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

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot com,

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Speaker 1: and of course on the Bloomberg terminal. There are these

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Speaker 1: large financial institutions and Alison Williams joins us. Now, Alison,

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Speaker 1: I figured out today the City Group's revenues three thirty

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Speaker 1: four million a day. That often yeah, okay, I did

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Speaker 1: some fancy yeah you know, you taught me the f

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Speaker 1: A function, and uh, you know it's They're ginormous. And

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Speaker 1: what I saw Allison Williams in their view for two

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Speaker 1: thousand twenty two is page fourteen, which is a layout

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Speaker 1: of their technology to come. How does any buddy and

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Speaker 1: banking compete with Lorie Beer in twelve billion dollars a

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Speaker 1: year in technology? Well, and I think that the big

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Speaker 1: number of seventies seven billion for next year from JP

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Speaker 1: Morgan is even more significant. And and the way they're

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Speaker 1: competing is they're spending. And I thought that, um, you know,

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Speaker 1: the JP Morgan call is going on now. But Jamie

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Speaker 1: Diamonds sort of finished up last quarter by saying, we're

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Speaker 1: going to spend whatever it takes to compete with all

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Speaker 1: these folks in our space. And I think the numbers

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Speaker 1: today are showing that they are committed to doing that.

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Speaker 1: I think that's might be a reason why people are

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Speaker 1: reacting negatively in the short term. But I think, you know,

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Speaker 1: the not just the articulated commitment, but seeing it in

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Speaker 1: the numbers like that shows you that they are going to, um,

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Speaker 1: you know, focus on building their positions, defending their positions.

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Speaker 1: Allison talked to us about loan growth out there. UM,

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Speaker 1: I know that's one of the key issues you and

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Speaker 1: your bank colleagues were focusing on this quarter. What we've

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Speaker 1: seen from some of the big banks so far looks

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Speaker 1: about in line. I think Bank America will be the

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Speaker 1: interesting one next week because they're they've been sort of

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Speaker 1: the more bullish one, and the commercial side of things

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Speaker 1: is really where we're getting the lift, and I think

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Speaker 1: where we're sort of the most bullish on the card

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Speaker 1: side of things. You know, payments still continue to be

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Speaker 1: elevated and people are spending, so consumers are healthy. It's

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Speaker 1: just that they have money in their pockets to pay

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Speaker 1: off those balances. So I think that's that's great for

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Speaker 1: the economy. It's great for the credit outlook for banks, UM.

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Speaker 1: But less borrowing means less interesting come related to that

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Speaker 1: bar what's the sweat factor on traditional credit cards? I mean,

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Speaker 1: there's like a firm and they're doing something with Amazon

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Speaker 1: and you know all this stuff better than me, Allison,

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Speaker 1: But like the are the big banks worried about the

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Speaker 1: end of charge cards or they're like, so what? I

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Speaker 1: think the big banks are aware of by things like

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Speaker 1: by now pay later, and you know they have competing products,

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Speaker 1: but I would argue that, you know, the distribution at

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Speaker 1: point of sale UM is obviously what's given the big

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Speaker 1: lift to that product. So I think it is something

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Speaker 1: that they're watching. I would keep in mind that it's

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Speaker 1: it's still very small in the scheme of things, UM

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Speaker 1: so growing very rapidly. But you know, so if you

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Speaker 1: go from one percent share of a market to two

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Speaker 1: percent share of a market, UM, you know, that's small

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Speaker 1: for the person that owns the lion share of that market,

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Speaker 1: but for that fast grow where they're doubling their revenue, right, So, UM,

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Speaker 1: I think it is something that um As I said,

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Speaker 1: the banks are aware of their not completely dismissing it.

