WEBVTT - Oil Soars on Biden Comments, US Services Activity Expands 0:00:02.480 --> 0:00:09.160 Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 0:00:09.200 --> 0:00:13.360 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:13.400 --> 0:00:16.360 Eastern on Apple Car playing Android Auto with the Bloomberg 0:00:16.440 --> 0:00:19.759 Business App. Listen on demand wherever you get your podcasts, 0:00:19.960 --> 0:00:22.360 or watch us live on YouTube. 0:00:23.600 --> 0:00:23.840 Again. 0:00:23.880 --> 0:00:26.040 We've been calling out crude oil Brent crude oil up 0:00:26.040 --> 0:00:29.200 three point nine percent today, seventy six dollars seventy seven cents, 0:00:29.240 --> 0:00:31.400 big big move hire over the last several days to 0:00:31.520 --> 0:00:34.360 the Mid East tensions. Here Daboca Krishna Kumar Joints, so 0:00:34.400 --> 0:00:38.000 she's a Bloomberg Oil Markets reporter. Debica, thanks so much 0:00:38.040 --> 0:00:41.040 for joining us. What's the latest that's moving markets today? 0:00:42.560 --> 0:00:46.000 Hi, thanks for having me today. The big question now 0:00:46.120 --> 0:00:51.200 is whether Israel's retort to Israel to Ron's missile strikes 0:00:51.200 --> 0:00:55.360 will involve oil targets or not. We just had moments 0:00:55.360 --> 0:01:01.680 ago comments from President Biden saying that that's currently being discussed. 0:01:01.840 --> 0:01:01.960 Now. 0:01:02.000 --> 0:01:06.920 The market's obviously on edge because oil infrastructure is critical 0:01:07.880 --> 0:01:11.080 when it comes to determining supply and demand going forward. 0:01:11.760 --> 0:01:15.440 Iran produces over three million barrels a day, so any 0:01:15.600 --> 0:01:21.119 attack on their main export facilities or energy infrastructure could 0:01:21.120 --> 0:01:24.040 have significant ripple effects across the market, which is why 0:01:24.040 --> 0:01:26.840 we're seeing now prices rise for a third straight day, 0:01:26.920 --> 0:01:29.120 because markets are very much on edge about how this 0:01:29.200 --> 0:01:29.920 is going to play out. 0:01:30.160 --> 0:01:32.119 And just looking at your reporting, you side a City 0:01:32.160 --> 0:01:35.280 Group analyst saying that a major strike could take one 0:01:35.319 --> 0:01:37.959 and a half million barrels of daily supply off the market, 0:01:38.160 --> 0:01:41.640 whereas a minor infrastructure strike on downstream assets would be 0:01:41.680 --> 0:01:44.160 closer to three hundred thousand to four hundred and fifty 0:01:44.200 --> 0:01:47.080 thousand barrels a day of output. He just put that 0:01:47.120 --> 0:01:50.680 into context and what that means for the energy space 0:01:50.680 --> 0:01:51.400 and for oil. 0:01:52.560 --> 0:01:55.920 Yeah, yeah, of course, we are actually in an interesting 0:01:55.960 --> 0:01:59.160 market right now because some people like to call it 0:01:59.480 --> 0:02:03.280 an artificial prop up because OPEC members and allies are 0:02:03.320 --> 0:02:06.840 basically curtailing production. They were supposed to return supplies to 0:02:06.880 --> 0:02:09.520 the market in October, but they took a look at 0:02:09.520 --> 0:02:12.600 the market and how demand was looking kind of shaky 0:02:12.639 --> 0:02:16.280 because of questions about economic growth in the US and China, 0:02:16.600 --> 0:02:19.200 the two biggest economies in the world, and they thought, well, 0:02:19.240 --> 0:02:21.880 maybe we should pause and maybe we should kind of 0:02:22.040 --> 0:02:25.400 rethink returning supplies to the market. So now the current 0:02:25.440 --> 0:02:27.720 plan is to return supplies to the market in December. 