Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanevik. We're here every day bringing
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Speaker 1: can also listen to our radio show at two pm
Speaker 1: Eastern Time on Bloomberg Radio or watch us on YouTube
Speaker 1: search Bloomberg Global News. Carol Master along with Tim Stanoviek,
Speaker 1: we mentioned some of the COVID headlines we know. U
Speaker 1: S regulators have given emergency approval for people ages twelve
Speaker 1: to fifteen to receive a third dose of Visor's vaccine.
Speaker 1: I do feel like all of this stuff is going
Speaker 1: to be very helpful, though I don't know that's the question. Yeah,
Speaker 1: there is always that issue, right. We do know a
Speaker 1: record ten million people were diagnosed in the seven days
Speaker 1: through Sunday, almost twice the previous weekly high, as a
Speaker 1: macron spread across the globe. So we are dealing with
Speaker 1: those numbers. Um, that's the tough part of another question.
Speaker 1: Do we still care about numbers? If everyone's gonna get this,
Speaker 1: do we do we care about case count or do
Speaker 1: we care more about hospitalizations and deaths? It's a great question.
Speaker 1: Let's put that to our next guest. Dr William Hazeltine
Speaker 1: is back with us, chairman and president of Access Health International.
Speaker 1: You know who they are there, a nonprofit. They're on
Speaker 1: a mission to really improve access to high quality and
Speaker 1: affordable health care for people everywhere. Dr hazel team so
Speaker 1: well known in the biotech world. He's founded several biotech companies,
Speaker 1: including Human Genome Sciences, and he joins us once again
Speaker 1: on the phone from Connecticut. Doctor Hazel teen, so good
Speaker 1: to have you here with Tim and myself. How are
Speaker 1: you very well? And I wish you both a happy
Speaker 1: Do hear well? Same to you, happy and healthy one
Speaker 1: to all of yours. Um, what do you what's the
Speaker 1: number we need to focus on when it comes to
Speaker 1: COVID cases versus hospitalizations, versus deaths and so on. It
Speaker 1: would be a real disaster to give up comedy cases
Speaker 1: of infection. The reason for that is that's how you
Speaker 1: allocate resources. You have to know where that detection is. Secondly, uh,
Speaker 1: it is also going to be an indicator of what's
Speaker 1: going to happen in the future or what's going to
Speaker 1: happen with long COVID. Everybody talks about hospitalizations, but you know,
Speaker 1: in any battle, account that wounded, the hospital and the dead.
Speaker 1: It's important account to dead. Of course, it's important to
Speaker 1: count hospitalizations, but those who are wounded may be seriously
Speaker 1: wounded for a long time. At least half of those
Speaker 1: who have mild cases may have two or three months
Speaker 1: of serious issues, and about ten may have long term,
Speaker 1: very serious mental issues, issues with the kidneys, needing, transplants, diabetes,
Speaker 1: heart disease, a lot of really big problems. So it's
Speaker 1: really important. It would be a big disaster. You know,
Speaker 1: we count flue cases as well as clue hospitalizations and death,
Speaker 1: so I think we have to keep counting cases. It
Speaker 1: tells us what's happening where. It's also very good gunning
Speaker 1: for you personally to figure out what you're listed yetting infected.
Speaker 1: H It's sort of like the weather. It's a weather report.
Speaker 1: Is it funny, is it rainy, is it a thunderstorm
Speaker 1: or Tornado. You have to know what the infection rate
Speaker 1: is in your area. It's a very very big mistake.
Speaker 1: I think we should give up case counting. Okay, that's
Speaker 1: good to know. Hey, Dr Hazeltine, help us understand how
Speaker 1: you're thinking about the omicron variant a lot. We're getting
Speaker 1: more and more data each and every day, and the
Speaker 1: data continue to tell us that perhaps this isn't as
Speaker 1: doesn't make people as sick as previous variants, including the
Speaker 1: delta variant. What do we need to know about the
Speaker 1: omicron variant? I think that again it's false reassurance. First
Speaker 1: of all, we know really highly highly transmissible, and that
Speaker 1: you and I know that we have people who've never
Speaker 1: been infected before, who are very carefully and triplely vaccinated
Speaker 1: and even triplely vaccinated and previously affected. We're getting infected
Speaker 1: and some of them are getting pretty sick. I have
Speaker 1: friends that have been sick for ten days already with it.
