Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane
Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
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Speaker 1: Chad joins us. Now, I kind of a security has
Speaker 1: had a macro strategy. Pizza. What a couple of weeks
Speaker 1: this has been. Are you leaning into this, leaning into
Speaker 1: some of the euphoria that we can all fail. Yeah,
Speaker 1: I'm a little bit cautious. I think we have to
Speaker 1: make it through Testa's inclusion. I think a lot of
Speaker 1: this band aid stimulus has already been priced in, So
Speaker 1: I'm leaning into a little bit and I still really
Speaker 1: expect a big rotation where they have not stocks do well,
Speaker 1: because next year I expect stimulus, but I expect, you know,
Speaker 1: proper stimulus where we really focus on job creation, where
Speaker 1: we're gonna get a big bang for the buck, may
Speaker 1: be involved in a structure bank at public private. So
Speaker 1: I view this current stimulus it's nice, but it's nowhere
Speaker 1: near sufficient for what we need to get real economic growth. Well,
Speaker 1: let's get the policy coal right first, and then we
Speaker 1: can get to the market code. The policy code this
Speaker 1: year has just been the only code to get right,
Speaker 1: and then you've absolutely now the rest of it lated
Speaker 1: to risk. The policy call. You called this an aid,
Speaker 1: band aid patriots n night billion. What's on offer today?
Speaker 1: Is that a band aid? These days? Unfortunately it is.
Speaker 1: As we're shutting down more and more businesses, I think
Speaker 1: you have to make sure those people receive some sort
Speaker 1: of compensation. So this is more just to keep things going.
Speaker 1: And as I see it, and we're not seeing true
Speaker 1: economic spending where we're going to get real growth. We're
Speaker 1: not seeing enough spending towards rebuilding, manufacturing, fixing some of
Speaker 1: our infrastructure, making sure we catch up and surpass other
Speaker 1: countries on five G technology. So that's what I expect
Speaker 1: to happen next year, and that's where we'll get the
Speaker 1: real boost. This for now, I think is really just
Speaker 1: covering up the problems that are coming from this resurgence
Speaker 1: and COVID cases. Covering put the problems. Is that enough
Speaker 1: to justify the rally that we've seen on the heels
Speaker 1: of expected support financially from Washington, d C and potentially
Speaker 1: the end of the pandemic at some point next year. Yeah,
Speaker 1: I think we're reasonably priced. I think the market's kind
Speaker 1: of figured out the pandemic. We have to make it
Speaker 1: through this struggle right now, but ultimately, with vaccines and
Speaker 1: treatments and everything improving, we will get through. At some
Speaker 1: point next year, the economis will look very good. And
Speaker 1: that's why again, even today, you're starting to see some
Speaker 1: of the you know, small caps value stocks continue to
Speaker 1: outperform big tech as this belief sinks in that, hey,
Speaker 1: we will have something that resembles a normal economy. It
Speaker 1: won't be worked from home necessarily, it won't be going
Speaker 1: back to the office. But there's a lot going on.
Speaker 1: There's a lot of reason for optimism. There will be
Speaker 1: ongoing Central Bank support. I think the Treasury Department will
Speaker 1: work well with the Fed. So I don't think we're
Speaker 1: miss priced. I just think we're doing for a little
Speaker 1: pull back, especially surrounding this Tesla inclusion in the SMP,
Speaker 1: which occurs at the closed Friday. Okay, so we'll get
Speaker 1: to Tesla perhaps, But I'm wondering about Airbnb and door
Speaker 1: Dad and some of these other I p o s
Speaker 1: that are coming out with valuations that are reminiscent of
Speaker 1: the tech bubble. I mean, the idea that they doubled
Speaker 1: in price. Does it give you a feeling of froth
Speaker 1: or is this also reasonably valued? You know? I think
Speaker 1: that's typical for these sorts of very hot I p
Speaker 1: o s where you don't necessarily want to squeeze every
Speaker 1: last sign out. You're only releasing a small number of shares,
Speaker 1: so it sounds like the company maybe left money on
Speaker 1: the table, but the bulk of their shares are still
Speaker 1: kind of held in reserve that they can issue going forward.