0:02:28.560 --> 0:02:31.000 So in the market looks at this broadly, the reason 0:02:31.000 --> 0:02:34.000 we're not actually seeing more talk about one hundred dollars 0:02:34.040 --> 0:02:38.080 oil or an insane spike in prices is because the 0:02:38.160 --> 0:02:42.280 market is where that OPEC members like Saudi Arabia, UAE 0:02:42.520 --> 0:02:46.000 other Middle Eastern producers could quickly bring on supplies should 0:02:46.040 --> 0:02:50.600 we face a major shortage. And obviously there's also the 0:02:50.639 --> 0:02:53.000 sense that you know, we need we need to understand 0:02:53.000 --> 0:02:55.839 how demand's going to play out. There's still worries about 0:02:55.880 --> 0:02:59.280 the economy, both in the US and China, and bear 0:02:59.320 --> 0:03:01.800 in mind China is actually a big buyer of Iranian 0:03:02.040 --> 0:03:06.760 CREWD so even if we had, even if this doesn't 0:03:06.760 --> 0:03:12.480 descend into further missile strikes an all out war, we 0:03:12.600 --> 0:03:17.520 might see more tighter economic sanctions, and that's kind of 0:03:18.000 --> 0:03:20.120 interesting to see. It'll be interesting to see how that 0:03:20.160 --> 0:03:24.280 plays out as well, because it's you could only target 0:03:24.360 --> 0:03:28.079 financial components of that trade, and that may not necessarily 0:03:28.200 --> 0:03:32.040 result in loss of supply. So in the broad context 0:03:32.040 --> 0:03:35.120 of things, there are several moving parts here, and the 0:03:35.160 --> 0:03:39.040 market really needs to understand how each component is going 0:03:39.080 --> 0:03:42.600 to play out. And it's happening in real time, which 0:03:42.600 --> 0:03:44.600 is why we're seeing the volatility and prices. 0:03:45.040 --> 0:03:47.160 Devika, thank you so much for your reporting. Really appreciate 0:03:47.200 --> 0:03:49.600 getting a few minutes of your time. Devica Krishna Kumar. 0:03:50.200 --> 0:03:52.360 She is part of the team that covers a global 0:03:52.480 --> 0:03:55.240 crude oil for Bloomberg News and they have a good 0:03:55.440 --> 0:03:57.160 reporting out this morning. To check it out on the 0:03:57.160 --> 0:04:00.559 Bloomberg Terminal and on Bloomberg dot Com. 0:04:01.600 --> 0:04:05.480 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:05.560 --> 0:04:09.080 weekdays at ten am Eastern on applecar Play and Android 0:04:09.120 --> 0:04:11.880 Auto with the Bloomberg Business app. You can also listen 0:04:12.000 --> 0:04:15.120 live on Amazon Alexa from our flagship New York station. 0:04:15.480 --> 0:04:18.239 Just say Alexa play Bloomberg eleven thirty. 0:04:19.640 --> 0:04:20.200 I'm Paul Swing. 0:04:20.240 --> 0:04:22.280 You're live here on our Bloomberg Interactive Broker Studio or 0:04:22.279 --> 0:04:25.039 streaming live on YouTube. To check us out there and 0:04:25.080 --> 0:04:27.080 go Bloomberg Live Radio. That's what I did yesterday that 0:04:27.120 --> 0:04:28.880 got me right to where I wanted to go. Networked 0:04:29.000 --> 0:04:29.599 just just fine. 0:04:29.600 --> 0:04:32.680 Here Bailer gets some ism data came out today. It 0:04:32.680 --> 0:04:34.680 looks like better than expected. Here looks better than expected. 0:04:34.720 --> 0:04:37.799 We see the SMP right now down call it two points, 0:04:37.839 --> 0:04:41.599 but major averages pairing losses, if not gains. 0:04:41.800 --> 0:04:42.320 Looking at the. 0:04:42.279 --> 0:04:45.920 Two year right now at three spot seven percent, So 0:04:46.240 --> 0:04:47.480 se markets move, all right. 0:04:47.440 --> 0:04:49.039 Let's get the breakdown of the ISM data. 0:04:49.040 --> 0:04:51.520 Steve Miller joins as he's the chairman for the Institute 0:04:51.560 --> 0:04:55.559 for Supply Management, joining us via that zoom thing. So Steve, 0:04:55.600 --> 0:04:58.640 seems like pretty good numbers. Again, fifty four point nine 0:04:58.680 --> 0:05:00.800 was the headline number they consent. This was fifty one 0:05:00.800 --> 0:05:03.599 point seven and last period was fIF fifty one point five. 0:05:03.680 --> 0:05:06.680 Pretty solid, Yeah, very solid. 0:05:06.720 --> 0:05:10.480 We saw over a six percent increase in both the 0:05:10.600 --> 0:05:13.960 business activity and the new orders indexes, and that's really 0:05:14.000 --> 0:05:17.880 what drove drove the change in the PMI this month. 0:05:18.200 --> 0:05:21.120 And see when I'm looking at our Bloomberg headline expand 0:05:21.160 --> 0:05:25.320 in September at the fastest pace since February twenty twenty three, 0:05:25.960 --> 0:05:28.120 reading too much into that that it's a bullish indicator. 