Speaker 1: So it's it maybe on the statistical basis putting fewer
Speaker 1: people in the hospital, and it looks like that's likely
Speaker 1: to be true, especially if you're fascinated. I think we
Speaker 1: have very little data on what happens to that large
Speaker 1: fraction of people who aren't fascinating. Second thing, before we
Speaker 1: were willing to write this off as mild and therefore
Speaker 1: not worry about it. What's happening to our kids. It's
Speaker 1: putting a lot of our kids and young people in
Speaker 1: the hospital h three or four times more than any
Speaker 1: other uh pandemically had of this in any other ways
Speaker 1: we have in the past. So I think those are
Speaker 1: really big crushes. And finally, we don't know what this
Speaker 1: is going to do for the long COVID. So one
Speaker 1: summary of this was a trodes and horse and inside
Speaker 1: the little saying uh long trovid. So we really have
Speaker 1: to take that good look that was the pathogesis is
Speaker 1: going to be a says. Responsible attitude is to say
Speaker 1: it's serious. Let's take it carefully and do what we
Speaker 1: can to avoid it. Yeah, it's something Tim and I
Speaker 1: I know talked about. I know we talked about at home.
Speaker 1: I have a daughter who's eighteen, and she's like my
Speaker 1: fear knocking for Micah. She hasn't gotten in and she
Speaker 1: thinks about I'm a young person, what happens if I'm
Speaker 1: one of the long haulers. I do wonder to Dr
Speaker 1: Haseltine you know, we have had members of the medical
Speaker 1: community on saying you're we're all going to get it,
Speaker 1: and in some ways that may help it burn itself out.
Speaker 1: But is that true, Like I do wonder, are we
Speaker 1: still possibly at risk of a variant that is very
Speaker 1: contagious and very very virulent at the same time we
Speaker 1: are And I think that those people who have always
Speaker 1: said there's always been a tendency for people to say
Speaker 1: that this is the last one we're going to get
Speaker 1: her immunity. I think it was clear from the very
Speaker 1: beginning that there is no such thing as her immunity
Speaker 1: for coronaviruses. Coronaviruses come back, as told every year, despite
Speaker 1: the fact you've had it the year before, and they
Speaker 1: give you another call. Uh, And this thing is going
Speaker 1: to keep coming back. It has been evolved two bypass
Speaker 1: our mute defenses. Now we're fortunate that the vaccines seem
Speaker 1: to reduce hospitalization by about ten folds, which is fantastic.
Speaker 1: But how long that will hold we don't know. We
Speaker 1: just have no idea yet. Whether it's a year, two years,
Speaker 1: or three years. We're pretty sure it's not going to
Speaker 1: be forever. But this virus is not. It's never going
Speaker 1: to be such a thing in my opinion as her community,
Speaker 1: whether it's induced by vaccine or by UH infection. We
Speaker 1: have to take this really seriously Europe. Of massive research
Speaker 1: efforts which we have, we have the capability to do it.
Speaker 1: Find many ways to stop this, whether it's with drugs
Speaker 1: or better vaccines or continual vaccines. We have to take
Speaker 1: this really seriously, and it's not going to go away.
Speaker 1: Not going to go away for her community. Hey, Dr Hazeltine,
Speaker 1: last question, when is this going to be in the
Speaker 1: rear view mirror for us unpredicted I'm not willing to
Speaker 1: make that perdition. I don't see in appearing in the mirror.
Speaker 1: You asked. The question to this combine both transmission and
Speaker 1: lethality is yes, it's what we're worried about. My immediate
Speaker 1: worry is it's going to recombine the delta called the
Speaker 1: friend of mine calls it Dolment's wrong. I'm a clock.
Speaker 1: So we might create are a lot of people with
Speaker 1: both in questions in this country right now, and we
Speaker 1: know this virus is a master of recombining. So I
Speaker 1: think we don't. I don't see the rear mirror appearing.
Speaker 1: Yet so just when you say that, that whole idea
Speaker 1: of what you said earlier to about the false sense
Speaker 1: of security heard people said well it's only to be omicron,
Speaker 1: it's not so lethal, and that we were having a
Speaker 1: conversation at home. But it's like, well what if I
Speaker 1: get it and I actually get from the delta areas,
Speaker 1: you know, and it's a lot more serious. Um. Doctor
Speaker 1: Haseltine always good to get some time with you. Please
Speaker 1: stay safe and healthy. Chairman and president of Access Health International,
Speaker 1: joining us once again on the phone from Connecticut. He's
Speaker 1: also author of cv PTSD COVID related post traumatic stress Disorder,
Speaker 1: What it is and What to do about it. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic on Bloomberg Radio. Workers we know
Speaker 1: continuing to work remotely increasingly so with the rise in
Speaker 1: COVID cases. Meantime, their kids are spending more time in
Speaker 1: the office. For more on what's going on is Tim.