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Speaker 1: And I think that goes to um as I said,

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Speaker 1: sort of the higher spending and and the focus. That's

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Speaker 1: that's what's different. I think that this time around, if

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Speaker 1: we looked back to sort of the evolution of the internet,

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Speaker 1: you know, way long ago. Uh, I think, you know,

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Speaker 1: initially banks were very dismissive of that, and then they

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Speaker 1: sort of saw the progress and they saw um, they

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Speaker 1: saw sort of things chip away at things that they

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Speaker 1: could have done themselves. And they're they're much more aware

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Speaker 1: and committed this time to making sure that they stay competitive. Alison,

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Speaker 1: how are my friends on the trading desk doing this

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Speaker 1: quarter of the equity desk, the fixed income desk, the commodities,

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Speaker 1: How are they doing? Because they had such a rip

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Speaker 1: roaring they did, and I think they're doing fine. Um.

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Speaker 1: You know, trading came in a little bit weaker than expected,

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Speaker 1: but but I would I would say it's fine, especially

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Speaker 1: you know last you know four Q twenty, as you said,

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Speaker 1: was was exceptionally strong. But the big winners are your

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Speaker 1: friends in the investment banking department, especially the M and

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Speaker 1: A bankers. Fees super strong, um coming in even better

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Speaker 1: than expected. Uh, there's momentum I think carrying through at

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Speaker 1: the moment of you know, we watched the environment um.

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Speaker 1: A big spike in volatility would be the biggest risk

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Speaker 1: to disrupting that. Obviously, any correction to ask A prices

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Speaker 1: might might hamper that. But but for now things are

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Speaker 1: strong and you know that's leading to the higher compensation

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Speaker 1: cost that you know, the war for talent and that's awesome.

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Speaker 1: Left too expensive. Saw that phrase on top livel of

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Speaker 1: Ellison Williams on here soon work about that. That's awesome

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Speaker 1: coming Memorial Day, but it's serious, Elison Williams, thank you

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Speaker 1: so much and goodbye. We get perspective from Scott Clemen's

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Speaker 1: chief investment strategist at Brown Brothers Hareman. Scott, you know,

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Speaker 1: it sort of felt like a year so far and

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Speaker 1: maybe it's at least a quarter here in the first

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Speaker 1: fourteen fifteen days of the year. Have you changed your

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Speaker 1: outlook since twee No, I don't think so, Tom. I

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Speaker 1: think what we've seen in the first handful of weeks

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Speaker 1: of this year, if anything, is a microcosm of how

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Speaker 1: the year is likely to unfold. If anything. The surprise

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Speaker 1: in one was the relative lack of market volatility. We

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Speaker 1: only have seven trading sessions last year in which the

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Speaker 1: SMP five index moved by two percent or more up

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Speaker 1: or down in either direction, and usually in a given

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Speaker 1: a year we have about twenty days like that. So

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Speaker 1: we're cautioning our clients they, given all the transitions taking place,

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Speaker 1: and we could talk about that for the rest of

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Speaker 1: the day, that there is likely to be more market

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Speaker 1: volatility in two. That may be a risk, that may

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Speaker 1: be disruptive and anxiety inducing. It's also an opportunity as

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Speaker 1: well for investors. How do you use it that as

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Speaker 1: an opportunity, Scott Well, Really, when you get that dislocation

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Speaker 1: between price and value is what a discipline, long term

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Speaker 1: patient investor can exploit. And what that really is is

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Speaker 1: not so much knowing something more than the market or

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Speaker 1: knowing something more than another trader. It's having a different

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Speaker 1: time frame for making that investment. So if you see

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Speaker 1: a company stumble in the near term of your confident

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Speaker 1: in the long term fundamental value direction of the business,

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Speaker 1: that near term stumble, maybe a near term EPs miss,

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Speaker 1: a product thiss, whatever it may be, is more of

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Speaker 1: an opportunity than it is a threat. So I want

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Speaker 1: to go to the story of the moment. As the

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Speaker 1: banks this morning, they're just killing it. Yet today the

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Speaker 1: stoke performance more than ten percent based self through in

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Speaker 1: the morning. Some people am willing to chase this. What

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Speaker 1: advice do you give them, uh, Jonathan, to take the

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Speaker 1: same kind of long term approach. This is an environment

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Speaker 1: which ought to be better and better for banks. Banks

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Speaker 1: are certainly undervalued relative to where they've been over a

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Speaker 1: long run. Higher interest rates ought to be beneficial for banks.