0:05:29.839 --> 0:05:32.280 So I'd say it's a bullish indicator because what we 0:05:32.360 --> 0:05:35.800 saw is an increase in kind of the broadening of 0:05:35.880 --> 0:05:39.640 the expansionary activity, both in business activity as well as 0:05:39.720 --> 0:05:42.880 new orders. But putting that in context, you know, we're 0:05:42.920 --> 0:05:46.040 ending kind of a lackluster Q three. If you look 0:05:46.080 --> 0:05:49.760 at the average PMI for this Q three, it's really 0:05:49.800 --> 0:05:53.520 the lowest average since two thousand and nine. So although 0:05:53.520 --> 0:05:55.719 we're seeing it was a great number for this month, 0:05:56.480 --> 0:05:59.160 but you know, fingers crossed that with the port activity 0:05:59.200 --> 0:06:02.160 and such, we'll be able to see that continued growth. 0:06:02.320 --> 0:06:04.320 Where would you like to see that that headline number, 0:06:04.360 --> 0:06:06.800 that fifty four point nine Again, it seems pretty good 0:06:06.920 --> 0:06:09.560 relative to the last period and relative to consensus. Where 0:06:09.560 --> 0:06:10.440 would you like to see that? 0:06:11.400 --> 0:06:14.880 Yeah, absolutely so if we if we saw consistency fifty 0:06:14.920 --> 0:06:17.520 three fifty five range, that would be really that'd be 0:06:17.600 --> 0:06:20.840 really healthy improvement coming off of a couple of fifty 0:06:20.880 --> 0:06:25.520 ones and then actually contraction before that. We're you know, 0:06:25.520 --> 0:06:27.719 we're on the right trajectory. Hopefully we can hold it 0:06:27.839 --> 0:06:28.360 all right, Very. 0:06:28.320 --> 0:06:30.000 Good, Steve, Thanks so much for joining us for a 0:06:30.040 --> 0:06:32.839 few minutes there, Steve Miller, chairman for the Institute for 0:06:33.040 --> 0:06:33.960 Supply Management. 0:06:33.960 --> 0:06:38.680 That's im to us. Cool kids there, Billy. 0:06:37.720 --> 0:06:41.560 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:41.680 --> 0:06:44.360 weekdays at ten am Eastern on fo card Playing and 0:06:44.520 --> 0:06:47.400 Broun Auto with the Bloomberg Business app. Listen on demand 0:06:47.440 --> 0:06:51.760 wherever you get your podcasts or watch us live on YouTube. 0:06:52.960 --> 0:06:53.839 Right now, let's go to market. 0:06:53.880 --> 0:06:58.159 Betell, Senior portfolio Managered Offspring Global Investments. Margo, We're going 0:06:58.200 --> 0:07:00.640 to get a big jobs print tomorrow, which will be 0:07:00.680 --> 0:07:02.280 presumably pretty informative for. 0:07:02.240 --> 0:07:03.280 This Federal Reserve. 0:07:03.880 --> 0:07:06.640 How are you thinking about the markets these days given 0:07:06.680 --> 0:07:08.840 all the economic data that we have had over the 0:07:08.880 --> 0:07:10.120 past several weeks. 0:07:11.080 --> 0:07:13.680 Well, I think it shows the economy is still growing. 0:07:13.760 --> 0:07:16.960 We had a great GDP number, three percent, which is 0:07:17.080 --> 0:07:19.280 better I think a lot of people thought, and I 0:07:19.280 --> 0:07:21.560 think it says a where to continue to move along 0:07:21.680 --> 0:07:25.280 at modest growth rates, probably less than three percent because 0:07:25.320 --> 0:07:29.000 some of the numbers, especially for labors next so still positive, 0:07:29.040 --> 0:07:32.880 no recession, no boomy upswing in GDP, so a little 0:07:32.880 --> 0:07:35.200 more of the same and a little pressure probably on 0:07:35.600 --> 0:07:37.800 revenues and profit margins going forward. 0:07:38.440 --> 0:07:41.160 And Mary, now that we have the first FED cut 0:07:41.240 --> 0:07:43.679 in the rear view mirror and at least the swaps 0:07:43.720 --> 0:07:47.200 market pricing in a string through the first half of 0:07:47.320 --> 0:07:51.160 next year, how are you positioning in this market, especially 0:07:51.200 --> 0:07:54.160 given the expectation that the Fed can navigate us off landing. 