Speaker 1: It's a story you'll find online of Bloomberg Business Week.
Speaker 1: Let's bring in Jeff Green who wrote the story. He's
Speaker 1: managing diversity reporter for Bloomberg News. He joins us on
Speaker 1: the phone from Michigan. Also joining us is Joel Webber,
Speaker 1: editor at Bloomberg business Week. He is joining us on
Speaker 1: the remote access line from Brooklyn. Happy New Year to
Speaker 1: both of you guys. First, Droll, I want to start
Speaker 1: with just just for people who don't have kids, maybe
Speaker 1: they don't understand or or know what Bright Horizons is.
Speaker 1: So let's start with bright Horizons because that's a central
Speaker 1: part of the story. Oh Man, So, bright Horizons has
Speaker 1: a network of facilities us the country that allow you
Speaker 1: to basically have a daycare option, and a lot of
Speaker 1: people and a lot of employeers use that as sort
Speaker 1: of an emergency safety now, yeah, exactly, it's all part
Speaker 1: of your E A P program UM and disclaimer, Bloomberg
Speaker 1: is included in that UM. They also have an in
Speaker 1: home option that pre pre COVID, like I personally would
Speaker 1: take advantage of when things went awry. UM. And you know,
Speaker 1: as we were, we're working on a series of stories
Speaker 1: that we were calling the New Rules of Work. Jeff's
Speaker 1: UMM reporting on the company sort of fascinated us because
Speaker 1: here's a company that actually has a business model UM
Speaker 1: that could only become more helpful for employers as we
Speaker 1: as we deal with these um you know, ongoing school dilemmas,
Speaker 1: ongoing childcare issues, um. And you know, ohmacrom in some
Speaker 1: ways embodies that. So, so Jeff, tell us about what
Speaker 1: you discovered and what the future holds for the company. Yeah,
Speaker 1: well it really led me into this is the fact
Speaker 1: that like the core core of their business is offering
Speaker 1: on site daycare for people who go to the office.
Speaker 1: So my initial assumption was, well, this can't be good
Speaker 1: because you know, nobody's going to the office, But in
Speaker 1: you know, sort of just just after ten twenty minutes
Speaker 1: talking to the CEO and then also looking at what
Speaker 1: was happening, became clear that you know, there's this daycare
Speaker 1: crisis that we already knew about. Here's a company that
Speaker 1: offers not just on site decare, but subsidize reduction for
Speaker 1: the employees for the you know, hundred and twenty kids
Speaker 1: whose parents are lucky enough to have this option. Um.
Speaker 1: And so what could have been a disaster. They had
Speaker 1: to close like eight hundred and fifty of a thousand
Speaker 1: centers um right off the bat when the pandemic came.
Speaker 1: Now they're almost all back opened and you know, people
Speaker 1: are using it as a retention tool or or a
Speaker 1: recruiting tool for new employees, saying, hey, you know, come here,
Speaker 1: we'll pay for your daycare and you can, you know,
Speaker 1: have them right here at the office. And if you're
Speaker 1: not coming to your office, your kids can be here.
Speaker 1: So it was it was completely not what I expected
Speaker 1: to hear. I thought I was going to hear the
Speaker 1: story of shifting completely to another line of business, but
Speaker 1: it turned out their core was actually positioned well too.
Speaker 1: You know, Jeff, I think about I feel like for
Speaker 1: so many years has been to bododle, like even talk
Speaker 1: about child care at the office. It's really um. And
Speaker 1: I don't know whether it's cost of COVID specifically, but
Speaker 1: things have changed dramatically. Yeah, a lot of people didn't
Speaker 1: really care if their employees had children or not, except
Speaker 1: you know, maybe in the HR department. But you start
Speaker 1: to see them on zoom and you realize, you know,
Speaker 1: when your own e vps of whatever are on Twitter
Speaker 1: talking about how rough it is to parent during the pandemic,
Speaker 1: Suddenly people are like, wow, like a lot of people
Speaker 1: have children, and some of those people are struggling. Um children, Yes, exactly. Yeah,
Speaker 1: and I mean that that the that is sort of
Speaker 1: it's almost a bitter sweet tale because so many of us,
Speaker 1: I mean, I shouldn't say us, because we technically qualified
Speaker 1: for at least the temporary version, but so many, very
Speaker 1: few people can actually get the full on subsidized on
Speaker 1: site daycare that this offers. So for those people who
Speaker 1: are lucky enough to work for those companies, this is
Speaker 1: a solution to a problem that for most people still
Speaker 1: doesn't really seem to have any kind of you know,
Speaker 1: you know, the building back Better is kind of stalled,
Speaker 1: which had some money toward it. It's just we don't
Speaker 1: really see an answer for most people for this problem.