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Speaker 1: But as you and chnologist reported on City Bank the

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Speaker 1: City Group, there are a lot of moving parts within

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Speaker 1: the banks, be the regulatory or be they a market

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Speaker 1: environment where the revenues are coming from higher costs of

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Speaker 1: employment when they can get back to offices, etcetera, etcetera, etcetera.

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Speaker 1: So it is an environment which is going to be

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Speaker 1: a great deal of holatility. I'd stay focused on the

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Speaker 1: longer term. Well focusing on the longer term though, and

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Speaker 1: this really goes to the heart of the moment, which

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Speaker 1: is what is being priced in from an interest rate perspective,

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Speaker 1: from a way to increased perspective, how do you determine

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Speaker 1: that to decide whether or not to say City Group

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Speaker 1: down three having a really rough time of it over

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Speaker 1: the last twelve months relative to other banks, let's go.

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Speaker 1: I think the the the interest rate environment is probably

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Speaker 1: the most important economic backdrop over the course of this year,

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Speaker 1: and it's really important. This is a subtle nuance, but

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Speaker 1: it's an important one. The important thing for markets, the

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Speaker 1: important thing for banks in particular, is not that interest

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Speaker 1: rates are rising, but why they're rising. And that's admittedly subjective,

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Speaker 1: and the push and pull and markets, even on a

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Speaker 1: day to day, hour to hour basis, might be precisely that,

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Speaker 1: on one hand, of interest rates are rising because people

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Speaker 1: are more confident in the economic outlook, the durability of

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Speaker 1: the labor market, the sustainability of corporate earnings, etcetera, etcetera.

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Speaker 1: That's a benign backdrop in which banks can do well,

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Speaker 1: in which the market can do well. If, on the

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Speaker 1: other hand, the market concludes that interest rates are rising

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Speaker 1: because the FED has lost a grip on inflation and

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Speaker 1: they're behind the curve and you're rushing to catch up,

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Speaker 1: that's a rather negative or rather disruptive outlook. And I

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Speaker 1: think there's gonna be a lot of push and pull

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Speaker 1: back and forth on that as the year unfolds, we

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Speaker 1: even see that to my earlier comment to Tom as

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Speaker 1: a microposit within individual training sessions, I'm confident that when

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Speaker 1: all is said and done, this transition of economic leadership

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Speaker 1: away from policy support, government support, monetary policy back to

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Speaker 1: the more traditional fundamental drivers of economic activity household spending

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Speaker 1: to name the most important one, that will take place.

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Speaker 1: But it is not a straight line between here and there.

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Speaker 1: Let's thank you, sir as always skilled clements that the

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Speaker 1: chief investment strategist at Brand Brothers Harriman, we get perspective

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Speaker 1: now and from Dana Peterson, chief economists at the Conference Board,

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Speaker 1: this is an important conversation and with a conference boards

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Speaker 1: heritage of looking at the American consumer, go beneath the

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Speaker 1: headline data. Dana, what is the American consumer telling you? Well,

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Speaker 1: I think the American consumer is telling us that December

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Speaker 1: was a really rough month. But let's think about this.

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Speaker 1: When we look at October sales, they were really strong,

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Speaker 1: so lots of people probably accelerated their holiday shopping. In fact,

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Speaker 1: I went and bought all my toys in October UM,

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Speaker 1: but we also had empty shelves and let's not forget omicron.

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Speaker 1: It was a huge issue during December and many people

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Speaker 1: probably were uh just not out there shopping because they

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Speaker 1: were afraid of getting sick or they were getting sick

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Speaker 1: in fact um. And indeed, we wouldn't be surprised if

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Speaker 1: consumer confidence in January comes off from what we saw

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Speaker 1: in December. But again that's a big function of omicron. Dana.