Speaker 1: So I'm not worried about that. I think there's been
Speaker 1: a lot of you know, hyperactive trading. We do see
Speaker 1: a lot of these small accounts participating. Whether these prices
Speaker 1: all last or not, it's a little bit you know,
Speaker 1: up in the air. Um Again, I think this is
Speaker 1: really going to depend on what we get in terms
Speaker 1: of policy next year, and partly what we haven't talked
Speaker 1: about is the negative potential or policy. Does do we
Speaker 1: see tax increases again, especially at the corporate level, and
Speaker 1: then some of these valuations might look a little bit
Speaker 1: more frothy. Pitch think that comes on the type of
Speaker 1: that conversation at some point twenty one. You know, we've
Speaker 1: been looking at this market as we think Congress and
Speaker 1: the Senate and the President are going to try and
Speaker 1: address the you know, everyone's been talking about this K
Speaker 1: shape recovery, that downward slope with a K. I think
Speaker 1: that gets addressed, right, and that's all good. That's the positive,
Speaker 1: that's the stimulus. The question is that upward slope with
Speaker 1: a K. Do they do something to punish that? Do
Speaker 1: they say, hey, you've been really successful, so we want
Speaker 1: to take something away from you, or do they let
Speaker 1: that slide. I think for the economy it's probably indifferent
Speaker 1: From markets, it's much better if they let it slide.
Speaker 1: I think a lot will hinge on that Georgia election
Speaker 1: January five, paid it for you. Is that when you
Speaker 1: start to establish what your year out look really looks
Speaker 1: like after that event? Yeah. I think right now we've
Speaker 1: got a base case of we're gonna get some decent
Speaker 1: amount of stimulus because I think the Republicans are on board.
Speaker 1: They kind of failed to get any sort of stimulus done, which,
Speaker 1: you know, of all the things I would have expected
Speaker 1: President Trump to be good at, it was building things
Speaker 1: we did not get any infrastructure done. So I think
Speaker 1: some level that's gonna be done regardless of the outcome.
Speaker 1: I think the outcome is gonna switch how much so
Speaker 1: if the Democrats one was the more spending, I also
Speaker 1: expected to switch the mix. So we'll see a much
Speaker 1: bigger environmental and sustainability focus if the Democrats win the Senate,
Speaker 1: I think less so if the Republicans retain the Senate. So,
Speaker 1: given all this fiscal support that you're expecting and fiscal
Speaker 1: stimulus actual stimulus next year, treasury yields, are we going
Speaker 1: to see them above one percent? How high can they
Speaker 1: possibly get? No, I think we get them above one
Speaker 1: percent fairly quickly. I'm kind of in the near term
Speaker 1: called the next few weeks, thinking we're between one and
Speaker 1: one and a quarter. I think it's hard to get
Speaker 1: much above even one fifty. I think the Federal Reserve
Speaker 1: will work very closely with the Treasury Department to control
Speaker 1: any rise. And again, markets I think will be fine
Speaker 1: if we see a rising treasury yield, so just as
Speaker 1: long as it's not a rapidly rising treasury yield. So again,
Speaker 1: to me, that would really help these small economies, those cyclicals,
Speaker 1: and probably less helpful for some of the big large
Speaker 1: tech fowls. Yelling and pal work in hand in hand
Speaker 1: PA a chair granted catch ups, pitt a chair of
Speaker 1: Academy Securities pay their thanks for everything each year as well,
Speaker 1: have a fantastic Christmas. If we don't talk again, put
Speaker 1: a chair their Meconomy Securities on this market. Bran Weinstein
Speaker 1: joined us now Morgan Stanley had a global fixed income. Brian,
Speaker 1: let's talk about the other event of the week. I'm
Speaker 1: not even sure that Brexit is the top of the
Speaker 1: list for many people. This Wednesday is the Federal Reserve decision.
Speaker 1: What are you looking for from the feed this Wednesday? Yeah,
Speaker 1: good morning, Jonathan, and good move on on breakfit rather
Speaker 1: not talking about that, so that will be interesting. I mean,
Speaker 1: we think it's a real close call, um, you know,
Speaker 1: fifty fifty, which is not I know it times we
Speaker 1: get caught out. But at the end of the day
Speaker 1: we think they probably won't go for for moving the
Speaker 1: the extension of the buying um, better to savor for later.
