Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
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Speaker 1: pm Eastern Time on the Bloomberg Radio or watch us
Speaker 1: on YouTube search Bloomberg Clovel News Well. A group of
Speaker 1: top vaccine experts meeting today also tomorrow to consider whether
Speaker 1: people who get the COVID nteaen vaccines made my BRAJOURNA
Speaker 1: and J and J should receive booster shots. This is
Speaker 1: continuing to kind of figure out who needs what, right,
Speaker 1: who needs what and web rank. The US FDA is
Speaker 1: going to send Merc's COVID nineteen pill to an advisory
Speaker 1: committee for review, using a public form to discuss any
Speaker 1: safety concerns ahead of a potential authorization. Remember this is treatment,
Speaker 1: so it really could change the game for people who
Speaker 1: are infected with COVID. All right, So that's some of
Speaker 1: the broader, bigger stories. When it comes to COVID nineteen.
Speaker 1: Dr Penny wheel Or is someone we have reached out
Speaker 1: to throughout the pandemic. She's present CEO at the Line
Speaker 1: of Health. They have UM a lot of hospitals, I
Speaker 1: think over ten. I think it's about a dozen in
Speaker 1: the Minnesota area, UM and so they have really a
Speaker 1: front row seat to what's been going in the Midwest
Speaker 1: when it comes to COVID. She's back with us on
Speaker 1: the phone from Minnesota. Dr Wheeler, it is so nice
Speaker 1: to have you back with us um this. You know, COVID.
Speaker 1: I think we all had hoped by now that we've
Speaker 1: been beyond it, UM, but we're not. What's going on
Speaker 1: in the Midwest, well sure, we sure wish we were
Speaker 1: beyond it here. You know. Unfortunately the country as a
Speaker 1: whole is going down from the delta variant, but we
Speaker 1: are still UM peaking here. So it seemed like the
Speaker 1: whole variant and it's infectivity moved north. So we're seeing
Speaker 1: cases here that are exceeding even our our second highest
Speaker 1: peak right now, and the situation has changed because the
Speaker 1: staffing is so vallenge challenging everywhere. So it's it's tough
Speaker 1: going right now. In the words of one doctor that
Speaker 1: I've heard of it just to show you the strain,
Speaker 1: he said, I don't know whether to drive for my
Speaker 1: shift in the e D or to drive into the reservoir.
Speaker 1: It's that it's that taxing for our caregivers who are
Speaker 1: just doing amazing work. Can you give us any numbers
Speaker 1: about what you're seeing in the thirteen hospitals and more
Speaker 1: than ninety clinics with with who's being affected right now,
Speaker 1: who's hospitalized right now, in the portion of those who
Speaker 1: are or not who are not vaccinated? Yeah? Sure, can
Speaker 1: we we uh at a line to take care about
Speaker 1: percent of the people who are hospitalized with COVID in
Speaker 1: our states were pretty good litmus tests. The vast majority
Speaker 1: of the people requiring hospitalization are unvaccinated. Eight percent of
Speaker 1: the people in our i c U s right now. Um,
Speaker 1: you know, intensive care units are unvaccinated, and that's where
Speaker 1: we're seeing the the primary really se your illness and sadly, sadly,
Speaker 1: way too many deaths occurring. So that's still that's still
Speaker 1: the case. Um, so and and again the numbers are
Speaker 1: in this geography still rising rather than falling. What's the
Speaker 1: risk planning or contingency planning that you guys are doing
Speaker 1: in anticipation of another way potentially or a variant that
Speaker 1: trips us up again? Yeah, well certainly, you know, a
Speaker 1: lot of it has to do with cash. How can
Speaker 1: we have adequate staffing available? So a lot of our
Speaker 1: our leaders are taking frontline positions and trying to bolster
Speaker 1: the staffing. We're trying to eliminate things that are unnecessary
Speaker 1: so that we can accommodate the surge we're having. UM.