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Speaker 1: The first point that you made empty shelves, how much

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Speaker 1: is this a supply chain disruption story? And I just

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Speaker 1: frankly supply story. If there wasn't the inventory to sell, well,

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Speaker 1: I think it all factors in if you can't if

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Speaker 1: there's no inventory, you can't clearly buy anything. And so

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Speaker 1: we really need to watch metrics that tell us what's

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Speaker 1: going on with inventories. And certainly when we look at

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Speaker 1: other private measures, we didn't see some improvement in terms

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Speaker 1: of of the movement of goods. But again arm across

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Speaker 1: is a big issue, certainly in foreign goods that we're

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Speaker 1: importing are challenged by zero COVID policies abroad, and then

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Speaker 1: also even just getting things two shelves, um, we still

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Speaker 1: have this huge backlog of ships uh takerships with with

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Speaker 1: things that can't be unloaded, and even once they're unloaded, um,

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Speaker 1: we can't get it to the stores because truckers are

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Speaker 1: in short supply. One Bloomberg Blue viewer rights in and

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Speaker 1: says have four kids, Santa had a rough time finding

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Speaker 1: at things, so talking about how Santa is pursuing it

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Speaker 1: from exactly the UK when I got over that same thing,

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Speaker 1: I said chains are tougher and shuff online and it

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Speaker 1: was intill. Sorry. Well, I'm sure that that will that

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Speaker 1: will read really well across the family and baby Charlie.

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Speaker 1: But there is an issue with if December was bad

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Speaker 1: because of amacron, we haven't even peaked in the United

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Speaker 1: States yet. When it comes to the virus, how bad

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Speaker 1: is January could have pay well, certainly we could see

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Speaker 1: some poor numbers in January, and at the conference board,

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Speaker 1: we've already factored in a pretty weak first quarter, looking

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Speaker 1: at two point two percent growth, which is pretty similar

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Speaker 1: to what we saw in the third quarter, um with

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Speaker 1: the delta variant. But you know, we're coming off a

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Speaker 1: very strong quarter in general. Fourth quarter probably looked pretty good.

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Speaker 1: We're gonna see a sad second first quarter this year,

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Speaker 1: but then the second quarter should pick up as we

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Speaker 1: get beyond AMCRON and certainly as in person services reopen

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Speaker 1: and people can go out there and enjoy their lives.

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Speaker 1: Dana a World Health organization as amicrons starting in South

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Speaker 1: Africa and to go north to Botswana A November two

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Speaker 1: thousand twenty one. You guys on the high ground on

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Speaker 1: this does a conference board see like charge card dynamics,

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Speaker 1: in entry dynamics into stores that really changed in December?

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Speaker 1: Is there actual granular evidence of what we all felt, Well,

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Speaker 1: we don't actually try that data, but um, I think that,

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Speaker 1: you know, certainly the retail sales are reflecting what happened

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Speaker 1: on the ground again for the reasons that that we've

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Speaker 1: all been discussing. And you know. The good news though,

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Speaker 1: is that in December, consumers were still kind of optimistic

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Speaker 1: in terms of the future. They were still thinking that

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Speaker 1: they're going to go on vacation within the next six months.

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Speaker 1: They're looking to buy cars, appliances, clothing, you know, all

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Speaker 1: that great stuff. And certainly, um, as Lisa mentioned earlier,

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Speaker 1: consumers have the capacity to spend. Many people are working,

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Speaker 1: people still have savings from the stimulus checks, Household balance

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Speaker 1: sheets are in good shape, and so once we get

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Speaker 1: past the omicron issue, which may be short lived. Certainly,

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Speaker 1: as we saw in South Africa came in strong and

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Speaker 1: then faded pretty quickly. We should probably get back to

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Speaker 1: an environment where consumers feel comfortable spending. Dina, thank you

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Speaker 1: as always to respond to that big down side surprise

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Speaker 1: on retail. Sus Diana Pattison at the conference, Bolt, Oh,

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Speaker 1: you know, I was out with the plague, and you know,

