1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,240 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. Kind the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:22,000 Speaker 1: and on Bloomberg dot com. I'm looking at bitcoin here, 7 00:00:22,040 --> 00:00:24,079 Speaker 1: looking at the chart here. We haven't talked bitcoin in 8 00:00:24,120 --> 00:00:25,800 Speaker 1: a while. I'm looking at the chart and it hit 9 00:00:25,880 --> 00:00:28,720 Speaker 1: a low for this year back around mid March, just 10 00:00:28,880 --> 00:00:32,239 Speaker 1: under five thousand dollars. Uh, look at it today it 11 00:00:32,360 --> 00:00:36,360 Speaker 1: is more than doubled over eleven thousand dollars. So Bitcoin 12 00:00:36,520 --> 00:00:39,760 Speaker 1: just really just rallying here once again. And I kind 13 00:00:39,760 --> 00:00:43,000 Speaker 1: of in line with gold. We talk a lot about gold, um, 14 00:00:43,040 --> 00:00:45,559 Speaker 1: but the bitcoin is just pen an extraordinary story. I'm 15 00:00:45,560 --> 00:00:47,920 Speaker 1: gonna talk about both gold and bitcoin. We can do that, 16 00:00:48,040 --> 00:00:53,080 Speaker 1: of course with one Michael mcglow, Bloomberg Intelligence Commodity strategists. 17 00:00:53,080 --> 00:00:56,400 Speaker 1: So Mike, let's start with bitcoin, because anything I know 18 00:00:56,440 --> 00:00:59,600 Speaker 1: about this commodity, and I admit it's limited, but whatever 19 00:00:59,600 --> 00:01:02,639 Speaker 1: I do, it's from reading your research. What's been going 20 00:01:02,680 --> 00:01:05,959 Speaker 1: on with bitcoin here, Hey, Paul, Well, the key thing 21 00:01:06,040 --> 00:01:08,840 Speaker 1: was ten thousand resistance. It held for quite a while, 22 00:01:08,959 --> 00:01:11,399 Speaker 1: basically almost a year, and market finally blew through that 23 00:01:12,120 --> 00:01:14,280 Speaker 1: last weekend. And I think the key thing was it's 24 00:01:14,280 --> 00:01:17,080 Speaker 1: following gold. And also there was notice from the o 25 00:01:17,200 --> 00:01:19,240 Speaker 1: c C, the Officer of the Controller of the currency, 26 00:01:19,240 --> 00:01:21,800 Speaker 1: that they're gonna allow banks to custody bitcoin. So bitcoins 27 00:01:21,800 --> 00:01:24,480 Speaker 1: finally reached that hurdle. And bitcoin is a tendency to 28 00:01:24,560 --> 00:01:27,000 Speaker 1: stagnate and and just drive people crazy forhil and then 29 00:01:27,080 --> 00:01:29,160 Speaker 1: jump for big moves. So the next target I really 30 00:01:29,200 --> 00:01:31,840 Speaker 1: see for bitcoin right now, it's around eleven thousand. I 31 00:01:31,840 --> 00:01:33,640 Speaker 1: see it really is around four team thousands, which was 32 00:01:33,680 --> 00:01:37,600 Speaker 1: last year's high. Interesting, all right, so how do you 33 00:01:37,720 --> 00:01:39,720 Speaker 1: view I know you were the first one to introduced 34 00:01:39,760 --> 00:01:43,000 Speaker 1: me to this concept as bitcoin, uh, similar to goal 35 00:01:43,240 --> 00:01:47,000 Speaker 1: in a store of value. How's your thinking on that 36 00:01:47,080 --> 00:01:49,920 Speaker 1: these days? The bottom line is the simple way to 37 00:01:49,920 --> 00:01:52,720 Speaker 1: look at bitcoin is this supply is declining by code 38 00:01:52,880 --> 00:01:54,840 Speaker 1: is going to be less than two percent next year 39 00:01:54,840 --> 00:01:56,600 Speaker 1: and and go to near one percent in the next 40 00:01:56,680 --> 00:01:59,280 Speaker 1: hundred years. And that's a big difference with gold. Gold 41 00:01:59,320 --> 00:02:01,880 Speaker 1: is historically been around two percent, but prices go higher, 42 00:02:02,040 --> 00:02:04,520 Speaker 1: more supply come on. Bigcoin won't do that. So the 43 00:02:04,600 --> 00:02:06,960 Speaker 1: key thing matters is demand and adoption. Yes, it's a 44 00:02:06,960 --> 00:02:09,639 Speaker 1: new technology, but all my indicators are for more adoption 45 00:02:10,160 --> 00:02:13,040 Speaker 1: and more demand, and this little news last week from 46 00:02:13,040 --> 00:02:15,079 Speaker 1: the occ really kind of picks it up. So that's 47 00:02:15,080 --> 00:02:18,000 Speaker 1: at the bottom line. Remember, it's digital currency, and there's 48 00:02:18,040 --> 00:02:20,280 Speaker 1: more demand for it and limit supply, and people are 49 00:02:20,280 --> 00:02:22,400 Speaker 1: adopting it. Talk to me about that supply, so you 50 00:02:22,480 --> 00:02:24,600 Speaker 1: can just explain that a little bit more to me 51 00:02:24,760 --> 00:02:28,320 Speaker 1: and our listeners. Why there would not be more supply. 52 00:02:28,360 --> 00:02:31,240 Speaker 1: Why can't I just go get a computer and create 53 00:02:31,280 --> 00:02:35,440 Speaker 1: some more supply. Well that's the thing. Um. The total 54 00:02:35,480 --> 00:02:37,760 Speaker 1: amount of bitcoins ever mind will be twenty one million. 55 00:02:37,840 --> 00:02:40,799 Speaker 1: We're almost nineteen million mind already. So now why why 56 00:02:40,919 --> 00:02:43,760 Speaker 1: is that? Where did that twenty one million number come from? 57 00:02:43,800 --> 00:02:45,880 Speaker 1: It was it was set up by code, by our 58 00:02:45,880 --> 00:02:48,520 Speaker 1: famous person, so Tosi Documoto. I think you might like 59 00:02:48,680 --> 00:02:51,920 Speaker 1: that name, but um, you might respond to that one 60 00:02:51,960 --> 00:02:53,800 Speaker 1: a little bit. But that was set up by code 61 00:02:53,800 --> 00:02:56,240 Speaker 1: to have limited supply means, so it would be more 62 00:02:56,240 --> 00:02:58,400 Speaker 1: of a store value. To me. I view it as 63 00:02:58,440 --> 00:03:01,840 Speaker 1: a collectible, and that's why it's becoming. So that's never 64 00:03:01,840 --> 00:03:04,520 Speaker 1: gonna go much above there. And it doesn't matter who 65 00:03:04,560 --> 00:03:06,520 Speaker 1: minds are, how many people mind. There's no more than 66 00:03:06,600 --> 00:03:09,679 Speaker 1: nine bitcoins created a day. Last year was eight d 67 00:03:10,120 --> 00:03:12,440 Speaker 1: and that's it. That's all they can be created so 68 00:03:12,760 --> 00:03:16,400 Speaker 1: via code unless something breaks down with something I can't predict, 69 00:03:16,760 --> 00:03:19,600 Speaker 1: it's going that way. And again it's digital money. It's new, 70 00:03:19,680 --> 00:03:21,799 Speaker 1: it's a new Internet money as people might call it, 71 00:03:21,919 --> 00:03:24,920 Speaker 1: but supplies limited and demands picking up. Interesting. All right, 72 00:03:24,960 --> 00:03:28,239 Speaker 1: let's go back to kind of older store of money, 73 00:03:28,400 --> 00:03:31,440 Speaker 1: and that is gold. We briefly saw a touch two 74 00:03:31,440 --> 00:03:35,120 Speaker 1: thousand dollars announced here. What are the drivers behind the 75 00:03:35,160 --> 00:03:38,320 Speaker 1: moving gold? Mic um? I think we all kind of 76 00:03:38,320 --> 00:03:40,640 Speaker 1: know the big picture ones. The bottom line is free money. 