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Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane

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Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Patty

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Speaker 1: Chad joins us. Now, I kind of a security has

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Speaker 1: had a macro strategy. Pizza. What a couple of weeks

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Speaker 1: this has been. Are you leaning into this, leaning into

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Speaker 1: some of the euphoria that we can all fail. Yeah,

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Speaker 1: I'm a little bit cautious. I think we have to

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Speaker 1: make it through Testa's inclusion. I think a lot of

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Speaker 1: this band aid stimulus has already been priced in, So

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Speaker 1: I'm leaning into a little bit and I still really

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Speaker 1: expect a big rotation where they have not stocks do well,

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Speaker 1: because next year I expect stimulus, but I expect, you know,

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Speaker 1: proper stimulus where we really focus on job creation, where

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Speaker 1: we're gonna get a big bang for the buck, may

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Speaker 1: be involved in a structure bank at public private. So

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Speaker 1: I view this current stimulus it's nice, but it's nowhere

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Speaker 1: near sufficient for what we need to get real economic growth. Well,

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Speaker 1: let's get the policy coal right first, and then we

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Speaker 1: can get to the market code. The policy code this

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Speaker 1: year has just been the only code to get right,

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Speaker 1: and then you've absolutely now the rest of it lated

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Speaker 1: to risk. The policy call. You called this an aid,

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Speaker 1: band aid patriots n night billion. What's on offer today?

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Speaker 1: Is that a band aid? These days? Unfortunately it is.

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Speaker 1: As we're shutting down more and more businesses, I think

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Speaker 1: you have to make sure those people receive some sort

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Speaker 1: of compensation. So this is more just to keep things going.

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Speaker 1: And as I see it, and we're not seeing true

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Speaker 1: economic spending where we're going to get real growth. We're

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Speaker 1: not seeing enough spending towards rebuilding, manufacturing, fixing some of

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Speaker 1: our infrastructure, making sure we catch up and surpass other

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Speaker 1: countries on five G technology. So that's what I expect

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Speaker 1: to happen next year, and that's where we'll get the

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Speaker 1: real boost. This for now, I think is really just

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Speaker 1: covering up the problems that are coming from this resurgence

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Speaker 1: and COVID cases. Covering put the problems. Is that enough

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Speaker 1: to justify the rally that we've seen on the heels

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Speaker 1: of expected support financially from Washington, d C and potentially

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Speaker 1: the end of the pandemic at some point next year. Yeah,

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Speaker 1: I think we're reasonably priced. I think the market's kind

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Speaker 1: of figured out the pandemic. We have to make it

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Speaker 1: through this struggle right now, but ultimately, with vaccines and

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Speaker 1: treatments and everything improving, we will get through. At some

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Speaker 1: point next year, the economis will look very good. And

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Speaker 1: that's why again, even today, you're starting to see some

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Speaker 1: of the you know, small caps value stocks continue to

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Speaker 1: outperform big tech as this belief sinks in that, hey,

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Speaker 1: we will have something that resembles a normal economy. It

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Speaker 1: won't be worked from home necessarily, it won't be going

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Speaker 1: back to the office. But there's a lot going on.

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Speaker 1: There's a lot of reason for optimism. There will be

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Speaker 1: ongoing Central Bank support. I think the Treasury Department will

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Speaker 1: work well with the Fed. So I don't think we're

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Speaker 1: miss priced. I just think we're doing for a little

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Speaker 1: pull back, especially surrounding this Tesla inclusion in the SMP,

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Speaker 1: which occurs at the closed Friday. Okay, so we'll get

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Speaker 1: to Tesla perhaps, But I'm wondering about Airbnb and door

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Speaker 1: Dad and some of these other I p o s

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Speaker 1: that are coming out with valuations that are reminiscent of

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Speaker 1: the tech bubble. I mean, the idea that they doubled

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Speaker 1: in price. Does it give you a feeling of froth

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Speaker 1: or is this also reasonably valued? You know? I think

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Speaker 1: that's typical for these sorts of very hot I p

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Speaker 1: o s where you don't necessarily want to squeeze every

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Speaker 1: last sign out. You're only releasing a small number of shares,

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Speaker 1: so it sounds like the company maybe left money on

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Speaker 1: the table, but the bulk of their shares are still

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Speaker 1: kind of held in reserve that they can issue going forward.