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Speaker 1: Mrs Kame was really upset, and she goes, you know

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Speaker 1: that were that rash on your face? I mean, what

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Speaker 1: is that? And I said, you know, I said, well,

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Speaker 1: you know, it's a case of lepto critosis. Um. She

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Speaker 1: said lepto critosis. And I said, yeah, it's a bad,

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Speaker 1: bad case of lepto critosis. And so I said, get

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Speaker 1: Ash ellen care. So we're gonna talk to Ash ellen

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Speaker 1: car right now about lepto critosis. Leptocretosis, folks, it's not

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Speaker 1: what between your toenails. Lepto Critosis is when the markets

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Speaker 1: are out of whack and the distribution is different of

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Speaker 1: whatever is going on, and the tails get flatter fatter,

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Speaker 1: I should say. And you that's where you hear about

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Speaker 1: this phrase fat tails, which is quite talk. We talked

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Speaker 1: to ash Allen Carro can translate this right now as

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Speaker 1: the dispersion of what's out there, the cacophony of noise.

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Speaker 1: We're seeing a crown and everything else. Has that created

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Speaker 1: fatter tails with greater potential risk? Yes? Uh? Why why?

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Speaker 1: I am familiar with liptocaturus. I'm not exactly sure I

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Speaker 1: know how to spell it, but you're exactly right, Like,

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Speaker 1: you have a lot of tail risk in the system now,

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Speaker 1: and that tail risk can take one of two forms.

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Speaker 1: It can be left tail risk, which is that bad tale,

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Speaker 1: um or it could be a right tail risk, which

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Speaker 1: is that good tale. And it really rests on the

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Speaker 1: notion that everyone is focused on today of whether or

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Speaker 1: not the US FED can strike that right balance between

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Speaker 1: fighting inflation yet keeping growth intact. And if you're a

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Speaker 1: betting man, um, and I am a betting man, the

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Speaker 1: history is pretty bad. The track record is a FED

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Speaker 1: striking that right balance is really really really bad. They

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Speaker 1: just never has able been They've never been able to

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Speaker 1: historically do to really balance that cause and effect correctly. Um. So, naturally,

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Speaker 1: that's the worry on everyone's mind that the days of

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Speaker 1: free money are coming to an end Um, the FED

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Speaker 1: is going to increase borrowing costs in an economy which

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Speaker 1: is fragile. UM. And today you saw retail sales numbers UM.

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Speaker 1: You hear JP Morrigan's earnings report, UM that things aren't

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Speaker 1: looking that good. Um. Is it a one time blip maybe,

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Speaker 1: but it's something we have to pay attention to. And

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Speaker 1: if they can strike that balance, then a right tail

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Speaker 1: can unfold. Um. The FED is able to contain inflation

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Speaker 1: which is killing people purchasing power um, and you could

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Speaker 1: see consumption increase. UM. You could see UH credit continue

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Speaker 1: to flow, you could see people take on leverage, an

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Speaker 1: equity market shoot up. Another just we're just doing this

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Speaker 1: for ash because we want to dazzle Im paul I

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Speaker 1: went to the Bloomberg and looked at JP Morgan done

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Speaker 1: ten dollars, having a difficult morning. JP Morgan down to

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Speaker 1: two standard deviations of where it's been is down five

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Speaker 1: point seven percent rounded out six percent from here from

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Speaker 1: where we are right now, from where it was in

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Speaker 1: the top band of standard deviation. It's a correction move.

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Speaker 1: We would have to go down eleven percent from where

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Speaker 1: we were to really show the bottom of a two

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Speaker 1: standard deviation truth, nobody cares. I'm just doing it the

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Speaker 1: dazzle Ash well, you know, Ash with the m I

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Speaker 1: T He's got a PhD from U C. L A.

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Speaker 1: I think he knows standard deviations. You know, he's okay

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Speaker 1: with that stuff. Ash. A lot of your portfolio managers

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Speaker 1: and your analysts and Janice probably haven't really had a

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Speaker 1: lot of experience in a rising interest rate environment. What

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Speaker 1: are you suggesting to them as they think about the

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Speaker 1: next question? Great question, UM that this is a completely

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Speaker 1: new regime, but it's a regime which is already priced in.