77 00:03:40,680 --> 00:03:43,480 Speaker 1: It was a cover of Economist magazine just a week ago. 78 00:03:43,840 --> 00:03:47,000 Speaker 1: And that is a concept that we can print as 79 00:03:47,080 --> 00:03:49,160 Speaker 1: much money as we want, to create as much liquidity 80 00:03:49,200 --> 00:03:51,840 Speaker 1: as we want by essential banks, and have as much 81 00:03:51,840 --> 00:03:54,440 Speaker 1: fiscal stimus as we want, yet not have higher bondial 82 00:03:54,760 --> 00:03:57,480 Speaker 1: And that to me is just a double bullmarket for 83 00:03:57,680 --> 00:03:59,920 Speaker 1: you know, big big foreign foundation for gold to go 84 00:04:00,120 --> 00:04:02,880 Speaker 1: higher when you don't have competition from higher yields. Gold 85 00:04:03,000 --> 00:04:04,920 Speaker 1: must appreciate, and that's what it's doing right now. It's 86 00:04:04,920 --> 00:04:07,480 Speaker 1: getting a little expensive around two thousand. I look at 87 00:04:07,480 --> 00:04:10,680 Speaker 1: a little more technically now above the fifty week average 88 00:04:10,680 --> 00:04:12,600 Speaker 1: is the most of the decade, so you want to 89 00:04:12,680 --> 00:04:15,480 Speaker 1: lay low a little bit. But fundamentally it's quite bullish. 90 00:04:15,520 --> 00:04:18,920 Speaker 1: And until we see something to limit people's ability to 91 00:04:18,960 --> 00:04:21,400 Speaker 1: print money, which by human nature of the petitions will 92 00:04:21,440 --> 00:04:25,240 Speaker 1: continue to do, golds to continue appreciate. And you know, 93 00:04:25,320 --> 00:04:28,480 Speaker 1: I'm just looking at the chart of silver. There there's 94 00:04:28,520 --> 00:04:32,760 Speaker 1: another commodity that from that same mid March period has 95 00:04:32,800 --> 00:04:36,719 Speaker 1: effectively doubled. It is now the best performing commodity on 96 00:04:36,760 --> 00:04:40,080 Speaker 1: the planet this year. Up about the thing is it's 97 00:04:40,080 --> 00:04:42,599 Speaker 1: only really catching up to gold. Its cup around twenty 98 00:04:42,600 --> 00:04:44,680 Speaker 1: five dollars is was really good. Resistance is the key 99 00:04:44,680 --> 00:04:47,039 Speaker 1: thing to remember about silver. Well, I'll perform gold in 100 00:04:47,080 --> 00:04:48,839 Speaker 1: a week dour environment, which you're getting a little bit 101 00:04:48,920 --> 00:04:51,840 Speaker 1: right now, but you need a strong economy. Demand for 102 00:04:51,880 --> 00:04:56,039 Speaker 1: silver is from industrial purposes, and right now that's probably 103 00:04:56,080 --> 00:04:59,200 Speaker 1: not likely. So um I view silver is pretty much 104 00:04:59,200 --> 00:05:01,480 Speaker 1: locked up in their good distance, probably not gonna get 105 00:05:01,520 --> 00:05:03,640 Speaker 1: them up much above thirty. But gold can easily get 106 00:05:03,640 --> 00:05:07,000 Speaker 1: to three thousand briefly in the next thirty seconds or so. Mike, 107 00:05:07,080 --> 00:05:10,200 Speaker 1: what's the other commodity that maybe we're not focusing on 108 00:05:10,320 --> 00:05:14,600 Speaker 1: and that we should be all precious metals pladium and platinum. 109 00:05:14,640 --> 00:05:16,760 Speaker 1: To me, it's all precious medals, the top performers on 110 00:05:16,839 --> 00:05:20,960 Speaker 1: the year, and I expect them to continue anything less 111 00:05:21,000 --> 00:05:23,520 Speaker 1: like on the agricultural or front or I mean my favorite, 112 00:05:23,520 --> 00:05:25,880 Speaker 1: you know, my favorite pork bellies, um, anything in the 113 00:05:25,920 --> 00:05:29,159 Speaker 1: egg front. I'm just gonna be doing my outlook. And 114 00:05:29,200 --> 00:05:31,679 Speaker 1: the problem with agg is just too much supplied. Weather 115 00:05:31,760 --> 00:05:34,560 Speaker 1: is good, too much corn, and there's just not enough 116 00:05:34,600 --> 00:05:38,160 Speaker 1: demand for it, most notally from slack demand for ethanal. Well, 117 00:05:38,200 --> 00:05:39,640 Speaker 1: we need China to come in and buy, right. Is 118 00:05:39,680 --> 00:05:42,680 Speaker 1: that does that move the market? Still? They're helping keep 119 00:05:42,680 --> 00:05:44,560 Speaker 1: it a floor into the market, But the bottom line 120 00:05:44,600 --> 00:05:46,680 Speaker 1: is there's just so much corn on the market. Because's 121 00:05:46,680 --> 00:05:49,080 Speaker 1: so much corn coming, weather is good, that will keep 122 00:05:49,080 --> 00:05:52,280 Speaker 1: a limit in prices. Appreciate so much, Mike McGlone, We 123 00:05:52,320 --> 00:05:56,760 Speaker 1: really appreciate that commodity update. Mikes, commodity strategist for Bloomberg Intelligence, 124 00:05:56,760 --> 00:06:00,159 Speaker 1: again giving us his thoughts on the just a commods 125 00:06:00,200 --> 00:06:02,120 Speaker 1: have just had a great, great run. Here again you 126 00:06:02,160 --> 00:06:04,920 Speaker 1: look up, pull up the chart for silver, for gold 127 00:06:04,960 --> 00:06:06,880 Speaker 1: and as micro was saying, precious medals in general, and 128 00:06:06,920 --> 00:06:09,520 Speaker 1: you to see uh, you know, this doubling off the 129 00:06:09,520 --> 00:06:11,760 Speaker 1: March low ands and then some and then that includes 130 00:06:11,800 --> 00:06:14,680 Speaker 1: bitcoin again more of a double in price off of 131 00:06:14,720 --> 00:06:17,520 Speaker 1: the March lows. So again with these low UH interest 132 00:06:17,600 --> 00:06:21,120 Speaker 1: rate environments, weaker dollars starting to see the commodities really 133 00:06:21,400 --> 00:06:24,520 Speaker 1: trade well, although not so much on the agricultural fronts. 