Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
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Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube and now also on Bloomberg Quick Take. We got
Speaker 1: more Fed talk we want to get to. Yeah, well,
Speaker 1: speaking to the FED, it's not really succeeding when it
Speaker 1: comes to its dual mandate. Yes, unemployment is low, but
Speaker 1: inflation remains sky high. That's at It's monetary tightening campaign
Speaker 1: is having a major impact in deflating asset bubbles that
Speaker 1: just swelled during the pandemic. I mean, we're talking crypto
Speaker 1: housing prices, tech stocks, and it's doing so without up
Speaker 1: ending its financial system. Rich Miller writes all about it.
Speaker 1: He's Bloomberg News Economics reporter he joins his via zoom
Speaker 1: from Washington, d C. Rich. Good to have you with
Speaker 1: us this ternon. So take us through the metrics that
Speaker 1: you looked at when you talk about deflating asset bubbles here. Well,
Speaker 1: I mean, obviously the one that topic topic the juror
Speaker 1: at the moment is is crypto, right, and that's depending
Speaker 1: on how you measured It's the market cap of crypto
Speaker 1: is down about two thirds from like three trillion dollar
Speaker 1: high not too long ago. Um. If you can look
Speaker 1: at the Fang stocks, they're down about more than fifty um.
Speaker 1: Nasac is down less than that, but Nasac as a whole.
Speaker 1: But if you um look at the Fang stocks that
Speaker 1: down by more than fifty cent, and the house prices
Speaker 1: they're just starting to tick over. But you know, this
Speaker 1: is the first time they've basically started the decline and
Speaker 1: in ten in ten years, um, so all across the
Speaker 1: board we're seeing sort of pretty weak asset prices. And
Speaker 1: if you would you know, I told people, you know
Speaker 1: that the FED was gonna raise rates so aggressively a
Speaker 1: year ago, Uh, they would have said, oh my god,
Speaker 1: you know, we're gonna see havoc in the financial markets.
Speaker 1: You're gonna you're gonna see um firms going bust. You're
Speaker 1: gonna see uh bank runs, You're gonna see etcetera, etcetera.
Speaker 1: None of that has happened. You know, we we the
Speaker 1: air is coming out of these bubbles. But so far,
Speaker 1: so far, and that's a big, big provisor. So far,
Speaker 1: it hasn't really you know, you know, shaking the financial
Speaker 1: system like we saw in you know, the Great Financial Crisis.
Speaker 1: It's interesting, I mean even looking at something like commodities,
Speaker 1: they're down about uh from their high back in June,
Speaker 1: and some of that's geopolitical rich, but you do wonder,
Speaker 1: right like it makes you think might the FED f
Speaker 1: O M. C. J. Powell and Company be able to
Speaker 1: engineer that soft landing? Yeah? I mean it it increases
Speaker 1: the chances, right um um. Obviously, if if you really
Speaker 1: saw havoc in the system, you know, the the we'll
Speaker 1: be heading into a recession, very clear really and probably
Speaker 1: a deep one, and and the FED would have to
Speaker 1: be cutting rates a lot. But uh, so far they can.
Speaker 1: They've been able to keep raising race without sort of
Speaker 1: causing so much havoc in the financial market that that
Speaker 1: that they'll have to you know, stop or retrace. And
Speaker 1: I've got a quote in there from Jeremy Stein, he's
Speaker 1: an ex fed governor, and you know he said, you know,
Speaker 1: if you had told me a year ago that they
Speaker 1: were going to be raising this, I'd say, oh my god,
Speaker 1: you know, you're gonna crack everything up. But so far
Speaker 1: we haven't. Is One of the reasons why this is
Speaker 1: kind of okay is because it goes to what's referred
Speaker 1: to as the wealth effect. When people's assets decline, they
Speaker 1: tend not to spend as much money on large purchases.
Speaker 1: But it's not huge though, right, Yeah, I mean I
Speaker 1: think the economists say it's you know, for every dollar full,
Speaker 1: it's only like a couple of cents off consumption basically, right,
Speaker 1: it might be a little a little, a little bit.
Speaker 1: But does that have an effect to bring down inflation. Well,
Speaker 1: that'll that'll be one factor contributing to uh, you know,
Speaker 1: a slowdown and consumption. And that's what the fit defend wants,
Speaker 1: you know, consumption to slow, demand to slow so that
Speaker 1: that's that's one of the one of the one of
Speaker 1: the vehicles. But I guess the main vehicles are what
Speaker 1: you'd say, you know, your higher buying costs right, so
Speaker 1: housing um buying less you know, fewer cars, buying, fewer
Speaker 1: durable goods. That would be the main um mechanism by
Speaker 1: which the higher interest rates would slow the economy down.