Speaker 1: If breads rise, better to savor for dry powder took
Speaker 1: to the world. We'll probably get some stimulus the equally
Speaker 1: markets doing great break evenings are keeping higher. I think
Speaker 1: they'll give us some language. I think they're going to
Speaker 1: try to link more closely um to the average inflation target,
Speaker 1: remind us they're not going to raise rates. There's a
Speaker 1: couple of things that they could do to tell us
Speaker 1: maybe when they'll look at this extension of of of
Speaker 1: the buying, the average maturity of the buying. But it's
Speaker 1: a close call. They could do it. I don't think
Speaker 1: it's a huge deal if they don't, as long as
Speaker 1: they give us some language and rates probably keep creeping higher. Well, Brian,
Speaker 1: you mentioned Brake Eaven's inflation expectations creeping higher. Do you
Speaker 1: think that could be the green light phenomenal yields to
Speaker 1: start to pick up through one percent, maybe towards your
Speaker 1: targets through twenty one? Yeah, yeah, I think I think
Speaker 1: that they could move higher. I mean three. Yeah, the
Speaker 1: three seems a while away, um, but getting tenure notes
Speaker 1: into the one percent range I think is a very
Speaker 1: likely outcome. Do you look across the world of Australia
Speaker 1: New Zealand, for example, We've seen raids start to creep
Speaker 1: higher there even though the central banks have stayed dubbish. Um,
Speaker 1: it just at some point isn't enough anymore and the
Speaker 1: markets get rested us when you see growth, when you
Speaker 1: see break evens. I think stimulus would be the last
Speaker 1: piece of that in the US. Remember, we need stimulus, right,
Speaker 1: the output gap is still big. We still need growth
Speaker 1: in twenty two to upset the lack of growth this year.
Speaker 1: Um So stimulus would be a big piece of getting
Speaker 1: rates higher, along with the stead not being aggressive on
Speaker 1: extending their purchases. So let's talk about the consequences of
Speaker 1: additional quantitative easing purchases, additional purchases by the Federal Reserve
Speaker 1: of Treasuries and other central banks around the world. I
Speaker 1: know Morgan Stanley has a forecast about two point eight
Speaker 1: trillion dollars of bond purchases or as a purchases by
Speaker 1: the major central banks next year. How much of that
Speaker 1: has already been priced into riskier debt versus yet to
Speaker 1: be really factored in. That's a great question, and one
Speaker 1: and one that we struggled with a lot. There's no
Speaker 1: question that a lot of has been priced in, right,
Speaker 1: we've we've I mean, how is stimulus not priced in?
Speaker 1: How is the vaccine not priced in? But the market
Speaker 1: still enjoys when the when these events happen UM and lesten,
Speaker 1: I think it's done well and we do get the growth.
Speaker 1: There's a reason to believe that this can continue. So
Speaker 1: it's hard to look at risk assets and said that
Speaker 1: none of this is known. The question I think is
Speaker 1: which risk assets does this help the most? And so
Speaker 1: when you look at treasuries and you look at investment
Speaker 1: grade credit where the most help was given, that's probably
Speaker 1: where the least upside is. When you look at the
Speaker 1: high old markets, the loan markets, the equity market UM,
Speaker 1: some of the emerging markets on anything that benefage more
Speaker 1: weaker dollar UM. There are many many things that that
Speaker 1: you can still have great outcomes in UM. You just
Speaker 1: have to have some of these actual actually come to fruition.
Speaker 1: So a lot of investment managers come on the show
Speaker 1: and they say, well, it's time to pick particular bonds
Speaker 1: and not necessarily indexes. And other people will say they're
Speaker 1: talking their book because their active managers. Is this going
Speaker 1: to be a specific bond, specific company story where you
Speaker 1: end up with certain defaults and others that do just fine,
Speaker 1: or is this still an index story still a big
Speaker 1: macro beta play on just more QUEUEI and more risk on.
Speaker 1: As an active manager, we do like picking on and
Speaker 1: certainly this has been a good year for for industries.
