --> 0:13:36.719 of the citywide conventions are not back yet. But the 0:13:36.800 --> 0:13:39.679 leisure travel has been very strong and as much as 0:13:39.880 --> 0:13:42.120 we started to see a national business coming back in 0:13:42.600 --> 0:13:47.000 once the rules changed um back in early November. Uh. 0:13:47.040 --> 0:13:48.800 And now you're starting to see that slow because of 0:13:48.880 --> 0:13:51.800 Mama Crown, but also domestic travel. It's not really going 0:13:51.840 --> 0:13:55.000 over in a going overseas, so we're still keeping a 0:13:55.040 --> 0:13:58.080 lot of the domestic travel coming into the property. So well, 0:13:58.160 --> 0:14:01.480 in all it's been you should wash, but we really 0:14:01.520 --> 0:14:04.280 want to get that corporate traveler back on the ranket Jay, 0:14:04.360 --> 0:14:07.839 let's talk about your domestic operations. We know New York City, California, 0:14:08.280 --> 0:14:11.440 some of these major cities on boast coasts are actually 0:14:11.480 --> 0:14:14.199 still waiting to read We're not yet. What are you 0:14:14.280 --> 0:14:16.760 seeing in the other major cities in the United States? 0:14:17.360 --> 0:14:19.840 You know, New York has has held up pretty well 0:14:20.080 --> 0:14:23.760 since spring and summer. A lot of leisure travel was 0:14:23.840 --> 0:14:26.680 coming in, UM. L A held up pretty well as 0:14:26.760 --> 0:14:30.920 as well. I think San Francisco, Chicago, those walkets were 0:14:30.960 --> 0:14:34.160 in Honolulu, we're taking I think a bigger hit UM 0:14:34.440 --> 0:14:37.120 than what we saw in l A and New York UM. 0:14:37.400 --> 0:14:40.000 But again, it's really relying on the business travel for 0:14:40.000 --> 0:14:42.840 those cities. J How how dynamic is your pricing when 0:14:42.840 --> 0:14:46.160 you think about overnight stays and how the willingness for 0:14:46.200 --> 0:14:48.120 you guys to lower prices at a time like this 0:14:48.200 --> 0:14:50.440 when perhaps people are canceling. How dynamic is it? And 0:14:50.480 --> 0:14:52.120 can you give us some examples of when you've had 0:14:52.120 --> 0:14:55.760 to adjust prices to to attract people so beds would 0:14:55.760 --> 0:14:58.800 be full. Yeah. Look, that's the amazing thing about this industry. 0:14:58.840 --> 0:15:01.320 It's only kind of type of real estate where it's 0:15:01.360 --> 0:15:03.800 so dynamic it could change in twenty four hours. We 0:15:03.800 --> 0:15:06.080 can run a hundred and thirty all or eight on 0:15:06.120 --> 0:15:08.960 a Sunday night and three three days later be at 0:15:08.960 --> 0:15:11.160 four dollars, and you just don't see that in the 0:15:11.200 --> 0:15:14.680 classes within real estate. UM, but you know, there's still 0:15:14.720 --> 0:15:17.600 a pretty good demand and rates actually have been going 0:15:17.680 --> 0:15:20.880 up in a lot of markets. UM. Miami has been 0:15:21.000 --> 0:15:24.720 very strong, Nashville has been very strong. Uh So, yeah, 0:15:25.400 --> 0:15:28.400 to question dynamic pricing, you know, I think the most 0:15:28.480 --> 0:15:31.280 dynamic in any real estate class. What about the what 0:15:31.320 --> 0:15:33.440 about the other side of that? J the cost side here, 0:15:33.560 --> 0:15:37.560 labor costs, materials, costs. Yeah, like everywhere else, it's it's 0:15:37.560 --> 0:15:41.280 becoming very difficult costs of and going up. Shortage and 0:15:41.400 --> 