Speaker 1: You have to talk a little bit more about this,
Speaker 1: because you do make that point in the story that
Speaker 1: this is something that is is really for the luckiest
Speaker 1: of employees in the United States, a benefit that's really
Speaker 1: only available to uh in the greater scheme of things,
Speaker 1: a handful of people. Um, what is the conversation that's
Speaker 1: happening nationwide and how has that changed in the Biden
Speaker 1: administration and with the stalling of Build back Better, does
Speaker 1: that become something in two that's kind of on the
Speaker 1: back burner? Yeah, I mean unless the government or somebody
Speaker 1: is going to come forward and say, hey, everyone who
Speaker 1: has children, here's subsidized daycare for you. I mean, in
Speaker 1: some places, your daycare costs more than your rent. So
Speaker 1: if you want to be a member of the of
Speaker 1: the workforce, and you know, I mean, you can't just
Speaker 1: keep your kids at home like we did during the pandemic.
Speaker 1: That's not a long term, tenable solution for anyone who's
Speaker 1: tried to, you know, have a meeting and have a
Speaker 1: toddler or even a teenager who has you know, things
Speaker 1: they need to do. It. It works in an emergency,
Speaker 1: but it's it's not like the solution for for forever.
Speaker 1: So so speaking of forever solutions, Jeff, Like, the other
Speaker 1: thing that a CEO of a child care company like
Speaker 1: this would faces just this ongoing labor shortage UM. And
Speaker 1: what did you learn on that front, because already, you know,
Speaker 1: childcare is not um. Childcare professionals are not getting paid
Speaker 1: um you know what would even be deemed a living
Speaker 1: wage for the most part. Right, Yeah, that's one of
Speaker 1: the other advantages they have being this sort of you know,
Speaker 1: on site high end partners. They can pay more. They
Speaker 1: also offer the ability to get into like a higher
Speaker 1: education degree in child um care or you know, in
Speaker 1: child whatever. I mean, you can go you can basically
Speaker 1: get a college degree by working here and take yourself
Speaker 1: even farther into this field to a higher level of pay.
Speaker 1: So it's it's that, but it's still I mean, one
Speaker 1: of the reasons they don't expect a full return to
Speaker 1: their margins until maybe later this year or next year,
Speaker 1: whatever the latest estimate is, is the headwind of having
Speaker 1: to pay more. I mean that they're not immune to it.
Speaker 1: It's just they start from a better position and they're
Speaker 1: able to maybe attract people with some of the benefits
Speaker 1: that others just can't offer for the same reasons we've
Speaker 1: been talking about, it's really hard to have eleven twelve
Speaker 1: dollar hours kind of the tops for a lot of
Speaker 1: these teacare providers. Okay, so the other thing that you
Speaker 1: can do when you're in this business is to not
Speaker 1: just do childcare and growth for the company looks like
Speaker 1: what yeah, so, I mean you mentioned the emergency care
Speaker 1: really high margins there. Every they added a hundred and
Speaker 1: fifty at least new customers in that area I think
Speaker 1: it was, and everyone they add is bringing in higher
Speaker 1: margin business because that's basically you know, any company, including ours,
Speaker 1: pays up for a certain number of days and then
Speaker 1: also will add days as more needed. Um. And then
Speaker 1: you have some of these other they bought Citter City,
Speaker 1: they bought a daycare, I mean a camp provider, which
Speaker 1: will be you know, loom a lot larger as we
Speaker 1: come into like with the third summer of a pandemic
Speaker 1: and people are trying to figure out, you know, where
Speaker 1: where kids going to go, and you know many of
Speaker 1: them are back at school, but there all these they
Speaker 1: basically kind of hedge their bat You can, in theory
Speaker 1: use their services everywhere from your toddler to your high
Speaker 1: school senior trying to find out how to get into college. Um.