0:07:55.880 --> 0:07:58.120 Well, we think some things are out of control of 0:07:58.120 --> 0:08:00.400 the FED, which is the economy. But I do think 0:08:00.440 --> 0:08:03.680 that we'll see another two quarter point reductions in the 0:08:03.760 --> 0:08:06.520 FED funds rate over the next few months, which would 0:08:06.560 --> 0:08:09.960 be modestly helpful over the long return for the economy. 0:08:10.000 --> 0:08:12.600 But basically we think that, as I said, the economy 0:08:12.680 --> 0:08:16.440 is growing, it's a sustainable level, but more modest than 0:08:16.480 --> 0:08:18.360 perhaps you might like to see. So we think that 0:08:18.480 --> 0:08:21.760 says that return some equity will be maybe mid single 0:08:21.760 --> 0:08:24.400 digit going forward, as opposed to the double digit types 0:08:24.400 --> 0:08:26.720 of rates we've had so far. Is here, So no 0:08:26.840 --> 0:08:28.720 changes in the portfolio or outlonger. 0:08:29.400 --> 0:08:31.840 So Margan, I'm looking at then GO function of the 0:08:31.840 --> 0:08:34.520 Bloomberg Index browser, and I see across the US fixed 0:08:34.520 --> 0:08:37.960 income everything's in the green here, solid mid single digit 0:08:38.040 --> 0:08:41.640 returns for fixed income investors share. The highlight, though, is 0:08:41.880 --> 0:08:44.160 US corporate high yield. How do you think about that 0:08:44.200 --> 0:08:46.720 the high yield market? Is there any value left there? 0:08:48.400 --> 0:08:51.120 Well, yes, there is this modest value. But actually, ever 0:08:51.160 --> 0:08:53.880 since the had began to raise short rates a couple 0:08:53.880 --> 0:08:56.480 of years ago, the best performing part of the high 0:08:56.559 --> 0:08:59.839 old market has been the fixed income market has been 0:09:00.160 --> 0:09:04.480 yield because it just simply pushioned those treasury rate rises 0:09:04.600 --> 0:09:06.760 with the extra yield do you get so right now 0:09:07.040 --> 0:09:09.240 in double B bonds you get a little over two 0:09:09.320 --> 0:09:13.120 hundred basis points two percentage points for single baes, say 0:09:13.160 --> 0:09:16.559 three percentage points, But with a backdrop of the economy 0:09:16.600 --> 0:09:19.600 growing and defaults looking like they're going to be under 0:09:19.640 --> 0:09:22.360 two percent over the next year, that says you're still 0:09:22.360 --> 0:09:25.240 getting a bargain for the risk you're taken by being 0:09:25.240 --> 0:09:27.520 in below investment grade. So we think it's still attractive, 0:09:27.800 --> 0:09:31.600 but modest. Certainly, we're not looking for double digit returns 0:09:31.600 --> 0:09:34.680 going forward, mid single digits, just basically the coupon. 0:09:35.679 --> 0:09:38.080 And so does that impact kind of your allocation to 0:09:38.400 --> 0:09:40.800 risk of your debt or how are you thinking about that? 0:09:41.960 --> 0:09:45.680 Well, with your spread so narrow and dollar prices pretty 0:09:45.720 --> 0:09:49.040 high in the high yeld market, most bonds are trading 0:09:49.240 --> 0:09:51.720 pretty close to their face value, maybe ninety eight ninety 0:09:51.720 --> 0:09:54.679 cents on the dollar, we think that you pretty much 0:09:54.720 --> 0:09:57.600 have gotten rid of the extra risk premium that was 0:09:57.600 --> 0:09:59.920 in the high yeld market when the Fed had rates 0:10:00.120 --> 0:10:02.640 or high. So we don't think there's a lot of 0:10:02.679 --> 0:10:06.040 capital appreciation room. So really, if you're looking realistically in 0:10:06.160 --> 0:10:09.640 return and say over the next year five six, maybe 0:10:09.679 --> 0:10:13.480 seven percent. That says to me that the market really 0:10:13.600 --> 0:10:15.800 is going to favor stocks where I think we should 0:10:15.840 --> 0:10:17.920 at least get that much and maybe even a little 0:10:17.960 --> 0:10:20.040 bit more if we have growth to stay around that 0:10:20.200 --> 0:10:26.319 one two percent level. So basically, low volatility, modest coupon, 0:10:26.440 --> 0:10:28.800 and modest return is how we see fixed income in 0:10:28.800 --> 0:10:30.080 the high old market right now. 0:10:30.679 --> 0:10:32.640 And Margie, I guess this month of September it was 0:10:32.679 --> 0:10:34.080 a record month for new issuance. 