134 00:06:24,520 --> 00:06:26,880 Speaker 1: Michael was just saying, just a supply and the demand 135 00:06:26,920 --> 00:06:31,440 Speaker 1: story just not there for UH commodity agg prices right here, 136 00:06:31,560 --> 00:06:37,160 Speaker 1: even if with China coming back into the market, well 137 00:06:37,200 --> 00:06:39,919 Speaker 1: as more and more businesses try to reopen and raises 138 00:06:40,000 --> 00:06:43,800 Speaker 1: the question if employees get sick with COVID nineteen when 139 00:06:43,800 --> 00:06:47,680 Speaker 1: they return to work, are employers liable. To try to 140 00:06:47,720 --> 00:06:49,680 Speaker 1: get the answer to that question, we welcome Ronnie has 141 00:06:49,720 --> 00:06:52,799 Speaker 1: said Home, managing partner of the said Home Law group. Ronnie, 142 00:06:52,880 --> 00:06:55,560 Speaker 1: thanks so much for joining us here. How does this 143 00:06:55,640 --> 00:06:59,440 Speaker 1: play out? Are the employers loyal liable? What's the law currently? 144 00:07:00,800 --> 00:07:03,720 Speaker 1: Thank you for having me, you know, I'm going to 145 00:07:03,800 --> 00:07:06,279 Speaker 1: give you the answer that lawyers what to say, and 146 00:07:06,320 --> 00:07:12,720 Speaker 1: that is, it depends yes, and it depends upon what 147 00:07:12,880 --> 00:07:16,880 Speaker 1: measures the employer is taking in order to maintain a 148 00:07:16,960 --> 00:07:21,480 Speaker 1: safe working environment. And as you know, it depends on 149 00:07:21,640 --> 00:07:25,280 Speaker 1: which state you're in. The governors are providing employers with 150 00:07:25,480 --> 00:07:29,760 Speaker 1: what they perceive as best practices. So let's take in 151 00:07:29,760 --> 00:07:33,280 Speaker 1: New York, for example, one thing that Governor Cuomo tells 152 00:07:33,320 --> 00:07:36,560 Speaker 1: us to do is take everybody's temperature every day recorded. 153 00:07:36,640 --> 00:07:40,080 Speaker 1: If someone has a fever of two degrees or fahrenheit 154 00:07:40,160 --> 00:07:43,400 Speaker 1: or higher, send them home, make them take the COVID 155 00:07:43,480 --> 00:07:46,840 Speaker 1: nineteen tests, have themselves quarantine. If they just positive, they 156 00:07:46,920 --> 00:07:49,360 Speaker 1: just negative, they can come back to work. And then 157 00:07:49,920 --> 00:07:52,440 Speaker 1: you're supposed to ask a series of questions related to 158 00:07:52,520 --> 00:07:56,760 Speaker 1: travel and interacting with individuals in general who may have 159 00:07:56,960 --> 00:08:02,160 Speaker 1: exposure to the virus. It also includes make workplaces sanitary 160 00:08:02,200 --> 00:08:05,520 Speaker 1: and maintaining social distance while working, and all of that 161 00:08:05,640 --> 00:08:08,160 Speaker 1: is fine. The employer can only do so much. If 162 00:08:08,240 --> 00:08:13,520 Speaker 1: I provide my employees with a questionnaire and they answer truthfully, 163 00:08:13,560 --> 00:08:15,680 Speaker 1: that's fine. But I don't know if they're going to 164 00:08:15,680 --> 00:08:18,320 Speaker 1: answer truthfully because I don't know what they're doing when 165 00:08:18,360 --> 00:08:20,160 Speaker 1: they go home. I don't know what they're doing over 166 00:08:20,200 --> 00:08:24,200 Speaker 1: the weekend, and I think it's there where the employer 167 00:08:24,240 --> 00:08:29,280 Speaker 1: will not be liable due to someone else's fib Yeah, 168 00:08:29,360 --> 00:08:33,240 Speaker 1: so it seems to me almost impossible for an employer 169 00:08:33,280 --> 00:08:36,760 Speaker 1: to be held liable assuming they do the basic requirements, 170 00:08:36,760 --> 00:08:40,800 Speaker 1: because you just don't know. You can't prove where I 171 00:08:40,840 --> 00:08:45,560 Speaker 1: would think a person got the viber's that is exactly correct. 172 00:08:45,679 --> 00:08:48,480 Speaker 1: And some people that I know personally have told me 173 00:08:48,559 --> 00:08:51,319 Speaker 1: that they did test positive for the virus and they 174 00:08:51,400 --> 00:08:55,040 Speaker 1: were effectively home most of this entire time since March 175 00:08:55,880 --> 00:08:58,240 Speaker 1: h mid March, at least a New York City. They're 176 00:08:58,280 --> 00:09:00,439 Speaker 1: all in New York City and they stay at home, 177 00:09:00,440 --> 00:09:04,120 Speaker 1: and somehow they um to catch the virus. So you're right, 178 00:09:04,160 --> 00:09:07,240 Speaker 1: it is impossible. And we're all still waiting for this, 179 00:09:07,320 --> 00:09:10,320 Speaker 1: you know. I guess it's the fourth stimulus now for 180 00:09:11,000 --> 00:09:14,800 Speaker 1: COVID nineteen from the government. But part of what everyone 181 00:09:14,880 --> 00:09:19,400 Speaker 1: is discussing is a waiver of liability for employers because 182 00:09:19,400 --> 00:09:22,240 Speaker 1: there's a there's a tug of war right now between 183 00:09:22,640 --> 00:09:26,560 Speaker 1: coming back to work and refusing to come back to work, 184 00:09:26,640 --> 00:09:30,320 Speaker 1: and some employers, uh, it's really impossible for them to 185 00:09:30,360 --> 00:09:35,120 Speaker 1: function with percent workforce working remotely. So do you think 186 00:09:35,200 --> 00:09:39,280 Speaker 1: that that virus relief proposal, where there is some liability 187 00:09:39,280 --> 00:09:42,040 Speaker 1: protection from businesses and schools, is that is that a 188 00:09:42,040 --> 00:09:45,719 Speaker 1: reasonable thing to have in federal legislation or can the 189 00:09:45,840 --> 00:09:47,480 Speaker 1: courts kind of take care of it on its own? 190 00:09:49,440 --> 00:09:52,000 Speaker 1: You know, it's uh, it's to me it's six of one, 191 00:09:52,040 --> 00:09:54,720 Speaker 1: half dozen, dozen of another. A law is only as 192 00:09:54,720 --> 00:09:58,280 Speaker 1: good as the individuals who follow it. So again, I 193 00:09:58,320 --> 00:10:03,200 Speaker 1: think asking questions seems reasonable on the surface, but everybody 194 00:10:03,240 --> 00:10:06,640 Speaker 1: knows their employees and they know who is going to 195 00:10:06,679 --> 00:10:08,560 Speaker 1: give them a straight answer and who