Speaker 1: We have a centralized access center so it can level load. UM,
Speaker 1: you know, where people can go of one hospitals fold
Speaker 1: and another hospital take it. And we do that actually
Speaker 1: with the whole state of Minnesota and the other health
Speaker 1: systems in the state UM as well. So we're trying
Speaker 1: to do some of those things to accommodate the needs.
Speaker 1: COVID is a big nied but we're also seeing delayed
Speaker 1: care needs of significance all at a time when staffing
Speaker 1: is really challenge. Dr Wheeler help set expectations for what
Speaker 1: things look like, Caroline, I are flying today tonight. It's
Speaker 1: the first time I've gone on a long flight. Your
Speaker 1: first time flying, Caroline, what eighteen months? Yeah, exactly. We're
Speaker 1: gonna be wearing masks throughout the flight at the airport.
Speaker 1: Is this something we're gonna be doing for the rest
Speaker 1: of our lives. Yeah, that's a good question. I wish
Speaker 1: I could predict it. What what has happened is we
Speaker 1: can only kind of see almost two to three weeks
Speaker 1: ahead of us. And beyond that, I mean, I wouldn't
Speaker 1: have predicted this, you know, Um, beyond that, it's really
Speaker 1: hard to predict. I'm I'm. I think that some of
Speaker 1: the rise in the cases are because of school openings,
Speaker 1: and I think that the more vaccinations we can get
Speaker 1: into the pediatric population that will help as well. Um.
Speaker 1: I think we're also realizing that some of what Japan
Speaker 1: did traditionally we probably should do more of in terms
Speaker 1: of masking when we're when we're not well, So some
Speaker 1: of that be savior probably should stay with us to
Speaker 1: keep people safe. It's hard to predict long term. Yeah,
Speaker 1: I've definitely gotten much more comfortable we're wearing a mask.
Speaker 1: I feel like I almost miss it sometimes when I'm
Speaker 1: out and about walking and it's not there. Um, I
Speaker 1: just want to ask you, you guys are transitioning. Uh,
Speaker 1: you're gonna have a new CEO and you're gonna move
Speaker 1: off to I believe the board. Tell us a little
Speaker 1: bit about that transition. Yeah, well, you know, I it's
Speaker 1: these people are so amazing. It's going to be these
Speaker 1: people with what they've accomplished for the CUIs that I
Speaker 1: will miss them most. But I am so grateful for
Speaker 1: the organization. I love to transition it to our chief
Speaker 1: operating officer and President Lisa Shannon, who's just really solid,
Speaker 1: so real smooth transition. Our our employees don't need any
Speaker 1: more disruption than they already have, and that to stay
Speaker 1: on the board and have that continuity is really important
Speaker 1: for us in the communities we serve. Well, it sounds
Speaker 1: like you've been a great leader. I know you guys
Speaker 1: have been had so much stuff to deal with, uh,
Speaker 1: certainly in this and we're not out of it out
Speaker 1: of the wood yet, and we have really leaned on
Speaker 1: you in terms of getting your ps sspective. So thank
Speaker 1: you so much, and uh you take care. Dr Penny Wheeler,
Speaker 1: President and Chief executive Officer at A Line of Health
Speaker 1: on the phone from Minnesota. I do think this is
Speaker 1: just a way of life. It is to some extent. Yeah,
Speaker 1: I think it is too. I mean there's the before
Speaker 1: times in the aftertimes, right. We kind of joke about it,
Speaker 1: but it really is. It's going to be the way
Speaker 1: that we live with it, and I think that we're
Speaker 1: getting more and more used to it. I think that
Speaker 1: kids part of it is is different because there are
Speaker 1: no vaccines yet for many kids, but hopefully getting closer
Speaker 1: to it. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. The
Speaker 1: US initial Joba's claims, we've been talking about it dropping
Speaker 1: to the low since March of time. Prices paid to
Speaker 1: US producers rose in September. We also heard about that
Speaker 1: from Charlie at the slowest pace of the year. And