0:10:34.320 --> 0:10:34.880 What is that? 0:10:35.160 --> 0:10:36.479 Is that good for the market. 0:10:37.840 --> 0:10:40.199 Yes, it's excellent because the problem with the high old 0:10:40.320 --> 0:10:43.200 market is there simply has not been enough supply for 0:10:43.320 --> 0:10:46.920 all the demand by investors for that extra yield. In fact, 0:10:47.000 --> 0:10:49.480 we actually had about a year ago or so the 0:10:49.480 --> 0:10:53.040 market actually shrink because we had new issuance drop off, 0:10:53.080 --> 0:10:55.800 we had maturities and bond calls, so the whole high 0:10:55.880 --> 0:10:59.079 old market actually shrunk. So it would be very good 0:10:59.400 --> 0:11:01.679 to have a big supply. There's a lot of demands 0:11:01.679 --> 0:11:03.960 that will match that, and to have the high old 0:11:04.040 --> 0:11:06.880 market grow a bit would add to the liquidity, give 0:11:07.040 --> 0:11:09.960 investors more choices of names Dubai, So I think more 0:11:09.960 --> 0:11:14.000 supply would be very positive. There's a saying supply creates 0:11:14.000 --> 0:11:16.560 and some demand in the bottom market. 0:11:17.440 --> 0:11:19.400 Yeah, very good at across all of fixed income. A 0:11:19.520 --> 0:11:22.800 really really busy September four new issue. And so Margia Btel, 0:11:22.840 --> 0:11:24.360 thanks so much for joining us market. Bettel is a 0:11:24.400 --> 0:11:27.480 senior portfolio manager all Spring Global Investment. She's based up 0:11:27.480 --> 0:11:30.839 there in Boston. Joining us via Zooming. 0:11:30.880 --> 0:11:34.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:11:34.840 --> 0:11:37.880 weekdays at ten am Eastern on Apple card Play and 0:11:37.880 --> 0:11:40.800 androyd Otto with the Bloomberg Business App. You can also 0:11:40.880 --> 0:11:44.360 listen live on Amazon Alexa from our flagship New York station, 0:11:44.760 --> 0:11:48.480 just say Alexa playing Bloomberg eleven thirty. 0:11:49.080 --> 0:11:51.440 All right, that port strike. It is still ever day 0:11:51.520 --> 0:11:53.439 three here, and it's starting to get serious here, and 0:11:53.520 --> 0:11:56.760 you don't get a sense that there is, you know, 0:11:56.840 --> 0:11:59.080 a lot of discussion going on here. So the questions 0:11:59.080 --> 0:12:01.160 one is going to really start the impact this economy? 0:12:01.360 --> 0:12:03.559 And to what degree? Dristic a critical joins is. She's 0:12:03.600 --> 0:12:06.360 a chief scientist at Workplace Culture. The company is called 0:12:06.440 --> 0:12:12.640 Culture Partners. Joining us via Sacramento via that Zoom thing. Jessica, 0:12:12.679 --> 0:12:15.480 talk about this strike. How do you kind of envision 0:12:15.480 --> 0:12:18.120 this strike from both sides perspective, what's what's going on. 0:12:18.120 --> 0:12:20.319 Here and where could there be movement? Maybe? 0:12:22.240 --> 0:12:25.120 Well, this strike comes down to ultimately two issues. It's 0:12:25.160 --> 0:12:29.000 about wages and it's about automation. So Harold Daggett, who's 0:12:29.040 --> 0:12:32.360 the president of the ISLA, has said, not only are 0:12:32.360 --> 0:12:36.120 they wanting seventy seven percent increase, which is significant, they've 0:12:36.160 --> 0:12:39.040 already been offered fifty percent. They're going to seventy seven, 0:12:39.640 --> 0:12:43.440 but they also want to create air tight language quote unquote, 0:12:43.480 --> 0:12:46.480 air tight language that removes the ability for the ports 0:12:46.480 --> 0:12:50.960 to use automation or semi automation. And it's downright archaic 0:12:51.120 --> 0:12:53.600 what they're asking for. If you want to understand what 0:12:53.679 --> 0:12:57.400 kind of automation they're saying they refuse to allow. It's 0:12:57.440 --> 0:13:01.920 not some complicated, new fancy AI technology. We're just talking 0:13:02.000 --> 0:13:04.680 parking gates going up and down. They're not okay with 