Speaker 1: But a peripheral periphetly we would also by by knocking
Speaker 1: asset prices down and makes people feel less rich. I'm
Speaker 1: gonna save a little more, I'm not going to spend
Speaker 1: that money, right. You know one thing I want to
Speaker 1: ask you, rich and I wonder if we can't roll
Speaker 1: out some kind of financial blow up, which you you
Speaker 1: point out your story because you know, one of the
Speaker 1: things I think about this, I'm not saying this is
Speaker 1: a blow but you have Blackstones Behemoth private credit fund,
Speaker 1: you know, hitting redemption limits for the first time. It's
Speaker 1: to your histories because you had investors pulling out some
Speaker 1: fifty billion dollars from the corporate landing. But like I
Speaker 1: saw that, and we continue to kind of figure out
Speaker 1: corporate real estate, like might it not come back fully
Speaker 1: post pandemic and so what happens? So I just wonder,
Speaker 1: is there's something potentially that could still happen. Yeah, yeah,
Speaker 1: I mean that actually that that fun the Blackstone Fund
Speaker 1: has actually been doing pretty well. So um uh, it's
Speaker 1: not like you know, people are pulling the money out
Speaker 1: because they um because they weren't getting performance yet losing
Speaker 1: money that they either they're pulling out to take profits
Speaker 1: or or they're pulling it out because they think, you know,
Speaker 1: maybe next year won't be so good as as for
Speaker 1: a commercial real estate as the dividends that they've been
Speaker 1: getting from that as as last year, and you know
Speaker 1: that fun did have you know a rule saying how
Speaker 1: much you could redeem? You know, So it's it's I'm
Speaker 1: not sure it's a sign of like you know, financial
Speaker 1: cracks are happening. Uh. I think it's more idiosynchronic. Actually,
Speaker 1: there was a caveat in here that you made. When
Speaker 1: when when does that caveat, if at all, come true?
Speaker 1: What do we need to look for to make sure that,
Speaker 1: you know, it doesn't up end the economy? What's the
Speaker 1: first sign? Yeah? I mean what you know? I wish
Speaker 1: I could tell you and right now I wouldn't be
Speaker 1: talking to you guys right or I'll be talking to
Speaker 1: you from a yacht right. We would welcome that with
Speaker 1: the great Internet connection too, I bet um uh, well,
Speaker 1: as we saw with the UK. I mean we're, you know,
Speaker 1: all of a sudden pension funds at all places, right,
Speaker 1: you know, we thought, you know, these are supposed to
Speaker 1: be rock solid, you know, all of a sudden that
Speaker 1: that you know, these things can come out of the blue.
Speaker 1: I mean, the regulators are doing their best to keep
Speaker 1: an eye on everything, but um, it's hard beforehand. You know,
Speaker 1: there's that Buffett saying, right when the when the tide
Speaker 1: goes out, you see who's swimming naked? Right? Um, you know,
Speaker 1: when when when the interest rates go up, you see
Speaker 1: who's sort of highly leveraged, and you know who who
Speaker 1: who Who's caught with their pants verbal pants now so
Speaker 1: to speak. So yeah, I mean mixing a lot of
Speaker 1: metaphors here, but anyway, yeah, um, you know, still to
Speaker 1: be said. But I mean, so far, so good. All right, Rich,
Speaker 1: we gotta run. Thank you so much. Rich Miller, economics
Speaker 1: reporter at Bloomberg News, joining us via zoom from Washington,
Speaker 1: d See Carol Master, Timsdanovich. This is Bloomberg Radio. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes.