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Speaker 1: So what you have to realize markets are efficient. The

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Speaker 1: markets today are pricing in about two hundred or two

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Speaker 1: increases in the overnight rate over the next two years.

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Speaker 1: That's already being priced in. UM. That's exactly the same

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Speaker 1: pace of the interest rate hikes that Powell and team

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Speaker 1: UM underwent in two thousand seventeen. So the key question

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Speaker 1: is are they going to hike faster and increase rates

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Speaker 1: faster than what's already priced? Who knows that the baseline

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Speaker 1: is a pretty aggressive baseline. I personally believe it's not

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Speaker 1: going to happen because we're entering a completely new post.

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Speaker 1: UM pandemic economy. UM. That economy is a new economy

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Speaker 1: UM characterized by remote working, characterized the characterized by the

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Speaker 1: rise of the suburbs. Character is buy a new endemic

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Speaker 1: to add to the seasonal flu. So you have to

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Speaker 1: realize the baseline is pretty aggressive. Nevertheless, if they do

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Speaker 1: hike faster than that brace line, because inflation pressures really

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Speaker 1: need to get into check, what should you do, UM, Well, naturally,

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Speaker 1: as rates rise, fixed income holders are going to sell

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Speaker 1: out of fixed income and look for other ways to

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Speaker 1: capture yield. So think about high divided yielding stocks. That's

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Speaker 1: a good rotational play. UM. Think about that left tail

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Speaker 1: risks or those tail risks TOM that you articulated to.

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Speaker 1: How do you hedge those tail rifts? The big tail

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Speaker 1: downside tail risk to the system is an increase in

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Speaker 1: real rates, so they sell off. We see an interest

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Speaker 1: rates over the past couple of weeks, it's all due

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Speaker 1: to the real rate increasing. So heads your real rates.

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Speaker 1: Think about buying options on put options on tips UM

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Speaker 1: to to hedge that left tail risk, which is not

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Speaker 1: not just a left tail risk to tips, it's a

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Speaker 1: left tail risk to all risky asset. You know one

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Speaker 1: thing that concerns me. Hear in Paul Sweete is an

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Speaker 1: old equity guy where he talks about yields up. Nobody cares.

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Speaker 1: It's about price. Are we in a bond bear market?

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Speaker 1: Or can you predict a bond bear market? Of our

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Speaker 1: listeners have never been in It's hard. I don't think

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Speaker 1: we're in a bond bear market. Um. I do believe

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Speaker 1: that the feds hiking schedule is going to be gradual. Um,

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Speaker 1: it's very unlikely they're going to hike more than what

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Speaker 1: is it eight times over the next two years. So

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Speaker 1: if they stay on course, that should be a non

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Speaker 1: event um in terms of fixed income rates. But it

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Speaker 1: can be actually a meaningful and significant event when it

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Speaker 1: comes to equities because you likely will see a shift

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Speaker 1: of your nominal interest rate being more real rate and

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Speaker 1: less inflation. And more real rate is bad because at

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Speaker 1: the end of the day, your pe ratio, which is

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Speaker 1: a real ratio, right, prices are nominal, earnings are nominal,

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Speaker 1: your real rate rises. This fantastic p expansion which tons

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Speaker 1: of people have made tons of money off of, you

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Speaker 1: start to compress. I mean, this is good. We gotta

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Speaker 1: leave it their ash, We gotta you gotta Could you

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Speaker 1: make a note kill? Can we get ashback on? I

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Speaker 1: think we need to. I think the snow is pretty

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Speaker 1: good out there in Denver. Ye, listen to you. You're

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Speaker 1: trying to get the ski trip. Yes, we get a

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Speaker 1: weekend brief from Andrew Pecks. He's professor of Rologists and

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Speaker 1: Therapists for the Keen Dining Room table joins us today

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Speaker 1: from Johns Hopkins and the Bloomberg School. There. Andy, this

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Speaker 1: came up last night at the table. What's after a macron?