0:13:04.720 --> 0:13:07.839 that kind of automation. They're not okay with time card 0:13:07.920 --> 0:13:11.120 stamping automation. In fact, right now they have people who 0:13:11.160 --> 0:13:13.760 are employed as schedulers to write down who is there, 0:13:13.840 --> 0:13:16.000 when they arrived and when they left, which allows for 0:13:16.080 --> 0:13:20.200 inaccuracy and time reporting. So they're really holding the port 0:13:20.880 --> 0:13:23.920 hostage with these demands, and that is why we're at 0:13:23.960 --> 0:13:25.680 a standstill. I think we could easily get there at 0:13:25.679 --> 0:13:27.480 the wages. The ports are doing very well. They have 0:13:27.559 --> 0:13:30.640 the financial capacity to meet the needs of seventy seven percent. 0:13:30.840 --> 0:13:33.120 But it's really the automation that is the sticking point. 0:13:33.880 --> 0:13:36.760 Is that just a fear of automation becoming a slippery 0:13:36.800 --> 0:13:38.679 slope from your understanding. 0:13:39.920 --> 0:13:42.440 I don't think it's a fear. I think it's a strategy. 0:13:42.640 --> 0:13:46.520 They have said, quote, I will cripple you are words 0:13:46.559 --> 0:13:49.480 that have come from the president of the union's mouth. 0:13:49.720 --> 0:13:53.320 He is intentionally trying to cripple the American economy in 0:13:53.360 --> 0:13:55.440 an effort to get what they want and to maintain 0:13:55.480 --> 0:13:59.000 the job security. And it is downright an American. I mean, 0:13:59.040 --> 0:14:02.200 I believe that we all, every industry has the ability 0:14:02.240 --> 0:14:07.280 to implement basic technology, basic automations in order to advance 0:14:07.440 --> 0:14:10.400 and progress as a society. And what's interesting here is 0:14:10.400 --> 0:14:12.880 if you look at what they're doing, they're actually making 0:14:12.920 --> 0:14:16.280 the argument for why we need these ports to implement automation, 0:14:16.760 --> 0:14:19.760 because if they were automated, we wouldn't be being held 0:14:19.800 --> 0:14:23.400 hostage by this union and the effects of the economy 0:14:23.480 --> 0:14:26.280 and the American consumer are going to be felt soon 0:14:26.640 --> 0:14:29.800 and it is going to be widespread. There will be panic. 0:14:29.840 --> 0:14:32.240 There already is panic. There's already been a run on 0:14:32.280 --> 0:14:35.720 toilet paper and paper towels, which is completely unrelated to 0:14:35.760 --> 0:14:38.400 the imports from these ports. So it's interesting that's really 0:14:38.440 --> 0:14:42.200 just psychological in nature. We're remembering when toilet paper wasn't 0:14:42.200 --> 0:14:45.040 available at COVID and so people are going to stockpile 0:14:45.400 --> 0:14:48.080 toilet paper now. But what else will they stockpile? And 0:14:48.120 --> 0:14:50.080 who else is going to be affected by this and 0:14:50.120 --> 0:14:52.640 lose their jobs because supplies that they need to do 0:14:52.680 --> 0:14:56.160 their jobs haven't arrived. It's really going to be devastating 0:14:56.320 --> 0:14:57.720 if this doesn't get resolved soon. 0:14:58.240 --> 0:15:02.120 So Jessco, what has anyone on either side quantified the 0:15:02.760 --> 0:15:05.680 job potential job loss from automation? How big of an 0:15:05.720 --> 0:15:06.720 issue is this in reality? 0:15:06.800 --> 0:15:07.120 Do we know? 0:15:08.360 --> 0:15:11.080 There are a lot of analysts making estimates on the 0:15:11.200 --> 0:15:14.240 cost that this strike will have and the ranges are 0:15:14.400 --> 0:15:18.400 significantly wide, so it's unclear and the job costs we 0:15:18.520 --> 0:15:22.880 can only speak right now philosophically, as construction materials don't arrive, 0:15:22.960 --> 0:15:25.240 when construction workers are not going to be able to 0:15:25.280 --> 0:15:27.520 do their jobs, and so they will be laid off 0:15:27.600 --> 0:15:31.440 or temporarily furloughed, and that impact will be devastating on 0:15:31.680 --> 0:15:34.880 those workers. So if you think about the union, workers 0:15:34.880 --> 0:15:38.040 are being very