Speaker 1: Tim Stenovic on Bloomberg Radio. Since life expanded, expectancy in
Speaker 1: the United States has declined two points seven years. It
Speaker 1: is the largest since World War Two that declined. Black
Speaker 1: Americans lost four years of life expectancy and Indigenous Americans
Speaker 1: lost more than six In our next guests as we
Speaker 1: can do a lot better, he writes about it in
Speaker 1: a recent article for Bloomberg City Lab. We're very pleased
Speaker 1: to have back with us. Dr Joshua Sharfstein. He's Igstein
Speaker 1: for the Public Health Practice and Community Engagement and director
Speaker 1: of the Bloomberg American Health Initiative. It's at the Johns
Speaker 1: Hopkins Bloomberg School of Public Health. It is supported by
Speaker 1: Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies,
Speaker 1: also the co author of the Opioid Epidemic What Everyone
Speaker 1: Needs to Know. Dr charf Stein this afternoon, joins us
Speaker 1: on the phone from Philadelphia. Dr Charfstein, It's always great
Speaker 1: to get you on the program. Anyone who reads this
Speaker 1: headline would say, Okay, that's just because of COVID, but
Speaker 1: you actually arguing your peace that life expectancy would have
Speaker 1: gone down even if we didn't have the excess deaths
Speaker 1: that were caused by COVID. What's going on. Well, it
Speaker 1: turns out life expectancy peaked in the United States and
Speaker 1: and it's been stagnating and even declining a little bit
Speaker 1: since then, even before the pandemic. UM. The pandemic obviously
Speaker 1: is the major reason for that shocking decline, which is
Speaker 1: the largest decline in life expecancy since World War One,
Speaker 1: over a hundred years ago. UM. But it's not the
Speaker 1: only cause. Another major cause are overdoses. More than a
Speaker 1: hundred thousand Americans now dying as fatal overdoses. That's double
Speaker 1: um what it was just a few years ago. UM.
Speaker 1: And then on top of that, we see a significant
Speaker 1: increases in gun related suicides and homicide, as well as
Speaker 1: motor vehicle crashes, which are up like since. So there
Speaker 1: are multiple causes, but what they do have in common
Speaker 1: is that they are preventable. UM. A lot of these
Speaker 1: deaths can be prevented if we take some basic steps
Speaker 1: which actually have a lot of support. And forgive me,
Speaker 1: you're right, I've misread the largest since World War Two,
Speaker 1: that two point seven years off our life expect expectancy
Speaker 1: since nineteen very very significant. You know. One of the
Speaker 1: things that I've done some work on And recently when
Speaker 1: the u n UM in town and the fall, we
Speaker 1: did a gathering to talk about noncommunicable diseases. You know,
Speaker 1: so this is something you cover too, and we're talking
Speaker 1: about things like diabetes, strokes, heart disease. UM. This is
Speaker 1: really the leading killer in so many different countries, and
Speaker 1: I feel like we all just kind of well, yeah,
Speaker 1: that's a part of life, but it doesn't have to be,
Speaker 1: does it. Well, Um, there are absolutely ways to reduce
Speaker 1: premature deaths from cardiovasc disease, diabetes, and other noncommunicable diseases. UM.
Speaker 1: In the report, we talk about the value of controlling
Speaker 1: salt intake, and most of the salt we take in
Speaker 1: is already in our food, it's not the salt we
Speaker 1: put on with the salt shaker and getting the salt
Speaker 1: down and that food could make a big difference. I
Speaker 1: think it's estimated saving fifty lines a year. UM. That's
Speaker 1: my understanding. So it's UM, it's really UM important not
Speaker 1: just to think of it as you know, eat healthy,
Speaker 1: but how do we get healthy food to ourselves and
Speaker 1: to other people so we can We've covered food. I
Speaker 1: want to go to overdoses. You're the co author of
Speaker 1: the opioid epidemic. What everyone needs to know. We know
Speaker 1: that over the last few years, opioid overdoses here in
Speaker 1: the United States of skyrocketed. UM what is the best
Speaker 1: way to address this? So I think if to start
Speaker 1: with what we know and what we know work and
Speaker 1: one of the most effective treatments for opioid use disorder
Speaker 1: our medications like methodone and bupanorpine. They reduced the chance
Speaker 1: of death from any cause. Somewhere on the order of
Speaker 1: these medications. Forgive me, but are these medications that people
Speaker 1: take if they are unconscious like a what um you
Speaker 1: know in through their nose or these medications of it
Speaker 1: is not the lockdone is what is? What is resuscitates you.
Speaker 1: But then the problem is if you still have addiction,
Speaker 1: if you're still addicted, it is quite likely that you
Speaker 1: will go back to um using opioids because that is
Speaker 1: what your brain is really compelling you to do. So
Speaker 1: what U A pupernorphine and methodone do is really addressed
Speaker 1: that craving and people say, aha, I can be myself again.
Speaker 1: I remember one person who we interviewed. He said, I
Speaker 1: felt like I was married to heroin until I got
Speaker 1: on treatment with methodone and then I could get a divorce.
Speaker 1: I thought only suicide would be my own. That was
Speaker 1: the only way to get away. But it really addresses
Speaker 1: the problem in the brain from addiction, really helps people
Speaker 1: put their lives back together and dramatically reduces the risk
Speaker 1: of overdose deaths. And unfortunately, if you were then one
Speaker 1: in five people with opius used to sort of actually
Speaker 1: get these medicines, many places don't offer them. Many emergency
Speaker 1: departments to fight evidence that starting treatment in the emergency
Speaker 1: department will double the success staying in treetment it one month,
Speaker 1: and that was a very well designed, randomized controlled child.