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Speaker 1: So I'm not worried about that. I think there's been

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Speaker 1: a lot of you know, hyperactive trading. We do see

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Speaker 1: a lot of these small accounts participating. Whether these prices

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Speaker 1: all last or not, it's a little bit you know,

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Speaker 1: up in the air. Um Again, I think this is

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Speaker 1: really going to depend on what we get in terms

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Speaker 1: of policy next year, and partly what we haven't talked

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Speaker 1: about is the negative potential or policy. Does do we

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Speaker 1: see tax increases again, especially at the corporate level, and

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Speaker 1: then some of these valuations might look a little bit

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Speaker 1: more frothy. Pitch think that comes on the type of

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Speaker 1: that conversation at some point twenty one. You know, we've

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Speaker 1: been looking at this market as we think Congress and

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Speaker 1: the Senate and the President are going to try and

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Speaker 1: address the you know, everyone's been talking about this K

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Speaker 1: shape recovery, that downward slope with a K. I think

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Speaker 1: that gets addressed, right, and that's all good. That's the positive,

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Speaker 1: that's the stimulus. The question is that upward slope with

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Speaker 1: a K. Do they do something to punish that? Do

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Speaker 1: they say, hey, you've been really successful, so we want

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Speaker 1: to take something away from you, or do they let

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Speaker 1: that slide. I think for the economy it's probably indifferent

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Speaker 1: From markets, it's much better if they let it slide.

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Speaker 1: I think a lot will hinge on that Georgia election

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Speaker 1: January five, paid it for you. Is that when you

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Speaker 1: start to establish what your year out look really looks

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Speaker 1: like after that event? Yeah. I think right now we've

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Speaker 1: got a base case of we're gonna get some decent

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Speaker 1: amount of stimulus because I think the Republicans are on board.

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Speaker 1: They kind of failed to get any sort of stimulus done, which,

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Speaker 1: you know, of all the things I would have expected

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Speaker 1: President Trump to be good at, it was building things

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Speaker 1: we did not get any infrastructure done. So I think

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Speaker 1: some level that's gonna be done regardless of the outcome.

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Speaker 1: I think the outcome is gonna switch how much so

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Speaker 1: if the Democrats one was the more spending, I also

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Speaker 1: expected to switch the mix. So we'll see a much

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Speaker 1: bigger environmental and sustainability focus if the Democrats win the Senate,

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Speaker 1: I think less so if the Republicans retain the Senate. So,

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Speaker 1: given all this fiscal support that you're expecting and fiscal

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Speaker 1: stimulus actual stimulus next year, treasury yields, are we going

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Speaker 1: to see them above one percent? How high can they

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Speaker 1: possibly get? No, I think we get them above one

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Speaker 1: percent fairly quickly. I'm kind of in the near term

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Speaker 1: called the next few weeks, thinking we're between one and

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Speaker 1: one and a quarter. I think it's hard to get

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Speaker 1: much above even one fifty. I think the Federal Reserve

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Speaker 1: will work very closely with the Treasury Department to control

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Speaker 1: any rise. And again, markets I think will be fine

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Speaker 1: if we see a rising treasury yield, so just as

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Speaker 1: long as it's not a rapidly rising treasury yield. So again,

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Speaker 1: to me, that would really help these small economies, those cyclicals,

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Speaker 1: and probably less helpful for some of the big large

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Speaker 1: tech fowls. Yelling and pal work in hand in hand

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Speaker 1: PA a chair granted catch ups, pitt a chair of

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Speaker 1: Academy Securities pay their thanks for everything each year as well,

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Speaker 1: have a fantastic Christmas. If we don't talk again, put

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Speaker 1: a chair their Meconomy Securities on this market. Bran Weinstein

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Speaker 1: joined us now Morgan Stanley had a global fixed income. Brian,

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Speaker 1: let's talk about the other event of the week. I'm

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Speaker 1: not even sure that Brexit is the top of the

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Speaker 1: list for many people. This Wednesday is the Federal Reserve decision.