Speaker 1: Although listen, it's been a great year for for some
Speaker 1: stock pickers, right, some of those certain UM tech stocks
Speaker 1: and things like that advent tremendously well away from the
Speaker 1: industries UM. But yes, I think if you stay in
Speaker 1: this world, whereas I said, treasuries and investment great credit
Speaker 1: have done the heavy lifting UM, and you're going to
Speaker 1: go into these markets. Now, it's harder to buy an
Speaker 1: e M index. It's it's not as smart to buy
Speaker 1: a high yield index. There are lots of active things
Speaker 1: that you should be doing in sectors that you should
Speaker 1: be avoiding UM. So you know, the data play is
Speaker 1: probably UM towards the tail, and now some of the
Speaker 1: bigger winners here will be more actively selected based on
Speaker 1: the outcomes of where the stimulus goes UM, Which EM
Speaker 1: countries are stronger, which EM corporative that are balance sheets,
Speaker 1: Those things should matter more now that the data rally
Speaker 1: is is at least mostly played out. Bran, let's just
Speaker 1: wrap things up there. I think it's really important to
Speaker 1: that word avoid that you just used a lot of
Speaker 1: people come on shows like this at the moment talking
Speaker 1: about embracing cyclicality, any cyclicality, any cyclical aitiaes of this
Speaker 1: market brand that you would avoid, you know, big thing.
Speaker 1: To me, it's a lot harder because the cyclical nature.
Speaker 1: It's just it's just a bit less cyclical. Um. I
Speaker 1: think when I want, when I stay avoid some of
Speaker 1: the things in data. When we look at the at
Speaker 1: the high high yield markets, we think there's still be
Speaker 1: plenty of default right. We still have the energy problems
Speaker 1: working through the system in a m there are still
Speaker 1: plenty of countries um where where that matters and where
Speaker 1: where stimulus is not getting to those countries and they
Speaker 1: can't do it because of their balance sheet. So I think, no,
Speaker 1: I don't think there's anything in BIX income as a
Speaker 1: as a sector that you need to avoid. I do
Speaker 1: think it's much more micro, which makes it a little
Speaker 1: bit harder to to go into in detail. Brown putting
Speaker 1: into hear from you as always Brown Wainstein their moment, Stanley,
Speaker 1: thank you sir. The vaccinations begin this week. It is
Speaker 1: a massive moment in the United States and joining us
Speaker 1: now is Dr Joseph Catcher ascensioned Chief Medical Officer, Doctor,
Speaker 1: fantastic to get you with us on the program. Let's
Speaker 1: just start first up, have you got the vaccine in house?
Speaker 1: And talk me through how big this week is? Is
Speaker 1: a big week nine months of of what we've been
Speaker 1: dealing with and what the public has been dealing with it.
Speaker 1: We're very excited our of the vaccines, how are arriving
Speaker 1: today on our many of our hospitals. We have a
Speaker 1: hundred and fifty hospitals across twenty states and are we
Speaker 1: and just state vaccine deliveries today And we've been preparing
Speaker 1: for that for the last eight weeks. We've had teams
Speaker 1: working every day on the logistics and um and delivery
Speaker 1: of the vaccine. So we're really excited about this. We
Speaker 1: feel this is the way to get us on the
Speaker 1: other side of the pandemic. Well, how that's the case? Doctor,
Speaker 1: When you look at the rollout, it's pretty clear to
Speaker 1: everyone frontline workers the most at risk in society. First,
Speaker 1: the decisions on who to give it to in house
Speaker 1: first doctor, in the initial rollout the first few weeks,
Speaker 1: is that difficult? How do you come around making those
Speaker 1: kind of calls? You know, we we really have strongly
Speaker 1: encouraged our employees to UM to get the vaccine UM,
Speaker 1: and our employees are stepping up just like they have
Speaker 1: through the entire pandemic and are volunteering. We obviously can't
Speaker 1: vaccinate everybody in a single unit in the same day,
Speaker 1: so frankly, we're just asking people to schedule their vaccine
Speaker 1: with us, and we are managing that scheduling process just
Speaker 1: like we want any other appointment. Our frontline workers are
Speaker 1: really the hospital workers. Both nurses are, respiratory therapist, patient
Speaker 1: care text. Those are the people that were prioritizing, and
Speaker 1: critical care nurses in particular, which really have bear a
Speaker 1: huge part of the brunt of this, as well as
Speaker 1: the respiratory therapists and patient care text We we really
Speaker 1: want to get them vaccinated early UM, and so we're
Speaker 1: prioritizing that group. Our frontline physicians are also very important.
