1 00:00:01,360 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,279 Speaker 1: and on Bloomberg dot Com. And Lisa bram Boyd's filling 7 00:00:21,280 --> 00:00:24,720 Speaker 1: in for Vonnie Queen alongside Paul Sweeney. Yesterday was an 8 00:00:24,720 --> 00:00:28,960 Speaker 1: extraordinary day in markets. Stocks dropped about three and a 9 00:00:29,040 --> 00:00:32,680 Speaker 1: half percent, but gold was down and so were treasuries. 10 00:00:32,760 --> 00:00:36,880 Speaker 1: Treasury yields rose priced down, which was unusual and it's 11 00:00:36,920 --> 00:00:41,879 Speaker 1: only happened twice since March eleventh and March eighteen. This 12 00:00:41,960 --> 00:00:45,199 Speaker 1: according to Bank of America Global Analysts, the question is 13 00:00:45,400 --> 00:00:49,360 Speaker 1: our treasury is no longer a hedge against equity volatility. 14 00:00:49,680 --> 00:00:52,800 Speaker 1: Joining us to answer that question, Tad Revel, chief Investment 15 00:00:52,800 --> 00:00:56,040 Speaker 1: Officer for Fixing come at TCW with two five billion 16 00:00:56,080 --> 00:01:01,240 Speaker 1: dollars of assets under management. Tad, what's your view on that? Well, 17 00:01:01,240 --> 00:01:04,360 Speaker 1: there's a lot of incoherence in the capital markets, and 18 00:01:04,440 --> 00:01:08,320 Speaker 1: I think pointing out the anomaly of gold and bonds 19 00:01:08,680 --> 00:01:12,000 Speaker 1: versus equity, and the breakdown of some of the traditional 20 00:01:12,120 --> 00:01:16,240 Speaker 1: relationships between those asset classes is one of the manifestations 21 00:01:16,280 --> 00:01:19,520 Speaker 1: of this, Uh, how do I call it? Let's call 22 00:01:19,560 --> 00:01:22,479 Speaker 1: it a massic economy in the sense that there's a 23 00:01:22,520 --> 00:01:26,800 Speaker 1: massive policy response that's still working its way through the 24 00:01:27,040 --> 00:01:30,560 Speaker 1: underlying economy and getting price into the capital markets, and 25 00:01:30,600 --> 00:01:34,160 Speaker 1: that's very much at odds with the actual reality that 26 00:01:34,200 --> 00:01:36,199 Speaker 1: we're facing in front of us. There is so much 27 00:01:36,600 --> 00:01:41,240 Speaker 1: opacity as it relates to the ongoing withdrawal of stimulus 28 00:01:41,240 --> 00:01:44,880 Speaker 1: that's taking place over time. The question that overhangs will 29 00:01:44,920 --> 00:01:48,200 Speaker 1: some of this be renewed or potentially enhanced with the elections. 30 00:01:48,600 --> 00:01:51,000 Speaker 1: There's issues related to the vaccines. So I don't know 31 00:01:51,040 --> 00:01:53,760 Speaker 1: that there's much that you can judge on the basis 32 00:01:53,840 --> 00:01:57,840 Speaker 1: of historical relationships in order to make judgments about how 33 00:01:57,880 --> 00:02:00,200 Speaker 1: assets are going to be correlating with one. In other 34 00:02:00,760 --> 00:02:04,800 Speaker 1: that said, there is so much suppression of rates and 35 00:02:04,880 --> 00:02:08,320 Speaker 1: volatility on the part of the FED um the FED 36 00:02:08,400 --> 00:02:10,400 Speaker 1: is not in a in a sense allowing the capital 37 00:02:10,440 --> 00:02:14,160 Speaker 1: markets to speak up and express what they perceive to 38 00:02:14,200 --> 00:02:17,120 Speaker 1: be this underlying level of uncertainty, and so it does 39 00:02:17,200 --> 00:02:20,720 Speaker 1: call into question whether owning treasuries at these very low, 40 00:02:21,080 --> 00:02:25,400 Speaker 1: historically low, galactically low interest rates actually is going to 41 00:02:25,480 --> 00:02:30,200 Speaker 1: correlate or provide any hedge against anything on an ongoing basis. 42 00:02:30,200 --> 00:02:33,440 Speaker 1: All right, So tad obvious. It seems clear, particularly after 43 00:02:33,480 --> 00:02:36,040 Speaker 1: hearing from Madame Leguard this morning of the e c B, 44 00:02:36,240 --> 00:02:40,000 Speaker 1: that we are in a world of lower rates for longer. 45 00:02:40,680 --> 00:02:42,880 Speaker 1: What is a person like you, I manage your fund 46 00:02:42,880 --> 00:02:45,400 Speaker 1: manager like you, what do you do in terms of 47 00:02:45,400 --> 00:02:49,120 Speaker 1: perhaps looking for some incremental yield in a in a 48 00:02:49,160 --> 00:02:52,280 Speaker 1: world where it's lower for longer. Yeah. So, in a sense, 49 00:02:52,320 --> 00:02:54,480 Speaker 1: you have to take the gift that's being offered by 50 00:02:54,480 --> 00:02:57,240 Speaker 1: the central banks to the extent to which they're so 51 00:02:57,360 --> 00:03:01,440 Speaker 1: to speak, allowing you to rely on borrowed funds in 52 00:03:01,560 --> 00:03:04,720 Speaker 1: order to make your bones um. One of the ways 53 00:03:04,720 --> 00:03:07,160 Speaker 1: you can do that is by accessing the t B 54 00:03:07,280 --> 00:03:13,600 Speaker 1: a agency mortgage back market. There are exceedingly low um rates, 55 00:03:14,360 --> 00:03:16,839 Speaker 1: lower than the rates that you can earn by being 56 00:03:16,960 --> 00:03:20,359 Speaker 1: long the agency mortgage that are implied in the financing 57 00:03:20,680 --> 00:03:25,040 Speaker 1: and so relying essentially on the gift that's being given 58 00:03:25,160 --> 00:03:28,760 Speaker 1: by the by the agency mortgage market courtesy of the 59 00:03:28,800 --> 00:03:31,360 Speaker 1: central banks is one thing that can be done. The 60 00:03:31,440 --> 00:03:33,480 Speaker 1: other thing that I think that can be done is 61 00:03:33,600 --> 00:03:37,160 Speaker 1: to remind yourself that we ain't through this yet. I mean, 62 00:03:37,160 --> 00:03:39,840 Speaker 1: there is a uh it's it's rather clear, at least 63 00:03:40,000 --> 00:03:43,880 Speaker 1: from our vantage point, that there's an ongoing economic transformation. 