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Speaker 1: What are you looking for from the feed this Wednesday? Yeah,

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Speaker 1: good morning, Jonathan, and good move on on breakfit rather

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Speaker 1: not talking about that, so that will be interesting. I mean,

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Speaker 1: we think it's a real close call, um, you know,

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Speaker 1: fifty fifty, which is not I know it times we

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Speaker 1: get caught out. But at the end of the day

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Speaker 1: we think they probably won't go for for moving the

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Speaker 1: the extension of the buying um, better to savor for later.

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Speaker 1: If breads rise, better to savor for dry powder took

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Speaker 1: to the world. We'll probably get some stimulus the equally

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Speaker 1: markets doing great break evenings are keeping higher. I think

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Speaker 1: they'll give us some language. I think they're going to

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Speaker 1: try to link more closely um to the average inflation target,

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Speaker 1: remind us they're not going to raise rates. There's a

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Speaker 1: couple of things that they could do to tell us

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Speaker 1: maybe when they'll look at this extension of of of

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Speaker 1: the buying, the average maturity of the buying. But it's

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Speaker 1: a close call. They could do it. I don't think

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Speaker 1: it's a huge deal if they don't, as long as

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Speaker 1: they give us some language and rates probably keep creeping higher. Well, Brian,

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Speaker 1: you mentioned Brake Eaven's inflation expectations creeping higher. Do you

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Speaker 1: think that could be the green light phenomenal yields to

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Speaker 1: start to pick up through one percent, maybe towards your

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Speaker 1: targets through twenty one? Yeah, yeah, I think I think

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Speaker 1: that they could move higher. I mean three. Yeah, the

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Speaker 1: three seems a while away, um, but getting tenure notes

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Speaker 1: into the one percent range I think is a very

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Speaker 1: likely outcome. Do you look across the world of Australia

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Speaker 1: New Zealand, for example, We've seen raids start to creep

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Speaker 1: higher there even though the central banks have stayed dubbish. Um,

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Speaker 1: it just at some point isn't enough anymore and the

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Speaker 1: markets get rested us when you see growth, when you

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Speaker 1: see break evens. I think stimulus would be the last

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Speaker 1: piece of that in the US. Remember, we need stimulus, right,

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Speaker 1: the output gap is still big. We still need growth

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Speaker 1: in twenty two to upset the lack of growth this year.

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Speaker 1: Um So stimulus would be a big piece of getting

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Speaker 1: rates higher, along with the stead not being aggressive on

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Speaker 1: extending their purchases. So let's talk about the consequences of

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Speaker 1: additional quantitative easing purchases, additional purchases by the Federal Reserve

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Speaker 1: of Treasuries and other central banks around the world. I

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Speaker 1: know Morgan Stanley has a forecast about two point eight

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Speaker 1: trillion dollars of bond purchases or as a purchases by

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Speaker 1: the major central banks next year. How much of that

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Speaker 1: has already been priced into riskier debt versus yet to

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Speaker 1: be really factored in. That's a great question, and one

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Speaker 1: and one that we struggled with a lot. There's no

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Speaker 1: question that a lot of has been priced in, right,

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Speaker 1: we've we've I mean, how is stimulus not priced in?

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Speaker 1: How is the vaccine not priced in? But the market

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Speaker 1: still enjoys when the when these events happen UM and lesten,

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Speaker 1: I think it's done well and we do get the growth.

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Speaker 1: There's a reason to believe that this can continue. So

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Speaker 1: it's hard to look at risk assets and said that

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Speaker 1: none of this is known. The question I think is

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Speaker 1: which risk assets does this help the most? And so

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Speaker 1: when you look at treasuries and you look at investment

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Speaker 1: grade credit where the most help was given, that's probably

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Speaker 1: where the least upside is. When you look at the

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Speaker 1: high old markets, the loan markets, the equity market UM,

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Speaker 1: some of the emerging markets on anything that benefage more

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Speaker 1: weaker dollar UM. There are many many things that that

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Speaker 1: you can still have great outcomes in UM. You just

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Speaker 1: have to have some of these actual actually come to fruition.