Speaker 1: Our critical care specialists are infectious disease specialists or polenologists.
Speaker 1: We were just we're very excited for ways and really
Speaker 1: strongly encouraging them to get the vaccines. Dr Coketona, It's
Speaker 1: interesting how the initial rollout will be viewed as a
Speaker 1: template for the further and more extensive rollout that is
Speaker 1: expected perhaps in the first half of next year. How
Speaker 1: complicated is it logistically given the cold temperatures that you
Speaker 1: have to keep the vaccine in addition to some of
Speaker 1: the other just typical vaccine logistical issues. You know, it's
Speaker 1: um it is a challenge. You know, we have to
Speaker 1: store between minus sixty and minus a d degrees. We
Speaker 1: have to be prepared to receive the vaccines cold from Viser. UM.
Speaker 1: I will say that Fiser. I've been on logistics calls
Speaker 1: with the Visor folks. They've done an incredible job orchestrating
Speaker 1: this since I'm very uh impressed at the way Fiser
Speaker 1: has approached us. It has, uh it has posed a problem.
Speaker 1: We've had to go out and get a bunch of freezers,
Speaker 1: some of those where we can't get freezers. Visor has
Speaker 1: made it so that the shipping boxes that they come
Speaker 1: and can be recharged with dry ice and we can
Speaker 1: store them in the shipping containers. So I think they
Speaker 1: have done an incredible job doing that and providing us
Speaker 1: backup plans in case freezer uh freezers were unavailable. As
Speaker 1: you can imagine, it was hard to the number of
Speaker 1: freezers that we need for health system our size. We're
Speaker 1: getting there, but we're not quite there yet, which raises
Speaker 1: a question about who pays for all of the extra
Speaker 1: equipment that's required in order to roll this out in
Speaker 1: effective way. I know there has been some money appropriated
Speaker 1: that has not yet been passed in Washington, d C.
Speaker 1: Beyond your particular organization, a sense in hospitals and health
Speaker 1: care facilities, is this going to be expensive? Who is
Speaker 1: going to pay for it at the end of the day,
Speaker 1: you know, as part of our health system. You know,
Speaker 1: our CEO told us at the beginning, take care of
Speaker 1: our associates, take care of our patients, and worry less
Speaker 1: about the economics. Uh and a global pandemic like this,
Speaker 1: with the number of people that have been affected by
Speaker 1: this and the number of lives lost, we have put
Speaker 1: our our patients and our associates first. And as for
Speaker 1: that reason, UM, we haven't thought about that as much.
Speaker 1: It is something that weighs on our mind over the
Speaker 1: long haul, but for the short term, we're really focused
Speaker 1: on delivering this vaccine and UM and for us, we're
Speaker 1: paying for it. You know, the government has provided us
Speaker 1: Care to Act funding, but we are paying for it
Speaker 1: out of ascension and this is part of a a normal
Speaker 1: business for us. Their technologies to come up all the
Speaker 1: time that we have to pay for before somebody actually
Speaker 1: reimburses us. So this is just part of a normal
Speaker 1: business for us. And um, you know, our commitment to
Speaker 1: this is overwhelming, to say the least. So just before
Speaker 1: we let you run, I think a massive issue over
Speaker 1: the last nine months, you know, has been compliance around
Speaker 1: social distancing, mosque wearing, et cetera. It's not just about
Speaker 1: the first vaccination. You've got to get to come back.
Speaker 1: They've got to come back for the second, the second hit.