64 00:03:44,160 --> 00:03:46,200 Speaker 1: It's a bit glib to put it this way, but 65 00:03:46,280 --> 00:03:49,560 Speaker 1: the economy of so to speak, is being fast forwarded 66 00:03:50,040 --> 00:03:53,520 Speaker 1: practically into the present day. And what that means, of course, 67 00:03:53,680 --> 00:03:55,920 Speaker 1: is that there are a lot of business models and 68 00:03:55,960 --> 00:03:58,000 Speaker 1: a lot of assets that are going to be rendered 69 00:03:58,040 --> 00:04:02,280 Speaker 1: obsolete or unprofitable. So wait, you can see this being 70 00:04:02,320 --> 00:04:06,400 Speaker 1: expressed through delinquency rates on commercial loans in the hotel space. 71 00:04:06,720 --> 00:04:08,920 Speaker 1: We don't need to talk a whole lot about what's 72 00:04:08,920 --> 00:04:12,840 Speaker 1: been happening, the devastation in so much of the industries 73 00:04:12,880 --> 00:04:15,520 Speaker 1: that are vulnerable to social distancing. And we have this 74 00:04:15,640 --> 00:04:20,320 Speaker 1: huge question. We ran this amazing experiment in which we 75 00:04:20,440 --> 00:04:25,240 Speaker 1: took many millions of professional working professionals and move them 76 00:04:25,240 --> 00:04:28,159 Speaker 1: out of the office environment and put them in a 77 00:04:28,360 --> 00:04:31,719 Speaker 1: work from home type situation. So big question I guess 78 00:04:31,720 --> 00:04:35,120 Speaker 1: that overhangs is how much commercial real estate do we 79 00:04:35,240 --> 00:04:38,240 Speaker 1: need going forward? If you hold back, I suspect that 80 00:04:38,240 --> 00:04:41,120 Speaker 1: there's going to be lots of opportunities as these asset 81 00:04:41,160 --> 00:04:43,960 Speaker 1: classes were priced right now, we're living in a world 82 00:04:44,080 --> 00:04:46,720 Speaker 1: where the sellers in general in so many of these 83 00:04:46,800 --> 00:04:50,039 Speaker 1: related asset classes are looking for last year's prices, and 84 00:04:50,040 --> 00:04:53,080 Speaker 1: the buyers obviously aren't stepping up to to validate that, 85 00:04:53,200 --> 00:04:55,880 Speaker 1: which is the reason Tad why there's been paralysis in 86 00:04:55,960 --> 00:04:58,440 Speaker 1: certain commercial real estate markets, because there just hasn't been 87 00:04:58,440 --> 00:05:00,600 Speaker 1: a meeting of minds in terms of what of value 88 00:05:00,640 --> 00:05:02,680 Speaker 1: is I want to go to a more liquid market 89 00:05:03,040 --> 00:05:06,960 Speaker 1: just to gauge the appetite for risk and to get 90 00:05:07,000 --> 00:05:09,360 Speaker 1: your sense of whether people are perhaps getting a little 91 00:05:09,360 --> 00:05:11,400 Speaker 1: ahead of themselves in terms of how much of a 92 00:05:11,440 --> 00:05:13,840 Speaker 1: backstop the FED is going to provide. I'm looking at 93 00:05:13,880 --> 00:05:17,400 Speaker 1: triple C rated junk bonds. This is the lowest rated 94 00:05:17,839 --> 00:05:20,920 Speaker 1: debt that is the closest to default. And yes, yields 95 00:05:20,920 --> 00:05:23,520 Speaker 1: recently have ticked up a little bit, prices down, but 96 00:05:23,600 --> 00:05:27,240 Speaker 1: still the yields are now sub ten percent versus a 97 00:05:27,360 --> 00:05:30,400 Speaker 1: high this year of nearly twenty at the peak of 98 00:05:30,440 --> 00:05:35,560 Speaker 1: the disruption in March. Are people pricing in the type 99 00:05:35,640 --> 00:05:39,919 Speaker 1: of insolvencies or struggles that you're talking about that are inevitable, 100 00:05:40,160 --> 00:05:42,719 Speaker 1: regardless of all of the FED support and regardless of 101 00:05:42,720 --> 00:05:46,520 Speaker 1: any fist glade. I mean, the short answer is that 102 00:05:47,120 --> 00:05:50,440 Speaker 1: as we localize the conversation to that part of the 103 00:05:50,520 --> 00:05:53,360 Speaker 1: high yield market, that the triple C area, the highly 104 00:05:53,480 --> 00:05:57,120 Speaker 1: leveraged and in many cases high operating leverage married to 105 00:05:57,200 --> 00:06:00,840 Speaker 1: high financial leverage, there are there is not a sufficient 106 00:06:00,880 --> 00:06:04,800 Speaker 1: degree of of appreciation for the defaults that are going 107 00:06:04,839 --> 00:06:07,520 Speaker 1: to be coming in those in those sectors, and nor, 108 00:06:07,680 --> 00:06:10,680 Speaker 1: as you alluded to, I think, is there sufficient appreciation 109 00:06:10,760 --> 00:06:12,880 Speaker 1: of the defaults that are going to be coming into 110 00:06:13,080 --> 00:06:16,680 Speaker 1: the commercial real estate market as well. So it's it's 111 00:06:16,800 --> 00:06:19,960 Speaker 1: very interesting. I mean, the FED can liquefy markets, but 112 00:06:20,400 --> 00:06:21,720 Speaker 1: at the end of the day, are they going to 113 00:06:21,800 --> 00:06:26,120 Speaker 1: make good operating losses to the bondholders or to essentially 114 00:06:26,120 --> 00:06:30,400 Speaker 1: allow obsolete businesses to sustain themselves in a zombified way 115 00:06:30,560 --> 00:06:34,400 Speaker 1: on an ongoing basis. So it creates this huge tiering 116 00:06:34,560 --> 00:06:37,000 Speaker 1: in which double B spreads or I don't know about 117 00:06:37,000 --> 00:06:40,240 Speaker 1: three hundred and fifty basis points over treasuries and triple 118 00:06:40,320 --> 00:06:42,880 Speaker 1: C s, which, as you pointed out, they have actually 119 00:06:42,880 --> 00:06:46,280 Speaker 1: been an outstanding performer um from the point of view 120 00:06:46,279 --> 00:06:48,440 Speaker 1: of where we were in March, and yet the level 121 00:06:48,600 --> 00:06:51,760 Speaker 1: of credit risk associated with that part of the market 122 00:06:52,240 --> 00:06:55,400 Speaker 1: is probably not properly priced at all in many cases 123 00:06:56,160 --> 00:06:59,320 