Speaker 1: what we're seeing, Tim, is cooling costs of services, including
Speaker 1: air fairs as the delta variant impacted demand. So that's
Speaker 1: pretty significant. It is pretty significant to join us to
Speaker 1: help us dig through these numbers and all this data
Speaker 1: is read Picker, US economy reporter at Bloomberg New She
Speaker 1: joins US on the phone from Washington, read it is
Speaker 1: always great to have you on the show. Thanks for
Speaker 1: joining us today. Where do you want to start? Do
Speaker 1: you want to start with initial jobless claims or do
Speaker 1: you want to start with p P I What do
Speaker 1: you think is more important? UM? So they're both important,
Speaker 1: but let's start with claims. UM. So, you know, in
Speaker 1: terms of things for having me on the show, it's
Speaker 1: always fun to be here. UM. In terms of them
Speaker 1: following below three thousand, I mean needs to great news
Speaker 1: all around, especially when you think about the fact of,
Speaker 1: you know, the prependemic level of these claims in what
Speaker 1: was one of the best job markets in years was
Speaker 1: around two hundred and fifteen thousand or so UM a week. UM.
Speaker 1: And I think what it really shows you when we
Speaker 1: think about this labor very confusing labor market that we're in,
Speaker 1: is we're in a jobs market where quaitsret record level,
Speaker 1: turnover is high, and businesses are struggling to fill open positions.
Speaker 1: So you know, employers are very much trying to hold
Speaker 1: onto their workers, and you know, from an inflation perspective,
Speaker 1: we've we've seen that in terms of folks raising wages,
Speaker 1: offering all kinds of incentives and bonuses. UM. But yeah,
Speaker 1: I think the labor market is in a very interesting
Speaker 1: state right now. But the jobless claims figures really point
Speaker 1: us in that direction of things are getting better. I
Speaker 1: just thinking as you're talking about this, read, I'm just
Speaker 1: thinking about Domino's Pizza, the company reporting earnings today and
Speaker 1: saying that it can't get enough people to cook and
Speaker 1: deliver pizzas, which actually hurts sales for the most recent quarter, Carol.
Speaker 1: So this is has a significant economic impact, right. We
Speaker 1: just heard for Penny Wheeler over the line of health healthcare,
Speaker 1: she can't get enough workers. It's just everywhere. Um. But nonetheless,
Speaker 1: this is a better sign when it comes to what
Speaker 1: we've been seeing in the labor market. And this is important,
Speaker 1: right because the jobs market, the monthly jobs markets are
Speaker 1: backward looking, and so this gives us a better better
Speaker 1: feel of real time data. Absolutely, And you know, I
Speaker 1: don't think anyone has a great handle on what's going on. Um.
Speaker 1: But you know one piece that I thought was really
Speaker 1: good today, Uh, Katya Dmitrieva and Jill Shaw actually had
Speaker 1: a really nice Business Week piece, UM that was talking
Speaker 1: about some of the stories of folks who aren't working
Speaker 1: right now and why you know, despite the fact that
Speaker 1: we have these near record job openings. UM. But I
Speaker 1: will say, you know, looking at the silver lining of this,
Speaker 1: I mean, from a worker perspective, you know, we have
Speaker 1: the highest clips right on record, UM, which shows that
Speaker 1: a lot of folks have a lot of confidence that
Speaker 1: they could find a new job, whether that's a job
Speaker 1: that fits their lifestyle, better, has their hours, has better pay, um,
Speaker 1: whatever it may be. UM. And you know we've seen
Speaker 1: pretty robust way games as well as employers try to
Speaker 1: attract these folks. So UM. From a worker perspective, I mean,
Speaker 1: it is a good time to you know, be a worker.
Speaker 1: And from that point of the labor market it's quite
Speaker 1: tight UM, which has you know, obviously had implications for
Speaker 1: the set as well. Let's talk about those other numbers.