Speaker 1: So it's they've been widening the aperture of like how
Speaker 1: they approach children. In fact, some of their customers have
Speaker 1: been demanding it. They wanted you know, they use some
Speaker 1: of their facilities that were closed as like middle school
Speaker 1: care kind of centers during the pandemic. Well. I also
Speaker 1: love how they're kind of helping out what they call
Speaker 1: that Sandwich generation, right, those individuals, because they're looking into
Speaker 1: also I guess providing elder care. So it's interesting that
Speaker 1: they are looking to kind of help us at all
Speaker 1: different levels so that we can actually work, whether it's
Speaker 1: from home or elsewhere. It is another great story from you, Jeff.
Speaker 1: Thank you so much. Jeff Green, he's managing Diversity reporter
Speaker 1: at Bloomberg News on the phone from Michigan. You can
Speaker 1: check it out. It is online at business week dot com.
Speaker 1: Jill Weber, he's editor of Business Week magazine. Uh and
Speaker 1: of course you can find all those stories online on
Speaker 1: the terminal, and of course check out the news stands
Speaker 1: because you can pick up the magazine as well. But
Speaker 1: it's easy to work from home with a three year old,
Speaker 1: it's not. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. We've
Speaker 1: been talking about already and watching. It's staying near its
Speaker 1: tides the day. It's Tesla band. It's up more today,
Speaker 1: Tesla smashing quarterly deliveries with a record of three eight thousand,
Speaker 1: six hundred cars. I saw Dani Hols article yesterday last
Speaker 1: night about this. I sent it to my team at
Speaker 1: quick take Stock and I said, watch Tesla stock tomorrow
Speaker 1: and see what happens after this. Let's bring her in now,
Speaker 1: Dana Holes, technology reporter for Bloomberg Near. She joins us
Speaker 1: on the phone from San Francisco, Dana, where you've been
Speaker 1: covering Tesla for years. This number, as you write, surpassing,
Speaker 1: you know, even the company's own expectations. Were you pretty
Speaker 1: blown away with it. I mean it was a very
Speaker 1: strong quarter. It really begs the question like why did
Speaker 1: the analysts get it so wrong? I mean, it's just
Speaker 1: like it's it's like, you know, and it's this expectations
Speaker 1: game where you know, the analysts put out you know,
Speaker 1: analysts have their own models, and then Tesla itself sends
Speaker 1: around its own consensus figures, you know that, which is
Speaker 1: sort of broader. But I mean they beat by like
Speaker 1: forty five thousand units, Like it's rare to have a
Speaker 1: beat that's quite this large. Um. You know, our bloom
Speaker 1: were consensus figures were two hundred sixty three and they
Speaker 1: delivered three six hundreds, I mean three thousand, six hundreds.
Speaker 1: So I mean that's like a pretty significant beat. And
Speaker 1: you know, I think I think it's it just shows
Speaker 1: that despite the semiconductor short shortage, despite COVID despite logistics
Speaker 1: that there is demand for electric vehicles, and um, you know,
Speaker 1: I would love more visibility from the company as to
Speaker 1: how many of these cars were sold in China. We
Speaker 1: don't have a lot of visibility into the regional breakdown. Um,
Speaker 1: but you know this is this is big for TESSI.
Speaker 1: I mean, we the transition is here and we're just
Speaker 1: sort of seeing that accelerate quarter after quarter. All right,
Speaker 1: so already up this year because it's the first day
Speaker 1: of trading, we've got at one point to a trillion
Speaker 1: dollar market cap downa you mentioned you'd like more visibility
Speaker 1: in terms of the geographic breakdowns. Why what are you
Speaker 1: looking for specifically? Well, testily just you know, their their
Speaker 1: report is just very bare bones. It's like, we sold
Speaker 1: this many cars this quarter in this year, and like
Speaker 1: we'd like to congratulate everyone on the tensile team, but
Speaker 1: they don't say where the cars are going. And you
Speaker 1: can usually find it in the ten Q which will
Speaker 1: come out after earnings, where they break down what their
Speaker 1: largest markets are. It's traditionally been the US, then China,
Speaker 1: then like Norway or the Netherlands. But but but I mean,
Speaker 1: I'm just curious like, I mean, is the U s
Speaker 1: still on top? Has China overtaken the US? I mean, now,
Speaker 1: you know, we I just don't know. I just really
Speaker 1: we really don't know and have to kind of piece
Speaker 1: together market data from a lot of disparate sources. And
Speaker 1: given you know that Tesla is the market leader, I
Speaker 1: just would love it if they would be more transparent about,
Speaker 1: you know, what is their top market and you know,
Speaker 1: I think that's just information that everyone would know because
Speaker 1: people get very hung up on like monthly sales in China.