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Speaker 1: So a lot of investment managers come on the show

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Speaker 1: and they say, well, it's time to pick particular bonds

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Speaker 1: and not necessarily indexes. And other people will say they're

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Speaker 1: talking their book because their active managers. Is this going

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Speaker 1: to be a specific bond, specific company story where you

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Speaker 1: end up with certain defaults and others that do just fine,

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Speaker 1: or is this still an index story still a big

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Speaker 1: macro beta play on just more QUEUEI and more risk on.

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Speaker 1: As an active manager, we do like picking on and

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Speaker 1: certainly this has been a good year for for industries.

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Speaker 1: Although listen, it's been a great year for for some

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Speaker 1: stock pickers, right, some of those certain UM tech stocks

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Speaker 1: and things like that advent tremendously well away from the

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Speaker 1: industries UM. But yes, I think if you stay in

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Speaker 1: this world, whereas I said, treasuries and investment great credit

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Speaker 1: have done the heavy lifting UM, and you're going to

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Speaker 1: go into these markets. Now, it's harder to buy an

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Speaker 1: e M index. It's it's not as smart to buy

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Speaker 1: a high yield index. There are lots of active things

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Speaker 1: that you should be doing in sectors that you should

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Speaker 1: be avoiding UM. So you know, the data play is

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Speaker 1: probably UM towards the tail, and now some of the

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Speaker 1: bigger winners here will be more actively selected based on

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Speaker 1: the outcomes of where the stimulus goes UM, Which EM

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Speaker 1: countries are stronger, which EM corporative that are balance sheets,

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Speaker 1: Those things should matter more now that the data rally

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Speaker 1: is is at least mostly played out. Bran, let's just

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Speaker 1: wrap things up there. I think it's really important to

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Speaker 1: that word avoid that you just used a lot of

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Speaker 1: people come on shows like this at the moment talking

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Speaker 1: about embracing cyclicality, any cyclicality, any cyclical aitiaes of this

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Speaker 1: market brand that you would avoid, you know, big thing.

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Speaker 1: To me, it's a lot harder because the cyclical nature.

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Speaker 1: It's just it's just a bit less cyclical. Um. I

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Speaker 1: think when I want, when I stay avoid some of

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Speaker 1: the things in data. When we look at the at

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Speaker 1: the high high yield markets, we think there's still be

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Speaker 1: plenty of default right. We still have the energy problems

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Speaker 1: working through the system in a m there are still

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Speaker 1: plenty of countries um where where that matters and where

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Speaker 1: where stimulus is not getting to those countries and they

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Speaker 1: can't do it because of their balance sheet. So I think, no,

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Speaker 1: I don't think there's anything in BIX income as a

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Speaker 1: as a sector that you need to avoid. I do

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Speaker 1: think it's much more micro, which makes it a little

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Speaker 1: bit harder to to go into in detail. Brown putting

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Speaker 1: into hear from you as always Brown Wainstein their moment, Stanley,

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Speaker 1: thank you sir. The vaccinations begin this week. It is

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Speaker 1: a massive moment in the United States and joining us

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Speaker 1: now is Dr Joseph Catcher ascensioned Chief Medical Officer, Doctor,

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Speaker 1: fantastic to get you with us on the program. Let's

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Speaker 1: just start first up, have you got the vaccine in house?

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Speaker 1: And talk me through how big this week is? Is

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Speaker 1: a big week nine months of of what we've been

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Speaker 1: dealing with and what the public has been dealing with it.

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Speaker 1: We're very excited our of the vaccines, how are arriving

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Speaker 1: today on our many of our hospitals. We have a

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Speaker 1: hundred and fifty hospitals across twenty states and are we

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Speaker 1: and just state vaccine deliveries today And we've been preparing

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Speaker 1: for that for the last eight weeks. We've had teams

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Speaker 1: working every day on the logistics and um and delivery

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Speaker 1: of the vaccine. So we're really excited about this. We

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Speaker 1: feel this is the way to get us on the

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Speaker 1: other side of the pandemic. Well, how that's the case? Doctor,

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Speaker 1: When you look at the rollout, it's pretty clear to

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Speaker 1: everyone frontline workers the most at risk in society. First,

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Speaker 1: the decisions on who to give it to in house

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Speaker 1: first doctor, in the initial rollout the first few weeks,

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Speaker 1: is that difficult? How do you come around making those