0:15:43.880 labor is is most most dramatic I've been doing this 0:15:43.880 --> 0:15:47.040 for forty years in the industry, most dramatic I've ever seen. 0:15:47.040 --> 0:15:49.320 But we'll get through it, you know. We'll raise prices, 0:15:49.560 --> 0:15:53.400 will raise the salaries and and and then the prices 0:15:53.440 --> 0:15:55.240 for the rooms are gonna go up, and there'll still 0:15:55.280 --> 0:15:56.520 be a good value. You know, if you're not. If 0:15:56.560 --> 0:15:58.360 you used to paying to seventy five and you're gonna 0:15:58.360 --> 0:16:00.640 be paid three fifty, it's just like the burger. You're 0:16:00.640 --> 0:16:03.720 going out now and you're spending seventeen and years ago 0:16:03.800 --> 0:16:07.320 it was eleven. So I think, you know, it'll balance 0:16:07.320 --> 0:16:09.600 that it'll take a little while. Once the demand comes back. 0:16:09.840 --> 0:16:12.480 When COVID runs through its course, you'll see the room 0:16:12.560 --> 0:16:15.840 rates really going up. Well. J Stein's CEO of Dream 0:16:15.920 --> 0:16:18.000 Hotel Group, We thank you so much for joining us 0:16:18.000 --> 0:16:22.680 at such a crucial time. This is Bloomberg. This is 0:16:22.680 --> 0:16:26.360 Bloomberg Market Special Markets Coverage, a simulcast edition. Here we 0:16:26.440 --> 0:16:29.680 welcome in our audiences across all of our platforms on TV, 0:16:29.840 --> 0:16:33.080 radio and YouTube. We're gonna be here all week long. 0:16:33.160 --> 0:16:37.200 Myself Romain Bostic alongside Tim Stinovic and Creedy Gupta breaking down. 0:16:37.200 --> 0:16:39.040 I guess not only the day to day moves here 0:16:39.080 --> 0:16:41.480 in the market to look back of course one, and 0:16:41.600 --> 0:16:44.680 hopefully I'll look ahead into two. Right now, guys, we 0:16:44.720 --> 0:16:47.160 are looking at a market that is holding right now 0:16:47.240 --> 0:16:49.160 to record high, at least for the SMB five hundred. 0:16:49.320 --> 0:16:52.760 The Nastack induscries aren't that far from reclaiming their record high. 0:16:52.760 --> 0:16:55.360 And when you take a look here, I think it 0:16:55.960 --> 0:16:58.440 just what we've seen over the past a few weeks, 0:16:58.440 --> 0:17:00.560 a few months here that's been quite stonishing. And I 0:17:00.560 --> 0:17:01.960 just want to point out, I mean, we talk about 0:17:02.240 --> 0:17:04.560 travel stocks being down today, but not by much. I 0:17:04.560 --> 0:17:06.800 mean they're still down pretty significantly from where we saw 0:17:07.119 --> 0:17:09.400 back in March here, But I gotta flag Apple here, guys, 0:17:09.440 --> 0:17:12.159 because this really seems indicative, Tim and Creaty about what 0:17:12.160 --> 0:17:13.720 we've seen in this market here, A lot of these 0:17:13.760 --> 0:17:16.680 large cap megacap tech names either are the ones getting bid. 0:17:16.880 --> 0:17:18.960 This is where the concentration is right now when it 0:17:18.960 --> 0:17:20.480 comes to this rally. Look, I know this is not 0:17:20.520 --> 0:17:22.400 a day where people go to Haven's, but it reminds 0:17:22.440 --> 0:17:24.320 me of what I think it was. JP Morgan said 0:17:24.320 --> 0:17:27.000 earlier today that increasingly a company like Apple is turning 0:17:27.040 --> 0:17:31.240 into a safe bet right of haven trade. Hey, Romayne, 0:17:31.280 --> 0:17:33.600 you mentioned today being a record high for the SMP 0:17:33.680 --> 0:17:35.760 five hundred. If it closes out, a record high would 0:17:35.760 --> 0:17:37.800 be the sixty nine record high of the year. You 0:17:37.840 --> 0:17:42.639 have to go back to to get more record closes. 