Speaker 1: Despite that evidence, a lot of places don't offer it.
Speaker 1: So we say, look, let's make that the standard of
Speaker 1: care not just an emergency department, but also in jails
Speaker 1: and prisons, where people can get started on treatment and
Speaker 1: not only dramatically reduced the chance they'll die when they
Speaker 1: leave detention, but also dramatically reduced the chance they'll commit
Speaker 1: another crime associated very clearly with lower risit of it.
Speaker 1: Can we talk about gun shootings and full transparency. We
Speaker 1: know Michael R. Bloomberg very dominant when it comes to
Speaker 1: gun violence prevention, and he established every Town for Gun Safety,
Speaker 1: the largest advocacy group back in and has donated money
Speaker 1: to it. Of course. Michael Bloomberg, the founder of Bloomberg
Speaker 1: LP and Bloomberg Philanthropies. But gun shootings, it's kind of
Speaker 1: almost sad that I don't know that we're getting used
Speaker 1: to it, but it just feels like gun shootings are very,
Speaker 1: very commonplace in the United States. That's another big reason
Speaker 1: why life expectancy has gone down. That's right, forty seven
Speaker 1: thousand gun related suicides and homicides UM and UH, they
Speaker 1: are preventable, and there are particular policies that really do work,
Speaker 1: and some of them have been adopted by states across
Speaker 1: the political spectrum. I remember after the Parkland shooting. UM,
Speaker 1: there was a lot of cynicism. People said, well, we've
Speaker 1: seen this movie before, nothing's going to change. But those
Speaker 1: young people got involved, and before you know it, a
Speaker 1: very red state, Florida pass the law called Extreme Risk
Speaker 1: Protection Orders, basically making it possible for people to um
Speaker 1: temporarily lose access to their guns if they're behaving dangerously
Speaker 1: and are a risk of themselves or others. And that
Speaker 1: was passed in Florida, and those laws indicates for every
Speaker 1: evidence so far, for every ten to twenty of those
Speaker 1: orders issued in temporary removals of guns happening, a suicide
Speaker 1: is prevented. And there are many examples of people who
Speaker 1: were um potentially going to kill someone else or even
Speaker 1: mass shootings whom this was a tool that kept everybody safe. Um.
Speaker 1: Those laws are in nineteen states, in the District of Columbia.
Speaker 1: Now our report says, let's let's put them everywhere. And
Speaker 1: in fact, Congress in its incredible you know gun legislation.
Speaker 1: I say incredible because people didn't think anything with hath
Speaker 1: actually provided money to help implement these laws, and good
Speaker 1: implementation of these laws where people know how to use them,
Speaker 1: really matters in preventing those suicides and homicides. The other
Speaker 1: policy that we write about has a lot of evidence
Speaker 1: behind that, and that's requiring a permit to get a firearm.
Speaker 1: Um it's called permits to purchase. And those laws are
Speaker 1: associated with fewer suicides, fewer homicides, and fewer mass shodes.
Speaker 1: What about when it comes to policies around driving, because
Speaker 1: motor vehicle deaths are another reason why we see a
Speaker 1: decline in life expectancy. You argue that these are preventable.
Speaker 1: How do cities and states prevent these? Yeah, they they
Speaker 1: they really are preventable, and there are different kinds of strategies.
Speaker 1: One of them that we mentioned in the report is
Speaker 1: additional technology to keep people who are um inebriated from driving.
Speaker 1: You know, reducing drunk driving UM is really important because
Speaker 1: it's responsible for so many deaths on the road. And
Speaker 1: right now there is um work to create new technology
Speaker 1: and cars that keeps people from driving who are drunk.
Speaker 1: And if if people can roll up their sleeves and
Speaker 1: get that technology to work, that could be very impactful.
Speaker 1: The other kind of solution we talked about is redesigned
Speaker 1: looking for where those crashes are happening. You know, when
Speaker 1: you see multiple little memorials on a particular corner, someone
Speaker 1: has to ask, you know, or a particular bend in
Speaker 1: the road, like is something wrong with the road? You know?
Speaker 1: And when you redesign to make things safe for pedestrians,
Speaker 1: safer for bicyclists, then you actually do see if you
Speaker 1: are motor vehicle related fatalities, and that can be a
Speaker 1: real strategy for reducing seemed that and I should be
Speaker 1: again full disclosure that Bloomberg Philanthropies has also been working
Speaker 1: to save lives and reduced industries injuries, I should say,
Speaker 1: from traffic crashes. Um. And they've been doing this around
Speaker 1: the world. Dr josh H. Charstein, thank you so much.