Speaker 1: ataches real quickly seconds in the corporate credit market. Any 124 00:06:59,360 --> 00:07:02,600 Speaker 1: areas of opportun a new for you right here, There's 125 00:07:02,600 --> 00:07:05,320 Speaker 1: been a number of them. Actually, um the but but 126 00:07:05,440 --> 00:07:08,840 Speaker 1: the short take on it essentially is that you want 127 00:07:08,880 --> 00:07:13,240 Speaker 1: to stick with the sectors that are most that are 128 00:07:13,400 --> 00:07:18,360 Speaker 1: least at risk of disruption by the the ongoing changes 129 00:07:18,440 --> 00:07:23,120 Speaker 1: transformations that are occurring in the underlying economy. So basically, uh, 130 00:07:23,280 --> 00:07:26,400 Speaker 1: in some cases, just we're really sticking with mostly higher 131 00:07:26,480 --> 00:07:32,160 Speaker 1: quality investment grade type type issuers. Tad, thanks as always 132 00:07:32,160 --> 00:07:34,360 Speaker 1: for joining us. We always appreciate getting your thoughts on 133 00:07:34,400 --> 00:07:39,320 Speaker 1: all things fixed income. Tad Revel, chief investment officer of TCW. 134 00:07:39,480 --> 00:07:42,080 Speaker 1: That's Trust Company of the West, one of the big 135 00:07:42,120 --> 00:07:45,280 Speaker 1: big money managers out there, two thirty five billion dollars 136 00:07:45,480 --> 00:07:47,760 Speaker 1: firm wide. It was a must stop for me back 137 00:07:47,760 --> 00:07:49,680 Speaker 1: in my analyst days while on the West Coast. You 138 00:07:49,680 --> 00:07:52,119 Speaker 1: had to go see the good folks at TCW. Getting 139 00:07:52,160 --> 00:07:55,960 Speaker 1: his thoughts on the credit markets. Fixed income markets here 140 00:07:55,960 --> 00:07:58,720 Speaker 1: really an issue here as we kind of go into 141 00:07:59,360 --> 00:08:05,320 Speaker 1: another love of this pandemic. Well, we got a sloom 142 00:08:05,360 --> 00:08:10,040 Speaker 1: of economic data this morning. GDP number thirty three percent 143 00:08:10,280 --> 00:08:13,600 Speaker 1: increase in the quarter, off setting the prior quarter thirty 144 00:08:13,800 --> 00:08:19,040 Speaker 1: or partially offsetting the prior quarters declined jobs claims came 145 00:08:19,200 --> 00:08:21,800 Speaker 1: in a little bit better than expected, but still stubbornly high. 146 00:08:21,880 --> 00:08:24,640 Speaker 1: Let's dig into some of the meat of those numbers. 147 00:08:24,720 --> 00:08:27,680 Speaker 1: We can do that with Constance Hunter, chief economists for 148 00:08:27,760 --> 00:08:30,960 Speaker 1: KPMG based in New York City. Constants, thanks so much 149 00:08:30,960 --> 00:08:33,160 Speaker 1: for joining us here. Let's start with the GDP number. 150 00:08:33,200 --> 00:08:37,440 Speaker 1: Obviously a big print, but we're no, we're not back 151 00:08:37,440 --> 00:08:40,880 Speaker 1: to where we were pre pandemic by any stretch, are we. Yeah, Paul, 152 00:08:40,960 --> 00:08:44,240 Speaker 1: that's a great point. We are two thirds below the 153 00:08:44,280 --> 00:08:47,400 Speaker 1: pre pandemic level of GDP. And and just to put 154 00:08:47,440 --> 00:08:51,120 Speaker 1: this in contact, on a per capita GDP basis, we're 155 00:08:51,200 --> 00:08:56,319 Speaker 1: back at Q four levels, right. So I think it's 156 00:08:56,360 --> 00:08:59,559 Speaker 1: important when you see such a bifurcation and the impact 157 00:08:59,600 --> 00:09:02,240 Speaker 1: of who the impacts to think about not just the 158 00:09:02,280 --> 00:09:06,120 Speaker 1: GDP level, but the per capita GDP. And then of 159 00:09:06,120 --> 00:09:08,319 Speaker 1: course on a year of a year basis, we're still 160 00:09:08,520 --> 00:09:13,240 Speaker 1: down two point nine percent. So Um, we're not back. 161 00:09:13,400 --> 00:09:17,480 Speaker 1: And more importantly, what this data says about the future 162 00:09:17,520 --> 00:09:20,080 Speaker 1: growth rate is very interesting. When we look at that 163 00:09:20,160 --> 00:09:26,040 Speaker 1: bifurcation between goods consumption and services consumption constants built up 164 00:09:26,040 --> 00:09:28,280 Speaker 1: on that place, What does that say about the future 165 00:09:28,520 --> 00:09:32,400 Speaker 1: of goods versus services. Well, so, first of all, normally 166 00:09:32,440 --> 00:09:36,439 Speaker 1: in a recession, we don't see services consumption fall that much. 167 00:09:36,480 --> 00:09:38,520 Speaker 1: And the reason is because people still go to the 168 00:09:38,640 --> 00:09:41,640 Speaker 1: dentist and they still get their hair cut even during 169 00:09:41,640 --> 00:09:47,840 Speaker 1: a recession. Right. So um, that fell dramatically um services 170 00:09:47,840 --> 00:09:50,400 Speaker 1: as a percentage GDP in part because of lockdowns and 171 00:09:50,440 --> 00:09:54,040 Speaker 1: in part because of reduced capacity. Um nobody bought World 172 00:09:54,040 --> 00:09:57,480 Speaker 1: Series tickets, for example, So um, there was a lot 173 00:09:57,520 --> 00:10:01,480 Speaker 1: of services consumption that just didn't occur. And then when 174 00:10:01,520 --> 00:10:05,080 Speaker 1: we compound this with people spending more time at home, 175 00:10:05,520 --> 00:10:08,480 Speaker 1: people are buying goods right there. They're buying fire pits, 176 00:10:08,480 --> 00:10:13,440 Speaker 1: they're buying you know, outdoors, uh, you know, like Lawan furniture, 177 00:10:13,480 --> 00:10:17,480 Speaker 1: and they're buying pelotons and things like that, right And 178 00:10:17,480 --> 00:10:20,480 Speaker 1: and there's only so many pelotons you're going to buy. Right, 179 00:10:20,520 --> 00:10:24,120 Speaker 1: So that goods consumption while it rose dramatically, and it's 180 00:10:24,240 --> 00:10:28,600 Speaker 1: up five point five per cent Q over q UM. 181 00:10:28,640 --> 00:10:32,719 Speaker 1: It is not going to continue at that pace right now. 182 00:10:32,760 --> 00:10:37,439 Speaker 1: The and so the hope is that services continues to rise. 183 00:10:37,679 --> 00:10:39,760 Speaker 1: It only rose at two point eight percent q over 184 00:10:39,840 --> 00:10:43,560 Speaker 1: q and and and that as we continue to reopen 185 00:10:43,600 --> 00:10:47,160 Speaker 1: services consumption is going to resume. The concern, of course, 186 00:10:47,360 --> 00:10:50,719 Speaker 1: is that the virus is surging in a number of 187 00:10:50,800 --> 00:10:53,120 Speaker 1: parts of the country and and actually growing in some 188 00:10:53,160 --> 00:10:56,199 Speaker 1: parts of the country where it was not growing previously. 