0:17:42.640 --> 0:17:46.080 About of days have been records for the SMP fire 0:17:46.440 --> 0:17:48.399 You know, Tim, what gets me about this whole Apple stories. 0:17:48.440 --> 0:17:50.239 We're talking about this as a haven, as this kind 0:17:50.240 --> 0:17:53.080 of growth play. What if it's traditionally becoming such a 0:17:53.200 --> 0:17:56.000 key part of everyone's portfolio that is, at the end 0:17:56.040 --> 0:17:59.120 of the day turning into perhaps a value play, still 0:17:59.160 --> 0:18:01.320 dependent on some of the supply change that extend all 0:18:01.359 --> 0:18:03.320 the way into Asia. It's really interesting to talk about 0:18:03.320 --> 0:18:06.439 how big tech. Where's ten different hats in terms of 0:18:06.440 --> 0:18:09.159 an investment portfolio. All right, well, let's continue talking about 0:18:09.200 --> 0:18:11.360 big tech, and of course that big hat right now. 0:18:11.400 --> 0:18:16.720 Looking at Apple market cap right now, two trillion billion, 0:18:16.720 --> 0:18:19.320 Abigail Doolittle, she's standing by right now. I assume you're 0:18:19.320 --> 0:18:22.080 on Apple watch right I am on Apple Watch looking 0:18:22.080 --> 0:18:24.760 for that three trillion dollar market cap that we were 0:18:24.800 --> 0:18:27.200 all looking for about two weeks ago. It hasn't happened, 0:18:27.200 --> 0:18:31.080 as Apple has stalled near that level. Has not happened yet, 0:18:31.119 --> 0:18:33.960 but very very close perhaps this week. Unlikely today, but 0:18:34.040 --> 0:18:37.760 you never know. The volume is so low below average volumes, 0:18:37.760 --> 0:18:40.439 that perhaps you'll see some traders take advantage of that. 0:18:40.480 --> 0:18:41.960 And I mean that in the best sense. As for 0:18:42.000 --> 0:18:44.360 a big tech though, over the last four days it's 0:18:44.359 --> 0:18:47.240 really astonishing. The NAZAC one hundred up about six percent, 0:18:47.320 --> 0:18:50.159 the best four days UH in about two months. It 0:18:50.160 --> 0:18:54.040 has everything to do with the likes of Apple, Microsoft, Tesla, 0:18:54.320 --> 0:18:57.000 Meta A, m D and Video, all of these big 0:18:57.040 --> 0:19:01.160 cap tech and communication services names really on fire. This 0:19:01.280 --> 0:19:03.240 is bond yields or down a little bit. So that 0:19:03.280 --> 0:19:05.560 of course offers a tail wind as it takes off 0:19:05.600 --> 0:19:10.240 concerns around valuation. But this Santa Claus rally, investors really 0:19:10.240 --> 0:19:12.800 seem to like big tech. In the context of the 0:19:12.840 --> 0:19:15.439 Santa Claus rally. One question though, that you all have 0:19:15.480 --> 0:19:18.080 been asking all day how long can it last? Because 0:19:18.160 --> 0:19:21.280 especially the SMP five hundred right now on pace for 0:19:21.480 --> 0:19:25.320 a twenty seven percent gain this year after gaining about 0:19:25.480 --> 0:19:30.280 sixteen percent in twenty and twenty eight percent even twenty 0:19:30.359 --> 0:19:34.399 nine percent. Uh in en, that's a huge, huge rally 0:19:34.440 --> 0:19:36.920 over the last three years, of course helped out by 0:19:36.960 --> 0:19:40.320 the Fed. Will it last? It will depend on big 0:19:40.359 --> 0:19:43.280