Speaker 1: It's going to be hard enough to get people to
Speaker 1: step up for the first one. Can you walk me
Speaker 1: through the kind of techniques the marketing around this that
Speaker 1: you think is effective that you'd like to say in
Speaker 1: the coming months. Yeah, it's really about education, education, education,
Speaker 1: you know, and we have significant issues in um, some
Speaker 1: of our populations that have trust issues. UM, you know,
Speaker 1: we have the Black African American population, Hispanic population that
Speaker 1: have trust issues with the medical community. We have to
Speaker 1: continue to educate, we have to be culturally sensitive, we
Speaker 1: have to use our leaders are our Hispanic leaders and
Speaker 1: our Black African American leaders to actually help educate those
Speaker 1: populations to give them the trust to get this vaccine,
Speaker 1: because it's a very important The more vulnerable you are
Speaker 1: to illness, the more the sicker you are um, the
Speaker 1: more likely this vaccine is to help you. Uh, And
Speaker 1: so we have to get that message out. It's going
Speaker 1: to be about education, education, education, And I just want
Speaker 1: emphasize one of the things, you know, as part of
Speaker 1: this whole thing we've been we've been absorbed with with COVID,
Speaker 1: but there is a secondary pandemic that's out there right now,
Speaker 1: and that is people are avoiding care, avoiding coming to
Speaker 1: our hospital. We're strongly encouraging people only to seek the vaccine,
Speaker 1: but also to continue to seek care for other medical donta.
Speaker 1: We would love to continue the conversation with you through
Speaker 1: the next couple of weeks and the next several months
Speaker 1: this rollout and really picks up to catch on that.
Speaker 1: Thank you very much joining us now as low to
Speaker 1: rite FS Investments chief economist Allow, right, if you could
Speaker 1: build on that, that that would be fantastic what you're looking
Speaker 1: for this Wednesday. Yeah, you know, so, I agree. I
Speaker 1: think you know they've talked about wanting to do something
Speaker 1: fairly soon. I think they are going to try to
Speaker 1: be more specific about locking in those forward expectations and
Speaker 1: continued financial market support and economic support. I think something
Speaker 1: that we really forget is if we look back at
Speaker 1: prior expansions. We don't know when this recession is going
Speaker 1: to end, but if you kind of look back ann
Speaker 1: and they one two thousand one, the FED was actively
Speaker 1: cutting interest rates in the first eighteen months of those expansions,
Speaker 1: Like they are really used to actively supporting an economy
Speaker 1: as we're coming out of a recession. And I don't
Speaker 1: think it's a it's a you know, it's not a coincidence.
Speaker 1: If you look back in two thousand and nine, interest
Speaker 1: rates towards zero, you know, puts them in a sticky
Speaker 1: spot where they can't really you know, do that traditional support.
Speaker 1: So the most active quantitative easy that we really got
Speaker 1: was two thousand eleven and two thousand thirteen, Like that
Speaker 1: is just a sign of how, you know, years into
Speaker 1: the expansion, they were still having to support our economy.
Speaker 1: So I really think obviously very different recessions, very different
Speaker 1: expansions I would expect, But the point is that they
Speaker 1: are really gearing markets up for the idea that they
Speaker 1: are going to have to be accommodating them for years
Speaker 1: to come. And I think Mike's point is important. Markets
Speaker 1: love to look for a change, They to be forward looking,
Speaker 1: and you know, they're not worried about changing expectations right
Speaker 1: now the rate hike. They're worried about those five year
Speaker 1: forward expectations and any kind of YO curb st deepening.
Speaker 1: They want to make sure to sit on that. Laura,
Speaker 1: this is a really important point, the idea that the
Speaker 1: FED is run out of a lot of ammunition, given
Speaker 1: where rates are, given how much money has already been
Speaker 1: pumped into the system by their monetary policies. Are you
Speaker 1: suggesting that based on where they are, based on their ammunition,
Speaker 1: they're not being easy enough that they're not necessarily increased
Speaker 1: their increasing their purchases enough to support the expansion as
Speaker 1: they have in the past, just based on where we
Speaker 1: are and how receptive the market is to their measures
Speaker 1: at Lisa, That's that's a tricky question because it goes
Speaker 1: both ways, like what more can they do? I mean,
Speaker 1: I think they have actively said now they're they're all
Speaker 1: really squawking when Venusians trying to shut down the main
Speaker 1: street lending facility. You know, I think they would acknowledge
Speaker 1: that they want to do more and that they really
Speaker 1: are upset that some of those pathways to impact the
Speaker 1: economy directly might be taken away. You know, I think
Speaker 1: they feel very comfortable that they can help financial conditions.
Speaker 1: The question is what that's really doing for the main
Speaker 1: street economy. So um that I think that's really the issue.