Speaker 1: But then because of the logistics of shipping cars, the
Speaker 1: monthly sales aren't always super accurate. So I don't know,
Speaker 1: I would just I would just love more from the company.
Speaker 1: Maybe we can press on that during earnings. Yeah, I
Speaker 1: mean Elon Musk might not be on the call, right
Speaker 1: because he's kind of oh no, oh no, he will
Speaker 1: be on this call. He tweeted that he's gonna come
Speaker 1: on the call, you know, so he was I mean,
Speaker 1: it's so funny, like Elon loves the limelight. So he
Speaker 1: made this big thing of saying, I'm not going to
Speaker 1: be on the call unless I have something to say.
Speaker 1: He was not on the last earnings call, but the
Speaker 1: first time in a decade. But then in November he
Speaker 1: tweeted that he would be back on the call in
Speaker 1: January with a significant product. So first a year he
Speaker 1: will be on the call. So be on the call, Danna,
Speaker 1: What I mean, what do you think? Is it something
Speaker 1: about a cyber truck. Perhaps that thing still hasn't made
Speaker 1: an appearance. Yeah, I mean Tesla has not, so I
Speaker 1: think that I would, Yeah, I would imagine. I mean,
Speaker 1: you know, Tesla has all these vehicles in the wings,
Speaker 1: the cyber truck, semi truck, the next generation roadster. They've
Speaker 1: talked about making a cheaper car in China. I mean,
Speaker 1: maybe they'll make a delivery van, you know. I mean,
Speaker 1: who knows. But but the truck is clearly the next
Speaker 1: car in their product pipeline. And this is the year
Speaker 1: of the electric truck. I mean, you have the competitors
Speaker 1: like Ford and Ribban all coming out with their trucks.
Speaker 1: I mean they're already out with their trucks, like the
Speaker 1: Ribban truck is is out, and so I would yeah,
Speaker 1: I would imagine that the cyber truck will be a signfic.
Speaker 1: Get part of that, is this a make or break.
Speaker 1: Maybe that's stupid to say, but I mean I feel
Speaker 1: like it's going to be a significant year for evs overall, Danna.
Speaker 1: And you know when I think about Mercedes, We've talked
Speaker 1: with them and they've got an EV and we're seeing
Speaker 1: that higher end markets certainly get more uh competition increasingly. So, um,
Speaker 1: how is that going to make things more difficult for
Speaker 1: Tesla potentially this year? Well, I've sort of argued this
Speaker 1: for a long time and I'll make the argument again.
Speaker 1: I think we need to kind of shift the way
Speaker 1: that we think about competition. The competition if not evs
Speaker 1: and evs fighting each other, the competition is really evies
Speaker 1: bring versus ice vehicles. So it's more and more people
Speaker 1: make the shift to e v s, the kind of
Speaker 1: share of the E V pie is going to continue
Speaker 1: to grow, and that's that's actually good for Tesla. Like
Speaker 1: the more that EV has become normalized, the better it
Speaker 1: is for sort of everyone. Um, So I need Tesla
Speaker 1: might quote unquote lose market share to other EV makers
Speaker 1: that they will continue to growth sales Europe Europe. That
Speaker 1: makes sense. I mean, like they you know, they grew,
Speaker 1: they grew sales just a phenomenal amount this year, and
Speaker 1: coming into the new year with two new factories coming
Speaker 1: online that will be able to continue to do so.
Speaker 1: So Dana, to that end, I've been asking h the
Speaker 1: question to other people today. Is there a chance that
Speaker 1: that Tesla sometimes soon becomes the company that produces more
Speaker 1: vehicles than any other any other automaker in the world. Well,
Speaker 1: they have a long way to go to get to that.
Speaker 1: I mean, like, if you know, compared to like Toyota
Speaker 1: and Volkswgen. But but do they make the most evs
Speaker 1: in the world. Absolutely, Yeah, it's fascinating. There was a
Speaker 1: column I think too on the Bloomberg that just says,
Speaker 1: people thinking about their cars, you have to be thinking
Speaker 1: about if you buy a new car today, what's the
Speaker 1: resale market in five or six years, when you typically
Speaker 1: often sell off a car, how's the battery doing? Well? Well,
Speaker 1: but not even that, like, are you gonna want to
Speaker 1: buy an ice right, an internal combustion engine when maybe
Speaker 1: in five or six years nobody's gonna want them, And
Speaker 1: so that just kind of pumps up the demand for evs.