Speaker 1: I'm just thinking, is that it gets to be you know,
Speaker 1: I'm hearing this and it's like dominos can't get workers.
Speaker 1: We just heard from the CEO of a line of
Speaker 1: health and we're getting into the end of the year. UM.
Speaker 1: Let's talk producer price index though, and and what we
Speaker 1: learned this morning, the smallest advance UH in quite a
Speaker 1: while read yeah, and you know, in that coming on
Speaker 1: the heels of the CPI data that we got a
Speaker 1: little bit earlier this week, UM, and it was it
Speaker 1: was good news and some ways because we saw some
Speaker 1: of that services inflation cooled down a little bit, UM,
Speaker 1: but we also saw a pretty still pretty robust inflation
Speaker 1: from the good side. UM. And you know, the way
Speaker 1: that I often think about the economy where we are
Speaker 1: right now is we have lower growth and higher inflation
Speaker 1: than many economists were expecting just a few months months ago.
Speaker 1: And you know, in terms of the growth picture, you know,
Speaker 1: we've essentially seen that consumers spinning in the third quarter
Speaker 1: has proven to be much weaker than economists thought a
Speaker 1: few months ago. A large part of that is ELSA,
Speaker 1: but you've also got these massive supply Chaine disruptions that
Speaker 1: are reaking havoc on growth and reaking havoc on PPI,
Speaker 1: the pp I index um as as well as consumer prices. UM.
Speaker 1: I mean, I just think of something like, I assume
Speaker 1: the manufacturing data where you've got solid news new orders growth, right,
Speaker 1: producers can't get the scale of material right they need
Speaker 1: to kill those orders. It's you know, data points that
Speaker 1: investors certainly seem to be pretty happy about Bloomberg News
Speaker 1: US economic reporter read pick it. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. This is among our most read.
Speaker 1: In fact, I think it might still be the most
Speaker 1: read on the Bloomberg in the past eight hours. It's
Speaker 1: also Today's Big Take. It's part of an ongoing Business
Speaker 1: Week online series here at Bloomberg, and this one in
Speaker 1: particular takes a look at how wealthy New Yorkers are
Speaker 1: getting a steel on property taxes. You heard it right, Tim.
Speaker 1: Jason Grotto is senior investigative reporter at Bloomberg. He joins
Speaker 1: us now on the phone from Chicago. Jason, it's great
Speaker 1: to have you on the show. Congratulations to you and
Speaker 1: the rest of the team on today's Big Take. I
Speaker 1: read this story and I thought to myself, you know what,
Speaker 1: it is so true when you look at real estate
Speaker 1: in New York City, there the amount of money that
Speaker 1: so many condos are worth. It is shocking to see
Speaker 1: how low some of the property taxes are. You found
Speaker 1: a two million dollar condo in Brooklyn that only pays
Speaker 1: a hundred and fifty seven dollars a year in property taxes.
Speaker 1: Why is that? Well, first, thanks thanks so much for
Speaker 1: having me. Um. Uh, it's it's the result of the
Speaker 1: system that you know, over the last thirty years or
Speaker 1: so has been you know, added to just become incredibly
Speaker 1: complex and and the low tax though on that particular
Speaker 1: condo is the result of two things. One is the
Speaker 1: extreme undervaluation of condo and and cooperatives of the market
Speaker 1: values that the city comes up with um. And then
Speaker 1: the other is the very generous um exemptions and abatements
Speaker 1: that are provided to certain condos and cooperatives that drive
Speaker 1: the build down even further. Well, and you guys, um
Speaker 1: looked into a ton of city records when it came
Speaker 1: to condo sales and taxes. UM. So tell us in
Speaker 1: terms of your takeaway, is it policy? Is it? It's
Speaker 1: something that just has been not noticed, Like, how does
Speaker 1: something like this perpetuate for so long? Well, yeah, that's right.