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Speaker 1: kind of calls? You know, we we really have strongly

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Speaker 1: encouraged our employees to UM to get the vaccine UM,

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Speaker 1: and our employees are stepping up just like they have

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Speaker 1: through the entire pandemic and are volunteering. We obviously can't

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Speaker 1: vaccinate everybody in a single unit in the same day,

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Speaker 1: so frankly, we're just asking people to schedule their vaccine

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Speaker 1: with us, and we are managing that scheduling process just

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Speaker 1: like we want any other appointment. Our frontline workers are

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Speaker 1: really the hospital workers. Both nurses are, respiratory therapist, patient

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Speaker 1: care text. Those are the people that were prioritizing, and

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Speaker 1: critical care nurses in particular, which really have bear a

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Speaker 1: huge part of the brunt of this, as well as

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Speaker 1: the respiratory therapists and patient care text We we really

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Speaker 1: want to get them vaccinated early UM, and so we're

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Speaker 1: prioritizing that group. Our frontline physicians are also very important.

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Speaker 1: Our critical care specialists are infectious disease specialists or polenologists.

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Speaker 1: We were just we're very excited for ways and really

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Speaker 1: strongly encouraging them to get the vaccines. Dr Coketona, It's

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Speaker 1: interesting how the initial rollout will be viewed as a

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Speaker 1: template for the further and more extensive rollout that is

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Speaker 1: expected perhaps in the first half of next year. How

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Speaker 1: complicated is it logistically given the cold temperatures that you

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Speaker 1: have to keep the vaccine in addition to some of

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Speaker 1: the other just typical vaccine logistical issues. You know, it's

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Speaker 1: um it is a challenge. You know, we have to

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Speaker 1: store between minus sixty and minus a d degrees. We

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Speaker 1: have to be prepared to receive the vaccines cold from Viser. UM.

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Speaker 1: I will say that Fiser. I've been on logistics calls

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Speaker 1: with the Visor folks. They've done an incredible job orchestrating

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Speaker 1: this since I'm very uh impressed at the way Fiser

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Speaker 1: has approached us. It has, uh it has posed a problem.

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Speaker 1: We've had to go out and get a bunch of freezers,

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Speaker 1: some of those where we can't get freezers. Visor has

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Speaker 1: made it so that the shipping boxes that they come

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Speaker 1: and can be recharged with dry ice and we can

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Speaker 1: store them in the shipping containers. So I think they

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Speaker 1: have done an incredible job doing that and providing us

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Speaker 1: backup plans in case freezer uh freezers were unavailable. As

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Speaker 1: you can imagine, it was hard to the number of

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Speaker 1: freezers that we need for health system our size. We're

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Speaker 1: getting there, but we're not quite there yet, which raises

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Speaker 1: a question about who pays for all of the extra

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Speaker 1: equipment that's required in order to roll this out in

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Speaker 1: effective way. I know there has been some money appropriated

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Speaker 1: that has not yet been passed in Washington, d C.

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Speaker 1: Beyond your particular organization, a sense in hospitals and health

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Speaker 1: care facilities, is this going to be expensive? Who is

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Speaker 1: going to pay for it at the end of the day,

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Speaker 1: you know, as part of our health system. You know,

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Speaker 1: our CEO told us at the beginning, take care of

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Speaker 1: our associates, take care of our patients, and worry less

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Speaker 1: about the economics. Uh and a global pandemic like this,

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Speaker 1: with the number of people that have been affected by

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Speaker 1: this and the number of lives lost, we have put

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Speaker 1: our our patients and our associates first. And as for

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Speaker 1: that reason, UM, we haven't thought about that as much.

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Speaker 1: It is something that weighs on our mind over the

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Speaker 1: long haul, but for the short term, we're really focused

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Speaker 1: on delivering this vaccine and UM and for us, we're

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Speaker 1: paying for it. You know, the government has provided us

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Speaker 1: Care to Act funding, but we are paying for it

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Speaker 1: out of ascension and this is part of a a normal

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Speaker 1: business for us. Their technologies to come up all the

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Speaker 1: time that we have to pay for before somebody actually

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Speaker 1: reimburses us. So this is just part of a normal

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Speaker 1: business for us. And um, you know, our commitment to

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Speaker 1: this is overwhelming, to say the least. So just before

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Speaker 1: we let you run, I think a massive issue over

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Speaker 1: the last nine months, you know, has been compliance around

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Speaker 1: social distancing, mosque wearing, et cetera. It's not just about

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Speaker 1: the first vaccination. You've got to get to come back.