189 00:10:56,559 --> 00:10:58,679 Speaker 1: And the concern here is this is going to hold 190 00:10:58,679 --> 00:11:01,640 Speaker 1: back conservices comes option. So we're not going to see 191 00:11:01,640 --> 00:11:05,480 Speaker 1: a repeat of the goods consumption. And unless services consumptions grow, 192 00:11:05,559 --> 00:11:08,080 Speaker 1: we're conservices consumption grows, we're going to see a pull 193 00:11:08,120 --> 00:11:10,720 Speaker 1: back in the pace of growth of GDP pretty significantly. 194 00:11:11,640 --> 00:11:14,880 Speaker 1: Cons Where are you were you kind of coming out 195 00:11:14,760 --> 00:11:17,640 Speaker 1: at KPMG in terms of your GDP look for the 196 00:11:17,679 --> 00:11:23,160 Speaker 1: remainder this year. But more importantly, yeah, so in UM, 197 00:11:23,360 --> 00:11:26,520 Speaker 1: we're so our base forecast at the moment does not 198 00:11:26,720 --> 00:11:30,040 Speaker 1: have additional stimulus. And and let me just say that 199 00:11:30,080 --> 00:11:33,840 Speaker 1: I think that's going to end up well, yes, and no, 200 00:11:34,040 --> 00:11:35,360 Speaker 1: I was gonna say I think that's going to end 201 00:11:35,440 --> 00:11:40,440 Speaker 1: up being incorrect because, um, if the president wins reelection, 202 00:11:40,840 --> 00:11:43,680 Speaker 1: he will try to put forth a stimulus plan. If 203 00:11:43,880 --> 00:11:46,319 Speaker 1: Biden wins, he will try to put forth a stimulus plan. 204 00:11:46,400 --> 00:11:49,560 Speaker 1: And the sign of that stimulus plan depends in large 205 00:11:49,640 --> 00:11:52,680 Speaker 1: part on whether the same party that holds the White 206 00:11:52,720 --> 00:11:55,560 Speaker 1: House holds the Senate. Right, So if you have a 207 00:11:55,600 --> 00:11:57,800 Speaker 1: different party holding the White House and holding the Senate, 208 00:11:57,840 --> 00:11:59,680 Speaker 1: the stimulus who is going to be smaller. If you 209 00:11:59,720 --> 00:12:02,160 Speaker 1: have the same party, the stimulus is going to be bigger. 210 00:12:02,400 --> 00:12:05,000 Speaker 1: And it honestly, both the Republicans and the Democrats, if 211 00:12:05,040 --> 00:12:07,200 Speaker 1: they are in control, are going to put forth similar 212 00:12:07,280 --> 00:12:11,760 Speaker 1: sizes of stimulus. The focus on where those stimulus stellars goes, 213 00:12:11,840 --> 00:12:14,280 Speaker 1: of course, will be very very different, depending upon whether 214 00:12:14,320 --> 00:12:17,160 Speaker 1: it is a Republican or Democratic resident constants. Just give 215 00:12:17,240 --> 00:12:18,960 Speaker 1: us a sense of how big the spread is in 216 00:12:19,000 --> 00:12:22,280 Speaker 1: your estimates for the economy if we get a fiscal 217 00:12:22,320 --> 00:12:26,280 Speaker 1: support bill or if we don't. Yeah, so it's it's 218 00:12:26,280 --> 00:12:29,320 Speaker 1: pretty significant, I mean um, and where where it really 219 00:12:29,320 --> 00:12:31,760 Speaker 1: comes down as in personal income, So we'll see personal 220 00:12:31,800 --> 00:12:37,440 Speaker 1: income decline um in one. If we don't get stimulus, um, 221 00:12:37,480 --> 00:12:39,640 Speaker 1: we will see it rise. And this sort of this 222 00:12:39,679 --> 00:12:42,360 Speaker 1: sort of makes the difference between like a five percent 223 00:12:42,360 --> 00:12:45,200 Speaker 1: rebound in GDP and like a six and a half 224 00:12:45,200 --> 00:12:49,080 Speaker 1: percent rebound in GDP. Wow, that's huge, Constance Hunter, thank 225 00:12:49,120 --> 00:12:51,000 Speaker 1: you so much for being with us and for all 226 00:12:51,040 --> 00:12:54,960 Speaker 1: of your research. Constance Hunter as chief economistic KPMG joining 227 00:12:55,040 --> 00:12:57,640 Speaker 1: us on those GDP figures. We didn't even get to 228 00:12:57,840 --> 00:13:01,000 Speaker 1: the jobless claims figures that we got today, which were 229 00:13:01,040 --> 00:13:04,080 Speaker 1: better than expected, but still a very hefty amount nearly 230 00:13:04,120 --> 00:13:07,160 Speaker 1: eight hundred thousand new claims coming in and a number 231 00:13:07,200 --> 00:13:11,880 Speaker 1: of people shifting to permanent unemployment. This is the sticking 232 00:13:11,920 --> 00:13:13,920 Speaker 1: point to meet at. Paul and I think about this 233 00:13:13,960 --> 00:13:17,800 Speaker 1: all the time. What is the structural scarring that we 234 00:13:17,840 --> 00:13:20,800 Speaker 1: are experiencing at this point? People who are not going 235 00:13:20,840 --> 00:13:24,480 Speaker 1: to get back into the workforce for years. That's exactly right. 