is not, and 196 00:10:08,600 --> 00:10:11,880 Speaker 1: it's impossible to police it. I think as long as 197 00:10:11,880 --> 00:10:15,000 Speaker 1: the employer is taking some kind of reasonable measure in 198 00:10:15,080 --> 00:10:18,880 Speaker 1: terms of social distancing, cleanliness, things of that nature, then 199 00:10:18,920 --> 00:10:20,880 Speaker 1: the employer should not be held liable. But if you 200 00:10:20,960 --> 00:10:23,800 Speaker 1: walked into your office and there are a hundred people 201 00:10:24,080 --> 00:10:28,280 Speaker 1: in an open architecture environment with no not even cubicles 202 00:10:28,400 --> 00:10:32,800 Speaker 1: and no division and no space, that's that's that's a 203 00:10:32,840 --> 00:10:35,480 Speaker 1: completely different issue. Do we have any precedent from a 204 00:10:35,559 --> 00:10:40,080 Speaker 1: legal perspective about you know, employer liability for just having 205 00:10:40,160 --> 00:10:43,840 Speaker 1: a I guess a clean workplace or one that's that's 206 00:10:43,880 --> 00:10:47,280 Speaker 1: that's conducive to health, or one that certainly doesn't is 207 00:10:47,280 --> 00:10:51,000 Speaker 1: not conducive to spreading disease. Generally speaking, I'm not an 208 00:10:51,000 --> 00:10:53,600 Speaker 1: expert in this area, but we do have ocean laws 209 00:10:53,679 --> 00:10:58,280 Speaker 1: occupational safety and health, and there's both federal and state legislation. 210 00:10:58,880 --> 00:11:03,160 Speaker 1: Its normal is looked at from the perspective of manual labor, 211 00:11:03,240 --> 00:11:05,880 Speaker 1: making sure individuals, for example, who are on a construction 212 00:11:05,960 --> 00:11:10,240 Speaker 1: site have proper retires so if God forbid, something falls 213 00:11:10,280 --> 00:11:12,440 Speaker 1: on their foot, they have steel toe shoes and they 214 00:11:12,520 --> 00:11:16,040 Speaker 1: won't lose a toe. Um, but that those ocean laws 215 00:11:16,040 --> 00:11:19,080 Speaker 1: do extend in general to health and safety, and so 216 00:11:19,360 --> 00:11:22,800 Speaker 1: those laws have not changed. They're still in place. If anything, 217 00:11:22,960 --> 00:11:25,520 Speaker 1: the c d C and the e E o C 218 00:11:25,760 --> 00:11:28,240 Speaker 1: have joined on the ocean bandwagon and now we have 219 00:11:28,320 --> 00:11:33,080 Speaker 1: specific COVID NINETEAM guideline do business. I wonder, you know, 220 00:11:33,120 --> 00:11:36,280 Speaker 1: it's just the liability of the uncertainty of the liability. 221 00:11:36,520 --> 00:11:39,480 Speaker 1: I wonder if that will you know, maybe prod certain 222 00:11:39,520 --> 00:11:42,160 Speaker 1: employers to say, you know what, you can work from home. 223 00:11:42,360 --> 00:11:43,960 Speaker 1: You know, I mean, if you heard any of that 224 00:11:44,040 --> 00:11:46,959 Speaker 1: that that type of concern coming from employers and until 225 00:11:47,040 --> 00:11:49,240 Speaker 1: there is a vaccine I'm not sure I want the 226 00:11:49,280 --> 00:11:53,000 Speaker 1: liability of people coming back into my office. Yes, I 227 00:11:53,440 --> 00:11:56,760 Speaker 1: have several clients and we've had that exact conversation, and 228 00:11:57,120 --> 00:12:01,480 Speaker 1: you know, the advice there is really simple. You as 229 00:12:01,480 --> 00:12:03,360 Speaker 1: a business owner need to do what you think is 230 00:12:03,440 --> 00:12:06,559 Speaker 1: best for your business and your employees, and the employees 231 00:12:06,600 --> 00:12:10,520 Speaker 1: also should play a role in that decision. So, and 232 00:12:10,720 --> 00:12:13,800 Speaker 1: it also depends upon what it is you're doing, and again, 233 00:12:13,840 --> 00:12:16,920 Speaker 1: how people are seated. So I'm the managing member of 234 00:12:16,960 --> 00:12:19,960 Speaker 1: my law firm, but every one of my attorneys has 235 00:12:20,000 --> 00:12:23,640 Speaker 1: their own office. Nobody shares offices because I know that 236 00:12:23,720 --> 00:12:26,240 Speaker 1: I get distracted easily, and therefore I like to give 237 00:12:26,240 --> 00:12:29,959 Speaker 1: everyone their own personal space. So for us, it's there's 238 00:12:30,040 --> 00:12:33,199 Speaker 1: less danger right of coming to the office. But depending 239 00:12:33,240 --> 00:12:35,840 Speaker 1: on how your office is designed, it may be perfectly 240 00:12:35,840 --> 00:12:38,840 Speaker 1: reasonable for you to tell people to continue to work 241 00:12:38,880 --> 00:12:42,120 Speaker 1: from home. But as you can imagine, there are some 242 00:12:42,200 --> 00:12:46,439 Speaker 1: jobs which makes it almost impossible for people. Yeah, it's interesting. 243 00:12:46,880 --> 00:12:49,000 Speaker 1: We had Google, I guess just announced today that you know, 244 00:12:49,160 --> 00:12:51,600 Speaker 1: or yesterday, Uh, their folks can stay home till the 245 00:12:51,720 --> 00:12:55,520 Speaker 1: end of the calendar year. So um really making Yeah, 246 00:12:55,600 --> 00:12:59,040 Speaker 1: so that a lot of those opening open space architecture. 247 00:12:59,760 --> 00:13:01,720 Speaker 1: But about the folks that are you don't have a choice, 248 00:13:01,760 --> 00:13:03,520 Speaker 1: you're work in a paltry plan or you work in 249 00:13:03,559 --> 00:13:06,199 Speaker 1: a meat fact, we've already seen issues there. Did those 250 00:13:06,240 --> 00:13:10,400 Speaker 1: folks have rights? I mean, they do have rights to 251 00:13:10,480 --> 00:13:12,880 Speaker 1: the extent that they have a valid reason to not 252 00:13:12,960 --> 00:13:16,160 Speaker 1: come to the office because maybe they have an underlying 253 00:13:16,160 --> 00:13:19,960 Speaker 1: health condition which makes it more unsafe for them than 254 00:13:20,000 --> 00:13:24,559 Speaker 1: the average individual. They have rights. Uh. They also if 255 00:13:24,559 --> 00:13:27,920 Speaker 1: they have other issues, for example, perhaps they live with 256 00:13:27,960 --> 00:13:31,400 Speaker 1: someone with a compromised immune system, they have rights there too. 257 00:13:31,520 --> 00:13:35,880 Speaker 1: There are emergency you know, sick time relief for those individuals, 258 00:13:35,920 --> 00:13:38,800 Speaker 1: but there's a cap on how much they'll earn, and 259 00:13:39,160 --> 00:13:41,120 Speaker 1: it may not be enough for some people to live 260 00:13:41,160 --> 00:13:44,200 Speaker 1: off of because in some instances, I think the federal 261 00:13:44,200 --> 00:13:47,439 Speaker 1: cap is two hundred dollars per day. So if you're 262 00:13:47,679 --> 00:13:50,280 Speaker 1: executive and you're earning a hundred and fifty thousand a year, 263 00:13:50,320 --> 00:13:53,160 Speaker 1: that's a pretty steep pay cut for you. It may 264 00:13:53,160 --> 00:13:56,880 Speaker 1: not be sustainable. But for the individual working, yes, inside 265 00:13:57,280 --> 00:14:02,000 Speaker 1: some kind of plant, perhaps that is in for them. Interesting. 