Speaker 1: So we ended up analyzing millions of property tax records
Speaker 1: in New York City and found, you know, a consistent pattern,
Speaker 1: first that the city drastically undervalues these properties by the
Speaker 1: magnitude of about and the other um thing that we
Speaker 1: found is that the valuations have a pattern. Lower priced
Speaker 1: properties are overvalued relative to market prices h market values,
Speaker 1: and higher priced ones are undervalues. And so the first
Speaker 1: part of the process, where everyone is overvalued, it really
Speaker 1: obscures the second part, which is known as regressivity. Essentially,
Speaker 1: New York has a regressive property tax system, and the
Speaker 1: low valuations mask that because you know, if I own
Speaker 1: a two dollar home and they're only capturing eighty five
Speaker 1: thousand dollars of my value, I'm thinking, hey, I'm getting
Speaker 1: a good deal. What what I don't know is that
Speaker 1: the person owns a two million dollar home, they're only
Speaker 1: capturing you know, two hundred thousand of that. So you know,
Speaker 1: one might be getting thirty seven of their value captured
Speaker 1: and the higher end property will be getting about and
Speaker 1: that skews the tax bills for the entire city that
Speaker 1: valuation process. Jason, this is one of the stories that
Speaker 1: encourage everyone to read online because there's an interactive element
Speaker 1: to it, and there are some amazing, amazing visuals that
Speaker 1: show on a chart how much a condo is worth
Speaker 1: and the portion of that that they're paying in property
Speaker 1: taxes per year and it's it's pretty mind boggling to
Speaker 1: see and you really have to look at it to
Speaker 1: just understand the magnitude of it. So, what is New
Speaker 1: York City? What a New York State? What do they
Speaker 1: say about this? Because they are leaving money on the table? Yeah, um,
Speaker 1: so we were not granted any interviews with the city
Speaker 1: despite months of trying. Um, you know, what do they
Speaker 1: do about it? You know, it's kind of the big question.
Speaker 1: And the problem here is that this issue has been
Speaker 1: going on for so long that the market itself, the
Speaker 1: real real estate market itself, has incorporated these um skewed
Speaker 1: taxes into actual values that capitalize them. So untangling this
Speaker 1: is going to be a real problem. And that's one
Speaker 1: reason why it hasn't been six in thirty years. There
Speaker 1: have been three mayoral efforts to try to fix the
Speaker 1: property tax system in New York. So people are well
Speaker 1: aware that there's you know, underlying problems. But you know,
Speaker 1: in order to fix it, you're gonna you're talking about
Speaker 1: a massive wealth transfer. Um, people who own really high
Speaker 1: end condos and co ops will be taxed at much
Speaker 1: higher rates, which could impact the value of the property.
Speaker 1: And that in the nutshell is why it's so hard
Speaker 1: to fix. You can't help but feel I have to say,
Speaker 1: we went through recently like a tax reassessment and like
Speaker 1: everybody was like, well wait, what is your property? Like
Speaker 1: how you know? And I feel like as transparency or
Speaker 1: if this data was all put out there and everybody,
Speaker 1: certainly those who are benefiting by not so I want
Speaker 1: that stuff put out there. But if you are being penalized,
Speaker 1: you're gonna be like, well, wait a minute, this isn't fair. Yeah.
Speaker 1: I mean I think you know, first of all, New
Speaker 1: York is not alone in this in these issues. We
Speaker 1: published the story earlier this year looking at this at
Speaker 1: a nationwide level, and we found that that this problem
Speaker 1: of regressivity is inherent in jurisdictions across the country. New
Speaker 1: York is huge and it is particularly bad and kind
Speaker 1: of as New York goes, so it was the rest
Speaker 1: of the country. UM, so we wanted to drill down
Speaker 1: into New York. But you know, the thing that you're
Speaker 1: touching on, the transparency piece is key. If people can't
Speaker 1: see clearly, um, it's it's very hard to understand what's
Speaker 1: going on, what is the relationship between landlords and this policy?