Speaker 1: Fi Stein for public health and practice and community engagement
Speaker 1: at John's Hopkins Bloomberg School of Public Health. He is
Speaker 1: also director of the Bloomberg American Health Initiative, also at
Speaker 1: Johns Hopkins. Joining us on the phone in Philadelphia, you're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. The new Wisha
Speaker 1: Bloomberg Business Week is out in this week's issue has
Speaker 1: at least a bit of good news for readers and listeners.
Speaker 1: It's the ninth annual Good Business issue, featuring subjects from
Speaker 1: tackling inequality to saving the planet with more sustainable practices.
Speaker 1: Bloomberg Business Week Solutions and Strategy Senior Editor Rebecca Penty
Speaker 1: oversees the issue. She joined us on the phone from London. Rebecca,
Speaker 1: I want to get to some of the stories in
Speaker 1: just a second, especially the cover story. It's close to
Speaker 1: my heart because I'm a subscriber to Misfits Market. But
Speaker 1: let's talk a little bit about your thinking behind the
Speaker 1: issue and how you approach it this year. Yeah, So,
Speaker 1: I think every year we're we're looking for uplifting stories
Speaker 1: to tell about how business can be a force for
Speaker 1: good in the world, um, which which isn't always something
Speaker 1: people think about. I mean often times people think that
Speaker 1: CEO is just out to make a quick book or
Speaker 1: you know, thinking about shareholder returns as being the b
Speaker 1: l end All. And I think this year our issue
Speaker 1: is landing at a time that's just perfect because we've
Speaker 1: got inflation throwing, We've got you know, job cuts that
Speaker 1: are starting to trickle through, and we've got some skepticism
Speaker 1: out there about E s G investing and most recently,
Speaker 1: you know, whether CEO philanthropists really are all they're cracked
Speaker 1: up to be, you know, the case of STX crumbling
Speaker 1: and sambankment freeds, effective altruism movement, um, you know, really
Speaker 1: becoming changed. So I think the issue is really timed
Speaker 1: well in providing readers with some uplifting stories about people
Speaker 1: about leaders who actually are doing some really positive work
Speaker 1: and deserves the attention. All right, Well, let's talk about
Speaker 1: one of those leaders, and that is the leader at
Speaker 1: Misfits Market, and that is the cover story tell us
Speaker 1: about this. I'm not familiar with him, but Tim says
Speaker 1: he's a pretty active I tell you, I got to
Speaker 1: tell you, Rebecca, I was exactly the person you described
Speaker 1: in this story. We didn't subscribe until lockdown hit and
Speaker 1: that's when we know thanks to the story, uh, Misfits
Speaker 1: went into overdrive. And I remember getting an email from
Speaker 1: them saying, Hey, you're not the only one. We are overwhelmed.
Speaker 1: You're on a wait list, but we'll try to get
Speaker 1: you in. I think that's when a lot of people
Speaker 1: started subscribing to online groceries. It's the same for me,
Speaker 1: you know, was when I when I started as well
Speaker 1: in London. And this is a really fun story about
Speaker 1: you know, a founder who is now thirty years old.
Speaker 1: UM the son of immigrants from India, and you know,
Speaker 1: his parents taught him the value of not wasting food
Speaker 1: about you know, eating eating. One of the anecdotes is
Speaker 1: his parents would let him throw an apple away until
Speaker 1: he'd eaten all the flesh around the core. And so
Speaker 1: he started this Philadelphia based online grocer in and you
Speaker 1: know he was talking odd ball shaped fruit of fruits
Speaker 1: and vegetables, you know, things that read are too big
Speaker 1: or odd shaped that the grocery stores wouldn't sell. UM
Speaker 1: in his living room with his apartment that he shared
Speaker 1: with his future wife, and it really grew from there.
Speaker 1: And soft Bank as an investor, they've got and he's
Speaker 1: got five million adventure capital funding and he's taken this
Speaker 1: thing national and that means, you know, a lot of
Speaker 1: growing pains, a lot of trying to sort out how
Speaker 1: does he stick to that mission of providing people with
Speaker 1: organic you know, UM produce, trying to trying to keep
Speaker 1: food out of the trash, UM with also trying to
Speaker 1: meet that those nationally sourcing all of the supply and
Speaker 1: and providing customers with things that they want because people
Speaker 1: are counting on being able to order what they want
Speaker 1: when they want, and that doesn't always line up with
Speaker 1: UM dealing with food that would otherwise end up in waste. Rebecca,
Speaker 1: as we said, this is one of the stories that
Speaker 1: makes up the cover, if you will, in the cover
Speaker 1: theme of good business. But I do wonder, you know,
Speaker 1: when you talk about misfits, you know there's lots of
Speaker 1: transparency and it does look like. This is truly when
Speaker 1: we think what maybe E. S G should be, this
Speaker 1: is what it kind of you would think it would
Speaker 1: look like. Having said that, is the business sustainable? Is
Speaker 1: it viable? Because it sounds like they're growing like crazy.