266 00:14:02,200 --> 00:14:04,520 Speaker 1: I think if we can have shifts, right, I think 267 00:14:04,559 --> 00:14:07,360 Speaker 1: everyone is just so entrenched in nine five or eight 268 00:14:07,400 --> 00:14:10,320 Speaker 1: to four or whatever. Everyone, I'm gonna have to have 269 00:14:10,360 --> 00:14:12,160 Speaker 1: to call it there because we're just out of time. 270 00:14:12,160 --> 00:14:13,719 Speaker 1: But thanks so much for joining us. Ronnie I set 271 00:14:13,760 --> 00:14:16,720 Speaker 1: Home Managing Partners, set Home Law Group joining us about 272 00:14:16,720 --> 00:14:22,920 Speaker 1: those back to work and protections for employers. Well, we 273 00:14:23,000 --> 00:14:26,320 Speaker 1: have the FED meeting today tomorrow, the FED decision at 274 00:14:26,520 --> 00:14:28,920 Speaker 1: two p m. Wall Street time tomorrow. To get a 275 00:14:28,920 --> 00:14:31,880 Speaker 1: preview of what we might hear from the Fed, we 276 00:14:31,960 --> 00:14:35,960 Speaker 1: welcome our favorite FED guests, Ira Jersey, chief US interest 277 00:14:36,040 --> 00:14:39,600 Speaker 1: rate strategist for Bloomberg Intelligence. So, Ira, I'm guessing you're 278 00:14:39,640 --> 00:14:43,200 Speaker 1: not expecting anything major to come out of the FED meeting, 279 00:14:43,240 --> 00:14:46,440 Speaker 1: but give us your thoughts. Yeah, thanks, Paul. It's all 280 00:14:46,560 --> 00:14:48,880 Speaker 1: going to be nuanced, I think. And you know, the 281 00:14:49,120 --> 00:14:51,680 Speaker 1: big thing that we're gonna be looking for is what 282 00:14:51,920 --> 00:14:54,680 Speaker 1: is the Federal Reserve thinking in terms of forward guidance, 283 00:14:54,720 --> 00:14:57,440 Speaker 1: because they, you know, they hinted basically early in the 284 00:14:57,480 --> 00:15:00,960 Speaker 1: crisis that they might try yield curve control, which is 285 00:15:01,080 --> 00:15:05,400 Speaker 1: buying bonds at a certain yield in unlimited size to 286 00:15:05,520 --> 00:15:08,440 Speaker 1: keep the long term interest rates low. But they kind 287 00:15:08,440 --> 00:15:11,920 Speaker 1: of backtracked on that over the last six weeks or so, 288 00:15:12,280 --> 00:15:14,520 Speaker 1: and in doing so. They they did say that they 289 00:15:14,560 --> 00:15:18,040 Speaker 1: were looking for some kind of other enhanced forward guidance. 290 00:15:18,200 --> 00:15:21,080 Speaker 1: So you know how that's going to work, how long 291 00:15:21,120 --> 00:15:23,280 Speaker 1: that guidance is going to be for basically saying that 292 00:15:23,320 --> 00:15:26,280 Speaker 1: we're gonna keep interest rates at zero for you know, 293 00:15:26,560 --> 00:15:30,080 Speaker 1: at least three years now, but maybe it's a little longer. Um. 294 00:15:30,120 --> 00:15:32,200 Speaker 1: You know that that's the type of guidance we're going 295 00:15:32,240 --> 00:15:34,680 Speaker 1: to be looking for in in both the statement and 296 00:15:34,920 --> 00:15:37,120 Speaker 1: more importantly in the press conference that starts at two 297 00:15:37,160 --> 00:15:42,160 Speaker 1: thirty tomorrow. Right. So, I the Fed received some pushback 298 00:15:42,240 --> 00:15:44,760 Speaker 1: I think on their plans over the last month or 299 00:15:44,800 --> 00:15:47,000 Speaker 1: so to you know, go into the bond market start 300 00:15:47,000 --> 00:15:50,040 Speaker 1: buying maybe even corporate bonds, buying even Apple bonds on 301 00:15:50,080 --> 00:15:53,560 Speaker 1: their list. What actually has the Fed been doing in 302 00:15:53,760 --> 00:15:57,760 Speaker 1: the open market. Yeah, so they have been buying corporate bonds, 303 00:15:57,800 --> 00:16:00,360 Speaker 1: but in very small size I mean relative to the 304 00:16:00,400 --> 00:16:03,960 Speaker 1: size of the market as well as the hum as 305 00:16:03,960 --> 00:16:06,440 Speaker 1: well as how much is being issued in new issuance. 306 00:16:06,560 --> 00:16:09,400 Speaker 1: But you know, basically they're doing it just a fulfill 307 00:16:09,440 --> 00:16:12,840 Speaker 1: a promise that they made when the Cares Act was 308 00:16:12,840 --> 00:16:15,840 Speaker 1: was first passed and Congress basically gave them the ability 309 00:16:15,880 --> 00:16:18,720 Speaker 1: to do that with UH some money from the Treasury 310 00:16:18,720 --> 00:16:21,520 Speaker 1: Department and taxpayer money UH in the event that they 311 00:16:21,560 --> 00:16:24,240 Speaker 1: take any losses um. But but they're still buying a 312 00:16:24,240 --> 00:16:28,720 Speaker 1: lot of treasury bonds and agency agency mortgage debt and 313 00:16:29,160 --> 00:16:32,840 Speaker 1: that is likely to continue, especially given the size of 314 00:16:32,920 --> 00:16:35,200 Speaker 1: the deficit and and a little bit of worry that 315 00:16:35,280 --> 00:16:38,000 Speaker 1: the FED has. I think that the that the bond 316 00:16:38,040 --> 00:16:42,280 Speaker 1: market might seize up at different times, especially if the 317 00:16:44,080 --> 00:16:47,600 Speaker 1: especially in periods when they're issuing so much debt. So 318 00:16:47,680 --> 00:16:50,080 Speaker 1: you know, we're we're talking about having a four and 319 00:16:50,120 --> 00:16:55,640 Speaker 1: a half trillion dollar deficit for fiscal year which ends 320 00:16:55,640 --> 00:16:58,240 Speaker 1: at the end of September UM and and you know, 321 00:16:58,320 --> 00:17:02,240 Speaker 1: additional stimulus is only to push out how big deficits 322 00:17:02,280 --> 00:17:04,840 Speaker 1: are going to be into. So so I think that 323 00:17:04,880 --> 00:17:07,359 Speaker 1: the FED is worried about market liquidity and they will 324 00:17:07,400 --> 00:17:10,480 Speaker 1: continue to buy corporate bonds and that means that you know, 325 00:17:10,520 --> 00:17:12,800 Speaker 1: their balance sheet are just going to keep expanding at 326 00:17:12,880 --> 00:17:15,720 Speaker 1: least for the time being. Do you expect tomorrow and 327 00:17:16,640 --> 00:17:18,359 Speaker 1: his prepared to marks end or in a Q and 328 00:17:18,400 --> 00:17:21,480 Speaker 1: A for FED Chairman pal To a Pine that more 329 00:17:21,520 --> 00:17:25,600 Speaker 1: fiscal stimulus is needed. Is that what is his role 330 00:17:25,840 --> 00:17:28,840 Speaker 1: in his commentary on that front. Yeah, so I think 331 00:17:28,880 --> 00:17:31,400 Speaker 1: he he will mention that. I mean, he hinted at 332 00:17:31,440 --> 00:17:33,600 Speaker 1: it in uh in the past. Actually, in at the 333 00:17:33,680 --> 00:17:36,040 Speaker 1: June meeting, he basically said that you know, there is 334 00:17:36,080 --> 00:17:39,280 Speaker 1: a there. It's he didn't come out and say it 335 00:17:39,320 --> 00:17:42,240 Speaker 1: directly that there's a limit to monetary policy because I 336 00:17:42,280 --> 00:17:45,240 Speaker 1: think that that they're scared that how the markets might 337 00:17:45,280 --> 00:17:49,359 Speaker 1: react and how the economy economic actors might react if 338 00:17:49,359 --> 00:17:51,200 Speaker 1: the Fed says that they don't have much more that 339 00:17:51,280 --> 00:17:53,960 Speaker 1: they can do. But in reality that with the exception 340 00:17:54,000 --> 00:17:56,399 Speaker 1: of increasing sizes, there's not a whole lot more that 341 00:17:56,480 --> 00:17:59,000 Speaker 1: the Federal Reserve can do. So he will not and 342 00:17:59,080 --> 00:18:01,280 Speaker 1: say that, you know, more school stimulus is needed. This 343 00:18:01,400 --> 00:18:04,960 Speaker 1: is unprecedented times. The economy is still fragile. You've seen 344 00:18:05,000 --> 00:18:08,240 Speaker 1: an uptick now in uh in in on insurance claims 345 00:18:08,280 --> 00:18:10,280 Speaker 1: over the last couple of weeks. So I think that 346 00:18:10,320 --> 00:18:13,080 Speaker 1: he'll point to some economic indicators to suggest that there 347 00:18:13,080 --> 00:18:15,959 Speaker 1: should be additional stimulus, and then of course a reporter 348 00:18:16,000 --> 00:18:18,840 Speaker 1: will ask him what should that stimulus include, and he'll 349 00:18:18,880 --> 00:18:20,720 Speaker 1: just say that's not up to me to decide, that's 350 00:18:20,760 --> 00:18:23,399 Speaker 1: up to Congress, and um, but you know, it should 351 00:18:23,400 --> 00:18:27,720 Speaker 1: be broad and help all the economic actors across the economy. Right, 352 00:18:28,119 --> 00:18:31,600 Speaker 1: what do you expect the ira UM in terms of 353 00:18:31,800 --> 00:18:34,879 Speaker 1: what else the FED can do? I mean it seems 354 00:18:34,920 --> 00:18:37,000 Speaker 1: like they've I mean, as as you look back on 355 00:18:37,040 --> 00:18:40,480 Speaker 1: these past five six months, the FED was early, the 356 00:18:40,520 --> 00:18:43,919 Speaker 1: FED was active, The Fed was I think transparent. The 357 00:18:43,920 --> 00:18:46,600 Speaker 1: FED generally gets good remarks. I think for most market 358 00:18:46,600 --> 00:18:49,560 Speaker 1: participants is its steady issue goes right here and it 359 00:18:49,680 --> 00:18:53,760 Speaker 1: kind of the the balance point is gonna be fiscal stimulus. Yeah, 360 00:18:53,840 --> 00:18:56,000 Speaker 1: So I think I think for the FED it's more 361 00:18:56,440 --> 00:18:59,119 Speaker 1: you know, right sizing the tools that they currently have. 362 00:18:59,359 --> 00:19:02,800 Speaker 1: So in the sense, for example, that there is another UM, 363 00:19:02,960 --> 00:19:06,439 Speaker 1: the significant downturn in the economy, and that it becomes 364 00:19:06,440 --> 00:19:09,639 Speaker 1: more difficult, for example, for credit to flow through UM, 365 00:19:09,680 --> 00:19:12,800 Speaker 1: you know, changing things like the main Street program perhaps 366 00:19:12,840 --> 00:19:15,760 Speaker 1: and and doing some tweaks into who's eligible to that. 367 00:19:15,760 --> 00:19:18,119 Speaker 1: They've done a little bit of that. UM certainly helping 368 00:19:18,119 --> 00:19:22,119 Speaker 1: the municipal bond market and and municipalities fund themselves given 369 00:19:22,640 --> 00:19:25,760 Speaker 1: the lack of tax revenue is something else that I 370 00:19:25,800 --> 00:19:27,960 Speaker 1: think can be tweaked a little bit here and there. 371 00:19:28,280 --> 00:19:30,800 Speaker 1: But there's UM. But but it's probably more about the 372 00:19:30,880 --> 00:19:32,879 Speaker 1: size that they might need to do in the future 373 00:19:32,880 --> 00:19:36,639 Speaker 1: as opposed to creating a lot of new programs. Any 374 00:19:36,760 --> 00:19:39,280 Speaker 1: surprises you're expecting in the Q and A tomorrow, what 375 00:19:39,280 --> 00:19:42,040 Speaker 1: what would surprise you? I think what would surprise me 376 00:19:42,080 --> 00:19:45,080 Speaker 1: is is is if they did announce some type of 377 00:19:45,160 --> 00:19:49,359 Speaker 1: yield curve control or extent really enhanced forward guidance that 378 00:19:49,560 --> 00:19:54,240 Speaker 1: was beyond the two time frame that they're currently talking about. 379 00:19:54,280 --> 00:19:57,080 Speaker 1: That would certainly be a surprise to the market. Um. 380 00:19:57,200 --> 00:19:58,879 Speaker 1: You know, what would the market reaction be? Well, with 381 00:19:58,920 --> 00:20:01,680 Speaker 1: ten year yields at fIF the eight basis point here? Um, 382 00:20:01,760 --> 00:20:03,880 Speaker 1: you know, it maybe goes back to the lows at 383 00:20:04,000 --> 00:20:07,720 Speaker 1: fifty four or fifty fifty basis points perhaps, but um, 384 00:20:07,760 --> 00:20:10,560 Speaker 1: but I don't see a significant market reaction even if 385 00:20:10,560 --> 00:20:14,080 Speaker 1: they were to enhance that guidance tomorrow. IRA, thanks so much, 386 00:20:14,119 --> 00:20:17,439 Speaker 1: as always, our Jersey chief US interest rate strategist for 387 00:20:17,480 --> 00:20:21,920 Speaker 1: Bloomberg Intelligence. We'll be watching the FED today and tomorrow again. UH. 388 00:20:21,960 --> 00:20:25,639 Speaker 1: Statement at two pm Wall Street time tomorrow, UH, And 389 00:20:25,680 --> 00:20:29,240 Speaker 1: as I ever mentioned, the press conference with FED Chairman 390 00:20:29,280 --> 00:20:33,040 Speaker 1: pal to thirty pm Wall Street time tomorrow, Bloomberg will 391 00:20:33,080 --> 00:20:35,760 Speaker 1: be covering that clearly will bring that all the important 392 00:20:35,760 --> 00:20:40,720 Speaker 1: information coming from that meeting, as we always do. Well, 393 00:20:40,720 --> 00:20:44,840 Speaker 1: we had some numbers Adam McDonald's really weak same store 394 00:20:44,880 --> 00:20:47,880 Speaker 1: sales that' stock trading off today. We've got Starbucks tomorrow. 