Speaker 1: But absolutely I think they will argue that they need
Speaker 1: to be doing more, They want to be doing more,
Speaker 1: and that you know, as to your point, they kind
Speaker 1: of run out of traditional mechanisms, so you know, how
Speaker 1: creative can they get? They are really pushing the envelope.
Speaker 1: In the meantime, you're flicking at the economy and the
Speaker 1: hurt that's currently out there. We're gonna be getting retail
Speaker 1: sales later this week, as John was talking about in
Speaker 1: the unemployment UH filings as well on Thursday. What are
Speaker 1: you looking for? How close our way to a double
Speaker 1: dip versus the expansion that people are already pricing in.
Speaker 1: I think we're pretty close. Uh. And again that's a
Speaker 1: typical during you know, longer downturns that we get you know,
Speaker 1: sub quarters the rise sub quarters fall as certainly don't
Speaker 1: think it's going to be another que two. But you know,
Speaker 1: think about you know, we were so used to looking
Speaker 1: at seasonally adjusted data, we forget that when it's not
Speaker 1: seasonally just in so much spending activity and hiring takes
Speaker 1: place in this holiday period, so we're already seeing claims
Speaker 1: move in the other direction. We're seeing, um, you know,
Speaker 1: we've already seen auto sales down in November, so I
Speaker 1: think we're gonna see a decline in November retail sales
Speaker 1: and December. I think, you know, you can really get
Speaker 1: some pain just inflicted upon the fact that normally seasonal
Speaker 1: hiring is you know, plus five million in December when
Speaker 1: it comes to you know, retail facilities and holiday shopping.
Speaker 1: So the December numbers could, just because of technical reasons,
Speaker 1: look pretty ugly. So I think it's you know, whether
Speaker 1: quarterly GDP you end up splitting it across to orders,
Speaker 1: you don't actually get into negative territory. We have a
Speaker 1: resilient consumer, resilient businesses. Those are that's the best that
Speaker 1: we can hope for to power us through when I
Speaker 1: think it's really a tricky time for the economy. But
Speaker 1: when you look at hiring. You know you're seeing those
Speaker 1: permanent layoffs increase. I think that's a that's going to
Speaker 1: be a concern going forward, Laurie, I mentioned retail salves.
Speaker 1: A negative print may be on Wednesday. A lot of
Speaker 1: people agree with you. We're looking for negative zero point
Speaker 1: three month on month on the headline number claims the
Speaker 1: day after you mentioned claims as well. Claims have been
Speaker 1: moving in the wrong direction the last couple of weeks,
Speaker 1: As you say, Laura, claims haven't exactly given you a
Speaker 1: clear read on where payrolls might go because there's just
Speaker 1: been this massive churn in the U. S economy. How
Speaker 1: useful do you think that is as an indicator for
Speaker 1: what's happening in this economy right now? I think you know,
Speaker 1: I always call it in your claims the canary in
Speaker 1: the full line. I feel like the direction that it takes,
Speaker 1: how fast it moves, really has enormous predictive hour. But
Speaker 1: it has been very hard and it's really stymied a
Speaker 1: lot of us because you can't draw the claims in
Speaker 1: terms of just plugging in as an exogenous factor into
Speaker 1: your model to get the employment number. Has really weakened
Speaker 1: in that regard, So I still think it's important to
Speaker 1: watch claims. That number last week really confirmed what we expect,
Speaker 1: which is that, you know, we've seen the mobility data
Speaker 1: shrinking a little bit, whether or not communities are imposing
Speaker 1: lockdowns or whether people are just selecting to be uh
Speaker 1: to stay at home, or either way, you know, we're
Speaker 1: seeing some slowdown and economic activity, you know, in November
Speaker 1: and most likely in December. So I think claims are
Speaker 1: still a critical indicator. But it's just to your point,
Speaker 1: it's making that that monthly payroll forecasts a lot more
Speaker 1: tricky because we're used to using that as a strong
Speaker 1: input and it's kind of been all over there. A
Speaker 1: lot of great to catch up to get your thoughts.
Speaker 1: Always appreciate your time, a lot of right meth Fs Investments,
Speaker 1: Chief Economist. Thanks for listening to the Bloomberg Surveillance podcast.
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