Speaker 1: But there is that battery story too down the hall.
Speaker 1: She's the best, She's Bloomberg Technology reporter. We love talking
Speaker 1: all things Tesla and Elon Musk with her. Yeah, but
Speaker 1: you let me drive. Oh no, no, no, this is
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Speaker 1: clothes on Bluebird Radio. All Right, folks, just about ten
Speaker 1: minutes left in our trading day. We've got stocks really
Speaker 1: hovering near their house of the session. I thought they
Speaker 1: had seen that we could see maybe records? Is it
Speaker 1: in the S and P five hundred today? Um, but
Speaker 1: we'll keep an eye on that for you. And by
Speaker 1: the way, this is still a Santa Claus rally. We
Speaker 1: got one more day. Santa's got He's gone back to
Speaker 1: the north. The technical definition of the Santa Claus Rally
Speaker 1: includes the first two trading days of the new year. Captain, alright,
Speaker 1: market captain, all right, Let's get to it with Steve Brown.
Speaker 1: He's senior portfolio manager at American Century Investments. They've got
Speaker 1: two fifty billion in assets under management. He's co manager
Speaker 1: on the company's real estate fund and the Global Real
Speaker 1: Estate Fund. That latter fund, by the way, beating most
Speaker 1: of its peers over the past five years. Reach running
Speaker 1: on average annually nearly four. He's on the phone in
Speaker 1: New York City. Hey, Steve, how are you happy New Year?
Speaker 1: I'm great? Happy New Year to you too. All Right,
Speaker 1: So some optimism in the markets despite yields moving up.
Speaker 1: It's been an interesting first day, but the first day
Speaker 1: does not necessarily make a market year. Um, what are
Speaker 1: your expectations as you look at two. Sure, we had
Speaker 1: a very strong year in two thousand one, and as
Speaker 1: we step into two, you know, we see a couple
Speaker 1: of things that are still in place. We see reads
Speaker 1: were really strong last year, right, I mean, if you
Speaker 1: look at one measure, I think it was up. I
Speaker 1: look at the DOWD Jones equity reat total returning decks
Speaker 1: up last year. That's a big bump. Yes, they were
Speaker 1: one of the worst performing asset classes in two thousand twenty,
Speaker 1: so they did have a bounce back. But in general,
Speaker 1: a couple of the drivers were strong. Beformance are inflationary trends,
Speaker 1: a lot of liquidity and demand being stronger than supplied
Speaker 1: many property types. As we enter twenty two, a lot
Speaker 1: of those factors are still true today. Demand is great
Speaker 1: and supply for many property sectors in regions the world,
Speaker 1: and uh, you know, as you sit here today, inflation
Speaker 1: is still running you know, five s. The FET is
Speaker 1: taking actions to address it. But I think in the
Speaker 1: first half this year we're gonna continue see inflation relatively strong.
Speaker 1: And there are a number of property sectors that have
Speaker 1: been able to raise rents you know, at the same
Speaker 1: level of inflation. So they have showed some very good,
Speaker 1: good earnings growth both in two thousand twenty one, and
Speaker 1: we expect to be that case in two two. Also. Okay,
Speaker 1: so where does the FED come into this, and where
Speaker 1: does monetary policy come into this? Because I know from
Speaker 1: from your notes that our producers gave us UH that
Speaker 1: you still expect easy money policies to continue throughout the world,
Speaker 1: even though we see tightening happening. Sure, My point is
Speaker 1: that last year we had extremely easy money policies and
Speaker 1: this year two two, we expect to have easy money policies.
Speaker 1: So from extremely easy, too easy, still easy yet so
Speaker 1: there's still a lot of liquidity out there. Rates are
Speaker 1: still very low. I mean, the FED once has said
Speaker 1: for the bond market, has said that the FED may
Speaker 1: raise the FED funds rate three times this year, you know,
Speaker 1: maybe up to h bases points or something like that
Speaker 1: in the ten year. You know, it's it's around, Like
Speaker 1: you said at the top of the hour, it's about
Speaker 1: one point six percent right now. You know, if that
Speaker 1: drifts hired a two percent or so, I mean, that's
Speaker 1: still a very accommodative environment for economic activity as well
Speaker 1: as real estate activity. You have noted as to mention
Speaker 1: some of the research you guys shared with us and
Speaker 1: some of the notes that property owners continue to benefit
Speaker 1: from demand being greater than supply in many markets. You
Speaker 1: mentioned it earlier. UM reads. There's all kinds of reads, right,
Speaker 1: there's commercial broadly speaking that but you could break it
Speaker 1: down into hospitality, you can talk break it down into
Speaker 1: office properties, you can break it down into retail. You know,
Speaker 1: where are we seeing demand and particularly being greater than
Speaker 1: supply in many markets or even geographical variations. UM, we
Speaker 1: see generally speaking, demand being granted and supply in rental housing, UM,
Speaker 1: industrial and self storage to name a couple three. And
Speaker 1: let me go back to the first one, which would
Speaker 1: be rental housing. This could be up the apartment, it
Speaker 1: could be single family rental properties, or to be manufactured housing. UM.