selfish right now, and they do want 0:15:38.240 --> 0:15:41.320 the American worker and consumer to feel the pain. They're 0:15:41.320 --> 0:15:44.640 counting on it, they're looking forward to that, and I 0:15:44.680 --> 0:15:46.880 think one of the devastating things here is that they're 0:15:46.920 --> 0:15:50.760 saying and don't blame us, blame them, So they're not 0:15:50.880 --> 0:15:53.640 taking accountability for the strategy. And I also don't think 0:15:53.640 --> 0:15:57.360 it's very logical because the American worker and consumer is 0:15:57.400 --> 0:16:00.400 going to become outraged and say, you know what, that 0:16:00.480 --> 0:16:03.400 we want them to automate because this is a danger 0:16:03.520 --> 0:16:08.080 to the American culture, society, workplace, labor market, all. 0:16:07.960 --> 0:16:11.040 Of it Protisica. In terms of the actual dock workers 0:16:11.040 --> 0:16:13.920 about twenty five thousand at the East Coast and Gulf 0:16:14.000 --> 0:16:18.920 Coast ports. What percentage or number of those workers would 0:16:19.000 --> 0:16:21.840 be at risk of losing their jobs if automation were 0:16:22.120 --> 0:16:24.080 to be implemented at a grand scale. 0:16:25.520 --> 0:16:27.840 It all depends on what we're talking about with regards 0:16:27.880 --> 0:16:30.800 to automation. So the schedulers will lose their job if 0:16:30.840 --> 0:16:34.240 we implement time cards. Right now, there is already some 0:16:34.560 --> 0:16:36.920 automation if you think about it. I was listening to 0:16:36.960 --> 0:16:40.280 an interview with one of the union strikers yesterday and 0:16:40.320 --> 0:16:44.080 he said, you know, decades ago, we were literally offloading 0:16:44.080 --> 0:16:46.720 one hundred and twenty five pounds of sugar with our hands. 0:16:46.800 --> 0:16:49.720 So that's not happening anymore. That's because of automation, and 0:16:49.760 --> 0:16:52.640 I'm sure that they celebrate it. So the where automation 0:16:52.840 --> 0:16:55.440 is allowed and where automation isn't allowed is exactly what's 0:16:55.480 --> 0:16:59.000 under negotiation. There is already in their current contract language 0:16:59.080 --> 0:17:03.000 that prevents new automation. They're not saying that they're okay 0:17:03.040 --> 0:17:05.680 with that language though, they're wanting to go backwards. They're 0:17:05.720 --> 0:17:09.560 wanting to remove automation that's already been implemented, and so 0:17:09.760 --> 0:17:12.440 that's really regressive and not progressive at all. 0:17:12.800 --> 0:17:14.479 All right, Well, have to see how this plays out 0:17:14.480 --> 0:17:17.040 where day three and again the tensions are mounting, the 0:17:17.080 --> 0:17:19.159 risks are mounting for the economy. Jessica Kregel, thank you 0:17:19.240 --> 0:17:21.439 so much for joining us. We really appreciate getting your 0:17:21.440 --> 0:17:24.679 thoughts of perspective. Jessica Kriegel. She's a chief scientist of 0:17:24.960 --> 0:17:28.680 workplace culture on the firm is called Culture Partners. They're 0:17:28.680 --> 0:17:31.880 based in Sacramento, California, and she's joining us via zoom. 0:17:33.240 --> 0:17:37.119 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:37.200 --> 0:17:40.720 weekdays at ten am Eastern on applecar Play and Android 0:17:40.760 --> 0:17:43.520 Auto with the Bloomberg Business App. You can also listen 0:17:43.640 --> 0:17:46.720 live on Amazon Alexa from our flagship New York station, 0:17:47.119 --> 0:17:50.159 Just say Alexa Play Bloomberg eleven thirty. 0:17:51.200 --> 0:17:54.159 Billy Lipscholtz sitting in for Alex Steele on Paulswuni. We 0:17:54.200 --> 0:17:56.760 live here on a Bloomberg and Arctive Brookers studio, which 0:17:56.760 --> 0:17:59.840 on Tucker We're assell streaming live on YouTube dot com. 0:18:00.320 --> 0:18:02.879 You can find us over there just search Bloomberg Live Radio. 0:18:03.800 --> 0:18:04.720 You know, we're a little bit. 0:18:04.680 --> 0:18:06.359 Of a sell off here today, A lot of just 0:18:06.400 --> 0:18:08.239 kind of mixed trading here, all within one or two 0:18:08.280 --> 0:18:09.440 percent of the all time highs. 