236 00:13:24,480 --> 00:13:26,280 Speaker 1: And you know, the longer this goes on, at least 237 00:13:26,559 --> 00:13:28,959 Speaker 1: the expectation is, you know, the more permanent some of 238 00:13:29,000 --> 00:13:31,120 Speaker 1: those job losses will in fact become. And we saw 239 00:13:31,880 --> 00:13:34,000 Speaker 1: that with the financial crisis in two thousand and eight 240 00:13:34,040 --> 00:13:36,400 Speaker 1: and two thousand nine. You know, many of those jobs 241 00:13:36,440 --> 00:13:40,360 Speaker 1: took several years uh to kind of get refilled and 242 00:13:40,880 --> 00:13:44,280 Speaker 1: get back to a stronger employment situation, and the concern 243 00:13:44,400 --> 00:13:47,760 Speaker 1: is we may have something like that this time around. Yeah, 244 00:13:47,880 --> 00:13:50,400 Speaker 1: with the added emphasis and this idea that there's an 245 00:13:50,400 --> 00:13:53,199 Speaker 1: increasing focus on tech. So what jobs are going to 246 00:13:53,280 --> 00:13:57,880 Speaker 1: be required. I don't know whose idea this was to 247 00:13:57,880 --> 00:14:02,120 Speaker 1: have Alphabet, Amazon, Apple, on Facebook, and Twitter all reporting 248 00:14:02,160 --> 00:14:06,560 Speaker 1: earnings after the bow on October twenty nine. But here 249 00:14:06,559 --> 00:14:08,280 Speaker 1: we are, and we are going to be trying to 250 00:14:08,320 --> 00:14:12,480 Speaker 1: pass through all of these earnings reports today, even though 251 00:14:12,679 --> 00:14:15,880 Speaker 1: they account for a significant chunk of the entire equity 252 00:14:15,920 --> 00:14:18,160 Speaker 1: market of the United States, not to mention the world economy, 253 00:14:18,240 --> 00:14:21,080 Speaker 1: joining us to help us focus on what the most 254 00:14:21,120 --> 00:14:24,520 Speaker 1: important aspects of these earnings reports will be. As David Garretty, 255 00:14:24,840 --> 00:14:27,640 Speaker 1: chief market strategist for laid Law and Company and partner 256 00:14:28,000 --> 00:14:32,240 Speaker 1: at bat Block, David, what were they thinking all coming 257 00:14:32,240 --> 00:14:36,640 Speaker 1: out in the same day? I gotta start there, well, Lisa, 258 00:14:36,760 --> 00:14:38,760 Speaker 1: it reminds me a lot of UH. I used to 259 00:14:38,760 --> 00:14:42,200 Speaker 1: work from the more of the Japanese bank back around 260 00:14:42,200 --> 00:14:44,880 Speaker 1: two thousand and it used to be the Japanese companies, 261 00:14:45,000 --> 00:14:47,600 Speaker 1: all the banks would all schedule the release date for 262 00:14:47,640 --> 00:14:50,000 Speaker 1: the same day. So I don't really want to say 263 00:14:50,000 --> 00:14:52,400 Speaker 1: it here, but you know, the tech Big Five. Are 264 00:14:52,400 --> 00:14:55,960 Speaker 1: they turning Japanese? Uh? Very good. I saw what you 265 00:14:56,000 --> 00:14:58,280 Speaker 1: did there, all right, David, So let's step back here. 266 00:14:58,280 --> 00:15:02,360 Speaker 1: We've gotta you know, some real bell weathers for the 267 00:15:02,440 --> 00:15:08,120 Speaker 1: technology economy, for the consumer economy, um, for the advertising economy. 268 00:15:08,200 --> 00:15:09,880 Speaker 1: What are you going to be looking for as you 269 00:15:09,960 --> 00:15:12,200 Speaker 1: kind of read across some of these big names the 270 00:15:12,240 --> 00:15:16,160 Speaker 1: section in Yeah, certainly, I mean probably starting off at 271 00:15:16,200 --> 00:15:18,760 Speaker 1: the top with Apple, I mean, clearly, what's gonna be 272 00:15:18,800 --> 00:15:20,960 Speaker 1: happening in terms of sell through or at least three 273 00:15:21,080 --> 00:15:25,360 Speaker 1: orders for the latest iPhone is going to be most significant. Also, 274 00:15:25,440 --> 00:15:28,360 Speaker 1: at the same time, looking at what continued demand there 275 00:15:28,480 --> 00:15:31,440 Speaker 1: is for hardware. We've certainly seen from data sources such 276 00:15:31,480 --> 00:15:34,400 Speaker 1: as mp D that you know, laptop shipments are up 277 00:15:34,440 --> 00:15:37,760 Speaker 1: substantially year over year, seeing some of their strongest years 278 00:15:37,800 --> 00:15:40,760 Speaker 1: in decades. Uh So, certainly we expect Apple to be 279 00:15:40,800 --> 00:15:45,760 Speaker 1: participating in that, um, you know, clearly looking for Amazon, um, 280 00:15:45,800 --> 00:15:50,280 Speaker 1: you know, people continue to be staying home. Obviously Amazon 281 00:15:50,400 --> 00:15:52,760 Speaker 1: is feeling more and more of their needs. Amazon also, 282 00:15:52,800 --> 00:15:55,080 Speaker 1: at the same time, the movements of the cloud. We 283 00:15:55,080 --> 00:15:58,239 Speaker 1: saw the strength and Microsoft's numbers earlier this week, Amazon's 284 00:15:58,360 --> 00:16:00,640 Speaker 1: leader in that sector. We would also say that Amazon 285 00:16:00,720 --> 00:16:04,080 Speaker 1: has been moving more in terms of online advertising. So clearly, 286 00:16:04,320 --> 00:16:07,120 Speaker 1: you know, Amazon has a lot of weapons to work 287 00:16:07,160 --> 00:16:10,160 Speaker 1: with and we expect to see them deploy them all. Uh, 288 00:16:10,200 --> 00:16:13,240 Speaker 1: if we're looking at Alphabet, you know, even though you 289 00:16:13,320 --> 00:16:15,160 Speaker 1: had a lot of heat being put on the CEO 290 00:16:15,560 --> 00:16:19,040 Speaker 1: last week from yesterday from the Senate Commerce Committee, Uh, 291 00:16:19,160 --> 00:16:22,760 Speaker 1: we do expect online advertising continues to do well. Uh. 292 00:16:22,800 --> 00:16:24,800 Speaker 1: There may be some drags that we see in terms 293 00:16:24,840 --> 00:16:27,360 Speaker 1: of some of their startup ventures, but you know, from 294 00:16:27,400 --> 00:16:29,680 Speaker 1: that standpoint, we still think that their market to remain 295 00:16:29,800 --> 00:16:33,080 Speaker 1: strong and they are clearly a significant player. Even though 296 00:16:33,160 --> 00:16:37,560 Speaker 1: Apple has been looking at moving off Google as being 297 00:16:37,600 --> 00:16:40,720 Speaker 1: the main search engine on its bones. But still we 298 00:16:40,760 --> 00:16:44,960 Speaker 1: think Google's alphabet's position remains quite strong looking. You