Speaker 1: I think that's the big question that the story isn't
Speaker 1: quite able to answer because they're just in the middle
Speaker 1: of scaling up. So, I mean, I think some of
Speaker 1: the risks that we point out is that they're investing
Speaker 1: a lot, I mean the capital investment in terms of facilities, technology, people,
Speaker 1: I mean, just investing in relationships with all their suppliers,
Speaker 1: um and and it's a it's a famously scrappy difficult
Speaker 1: space to crack because if you're going you know, if
Speaker 1: you're going into the very urban areas, then it makes
Speaker 1: it's easy. But if you're going to rural places, I mean,
Speaker 1: the CEO acknowledges that they're losing money in some of
Speaker 1: their roots in order to just gain those customers. So
Speaker 1: it's certainly a risky bet. And we don't have all
Speaker 1: the information because of course they're not going to share
Speaker 1: everything with us, But I think it's um you know,
Speaker 1: and I think also it's disclosing that not every single
Speaker 1: bit of produce is going to be odd ball when
Speaker 1: you're when you're growing that big and when you're trying
Speaker 1: to meet that's that's what I said. I said, we
Speaker 1: really get something that looks funny. I mean, oftentimes stuff
Speaker 1: is small. But speaking of solutions, there's a lot of
Speaker 1: stuff in need of solutions here. It is the solutions issue.
Speaker 1: Healthcare is one of those things that needs fixing. John
Speaker 1: Tozzi has a story in the current Issue all about
Speaker 1: how JP Morgan is still trying to fix healthcare even
Speaker 1: after Haven, which was that thing that I tried with
Speaker 1: Amazon and Berkshire Hathaway failed. Yeah. I think this is
Speaker 1: fascinating because it's our example of a really massive company
Speaker 1: that is looking at it an issue that's really important
Speaker 1: for society. Healthcare costs are just ballooning in the US now.
Speaker 1: No matter how much employers throw at it, the cost
Speaker 1: keeps climbing, and a lot of its structural. I mean,
Speaker 1: these are issues that are different in different countries, but
Speaker 1: in the US in particular, you know, I mean, doctors
Speaker 1: are prescribing medications that cost more money. Ensures are having
Speaker 1: to pay more for those medications. So what JP Morgan
Speaker 1: is doing. Is is something that others have tried before,
Speaker 1: including JP Morgan previously with but they're trying to really
Speaker 1: um serve their own employees on the ground and prevent issues.
Speaker 1: So they've got you know, clinics near their office in
Speaker 1: Ohio and Columbus, Ohio, and they are trying to to
Speaker 1: make sure that their employees are building relationships of those
Speaker 1: medical professionals that they will go get seen at the
Speaker 1: first indication that something is wrong and actually prevents those
Speaker 1: big issues from happening. Kind Of glad somebody's working on
Speaker 1: because I do feel like this is the big nut
Speaker 1: to crack still when we talk about disruption, it really
Speaker 1: still has to come in the healthcare space really quickly.
Speaker 1: Thirty seconds. Rebecca faked chocolate. That seems like a crime quickly.
Speaker 1: I know. I know when when our reporter who's who's
Speaker 1: actually based in Madrid pitched this to me a few
Speaker 1: months ago, I thought, really, what's the problem with chocolate?
Speaker 1: And I felt super ignorant when I learned about all
Speaker 1: the terrible problems with chocolate that I feel like I
Speaker 1: should have known. But it's you know, chocolate is um cocre.
Speaker 1: Farming is a huge cause of deforestation and child labor.
Speaker 1: So these you know, there are a few upstarts and
Speaker 1: the one that we feature is called Win Win Food
Speaker 1: Labs are based in London and they used for men
Speaker 1: to barley and carib to produce chocolate and they're using
Speaker 1: a lot of the same technologies that the vegan food
Speaker 1: industry uses to take those flavors that chocolate. Um, chocolate
Speaker 1: is standards port and pieces out using other ingredients. Love
Speaker 1: the issue. I feel like we all need a little
Speaker 1: good business right now, and you guys give us so much.