Speaker 1: They're all benefiting these property owners, these real estate companies
Speaker 1: are from demanding grades and supply and ability to raise
Speaker 1: rents at a higher late rate than inflation. They're also
Speaker 1: being benefited by high home prices. I mean, home prices
Speaker 1: are probably a in two one. We don't expect that
Speaker 1: type of appreciation in twenty two. But there is still
Speaker 1: a very good demand for rental housing, and the remains
Speaker 1: in most parts of the world assured as affordable housing.
Speaker 1: I know a lot of people who are selling their
Speaker 1: homes because as they know that you're going to move
Speaker 1: in the near term or something, and taking advantage of
Speaker 1: a market that is just silling and renting. Yep, yep.
Speaker 1: There are those serious tax implications to doing that, right
Speaker 1: if you take the gains and you don't actually buy
Speaker 1: new property. That's true, that's a good point. Yeah, I mean,
Speaker 1: but we're seeing in general is that it's still relatively
Speaker 1: cheaper to rent than to buy because of the hurdle
Speaker 1: putting down ten or deposits. So it really has opened
Speaker 1: the runway up for continued strength in the rent old
Speaker 1: apartment market, whether to New York or the sun Bold
Speaker 1: or other parts of the country. M Hey, Steve um
Speaker 1: Let's talk a little bit about retail, and you know,
Speaker 1: Simon Property Group is among your your top holdings here,
Speaker 1: and I'm I'm wondering how you're how you're looking at
Speaker 1: retail in the recovery and retail sure UM retail reads,
Speaker 1: whether it's Simon or some Shopping to Reach, performed very
Speaker 1: well in two thousand twenty one. They bounced back from
Speaker 1: a disastrous two UM as the economy generally reopened, both
Speaker 1: in Europe, Asia in North America, so the stocks had
Speaker 1: a good bounce. UM as we sit today, we're still
Speaker 1: constructive on them for a couple of reasons. One is,
Speaker 1: UM there's been a lot of leaking activity in two
Speaker 1: thousand twenty one and that should flow into two thou
Speaker 1: into higher outdancy levels. Secondly, UM, there have been very
Speaker 1: few store closing their bankruptcies and the part of retailers,
Speaker 1: so I think as we entered the peak store closing season,
Speaker 1: which is couldly the first quarter of the year, UH,
Speaker 1: store closing is gonna be very low. And then thirdly,
Speaker 1: generally speaking, consumers are in good shape from a balancary perspective,
Speaker 1: so they have plenty of spending power and so that
Speaker 1: combination of events you know, rising outencies, lower store closings,
Speaker 1: and they help the consumer, you know, bode well for
Speaker 1: both consumers spending, but also for rent growth and then
Speaker 1: a lot of growth on the part of a Simon
Speaker 1: Property group or some strip center names like a kink
Speaker 1: or quite Realty with you own grocery anchored optic centers.
Speaker 1: What's your favorite space when it comes to reads or
Speaker 1: within the commercial real estate market or even residential. Just quickly,
Speaker 1: we're still like industrial for a number of reasons. Uh,
Speaker 1: the man is clearly greater than supply there and the
Speaker 1: demand drivers of the growth and e commerce generally speaking,
Speaker 1: and it's not just it's factors to Amazon or Shopify,
Speaker 1: it's also the traditional players like Walmart and Target, you know,
Speaker 1: really emphasizing delivering the goods the consumer in a shorter time,
Speaker 1: and the backup in the ports has put more pressure,
Speaker 1: more emphasis on getting the goods into the warehouses, so
Speaker 1: these retailers can control the desk in a little better.
Speaker 1: All right, Listen, Steve, thanks so much for joining us.
Speaker 1: Steve Brown, Senior portfolio manager, American Century Investments. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes,
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