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Speaker 1: What is after this variant? Well, you know, it's hard

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Speaker 1: to predict exact what's going to happen with the with

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Speaker 1: these variants were we can say with pretty good certainty

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Speaker 1: that there will be more variants coming down the pipeline.

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Speaker 1: But we really think that, you know, all Macron was

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Speaker 1: a tremendous challenge to the current vaccines and the treatment regimens.

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Speaker 1: And if we can handle all Macron, which in many

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Speaker 1: ways when it comes to hospitalizations and the rates of hospitalizations,

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Speaker 1: we are we probably are going to be in a

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Speaker 1: good place to be able to deal with other surges

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Speaker 1: and be able to limit them in the future. Where

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Speaker 1: did Delta go? Delta is still around a little bit.

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Speaker 1: We have a few people here in the hospital that

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Speaker 1: are infected with Delta. Delta is at very low levels

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Speaker 1: across the country, maybe ten percent of sequences. But all

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Speaker 1: Macron has really come in and outpaced Delta and really

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Speaker 1: become the dominant virus and an incredibly fast period of time. Andy,

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Speaker 1: we're talking about economic momentum in the face of the

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Speaker 1: A macron up swaying, and we've been talking about when

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Speaker 1: we can expect it to be over. I'm curious about

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Speaker 1: what you've observed about a five day isolation period, as

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Speaker 1: the CDC guidance lays out as well as now the

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Speaker 1: United Kingdom, is that proven to be the effective amount

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Speaker 1: of time that people are contagious after which they can

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Speaker 1: go back into circulation. The problem is is a very nuanced,

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Speaker 1: good question. There is some data suggesting that if you've

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Speaker 1: been vaccinated that after five days um you are very

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Speaker 1: unlikely to be infectious. But all of that data was

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Speaker 1: was generated with variants other than a macron, and we

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Speaker 1: already know from some of the testing procedures some of

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Speaker 1: the transmission of all macron that it's doing things a

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Speaker 1: little bit differently than previous variants. So many scientists, including myself,

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Speaker 1: really wanted to hear that five day incubation period ended

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Speaker 1: with a negative antigen tests, because that would have really

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Speaker 1: been strong evidence that you would be very unlikely to

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Speaker 1: spread the virus if you went back to the work place.

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Speaker 1: And although with other variants I would have said fine,

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Speaker 1: but with a Macron things are a little different. Andy

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Speaker 1: Tom started the conversation off saying, what comes after a Macron?

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Speaker 1: And we're talking about bank earnings, We're talking about the

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Speaker 1: return to work plans that were put on hold as

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Speaker 1: we deal with this latest variant. What will return to work,

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Speaker 1: return to party, return to restaurant look like once we

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Speaker 1: are back to an endemic phase of this virus rather

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Speaker 1: than pandemic. Well, if there's any bit of a silver

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Speaker 1: lining right now, it's, Uh, it's it's becoming clear that

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Speaker 1: if you've been vaccinated and you get an O Macron infection,

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Speaker 1: your immune response afterwards is not only tremendously high, but

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Speaker 1: it's also very broad, meaning that it recognizes all these

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Speaker 1: previous variants that have come through. So there's suggestive data

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Speaker 1: right now, uh, indicating that people who have gotten through

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Speaker 1: this Amicron surge may end up with a really strong

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Speaker 1: immune response. Afterwards, it's going to provide even more protection

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Speaker 1: against whatever the next variant is. And if that's true,

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Speaker 1: that could be a returning point in turn of in

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Speaker 1: terms of dealing with this as as a pandemic versus

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Speaker 1: something seasonal like influenza. Dr Pecrows, thank you so much

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Speaker 1: for joining us today with JOHNS Hopkins at University. This

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Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us

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Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on

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Speaker 1: the terminal. I'm Tom Keene and this is Bloomberg