395 00:20:48,000 --> 00:20:51,000 Speaker 1: Good opportunity to get a sense at how restaurants are 396 00:20:51,160 --> 00:20:53,240 Speaker 1: dealing in this pandemic right here as we enter into 397 00:20:53,280 --> 00:20:55,399 Speaker 1: the fifth or six month here, so the way to 398 00:20:55,640 --> 00:20:58,119 Speaker 1: really get close to the restaurant business. We're pleased to 399 00:20:58,119 --> 00:21:00,359 Speaker 1: be able to chat with Michael Halen. He covers Stronts 400 00:21:00,400 --> 00:21:03,480 Speaker 1: for Bluemberg Intelligence. He's a senior analysts there. Mike, let's 401 00:21:03,480 --> 00:21:06,400 Speaker 1: start with Mickey D's. Uh, what was your takeaway from 402 00:21:06,400 --> 00:21:10,840 Speaker 1: the numbers today? Uh? You know, Mickey D's kind of 403 00:21:10,920 --> 00:21:15,159 Speaker 1: underperformed a little bit early on in the pandemic. I 404 00:21:15,160 --> 00:21:17,560 Speaker 1: think part of that was the fact that they've they've 405 00:21:17,640 --> 00:21:20,680 Speaker 1: halted their all day breakfast to kind of help um 406 00:21:20,840 --> 00:21:26,080 Speaker 1: improve franchising market margins and throughput at the drive through 407 00:21:26,200 --> 00:21:30,080 Speaker 1: during lunch and dinner times. But they've been able to 408 00:21:30,320 --> 00:21:34,720 Speaker 1: increase their same store sales in July. Uh, they outperformed 409 00:21:34,760 --> 00:21:37,880 Speaker 1: the QUSR competitors of theirs. Uh in May and June, 410 00:21:37,880 --> 00:21:40,960 Speaker 1: which we knew were going to be weak anyway, So 411 00:21:40,960 --> 00:21:44,640 Speaker 1: so it looks like, um, when it comes to sales, 412 00:21:44,720 --> 00:21:49,080 Speaker 1: they're back, uh in in in a mode of kind 413 00:21:49,119 --> 00:21:52,679 Speaker 1: of taking uh market share again here in the US, 414 00:21:52,760 --> 00:21:54,919 Speaker 1: which which we've been kind of accustomed to over the 415 00:21:55,000 --> 00:21:59,160 Speaker 1: last three years. Same source sales came in brutally low. 416 00:21:59,160 --> 00:22:02,800 Speaker 1: I think it's twenty point nine percent negative. Uh was 417 00:22:03,680 --> 00:22:06,040 Speaker 1: is that? Was that more than the street I've been 418 00:22:06,040 --> 00:22:08,800 Speaker 1: looking for? Worse than the street had been looking for. Yeah, 419 00:22:08,840 --> 00:22:11,840 Speaker 1: it was slightly worse. Results were kind of mixed. It 420 00:22:11,880 --> 00:22:14,960 Speaker 1: was slightly worse. US was was uh you know, only 421 00:22:15,080 --> 00:22:18,359 Speaker 1: maybe thirty basis points worse than than what was the 422 00:22:18,760 --> 00:22:22,240 Speaker 1: street was expecting. You know that headline total same store 423 00:22:22,280 --> 00:22:27,720 Speaker 1: sales number was was greatly impacted by uh international store closures. Um. 424 00:22:27,760 --> 00:22:31,119 Speaker 1: You know some markets were shut down completely, you know, France, 425 00:22:31,840 --> 00:22:36,719 Speaker 1: uh UK, Spain, Italy. Those were four markets that were 426 00:22:36,760 --> 00:22:40,440 Speaker 1: completely closed for for part of the quarter. And McDonald's 427 00:22:40,480 --> 00:22:42,720 Speaker 1: does the right thing by including store closures in their 428 00:22:42,760 --> 00:22:46,440 Speaker 1: same store sales estimate. So some of the restaurant peers 429 00:22:46,440 --> 00:22:48,520 Speaker 1: were going to see reporting the numbers might look a 430 00:22:48,560 --> 00:22:51,840 Speaker 1: little better, but that's because they leave closed stores out 431 00:22:51,880 --> 00:22:54,719 Speaker 1: of the compace. So so so I think you know 432 00:22:54,960 --> 00:22:58,600 Speaker 1: all told you know, what you see out of McDonald's 433 00:22:58,800 --> 00:23:02,240 Speaker 1: is that you know, they're recovering. They're recovering a little 434 00:23:02,280 --> 00:23:04,440 Speaker 1: faster than many of their peers because of a strong 435 00:23:04,560 --> 00:23:08,280 Speaker 1: drive through business, uh, you know, and sales as sales 436 00:23:08,320 --> 00:23:11,959 Speaker 1: are getting back to growth, you know, margins however, a 437 00:23:11,960 --> 00:23:14,680 Speaker 1: little bit of a different story. So top line, you know, 438 00:23:14,720 --> 00:23:17,080 Speaker 1: I was appreciate the forecast for McDonald's because it truly 439 00:23:17,160 --> 00:23:19,760 Speaker 1: is a global forecast. What are they seeing in some 440 00:23:19,840 --> 00:23:22,840 Speaker 1: of the markets going forward? Are they what's their level 441 00:23:22,880 --> 00:23:26,399 Speaker 1: of optimism were concerned? I think there's a lot more 442 00:23:26,400 --> 00:23:29,199 Speaker 1: optimism here in the US, and that's because they have 443 00:23:29,240 --> 00:23:31,440 Speaker 1: a very strong drive through business. About two thirds of 444 00:23:31,480 --> 00:23:34,520 Speaker 1: their sales comes through the drive through prior to COVID, 445 00:23:34,560 --> 00:23:38,840 Speaker 1: and now obviously those numbers are higher. Delivery has seen 446 00:23:38,920 --> 00:23:41,280 Speaker 1: some growth, and then although even though they only have 447 00:23:41,440 --> 00:23:44,359 Speaker 1: two thousand dining rooms open, the fact that they're able 448 00:23:44,359 --> 00:23:49,040 Speaker 1: to generate positive seams our sales uh is a good sign. Uh. 449 00:23:49,119 --> 00:23:51,560 Speaker 1: International a little bit