Speaker 1: Because I think to myself, Okay, well New York City
Speaker 1: is a place where a lot of people rent, and
Speaker 1: I wonder to what extent landlords have had favorable tax advantages. Well,
Speaker 1: what we found is that actually the effective tax rate,
Speaker 1: which is really just you know, the property tax of
Speaker 1: bill divided by the value of the market price of
Speaker 1: the property. We found that rental properties actually pay a
Speaker 1: higher effective class rate than condos and condos because that
Speaker 1: was what we studied, but cooperatives are valued the same
Speaker 1: way UM, and and what that means is they're in
Speaker 1: the same what they call tax class. So it's a
Speaker 1: matter of how is the distribution of the property tax burden,
Speaker 1: how is it distributed? And within the tax class, everyone
Speaker 1: should be paying the same effective tax rate. And what
Speaker 1: we found is that UM, condominiums are pay much lower
Speaker 1: effective tax rates UM than rentals. And what that means is,
Speaker 1: you know, to the extent that landlords passed the cost
Speaker 1: of taxes onto their tenants, rents are higher than they
Speaker 1: would be UM. Potentially if if if those taxes were lower,
Speaker 1: court landlords might pocket a lot of that money as well.
Speaker 1: So it's it's a very complex problem, but you know
Speaker 1: what it means is a lot of a lot of
Speaker 1: the burden is being shifted onto rental properties. Yeah, that's interesting.
Speaker 1: It sounds like nothing's going to change. Just got about
Speaker 1: thirty seconds here right at this point. Um, I think
Speaker 1: it's going to be very, very difficult. The political optics
Speaker 1: of it are very bad, and sort of the lessons
Speaker 1: you know that we're writing for a national audience, and
Speaker 1: the lesson is don't let it get this bad. Nothing
Speaker 1: gets people going there like property taxes and in terms
Speaker 1: of are you in taxes in general? Um, Jason, thank you.
Speaker 1: It is an in depth story, and as Tim said,
Speaker 1: check out it online because there's a lot of interactive
Speaker 1: components to it and a lot of information in details. Yeah,
Speaker 1: you can see Jason's story. It's available at Bloomberg and
Speaker 1: at Bloomberg dot com, slash business Week. You can also
Speaker 1: get to it on the blue Berg terminal. All you
Speaker 1: gotta do is type in an I big take or
Speaker 1: just a big take. Jason Grotto, He's senior investigative reporter
Speaker 1: EP Bloomberg News, joining us on the phone from Chicago.
Speaker 1: I'm ro macro journal now, but you let me drive no, no, no,
Speaker 1: no home honey, please, I'll do the right drivel I
Speaker 1: want to drive drive by good question trying this is
Speaker 1: the drive to the globe. Give me thanks, we'll try
Speaker 1: us down on Bloomberg Radio. So just about time, minutes
Speaker 1: left and today's trading session, getting ready to wrap up
Speaker 1: the Thursday trade. We are hovering near our highs, as
Speaker 1: you just heard from Charlie, just off of them. But
Speaker 1: nonetheless a rally underway. Earnings a big reason why we're
Speaker 1: gonna get into that economic data too. But let's break
Speaker 1: it down. Let's get to the drive to the close
Speaker 1: with Bloomberg News Markets reporter Abigail Doolittle. She is on
Speaker 1: the phone in our New York City bureau. It is
Speaker 1: definitely a risk on trade and it's broad based in
Speaker 1: terms of the rally, it certainly is, Carol. We're looking
Speaker 1: at the best day for the SMP five. Charlie was
Speaker 1: mentioning up one point six percent since March. The nasdack
Speaker 1: also up the same amount. That's the best day since May.