know, 299 00:16:45,160 --> 00:16:49,160 Speaker 1: Facebook also the subject of the Commerce here in Commerce 300 00:16:49,160 --> 00:16:52,120 Speaker 1: Committee hearings yesterday in the Senate UM. You know, certainly 301 00:16:52,160 --> 00:16:55,600 Speaker 1: Facebook also benefiting as well also with the run up 302 00:16:55,600 --> 00:17:00,520 Speaker 1: into the election next week. All the social media companies Facebook, Twitter, 303 00:17:00,840 --> 00:17:04,840 Speaker 1: Snap to some extent have all been beneficiaries of influx 304 00:17:04,880 --> 00:17:09,320 Speaker 1: in terms of more campaign driven spending. But that's something 305 00:17:09,359 --> 00:17:12,480 Speaker 1: that's cyclical phenomenon. But elections look have only become more 306 00:17:12,480 --> 00:17:15,560 Speaker 1: expensive over time, So we're seeing a nice uptick here 307 00:17:15,600 --> 00:17:18,240 Speaker 1: from two thousand and sixteen levels as far as spending 308 00:17:18,359 --> 00:17:21,720 Speaker 1: is concerned. And then you know, uh, let's see. I 309 00:17:21,760 --> 00:17:25,240 Speaker 1: think that I think we got to you got through 310 00:17:25,280 --> 00:17:26,879 Speaker 1: a lot of it. I don't know, just home in 311 00:17:26,920 --> 00:17:30,239 Speaker 1: on one. In particular, Amazon, I'm particularly curious about the 312 00:17:30,280 --> 00:17:33,920 Speaker 1: costs that they have incurred to operate in this environment, 313 00:17:34,320 --> 00:17:36,600 Speaker 1: to pay their employees enough to keep them coming back 314 00:17:36,640 --> 00:17:39,600 Speaker 1: to work, to provide the right pps and whatever else 315 00:17:39,640 --> 00:17:43,000 Speaker 1: to keep their workers from getting sick. Do you think 316 00:17:43,000 --> 00:17:45,600 Speaker 1: that they will be able to deliver the margins that 317 00:17:45,640 --> 00:17:48,040 Speaker 1: are being priced into their share prices after the run 318 00:17:48,119 --> 00:17:51,680 Speaker 1: up that we've seen this year. I think that while 319 00:17:51,720 --> 00:17:56,200 Speaker 1: you may have costs in their online e commerce business, 320 00:17:56,359 --> 00:18:00,119 Speaker 1: specifically related to worker protection, you know, remain high as 321 00:18:00,119 --> 00:18:03,080 Speaker 1: they were back during the second quarter, I think that 322 00:18:03,160 --> 00:18:05,679 Speaker 1: the uptick that you see in terms of profitability on 323 00:18:05,720 --> 00:18:09,760 Speaker 1: the cloud as well on online advertising could help to 324 00:18:09,920 --> 00:18:12,560 Speaker 1: offset some of that margin pressure. So I think the 325 00:18:12,640 --> 00:18:16,160 Speaker 1: mix of Amazon continues to improve favorably. And I think 326 00:18:16,320 --> 00:18:19,200 Speaker 1: obviously we're sitting here in front of the year end 327 00:18:19,200 --> 00:18:22,280 Speaker 1: holiday shopping season, which given all the news about COVID. 328 00:18:22,480 --> 00:18:24,119 Speaker 1: People are not gonna be going at the stores to 329 00:18:24,200 --> 00:18:26,480 Speaker 1: do shopping. So where are they going to go? I 330 00:18:26,520 --> 00:18:28,679 Speaker 1: guess it's Amazon? So you know, you don't want to 331 00:18:28,680 --> 00:18:31,680 Speaker 1: sell the stock here in front of the strongest seasonal 332 00:18:31,760 --> 00:18:35,520 Speaker 1: quarter of the year, David. Uh. That hearing we had 333 00:18:35,600 --> 00:18:38,480 Speaker 1: yesterday were some of the you know, the Microsoft Uh. 334 00:18:39,040 --> 00:18:41,000 Speaker 1: You know, we had some of the big CEO s 335 00:18:41,000 --> 00:18:43,280 Speaker 1: there is that. What do you make of that? Is 336 00:18:43,280 --> 00:18:47,760 Speaker 1: that important risk for some of the big tech companies? UM? 337 00:18:47,800 --> 00:18:50,399 Speaker 1: I mean what's been interesting to look at here, Paul, 338 00:18:50,560 --> 00:18:52,320 Speaker 1: is the fact that you know, the tech companies have 339 00:18:52,359 --> 00:18:55,280 Speaker 1: been ramping up their lobbying spending. Actually the tech company's 340 00:18:55,320 --> 00:18:58,240 Speaker 1: Amazon being one, and are actually spending more on lobbying 341 00:18:58,240 --> 00:19:01,000 Speaker 1: than Boeing or a lock Keed Martin, who you would 342 00:19:01,000 --> 00:19:05,280 Speaker 1: think of as the DC lobbying giants. Historically. Clearly, these 343 00:19:05,320 --> 00:19:09,000 Speaker 1: spending levels are indications of what kind of regulatory risk 344 00:19:09,200 --> 00:19:12,560 Speaker 1: these companies perceive around their businesses. And all we really 345 00:19:12,560 --> 00:19:16,199 Speaker 1: saw last yesterday, I hate to say it was the 346 00:19:16,200 --> 00:19:18,080 Speaker 1: fact that just a lot of grandstanding, you know, the 347 00:19:18,160 --> 00:19:21,159 Speaker 1: GOP coming down in these companies because of where their 348 00:19:21,200 --> 00:19:24,879 Speaker 1: headquarters are geographically or what kind of contributions from a 349 00:19:24,920 --> 00:19:28,320 Speaker 1: political standpoint their employees make. I mean, good, Lord Paul, 350 00:19:28,520 --> 00:19:30,080 Speaker 1: I mean the next thing you're gonna hear is that 351 00:19:30,119 --> 00:19:32,879 Speaker 1: they're gonna start criticizing these companies because of the religions 352 00:19:32,880 --> 00:19:35,680 Speaker 1: of their employees or the color of their skin. Come on, 353 00:19:36,040 --> 00:19:40,480 Speaker 1: this is ridiculous. I think that Maria Senator Cantwell from 354 00:19:40,560 --> 00:19:44,080 Speaker 1: Washington I basically did the right thing and basically stepped 355 00:19:44,119 --> 00:19:46,280 Speaker 1: in on the democratic side and said, look, there's a 356 00:19:46,320 --> 00:19:49,480 Speaker 1: freedom of speech in this country that needs to be protected. 