Speaker 1: Rebecca Pentty, Solutions and Strategy, Senior editor of Bloomberg Business Week.
Speaker 1: The Good Business Issue. It is at a newsstands, online
Speaker 1: and always on the Bloomberg terminal. I'm broad macro journal now.
Speaker 1: But you let me drive. Oh no, no, no no, no
Speaker 1: home please, I'll do the dravels. I want to drive.
Speaker 1: It's good question, good drive. This is the drive to
Speaker 1: the clothes well down on Bloomberg Radio. All right, just
Speaker 1: about seventy minutes left in today's trading session, getting ready
Speaker 1: to count down the Thursday trade equities. As you heard
Speaker 1: from Charlie, certainly kicking around, uh if you will, um,
Speaker 1: But we are definitely off our worst lovels of the session,
Speaker 1: but we're off our highs. But it's really about the
Speaker 1: tech trade today. Those big name fang stocks, many of
Speaker 1: them are really outperforming today. Let's get into it with
Speaker 1: Samir Samana, senior Global market strategist at the Wells Fargo
Speaker 1: Investment Institute. Semeir joining us this afternoon via zoom from Charlotte,
Speaker 1: North Carolina. Semir, it's good to have you back with us.
Speaker 1: How are you, I'm good, Thanks for having me. Well,
Speaker 1: thanks so much for joining us. So how do you
Speaker 1: take into account everything that we've seen over the last
Speaker 1: week or so? After we heard from Fed chair J
Speaker 1: Powell got sleuve economic data last week, Mike McKee described
Speaker 1: this week's economic data is a bit boring, but you
Speaker 1: know you can debate that. Uh, and you know what
Speaker 1: we have next week coming from Fed Chair J Powell.
Speaker 1: How's it all laying out for you? It just still
Speaker 1: seems a little too Pavlovian. I mean, the market just
Speaker 1: keeps nothing off the old playbook where it goes right
Speaker 1: back to you know you guys mentioned saying you know,
Speaker 1: non earning you know, small cap growth stocks, you know,
Speaker 1: cryptos having a pretty good day. Um, we just think
Speaker 1: the regime has changed again. It doesn't have to be
Speaker 1: a major change, but you know, we do think going forward,
Speaker 1: cyclicals will do much better. Um. Honestly, we're a little
Speaker 1: surprised to see oil falling, you know, even on the
Speaker 1: day when it seems like there's some supply disruptions. Um.
Speaker 1: And we continue like that sector quite a bit. So
Speaker 1: there are pockets of value that investors can take advantage
Speaker 1: up to play kind of the environment we see over
Speaker 1: next year, but we don't think it's going to be
Speaker 1: led by by those growth stocks. Interesting having said that, Apple, Microsoft, Amazon,
Speaker 1: Meta or all some of your outperformers in today's session,
Speaker 1: Met alone, and I know it's been beaten down, but
Speaker 1: it's up from early November. You've got Amazon up about
Speaker 1: fift since early November. Microsoft's since early November. And these
Speaker 1: are obviously why you're seeing certainly the Nasdaq one hundred
Speaker 1: outperformed today. Um, these are these names are areas that
Speaker 1: you would bet on. It sounds like no when you
Speaker 1: when you say that you're not really into growth. So
Speaker 1: we like technology. So if you know, too often it
Speaker 1: seems like information technology, consumer discretionary and camp services kind
Speaker 1: of get lumped together and what I will call the
Speaker 1: growth trade. UM we like information technology, we like UM
Speaker 1: camp services, well, parts of camp services were neutral there
Speaker 1: and the part that we would probably avoid is consumer discretionary. Right.
Speaker 1: That's where you've got a large electronic vehicle maker and
Speaker 1: you've got a large e commerce company which you know
Speaker 1: aren't consumer centric is they used to be? Now they're
Speaker 1: more part of this growth trade. And I think the
Speaker 1: growth trade as a whole, it starts to bifurcate into
Speaker 1: the more enterprise you know, specific names kind of on
Speaker 1: the technology side, the true technology side, whereas the consumer
Speaker 1: probably struggled in the first part of next year as
Speaker 1: a moderate recession takes hold. Again, keep in mind, in
Speaker 1: order to get in place you under control, the FED
Speaker 1: probably has to has to make sure that the consumer
Speaker 1: doesn't feel all that great in the first part of
Speaker 1: next year. Let's talk a little more about that. What
Speaker 1: do you mean the consumer struggles just a little bit.