different. So those four markets that 450 00:23:51,600 --> 00:23:55,200 Speaker 1: I mentioned in Europe that had been closed down, they 451 00:23:55,240 --> 00:24:00,159 Speaker 1: do maybe thirty percent of their sales at the drive through. So, um, 452 00:24:00,200 --> 00:24:03,439 Speaker 1: that's going to be a big headwind. China also seems 453 00:24:03,480 --> 00:24:06,760 Speaker 1: to be consumers seem to be continue to be scared 454 00:24:07,240 --> 00:24:12,080 Speaker 1: of UH coronavirus and it's affecting their consumption behavior. There's 455 00:24:12,280 --> 00:24:14,639 Speaker 1: very few drive throughs in that country. So so they 456 00:24:14,680 --> 00:24:19,840 Speaker 1: also pointed out that China they expect UH sluggish sales 457 00:24:19,840 --> 00:24:24,320 Speaker 1: to continue through year end. Starbucks reports tomorrow. What's your 458 00:24:24,359 --> 00:24:30,000 Speaker 1: expectation like, Yeah, so Starbucks has a you know, much 459 00:24:30,040 --> 00:24:32,280 Speaker 1: bigger issues than McDonald's and I think it's gonna take 460 00:24:32,320 --> 00:24:35,120 Speaker 1: a lot longer for their sales to recover. So, uh, 461 00:24:35,240 --> 00:24:37,800 Speaker 1: first of all, on the sales side, don't they have 462 00:24:37,880 --> 00:24:41,440 Speaker 1: only about of their U S stores have a drive through, 463 00:24:41,880 --> 00:24:46,800 Speaker 1: So that's problematic. Also, breakfast sales have been hurt hit 464 00:24:46,880 --> 00:24:50,840 Speaker 1: the hardest in the QSR industry because of increased telecommuting, 465 00:24:51,000 --> 00:24:54,840 Speaker 1: less people going to work. Um, so that's obviously going 466 00:24:54,880 --> 00:24:57,600 Speaker 1: to be very impactful for Starbucks. And they do a 467 00:24:57,680 --> 00:24:59,520 Speaker 1: big business and there has a lot of people in 468 00:24:59,560 --> 00:25:02,600 Speaker 1: the store, and you have consumers that still aren't ready 469 00:25:02,640 --> 00:25:06,280 Speaker 1: to get back to you know, packed cafes. So all 470 00:25:06,320 --> 00:25:08,600 Speaker 1: for all of those reasons, we expect sales to be 471 00:25:08,680 --> 00:25:12,600 Speaker 1: down much much more in the quarter, maybe down about 472 00:25:14,000 --> 00:25:16,520 Speaker 1: for Starbucks. And then they also have much more margin 473 00:25:16,560 --> 00:25:20,320 Speaker 1: pressure because they um own and operate about fifty percent 474 00:25:20,400 --> 00:25:23,760 Speaker 1: of their stores, whereas you know McDonald's is about six percent, 475 00:25:23,920 --> 00:25:27,000 Speaker 1: So they're gonna have much higher pressure on the margin 476 00:25:27,160 --> 00:25:31,880 Speaker 1: side as well as Starbucks. So it's interesting just kind 477 00:25:31,880 --> 00:25:33,680 Speaker 1: of looking at your peer group. In the peer group 478 00:25:33,720 --> 00:25:36,120 Speaker 1: for Starbucks, I mean, if you're an indoor dining facility, 479 00:25:36,160 --> 00:25:39,119 Speaker 1: your stocks just obviously kind of gotten hit pretty hard 480 00:25:39,200 --> 00:25:42,000 Speaker 1: year to day. But if you're you know, kind of 481 00:25:42,080 --> 00:25:44,480 Speaker 1: out of home a little bit, Domino's at Chipotle, that's 482 00:25:44,520 --> 00:25:46,560 Speaker 1: been the play for restaurants and is that kind of 483 00:25:46,600 --> 00:25:50,160 Speaker 1: the foreseeable future the call Mike, Yeah, we think that's 484 00:25:50,160 --> 00:25:53,600 Speaker 1: going to continue. I mean, some of these full service 485 00:25:53,640 --> 00:25:56,359 Speaker 1: dining chains are starting to do better because I think 486 00:25:56,560 --> 00:25:59,960 Speaker 1: a there was stimulus checks right, there was increased payment 487 00:26:00,040 --> 00:26:04,080 Speaker 1: in the unemployment. People definitely had a lot of cabin fever. 488 00:26:04,200 --> 00:26:07,560 Speaker 1: People were tired of staying home and wanted to get out. Uh, 489 00:26:07,600 --> 00:26:09,320 Speaker 1: And they're kind of making picking up some of the 490 00:26:09,320 --> 00:26:13,399 Speaker 1: slack with outdoor dining. Um, but with a lot of 491 00:26:13,680 --> 00:26:17,760 Speaker 1: you know, with this unemployment, insurance uncertainty. UH. You know, 492 00:26:18,000 --> 00:26:20,800 Speaker 1: as we move into the fall in the winter and 493 00:26:21,119 --> 00:26:23,520 Speaker 1: outdoor dining goes away in many of the states in 494 00:26:23,560 --> 00:26:26,000 Speaker 1: the United States, you know, we expect there to be 495 00:26:26,080 --> 00:26:29,840 Speaker 1: continued pressure on a full service UH sector. And and 496 00:26:30,000 --> 00:26:32,680 Speaker 1: you know, right now delivery continues to be the place 497 00:26:32,760 --> 00:26:36,440 Speaker 1: to be with with drive through as a close second. Interesting, 498 00:26:36,480 --> 00:26:39,320 Speaker 1: interesting times in the restaurant business, initially one of the 499 00:26:39,320 --> 00:26:42,240 Speaker 1: hardest hit sectors, still filling the pain. Michael Halen, senior 500 00:26:42,240 --> 00:26:45,800 Speaker 1: restaurant analysts for Bloomberg Opinion, giving us his thoughts here. 501 00:26:46,240 --> 00:26:48,280 Speaker 1: I could just say, for you know, here in New Jersey, 502 00:26:48,320 --> 00:26:51,720 Speaker 1: we have the outdoor dining and that's generally going pretty well. 503 00:26:51,760 --> 00:26:53,159 Speaker 1: I think a lot of the restaurants I talked to 504 00:26:53,160 --> 00:26:55,920 Speaker 1: say it helps, but it certainly is not the cure 505 00:26:55,920 --> 00:26:59,199 Speaker 1: all and of course that only works when the weather cooperates, 506 00:26:59,200 --> 00:27:03,760 Speaker 1: so clearly rest runs looking for some help there. Thanks 507 00:27:03,800 --> 00:27:07,040 Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and 508 00:27:07,119 --> 00:27:10,920 Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform 509 00:27:10,960 --> 00:27:14,439 Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn, 510 00:27:14,560 --> 00:27:16,960 Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 511 00:27:17,000 --> 00:27:19,639 Speaker 1: Before the podcast, you can always catch us worldwide at 512 00:27:19,680 --> 00:27:20,480 Speaker 1: Bloomberg Radio