357 00:19:49,720 --> 00:19:52,520 Speaker 1: And these companies in the testimony came out and talked 358 00:19:52,560 --> 00:19:56,040 Speaker 1: about what they're doing to try and safeguard social media 359 00:19:56,160 --> 00:19:58,760 Speaker 1: as difficult as it is is from being manipulated by 360 00:19:58,800 --> 00:20:01,200 Speaker 1: outside sources. Right, we'll have to say that's going to 361 00:20:01,240 --> 00:20:03,360 Speaker 1: play out over the long term, certainly. David Garretty, Chief 362 00:20:03,359 --> 00:20:05,159 Speaker 1: Market strategis, thanks so much for joining us. He's a 363 00:20:05,240 --> 00:20:08,360 Speaker 1: laid long company also a partner at bt block giving 364 00:20:08,440 --> 00:20:14,240 Speaker 1: his tech rundown. Well as companies and governments around the 365 00:20:14,240 --> 00:20:18,399 Speaker 1: world race forward in look in search of therapeutics and 366 00:20:18,520 --> 00:20:21,360 Speaker 1: vaccines for this virus. That's probably we're taking a look 367 00:20:21,400 --> 00:20:24,639 Speaker 1: at Operation warp Speed. That's the US government's effort to 368 00:20:24,720 --> 00:20:28,280 Speaker 1: accelerate development of a vaccine. We can do that with 369 00:20:28,320 --> 00:20:32,800 Speaker 1: Stephanie Baker, financial investigation senior writer for Bloomberg News. She 370 00:20:32,880 --> 00:20:35,640 Speaker 1: joins us on the phone from London and she has 371 00:20:35,680 --> 00:20:38,400 Speaker 1: a Bloomberg Business Week story. I think it's just fascinating here. 372 00:20:38,760 --> 00:20:41,840 Speaker 1: Operation Warp Speed could shape up to be an eighteen 373 00:20:41,920 --> 00:20:45,720 Speaker 1: billion dollar bargain. Stephanie, thanks so much for joining us here. 374 00:20:45,960 --> 00:20:52,400 Speaker 1: What's your key takeaway with the status of Operation Warp Speed. Wait? UM, 375 00:20:52,480 --> 00:20:57,639 Speaker 1: you know, given that Trump has not UM pursuit a 376 00:20:57,680 --> 00:21:01,920 Speaker 1: strategy of trying to contain virus in the US, Warp 377 00:21:02,000 --> 00:21:08,040 Speaker 1: Speed is really the most visible tangible response of the 378 00:21:08,040 --> 00:21:12,560 Speaker 1: Trump administration to the COVID pandemic, and it's it is 379 00:21:12,600 --> 00:21:17,440 Speaker 1: a unique initiative public private partnership where they've given out 380 00:21:17,600 --> 00:21:20,320 Speaker 1: billions of dollars to pharmaceutical companies to try to fast 381 00:21:20,359 --> 00:21:25,679 Speaker 1: track a COVID vaccine and UM utilize the expertise, the 382 00:21:25,800 --> 00:21:29,320 Speaker 1: logistics expertise of the Department of Defense to try to 383 00:21:29,400 --> 00:21:34,119 Speaker 1: help on the manufacturing side, to try to help, you know, 384 00:21:34,480 --> 00:21:38,520 Speaker 1: fast track everything from you know, the manufacturing of you know, 385 00:21:38,600 --> 00:21:44,680 Speaker 1: syringes to vials. UM and other uh parts of the 386 00:21:44,800 --> 00:21:48,639 Speaker 1: vaccine manufacturing process to make sure that once a vaccine 387 00:21:48,800 --> 00:21:52,560 Speaker 1: is approved, there are doses ready. So obviously there's no 388 00:21:52,600 --> 00:21:55,040 Speaker 1: point in having an approved vaccine unless there are doses 389 00:21:55,680 --> 00:21:58,880 Speaker 1: um waiting and ready to go into people's arms. So 390 00:21:59,240 --> 00:22:01,000 Speaker 1: we're just to set it to take a closer look. 391 00:22:01,040 --> 00:22:04,240 Speaker 1: Is it working? You know, how are these companies interacting 392 00:22:04,280 --> 00:22:07,000 Speaker 1: with the federal government, What help exactly are they getting 393 00:22:07,040 --> 00:22:08,760 Speaker 1: from the U. S. Military? And it was kind of 394 00:22:08,760 --> 00:22:12,720 Speaker 1: a fascinating look behind scenes to try to figure out 395 00:22:12,720 --> 00:22:15,520 Speaker 1: exactly what is happening. It does seem like it is 396 00:22:15,560 --> 00:22:18,080 Speaker 1: moving forward. It's still an open question of course, is 397 00:22:18,160 --> 00:22:21,800 Speaker 1: to you know, will we get enough doses, will there 398 00:22:21,800 --> 00:22:23,879 Speaker 1: be a vaccine that will be approved, and if so 399 00:22:24,080 --> 00:22:26,800 Speaker 1: when they're quite bullish in terms of when we might 400 00:22:26,880 --> 00:22:30,920 Speaker 1: get one that operation work speed Um folks are saying 401 00:22:30,960 --> 00:22:32,760 Speaker 1: that they think they'll have more than a hundred million 402 00:22:32,800 --> 00:22:35,399 Speaker 1: doses by the end of the year. So do you 403 00:22:35,440 --> 00:22:38,639 Speaker 1: get a sense that the government is paying the appropriate 404 00:22:38,680 --> 00:22:42,600 Speaker 1: amount for the development of these items, that they're overpaying, 405 00:22:42,840 --> 00:22:46,440 Speaker 1: that they're getting a bargain. You know, I went into 406 00:22:46,440 --> 00:22:49,040 Speaker 1: this thinking, actually is this you know, there are a 407 00:22:49,080 --> 00:22:53,159 Speaker 1: lot of questions about lack of transparency UM. And you 408 00:22:53,200 --> 00:22:56,280 Speaker 1: know whether or not the pharmaceutical companies were profiting off this, 409 00:22:56,359 --> 00:23:00,320 Speaker 1: And there's no doubt that there's some pharmacutical pharmaceutical bodies 410 00:23:00,320 --> 00:23:03,560 Speaker 1: that are doing quite well off of this, and their 411 00:23:03,600 --> 00:23:07,840 Speaker 1: stock prices have rallied on the back of these government contracts. 