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Speaker 1: They've got to come back for the second, the second hit.

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Speaker 1: It's going to be hard enough to get people to

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Speaker 1: step up for the first one. Can you walk me

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Speaker 1: through the kind of techniques the marketing around this that

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Speaker 1: you think is effective that you'd like to say in

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Speaker 1: the coming months. Yeah, it's really about education, education, education,

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Speaker 1: you know, and we have significant issues in um, some

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Speaker 1: of our populations that have trust issues. UM, you know,

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Speaker 1: we have the Black African American population, Hispanic population that

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Speaker 1: have trust issues with the medical community. We have to

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Speaker 1: continue to educate, we have to be culturally sensitive, we

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Speaker 1: have to use our leaders are our Hispanic leaders and

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Speaker 1: our Black African American leaders to actually help educate those

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Speaker 1: populations to give them the trust to get this vaccine,

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Speaker 1: because it's a very important The more vulnerable you are

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Speaker 1: to illness, the more the sicker you are um, the

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Speaker 1: more likely this vaccine is to help you. Uh, And

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Speaker 1: so we have to get that message out. It's going

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Speaker 1: to be about education, education, education, And I just want

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Speaker 1: emphasize one of the things, you know, as part of

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Speaker 1: this whole thing we've been we've been absorbed with with COVID,

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Speaker 1: but there is a secondary pandemic that's out there right now,

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Speaker 1: and that is people are avoiding care, avoiding coming to

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Speaker 1: our hospital. We're strongly encouraging people only to seek the vaccine,

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Speaker 1: but also to continue to seek care for other medical donta.

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Speaker 1: We would love to continue the conversation with you through

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Speaker 1: the next couple of weeks and the next several months

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Speaker 1: this rollout and really picks up to catch on that.

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Speaker 1: Thank you very much joining us now as low to

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Speaker 1: rite FS Investments chief economist Allow, right, if you could

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Speaker 1: build on that, that that would be fantastic what you're looking

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Speaker 1: for this Wednesday. Yeah, you know, so, I agree. I

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Speaker 1: think you know they've talked about wanting to do something

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Speaker 1: fairly soon. I think they are going to try to

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Speaker 1: be more specific about locking in those forward expectations and

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Speaker 1: continued financial market support and economic support. I think something

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Speaker 1: that we really forget is if we look back at

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Speaker 1: prior expansions. We don't know when this recession is going

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Speaker 1: to end, but if you kind of look back ann

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Speaker 1: and they one two thousand one, the FED was actively

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Speaker 1: cutting interest rates in the first eighteen months of those expansions,

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Speaker 1: Like they are really used to actively supporting an economy

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Speaker 1: as we're coming out of a recession. And I don't

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Speaker 1: think it's a it's a you know, it's not a coincidence.

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Speaker 1: If you look back in two thousand and nine, interest

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Speaker 1: rates towards zero, you know, puts them in a sticky

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Speaker 1: spot where they can't really you know, do that traditional support.

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Speaker 1: So the most active quantitative easy that we really got

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Speaker 1: was two thousand eleven and two thousand thirteen, Like that

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Speaker 1: is just a sign of how, you know, years into

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Speaker 1: the expansion, they were still having to support our economy.

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Speaker 1: So I really think obviously very different recessions, very different

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Speaker 1: expansions I would expect, But the point is that they

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Speaker 1: are really gearing markets up for the idea that they

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Speaker 1: are going to have to be accommodating them for years

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Speaker 1: to come. And I think Mike's point is important. Markets

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Speaker 1: love to look for a change, They to be forward looking,

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Speaker 1: and you know, they're not worried about changing expectations right

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Speaker 1: now the rate hike. They're worried about those five year

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Speaker 1: forward expectations and any kind of YO curb st deepening.