0:18:09.480 --> 0:18:11.560 I mean why not? I mean, I guess you got a. 0:18:11.560 --> 0:18:14.439 Fed cutting rates, you got decent earnings. I guess that's 0:18:14.480 --> 0:18:16.720 a pretty constructive look for this market. I want to 0:18:16.760 --> 0:18:18.480 how the technicals look. Our next guest, I think can 0:18:18.520 --> 0:18:20.919 help us a little bit there. Francis Stacy chairwoman of 0:18:20.960 --> 0:18:24.200 the Global Digital Finance Committee, joining us from Tampa, Florida 0:18:24.280 --> 0:18:27.840 via zoom. Francis Again, you look at this charge kind 0:18:27.840 --> 0:18:29.840 of up into the right here. What are the technicals 0:18:29.880 --> 0:18:32.840 tell you about this market? Anything concerning you? 0:18:34.359 --> 0:18:37.080 Yeah, So it's very interesting because the technicals actually look 0:18:37.200 --> 0:18:40.000 quite toppy. And I do think that if the S 0:18:40.040 --> 0:18:42.679 ANDP gains any kind of momentum and a bit of 0:18:42.680 --> 0:18:45.399 a sellof which is you know, could be news driven. 0:18:45.440 --> 0:18:48.800 We've got a big jobs number coming out tomorrow, you know. 0:18:49.040 --> 0:18:51.680 I think fifty six twenty five is the initial stop 0:18:51.720 --> 0:18:55.320 for support to indicate that the upward trend is as 0:18:55.359 --> 0:18:58.040 well in play, and there's nothing that's coming on the horizon. 0:18:58.040 --> 0:19:01.080 As far as calculating an additional risk, I agree with you. 0:19:01.200 --> 0:19:05.080 The FED is obviously changed its modality into an easing mode, 0:19:05.240 --> 0:19:08.800 and that's happening globally. I mean, the global money supply 0:19:08.920 --> 0:19:12.359 is up seven point three trillion as of September, and 0:19:12.520 --> 0:19:15.160 just globally we're getting a lot of simultaneous rate cutting 0:19:15.240 --> 0:19:19.439 and that supports the reacceleration and global growth type mindset. 0:19:20.520 --> 0:19:22.520 I do think we'll see a little bit more softening 0:19:22.560 --> 0:19:24.919 in the growth and labor markets here in the US, 0:19:25.080 --> 0:19:27.800 and we just have to see if there's a catalyst 0:19:28.200 --> 0:19:31.240 that would indicate a recession, Well, how. 0:19:31.200 --> 0:19:33.280 Much is that recession risk being priced in. I'm just 0:19:33.320 --> 0:19:36.439 looking at the swaps market, and at least as it 0:19:36.440 --> 0:19:38.520 relates to the FED, we're at an implied rate at 0:19:38.520 --> 0:19:40.439 a round three and a half percent by May of 0:19:40.520 --> 0:19:43.639 next year. In VideA is kind of the S and 0:19:43.680 --> 0:19:46.640 P one, if you will, and is seemingly talking up demand. 0:19:46.720 --> 0:19:49.960 Apple and Microsoftware are relatively bullish as well. 0:19:50.119 --> 0:19:51.560 Kind of what do you make of those dynamics. 0:19:52.840 --> 0:19:56.000 Yeah, so absolutely there's no indication and the markets are 0:19:56.040 --> 0:19:58.680 not pricing in an indication of a recession, which makes 0:19:58.760 --> 0:20:01.120 this rate cutting and a regressive rate cutting, I would 0:20:01.160 --> 0:20:04.840 argue globally very interesting. I mean, I think they're cutting 0:20:04.920 --> 0:20:07.400 rates globally on the orders of magnitude that they did 0:20:07.480 --> 0:20:12.040 during the you know, the global financial crisis. Without that 0:20:12.160 --> 0:20:16.040 catalyst in place. It's just basically looking at the yield 0:20:16.119 --> 0:20:19.120 curve and potential. You know what happens when you have 0:20:19.200 --> 0:20:23.080 a prolonged and yield curve inversion that is, you know, 0:20:23.240 --> 0:20:28.000 pretty severe and you have the resteepening quinte essentially that 0:20:28.040 --> 0:20:32.200 has been an indicator mechanically of an imminent recession. However, 0:20:32.680 --> 0:20:35.440 there was always a catalyst. You know, in the nineties 0:20:35.520 --> 0:20:39.480 you had the invasion, you know, the Kuwait situation, and 0:20:39.520 --> 0:20:41.960