412 00:23:07,880 --> 00:23:09,800 Speaker 1: But if you step back and look at it, and 413 00:23:09,800 --> 00:23:13,400 Speaker 1: you look at the cost to the economy, trillions of dollars, 414 00:23:13,480 --> 00:23:19,359 Speaker 1: I mean huge economic fallout, eighteen billion is nothing, and 415 00:23:19,440 --> 00:23:21,920 Speaker 1: you could argue that they should be throwing even more 416 00:23:21,960 --> 00:23:25,760 Speaker 1: money at this UM given the scale of the economic fallout. 417 00:23:26,680 --> 00:23:29,520 Speaker 1: So Stephanie, is you know at this stage it might 418 00:23:29,560 --> 00:23:32,199 Speaker 1: be too early. Do most people within the industry, the 419 00:23:32,240 --> 00:23:35,360 Speaker 1: healthcare industry, the pharmaceutical industry, did they feel like Operation 420 00:23:35,359 --> 00:23:38,400 Speaker 1: warp Speed is, for lack of a better term, working 421 00:23:38,800 --> 00:23:42,840 Speaker 1: helping the process? I think they are. I mean, you 422 00:23:42,880 --> 00:23:47,200 Speaker 1: know there are Operation warp speed is back to six 423 00:23:47,359 --> 00:23:50,879 Speaker 1: companies developing vaccines, at least publicly. There are a couple 424 00:23:50,920 --> 00:23:54,960 Speaker 1: of others that they are looking at backing UM and 425 00:23:55,200 --> 00:23:59,920 Speaker 1: five of those are basically using Operation warp Speed how 426 00:24:00,200 --> 00:24:03,639 Speaker 1: either to run trials or to help on on the 427 00:24:03,680 --> 00:24:08,359 Speaker 1: manufacturing side. Um Fizer, which is developing a vaccine together 428 00:24:08,400 --> 00:24:11,880 Speaker 1: with Germany's BioNTech UM decided to go different route and 429 00:24:11,960 --> 00:24:15,720 Speaker 1: they are paying for the cost of the clinical trials 430 00:24:16,000 --> 00:24:20,560 Speaker 1: and manufacturing will recoup its investment UM when it sells 431 00:24:20,720 --> 00:24:24,480 Speaker 1: and and approved vaccine to the government. UM. You know, 432 00:24:24,680 --> 00:24:28,840 Speaker 1: so I think it would be hard for these companies 433 00:24:29,560 --> 00:24:31,720 Speaker 1: to be able to do this completely on their own 434 00:24:31,760 --> 00:24:35,280 Speaker 1: without the government stepping in. And for instance, that used 435 00:24:35,400 --> 00:24:42,120 Speaker 1: the Defense Production Act pretty extensively actually to prioritize um 436 00:24:42,359 --> 00:24:47,960 Speaker 1: UH suppliers. Who are you know, providing key materials to 437 00:24:48,240 --> 00:24:52,640 Speaker 1: either the vaccine manufacturing process or you know Corning, which 438 00:24:52,680 --> 00:24:55,679 Speaker 1: is another big company that is making glass files and 439 00:24:55,760 --> 00:24:58,640 Speaker 1: what have you. And I think that as that has helped, 440 00:24:58,680 --> 00:25:02,200 Speaker 1: I think there would be delayed if that had not happened. Stephanie, 441 00:25:02,280 --> 00:25:04,280 Speaker 1: just twenty seconds here. How much do you expect us 442 00:25:04,320 --> 00:25:09,040 Speaker 1: to be talking about government funded medical infrastructure the way 443 00:25:09,040 --> 00:25:11,760 Speaker 1: that we had in this extraordinary setting in a more 444 00:25:11,880 --> 00:25:16,520 Speaker 1: ordinary setting. You know, it's a really interesting question. How 445 00:25:16,560 --> 00:25:21,719 Speaker 1: will this change the way the government UH interacts, you know, 446 00:25:21,880 --> 00:25:25,800 Speaker 1: with healthcare provision going forward? I mean, I think the 447 00:25:25,920 --> 00:25:29,440 Speaker 1: expectation is down the line um that the government will 448 00:25:29,480 --> 00:25:31,760 Speaker 1: step out once we have in a vaccine and we 449 00:25:31,800 --> 00:25:35,359 Speaker 1: have it and you know, in sufficient supply, that the 450 00:25:35,400 --> 00:25:37,679 Speaker 1: government will no longer be involved. But I think it 451 00:25:37,720 --> 00:25:39,840 Speaker 1: does raise the question of we need to be investing 452 00:25:39,960 --> 00:25:44,639 Speaker 1: more in things like vaccine and rapid technology technology to 453 00:25:44,920 --> 00:25:49,040 Speaker 1: rapidly make vaccines to emerging pathogens. Stephanie Baker, thank you 454 00:25:49,080 --> 00:25:51,119 Speaker 1: so much for being with us and for the tremendous story. 455 00:25:51,400 --> 00:25:54,840 Speaker 1: Stephanie Baker, senior writer for Bloomberg. Talking about that story, 456 00:25:55,280 --> 00:25:58,320 Speaker 1: Operation Warp Speed could shape up to be an eighteen 457 00:25:58,520 --> 00:26:00,960 Speaker 1: billion dollar bargain. I mean, I'll just want to bring 458 00:26:00,960 --> 00:26:03,679 Speaker 1: you this headline crossing the Bloomberg terminal x on mobile 459 00:26:04,119 --> 00:26:07,960 Speaker 1: is going to cut nine hundred jobs, mostly at US 460 00:26:08,040 --> 00:26:10,760 Speaker 1: management offices. Has comes, of course, as the price of 461 00:26:10,880 --> 00:26:14,639 Speaker 1: crude SAgs to the lowest since May. Uh. This is 462 00:26:14,640 --> 00:26:18,280 Speaker 1: going to be through voluntary and involuntary programs, and they 463 00:26:18,280 --> 00:26:22,239 Speaker 1: have kept their dividend despite the oil route trying to 464 00:26:22,359 --> 00:26:25,720 Speaker 1: attract investors and Lisa bram Boyd's filling in for Vonnie 465 00:26:25,760 --> 00:26:30,600 Speaker 1: Quinn alongside Paul Sweeney. This is Bloomberg. Thanks for listening 466 00:26:30,640 --> 00:26:34,000 Speaker 1: to Bloomberg Markets podcast. You can subscribe and listen to 467 00:26:34,080 --> 00:26:37,879 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 468 00:26:38,080 --> 00:26:41,119 Speaker 1: I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn. And 469 00:26:41,280 --> 00:26:44,360 Speaker 1: Paul Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 470 00:26:44,400 --> 00:26:46,920 Speaker 1: you can always catch us worldwide at Bloomberg Radio