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Speaker 1: They want to make sure to sit on that. Laura,

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Speaker 1: this is a really important point, the idea that the

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Speaker 1: FED is run out of a lot of ammunition, given

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Speaker 1: where rates are, given how much money has already been

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Speaker 1: pumped into the system by their monetary policies. Are you

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Speaker 1: suggesting that based on where they are, based on their ammunition,

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Speaker 1: they're not being easy enough that they're not necessarily increased

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Speaker 1: their increasing their purchases enough to support the expansion as

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Speaker 1: they have in the past, just based on where we

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Speaker 1: are and how receptive the market is to their measures

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Speaker 1: at Lisa, That's that's a tricky question because it goes

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Speaker 1: both ways, like what more can they do? I mean,

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Speaker 1: I think they have actively said now they're they're all

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Speaker 1: really squawking when Venusians trying to shut down the main

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Speaker 1: street lending facility. You know, I think they would acknowledge

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Speaker 1: that they want to do more and that they really

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Speaker 1: are upset that some of those pathways to impact the

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Speaker 1: economy directly might be taken away. You know, I think

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Speaker 1: they feel very comfortable that they can help financial conditions.

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Speaker 1: The question is what that's really doing for the main

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Speaker 1: street economy. So um that I think that's really the issue.

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Speaker 1: But absolutely I think they will argue that they need

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Speaker 1: to be doing more, They want to be doing more,

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Speaker 1: and that you know, as to your point, they kind

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Speaker 1: of run out of traditional mechanisms, so you know, how

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Speaker 1: creative can they get? They are really pushing the envelope.

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Speaker 1: In the meantime, you're flicking at the economy and the

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Speaker 1: hurt that's currently out there. We're gonna be getting retail

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Speaker 1: sales later this week, as John was talking about in

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Speaker 1: the unemployment UH filings as well on Thursday. What are

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Speaker 1: you looking for? How close our way to a double

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Speaker 1: dip versus the expansion that people are already pricing in.

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Speaker 1: I think we're pretty close. Uh. And again that's a

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Speaker 1: typical during you know, longer downturns that we get you know,

431
00:22:04,200 --> 00:22:06,440
Speaker 1: sub quarters the rise sub quarters fall as certainly don't

432
00:22:06,440 --> 00:22:08,879
Speaker 1: think it's going to be another que two. But you know,

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00:22:08,960 --> 00:22:11,160
Speaker 1: think about you know, we were so used to looking

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00:22:11,160 --> 00:22:13,399
Speaker 1: at seasonally adjusted data, we forget that when it's not

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00:22:13,480 --> 00:22:18,439
Speaker 1: seasonally just in so much spending activity and hiring takes

436
00:22:18,480 --> 00:22:22,040
Speaker 1: place in this holiday period, so we're already seeing claims

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00:22:22,040 --> 00:22:24,879
Speaker 1: move in the other direction. We're seeing, um, you know,

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00:22:24,920 --> 00:22:27,919
Speaker 1: we've already seen auto sales down in November, so I

439
00:22:27,920 --> 00:22:31,400
Speaker 1: think we're gonna see a decline in November retail sales

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00:22:31,920 --> 00:22:34,840
Speaker 1: and December. I think, you know, you can really get

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00:22:34,880 --> 00:22:39,200
Speaker 1: some pain just inflicted upon the fact that normally seasonal

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00:22:39,320 --> 00:22:43,600
Speaker 1: hiring is you know, plus five million in December when

443
00:22:43,600 --> 00:22:47,640
Speaker 1: it comes to you know, retail facilities and holiday shopping.

444
00:22:47,800 --> 00:22:52,400
Speaker 1: So the December numbers could, just because of technical reasons,

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00:22:52,480 --> 00:22:56,800
Speaker 1: look pretty ugly. So I think it's you know, whether

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00:22:57,280 --> 00:23:00,439
Speaker 1: quarterly GDP you end up splitting it across to orders,

447
00:23:00,480 --> 00:23:03,000
Speaker 1: you don't actually get into negative territory. We have a

448
00:23:03,040 --> 00:23:06,800
Speaker 1: resilient consumer, resilient businesses. Those are that's the best that

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00:23:06,840 --> 00:23:08,800
Speaker 1: we can hope for to power us through when I

450
00:23:08,840 --> 00:23:11,880
Speaker 1: think it's really a tricky time for the economy. But

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00:23:12,359 --> 00:23:14,760
Speaker 1: when you look at hiring. You know you're seeing those

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00:23:15,040 --> 00:23:18,359
Speaker 1: permanent layoffs increase. I think that's a that's going to

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00:23:18,400 --> 00:23:21,880
Speaker 1: be a concern going forward, Laurie, I mentioned retail salves.