Speaker 1: What data is pointing to that for you? Sure? So
Speaker 1: we talked about continuing claims earlier on Bloomberg TV with
Speaker 1: respect to how those are starting to kind of perk
Speaker 1: up and get close to levels where they're higher than
Speaker 1: they were about a year ago. If you look at
Speaker 1: the Challenger layoffs on your Bloombroock terminal, those are up,
Speaker 1: I believe four hundred plus percent over the past year,
Speaker 1: which tells me that those should eventually start to flow
Speaker 1: into the claims data UM. If you look at l
Speaker 1: A I, that's down quite a bit, consistent with a
Speaker 1: recession starting in the coming quarters. So all these different
Speaker 1: things tell us that you know, again it's more time
Speaker 1: you win, not if there's a recession. One thing I'm
Speaker 1: gonna ask you about the notes that you shared with
Speaker 1: our producer Paul and and then obviously with US, is
Speaker 1: you're overlying thinking is it's not a time to broadly
Speaker 1: buy equity, so not necessarily buy the equity markets. And
Speaker 1: you point to the SPX resistance SMP five hundred at
Speaker 1: the two hundred day moving average in UM and more
Speaker 1: resistance at the trend line off the January record high
Speaker 1: in forty area and not likely to sustainably break. Having
Speaker 1: said that, we kicked off our broadcast at two pm
Speaker 1: Moll Street Time with Abigail Doolittle, who as the markets
Speaker 1: for US, and she noted the dow out performance this
Speaker 1: year and it being above it's two d day and
Speaker 1: above it's August high, and that it's hard not to
Speaker 1: make the argument that the S and P is likely
Speaker 1: to follow. Do you not buy into that? Well, I
Speaker 1: think the tricky part there is if you look at
Speaker 1: what's driving the Dow, really it's energy, it's healthcare to
Speaker 1: a certain extent, and then in some of those tech
Speaker 1: names that we mentioned, and again that to us is
Speaker 1: a pretty defensive playbook for the type of slowdown that
Speaker 1: we see. So the reason we like those three sectors
Speaker 1: is we think they'll be durable in the midst of
Speaker 1: a recession. So in some ways it's possible that the
Speaker 1: sp follows the Dow higher, but I would think the
Speaker 1: next move, probably for both of them, is probably to
Speaker 1: the downside. Again, because I don't think markets, equity markets
Speaker 1: more broadly reflective recession. You know, we were talking earlier
Speaker 1: on Bloomberg TV about how the markets for the most part,
Speaker 1: you know, seem to be thinking of soft landing is
Speaker 1: about the really only option. Um every time that that
Speaker 1: kind of talks about, you know, interest rates in the
Speaker 1: various outcomes. But you know, J. Powell and others have
Speaker 1: been very clear that it's still possible that you know,
Speaker 1: a recession is possible next year, and we think it's
Speaker 1: actually pretty likely. What do you need to see on
Speaker 1: the SMP five hundred for you, it's for you to say, Okay,
Speaker 1: now the SMP five hundred is broadly reflecting a recession. Sure,
Speaker 1: So we've been saying price or time. So either you know,
Speaker 1: get us to probably the first or second quarter of
Speaker 1: next year, because again, you know, if the market is
Speaker 1: a leading indicator by about a quarter or two and
Speaker 1: we think the recessions over by let's call it late
Speaker 1: summer of next year, then you know, again probably first
Speaker 1: or second quarter from a timing standpoint, makes a lot
Speaker 1: of sense to us. Or the other option would be,
Speaker 1: you know, if you get back kind of to these
Speaker 1: recent lows that we've been at, called thirty five thirty
Speaker 1: six hundred, at those levels, we do think there's probably
Speaker 1: some good risk reward. And what I mean by that
Speaker 1: is so our YearIn target for next year on the
Speaker 1: SMP is about forty four hundred, and so you know,
Speaker 1: at those thirty seven hundred lows, you know and below,
Speaker 1: you've got almost upside to the year end target range
Speaker 1: that we have for next year, and it wouldn't surprise
Speaker 1: me if there's only about five downside from those levels
Speaker 1: in terms of it overshoot. So to have kind of
Speaker 1: two to three to one odds as an investor, we
Speaker 1: think is a pretty good outcome. All Right, we're gonna
Speaker 1: leave it there. Hey, Samir, thank you so much. Really
Speaker 1: appreciate your time today. Samir Samana, Senior global market strategist
Speaker 1: over at Wells Fargo Investment Institute. That's a subsidiary of
Speaker 1: Wells Fargo Bank, which really kind of serves the Wells
Speaker 1: Fargo wealth and investment management clients. Joining us via zoom
Speaker 1: in Charlotte, North Carolina. Thanks for listening to Bloomberg Business Week.
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