Speaker 1: So that's the degree of the buying power and speaking
Speaker 1: to the broad based nature of the rally, all eleven
Speaker 1: of the SMP five hundred sectors are higher, most by
Speaker 1: about one percent or more. The best is Materials up
Speaker 1: two point. That has everything to do with the rally
Speaker 1: and medals Materials and then Tech, and that has a
Speaker 1: lot to do with the fact that yielder down yet
Speaker 1: another day, relieving valuation concerns. So it's a really nice
Speaker 1: day for stocks for sure. Hey, Abigail, I'll talk a
Speaker 1: little bit about the socks the Philadelphia Semiconductor Index because
Speaker 1: it is having a day at one point higher by
Speaker 1: more than two point four percent and uh and at
Speaker 1: one point there were no stocks in the socks in
Speaker 1: the red. You know, this is an interesting one um
Speaker 1: for Shure Tim from the standpoint that the socks similar
Speaker 1: to the Russell two thousand, that small cap index in
Speaker 1: recent days has been testing its two day moving average,
Speaker 1: something that the other indexes have not done. H that's
Speaker 1: long term support, the long term buyers, and yet it's
Speaker 1: tip to day moving averages rounding down, telling you that
Speaker 1: the near term buyers are not around. The dip buyers
Speaker 1: are gone. But today you have the socks right in between.
Speaker 1: This is a range we're seeing ranges on other indexes
Speaker 1: to and a range is all about information or all
Speaker 1: about uncertainty. Folks are waiting for more information and I
Speaker 1: believe that will probably gather more information on a micro
Speaker 1: level from the earnings reports. Everybody wants to know not
Speaker 1: so much about demand, but about you know, supply margins, uh,
Speaker 1: the supply chains. And then of course rates, are rates
Speaker 1: going higher? Are they going lower? And forgive me the
Speaker 1: socks higher by more than two point eight per cents?
Speaker 1: As so, were you just talking about the socks? Are
Speaker 1: the sp the socks with the fifty day You said
Speaker 1: the trend line has been moving lower. Correct, Well, they're
Speaker 1: both very similar. Um. The difference between the socks and
Speaker 1: the SMP five hundred. The socks has been in a
Speaker 1: range for much of the year, so it's been testing
Speaker 1: that too inter day moving average, whereas the SMP five
Speaker 1: hundred is between the one hundred and fifty day moving average.
Speaker 1: But the same idea. These range bound treating areas where
Speaker 1: investors just don't know, the buyers don't have enough information
Speaker 1: to create new all time highs yet, and the sellers
Speaker 1: don't feel confident enough to push these indexes lower. If
Speaker 1: the fifty day moving averages are sloping to the downside. Uh.
Speaker 1: Some technicians really consider that to seek to be an
Speaker 1: early sign of potential weakness. Well, that's what I was
Speaker 1: going to ask you. I mean, bottom line healthy move
Speaker 1: that we're seeing today, reactive moved. What can you tell
Speaker 1: from those technicals and the internals right now? Great question, Carrol.
Speaker 1: It's probably a little bit more reactive until you have
Speaker 1: a break out of the range. The range is exciting
Speaker 1: in terms of these up and down moves. Each week.
Speaker 1: It seems to be up and right down and then
Speaker 1: up and down and grabs a lot of attention. But
Speaker 1: the thing you really want to watch is to see
Speaker 1: which way the range breaks. And we just don't know.
Speaker 1: We're right in the middle. It's going to come down
Speaker 1: to earnings and it will come down to inflation and rates.
Speaker 1: You know, it's interesting. I'm just I've got I think
Speaker 1: a six month up on the SMP five hundred and
Speaker 1: for a long time, even though as we pulled back,
Speaker 1: it was like this almost steady line to the up
Speaker 1: side until we got to what was it like rolling
Speaker 1: over in August and then it's really been choppy. So
Speaker 1: the one thing we know for certain is that there's
Speaker 1: more volatility in this market. For sure. Volatility breeds volatility,
Speaker 1: and that's a terrific point on the SMP five hundred.
Speaker 1: That uptrend had been beautiful for such a long time, right,
Speaker 1: so clean and now more holding that fifty day moving
Speaker 1: average time after time after time, telling those dip buyers
Speaker 1: were there. But over the last three months, slowly but surely,
Speaker 1: the index has been rolling over a little bit, not
Speaker 1: a lot, but it's flattening. And when you have a
Speaker 1: flattening market, it breaks the uptrend sugge. Seeing that there's
Speaker 1: enough uncertainty that you could see some sort of a
Speaker 1: correction if the buyers really don't step in, particularly after
Speaker 1: such a huge rally. You know, the SMP five hundred,
Speaker 1: like many of the other indexes from the March lows
Speaker 1: of a double to the peak or even more than
Speaker 1: a double. I mean, that's a that's a pretty significant
Speaker 1: statement that you could have these indexes going up so much.
Speaker 1: So just a little bit of cooling off on again
Speaker 1: the micro wondering what will these earnings reports uh come out?
Speaker 1: And the supply chain. You know, there's this great chart
Speaker 1: that we've been passing around here today and yesterday. Uh.
Speaker 1: I love when ned do that and you pass around
Speaker 1: char I say that with love because I love charts
Speaker 1: to it's a fun thing to do. And this one's
Speaker 1: especially great. It's not even a technical analysis start, it's
Speaker 1: showing that in the year of one more than three
Speaker 1: thousand mentions of supply chain have happened on earnings calls,
Speaker 1: and previous years it's much closer to one thousands. So
Speaker 1: that's the degree of the constraint coming out of the pandemic.
Speaker 1: And the big question is what does it mean for
Speaker 1: outlooks on what does it mean for margins? That's probably
Speaker 1: the big piece of what this range in all these
Speaker 1: indexes represents right now, uncertainty about you know, our company
Speaker 1: is going to be able to continue to put up
Speaker 1: big results while their outlooks um be strong. And then
Speaker 1: going back to the inflation and the rates question too,
Speaker 1: of course, it is Abigail pretty remarkable to hear what
Speaker 1: executives from the biggest banks are saying about the economy.
Speaker 1: Brian winnahand just now with David Weston saying that Bank
Speaker 1: of America's activity levels now bigger than before the pandemic,
Speaker 1: projects US economic growth round five the next quarter, that
Speaker 1: people have money to spend, balances up. How is this
Speaker 1: setting the tone before we can expect from other companies
Speaker 1: and look full caveat here Dave Wilson reminding me that
Speaker 1: you know, these banks are not waiting for products that
Speaker 1: are on ships off the Port of Long Beach in
Speaker 1: Los Angeles. Yeah, that's an interesting point. I would certainly
Speaker 1: agree with Dave on that. In the way that I
Speaker 1: would think about it is it's very queer that all
Speaker 1: of the Fed liquidity and Central Bank liquidity and support
Speaker 1: out of the pandemic has certainly helped Wall Street. But
Speaker 1: will it continue to help Main Street? We just don't know,
Speaker 1: and if we continue to have these supply chain issues
Speaker 1: and labor issues. I mean Domino's Pizza today. Initially when
Speaker 1: their report came out, they missed sales, and the thought
Speaker 1: was that had to do with not as much interest
Speaker 1: in pizza because of the pandemic, pizza fatigue. Basically am
Speaker 1: there was like, no way, I love my pizza. I
Speaker 1: love pizza too, I love white pizza, but I actually
Speaker 1: love Domino's cheesy break Oh learning a lot about the chartress. Yes,
Speaker 1: so we have a little bit of a Domino's habit.
Speaker 1: But in any case, they miss sales not because of demand,
Speaker 1: but because of labor. They didn't have enough people to
Speaker 1: take the orders and deliver the pizza. Yeah, we see
Speaker 1: that in other sort of retail stores of all thorces
Speaker 1: a crisis, That's what I say. Hey, we gotta run great,
Speaker 1: great perspective. Bloomberg News Markets Reporter Abigail Doolittle. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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