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00:23:22,000 --> 00:23:24,240
Speaker 1: A negative print may be on Wednesday. A lot of

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00:23:24,240 --> 00:23:26,320
Speaker 1: people agree with you. We're looking for negative zero point

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00:23:26,400 --> 00:23:30,480
Speaker 1: three month on month on the headline number claims the

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00:23:30,520 --> 00:23:32,840
Speaker 1: day after you mentioned claims as well. Claims have been

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00:23:32,840 --> 00:23:34,680
Speaker 1: moving in the wrong direction the last couple of weeks,

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00:23:34,680 --> 00:23:38,439
Speaker 1: As you say, Laura, claims haven't exactly given you a

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00:23:38,440 --> 00:23:41,359
Speaker 1: clear read on where payrolls might go because there's just

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00:23:41,400 --> 00:23:44,040
Speaker 1: been this massive churn in the U. S economy. How

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00:23:44,119 --> 00:23:45,919
Speaker 1: useful do you think that is as an indicator for

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00:23:46,280 --> 00:23:51,520
Speaker 1: what's happening in this economy right now? I think you know,

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00:23:51,600 --> 00:23:53,399
Speaker 1: I always call it in your claims the canary in

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00:23:53,400 --> 00:23:56,160
Speaker 1: the full line. I feel like the direction that it takes,

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00:23:56,200 --> 00:24:00,760
Speaker 1: how fast it moves, really has enormous predictive hour. But

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00:24:01,200 --> 00:24:03,960
Speaker 1: it has been very hard and it's really stymied a

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00:24:03,960 --> 00:24:07,639
Speaker 1: lot of us because you can't draw the claims in

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00:24:07,760 --> 00:24:10,480
Speaker 1: terms of just plugging in as an exogenous factor into

470
00:24:10,560 --> 00:24:14,160
Speaker 1: your model to get the employment number. Has really weakened

471
00:24:14,400 --> 00:24:17,440
Speaker 1: in that regard, So I still think it's important to

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00:24:17,480 --> 00:24:20,960
Speaker 1: watch claims. That number last week really confirmed what we expect,

473
00:24:21,040 --> 00:24:23,240
Speaker 1: which is that, you know, we've seen the mobility data

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00:24:23,280 --> 00:24:27,600
Speaker 1: shrinking a little bit, whether or not communities are imposing

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00:24:27,640 --> 00:24:31,040
Speaker 1: lockdowns or whether people are just selecting to be uh

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00:24:31,160 --> 00:24:34,000
Speaker 1: to stay at home, or either way, you know, we're

477
00:24:34,040 --> 00:24:37,360
Speaker 1: seeing some slowdown and economic activity, you know, in November

478
00:24:37,400 --> 00:24:40,760
Speaker 1: and most likely in December. So I think claims are

479
00:24:40,800 --> 00:24:44,280
Speaker 1: still a critical indicator. But it's just to your point,

480
00:24:44,280 --> 00:24:47,640
Speaker 1: it's making that that monthly payroll forecasts a lot more

481
00:24:47,680 --> 00:24:49,720
Speaker 1: tricky because we're used to using that as a strong

482
00:24:49,720 --> 00:24:52,119
Speaker 1: input and it's kind of been all over there. A

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00:24:52,119 --> 00:24:53,720
Speaker 1: lot of great to catch up to get your thoughts.

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Speaker 1: Always appreciate your time, a lot of right meth Fs Investments,

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00:24:56,800 --> 00:25:01,119
Speaker 1: Chief Economist. Thanks for listening to the Bloomberg Surveillance podcast.

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00:25:01,480 --> 00:25:06,399
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or

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00:25:06,560 --> 00:25:10,879
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom

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00:25:11,000 --> 00:25:14,800
Speaker 1: Keane before the podcast. You can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio