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 CEO, 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 Podcasts or wherever you listen to podcasts,

6
00:00:17,000 --> 00:00:20,919
Speaker 1: and on Bloomberg dot com. Certainly, one of the key

7
00:00:21,000 --> 00:00:24,239
Speaker 1: issues from the pandemic that we're dealing with right now

8
00:00:24,239 --> 00:00:29,440
Speaker 1: our potential therapeutics as well as obviously vaccines, and we

9
00:00:29,480 --> 00:00:31,760
Speaker 1: are really fortunate to have the good, good folks at

10
00:00:31,840 --> 00:00:35,000
Speaker 1: Johns Hopkins University UH with us to help us kind

11
00:00:35,000 --> 00:00:37,599
Speaker 1: of get through some of this very difficult to understand

12
00:00:37,600 --> 00:00:40,120
Speaker 1: news and try to put everything in perspective. Lawrence Sour,

13
00:00:40,240 --> 00:00:44,239
Speaker 1: Assistant Professor of Emergency Medicine at Johns Hopkins University UH

14
00:00:44,280 --> 00:00:47,320
Speaker 1: School of Medicine joints us on the phone from UH Baltimore,

15
00:00:47,360 --> 00:00:49,199
Speaker 1: should note that the Bloomberg School of Public Health is

16
00:00:49,200 --> 00:00:52,680
Speaker 1: supported by Michael Bloomberg found our Bloomberg Glope Bloomberg Philanthropies

17
00:00:52,720 --> 00:00:56,280
Speaker 1: in this radio and TV operation. So Lauren, let's start

18
00:00:56,360 --> 00:01:02,000
Speaker 1: with um kind of the therapeutic that are out there

19
00:01:02,200 --> 00:01:04,640
Speaker 1: that people are working on that may help in the

20
00:01:04,840 --> 00:01:08,880
Speaker 1: treatment of ongoing cases. Where where where do you? Where

21
00:01:08,880 --> 00:01:11,880
Speaker 1: are you kind of looking right now? Yeah, there's been

22
00:01:11,920 --> 00:01:15,720
Speaker 1: some exciting movement the past few months on therapeutics UM

23
00:01:15,800 --> 00:01:22,000
Speaker 1: for COVID nineteen, and the vaccine landscape is moving exceptionally quickly. UM.

24
00:01:22,080 --> 00:01:25,839
Speaker 1: We know that the NIH just started Act three, which

25
00:01:25,880 --> 00:01:31,319
Speaker 1: is the third installation of their UM therapeutic trials UM.

26
00:01:31,360 --> 00:01:34,880
Speaker 1: They also have a large scale clinical trial being set

27
00:01:34,959 --> 00:01:41,480
Speaker 1: up to test antibodies and UM uh montoquino antibodies for

28
00:01:41,480 --> 00:01:44,560
Speaker 1: for COVID nineteen, which is a promising route that I

29
00:01:44,560 --> 00:01:48,120
Speaker 1: think everyone is hoping UM will be an option, particularly

30
00:01:48,120 --> 00:01:50,800
Speaker 1: as we wait for the development of a vaccine. On

31
00:01:50,840 --> 00:01:53,240
Speaker 1: the vaccine side, I think we are seeing a lot

32
00:01:53,240 --> 00:01:56,240
Speaker 1: of progress UM. There's been a lot of conversations about

33
00:01:56,400 --> 00:01:59,280
Speaker 1: the vaccines that are moving into phase three UM. One

34
00:01:59,320 --> 00:02:01,800
Speaker 1: of them is an MARNA vaccine, which would be the

35
00:02:01,840 --> 00:02:04,960
Speaker 1: first of its kind if it makes it through phase three.

36
00:02:05,000 --> 00:02:09,000
Speaker 1: But I think a lot of UM exciting potential opportunities

37
00:02:09,560 --> 00:02:12,520
Speaker 1: for progress to be made here in the next few months. Lauren,

38
00:02:12,639 --> 00:02:15,440
Speaker 1: what's the headline that we're looking for? So you know,

39
00:02:15,639 --> 00:02:18,680
Speaker 1: I'm presumably between now and then there will be you know,

40
00:02:18,840 --> 00:02:22,000
Speaker 1: a bunch of different headlines about the progress in all

41
00:02:22,000 --> 00:02:24,880
Speaker 1: of these studies. Is there one which will suggest that

42
00:02:24,919 --> 00:02:26,800
Speaker 1: perhaps we can start coming out of our houses again.

43
00:02:28,360 --> 00:02:30,400
Speaker 1: I think the vaccine one will be the biggest one.

44
00:02:30,480 --> 00:02:34,040
Speaker 1: Monacono antibodies are also really um have the potential to

45
00:02:34,080 --> 00:02:36,400
Speaker 1: be a really exciting development because they can be used

46
00:02:36,400 --> 00:02:38,320
Speaker 1: in that gap between now and when we have a

47
00:02:38,400 --> 00:02:43,839
Speaker 1: vaccine UM, possibly even prophylactically, so before people get um

48
00:02:44,080 --> 00:02:47,280
Speaker 1: COVID nineteen or may have been exposed to COVID nineteen.

49
00:02:47,800 --> 00:02:51,840
Speaker 1: And frankly, I still think that we can look towards

50
00:02:52,600 --> 00:02:56,000
Speaker 1: towards getting out more, getting a little more social if

51
00:02:56,040 --> 00:03:00,400
Speaker 1: we really um hampered down on that on that the

52
00:03:00,400 --> 00:03:02,600
Speaker 1: desire for people not to use masks. So if people

53
00:03:03,280 --> 00:03:06,800
Speaker 1: buy into masks, if people buy into socially distancing while

54
00:03:06,919 --> 00:03:09,440
Speaker 1: in public, then we can move towards that as well.

55
00:03:09,520 --> 00:03:12,400
Speaker 1: And and so that is our best bet those non

56
00:03:12,440 --> 00:03:16,080
Speaker 1: pharmaceutical interventions while we wait for the pharmaceutical interventions to

57
00:03:16,120 --> 00:03:19,800
Speaker 1: come on board. Is there a sense, Lauren, that the

58
00:03:19,919 --> 00:03:22,440
Speaker 1: safety protocols are as we go through the testing here?

59
00:03:22,480 --> 00:03:25,440
Speaker 1: I know we're accelerating at the timeline aggressively in order

60
00:03:25,440 --> 00:03:27,840
Speaker 1: to kind of meet that the need. But within the

61
00:03:27,880 --> 00:03:32,560
Speaker 1: scientific community, is there concerned that maybe we're going too fast? UM.

62
00:03:32,919 --> 00:03:35,880
Speaker 1: I think there's always a bit of a concern when

63
00:03:36,240 --> 00:03:39,320
Speaker 1: the timeline looks so much faster than what all of

64
00:03:39,400 --> 00:03:42,120
Speaker 1: us are used to UM. There were some calls last

65
00:03:42,120 --> 00:03:45,080
Speaker 1: week for UM skipping phase three of some of the

66
00:03:45,160 --> 00:03:48,720
Speaker 1: vaccine trials, which is not appropriate, and I think we're

67
00:03:48,880 --> 00:03:52,200
Speaker 1: rightfully sort of shut down. I think everyone is looking

68
00:03:52,520 --> 00:03:55,080
Speaker 1: with a careful eye at the FDA on the decisions

69
00:03:55,120 --> 00:03:58,120
Speaker 1: and the concessions that they're making. But I think given

70
00:03:58,160 --> 00:04:00,920
Speaker 1: the fact that the decisions there may in our public,

71
00:04:01,160 --> 00:04:05,960
Speaker 1: we generally speaking feel confident that that that the pathways

72
00:04:06,000 --> 00:04:08,680
Speaker 1: being followed. It's just an all hands on deck approach

73
00:04:08,760 --> 00:04:11,840
Speaker 1: to make it as quick and efficient as possible. Lauren,

74
00:04:11,840 --> 00:04:14,040
Speaker 1: I want to get your reaction to something we just

75
00:04:14,200 --> 00:04:17,560
Speaker 1: got word The Governor Cuomo of New York says all

76
00:04:17,760 --> 00:04:23,599
Speaker 1: school districts in New York can reopen, So obviously it'll be,

77
00:04:23,760 --> 00:04:26,880
Speaker 1: you know, up to each municipality, but the Governor's point

78
00:04:26,880 --> 00:04:29,120
Speaker 1: of view is that all school districts in New York,

79
00:04:29,200 --> 00:04:31,880
Speaker 1: all around the region and all across the state can reopen.

80
00:04:32,320 --> 00:04:35,960
Speaker 1: It's one of very few sort of decisions on the

81
00:04:35,960 --> 00:04:38,839
Speaker 1: part of governors across the states for school districts in

82
00:04:38,880 --> 00:04:41,760
Speaker 1: the entire state to be allowed reopen should they wish

83
00:04:41,800 --> 00:04:44,400
Speaker 1: to do. You think it's the right decision. I mean,

84
00:04:44,440 --> 00:04:46,839
Speaker 1: I don't want you to have to weigh in politically,

85
00:04:46,920 --> 00:04:49,560
Speaker 1: but if you know, if you had children that were

86
00:04:49,920 --> 00:04:52,000
Speaker 1: in the New York school system, would you be okay

87
00:04:52,000 --> 00:04:54,720
Speaker 1: with them going back to school? Yeah, I'm not sure

88
00:04:54,800 --> 00:04:56,640
Speaker 1: yet that I would be okay with them going back

89
00:04:56,640 --> 00:04:59,400
Speaker 1: to school in person. I think the pictures from earlier

90
00:04:59,400 --> 00:05:03,120
Speaker 1: this week for the Georgia school systems, UM, we're very

91
00:05:03,160 --> 00:05:05,360
Speaker 1: concerning to a lot of us. And I think the

92
00:05:06,040 --> 00:05:09,960
Speaker 1: UM the short timeline for planning to do this safely

93
00:05:10,000 --> 00:05:12,440
Speaker 1: and effectively, and the lack of resources that have been

94
00:05:12,480 --> 00:05:15,360
Speaker 1: given broadly across the country to schools to do it

95
00:05:15,440 --> 00:05:19,479
Speaker 1: safely and effectively. UM still away on austin public health

96
00:05:19,640 --> 00:05:22,520
Speaker 1: very very heavily. UM. I think New York is a

97
00:05:22,560 --> 00:05:26,360
Speaker 1: place where if the transmission is well under control, then

98
00:05:26,520 --> 00:05:30,800
Speaker 1: giving the permission to the local municipalities to do what

99
00:05:30,839 --> 00:05:35,039
Speaker 1: they think is best is probably appropriate. That being said,

100
00:05:35,839 --> 00:05:39,400
Speaker 1: I think the um the key will be understanding what

101
00:05:39,480 --> 00:05:43,800
Speaker 1: local transmission looks like in order to let local communities

102
00:05:43,880 --> 00:05:47,960
Speaker 1: make those decisions and not forcing anyone back to opening

103
00:05:48,040 --> 00:05:50,440
Speaker 1: in a in a situation where they either don't feel

104
00:05:50,440 --> 00:05:53,560
Speaker 1: they have the resources or feel that community transmission is

105
00:05:53,640 --> 00:05:56,520
Speaker 1: too high to do it safely. You know, kids are

106
00:05:56,560 --> 00:06:00,400
Speaker 1: getting sick, kids are dying, um and so, and they

107
00:06:00,400 --> 00:06:03,440
Speaker 1: have family members who may be dramatically affected by a

108
00:06:03,520 --> 00:06:07,320
Speaker 1: rush to reopen school. So we have to focus on

109
00:06:07,360 --> 00:06:11,240
Speaker 1: reducing community transmission in order to open schools safely. Yeah,

110
00:06:11,279 --> 00:06:12,839
Speaker 1: I mean we're talking about just a couple of weeks

111
00:06:12,880 --> 00:06:15,799
Speaker 1: away here a school districts in the state can reopen

112
00:06:15,839 --> 00:06:18,640
Speaker 1: in September. This was one of the hold out states.

113
00:06:18,640 --> 00:06:21,040
Speaker 1: I feel like we're still waiting for the decision from

114
00:06:21,120 --> 00:06:22,800
Speaker 1: New York, and now we have that decision from the

115
00:06:22,839 --> 00:06:25,360
Speaker 1: Governor Andrew Cuomo. Lauren, I want to thank you for

116
00:06:25,400 --> 00:06:28,800
Speaker 1: your contribution today and always here on Bloomberg Radio and

117
00:06:28,839 --> 00:06:33,200
Speaker 1: across Bloomberg Media. Lauren sur is professor of emergency medicine

118
00:06:33,240 --> 00:06:36,080
Speaker 1: at Johns Hopkins University, and we really really do thank

119
00:06:36,120 --> 00:06:38,640
Speaker 1: her for coming on and explaining things to us. In

120
00:06:38,760 --> 00:06:41,200
Speaker 1: Layman's terms. I do want to point out that many

121
00:06:41,240 --> 00:06:44,120
Speaker 1: of the labor unions are not okay with schools reopening.

122
00:06:44,120 --> 00:06:48,719
Speaker 1: Just yesterday, the new National Education Association president, Becky Pringle

123
00:06:48,800 --> 00:06:53,400
Speaker 1: said schools aren't safe to reopen. Time for another look

124
00:06:53,400 --> 00:06:56,400
Speaker 1: now at the non farm payrolls reports at stimulus and

125
00:06:56,440 --> 00:06:58,920
Speaker 1: how it all is impacting the market. Let's bring in

126
00:06:58,960 --> 00:07:03,520
Speaker 1: Marvin Loew, senior lobal macro strategist at State Street in Boston. So, Marvin,

127
00:07:03,640 --> 00:07:06,520
Speaker 1: I think it's pretty well established now that fundamentals are

128
00:07:06,560 --> 00:07:09,920
Speaker 1: just a little bit distorted in terms of you know,

129
00:07:10,200 --> 00:07:12,640
Speaker 1: pandemic effects, and that the market is sort of ignoring

130
00:07:12,680 --> 00:07:14,960
Speaker 1: a little bit of that. How are you reading the

131
00:07:15,000 --> 00:07:20,040
Speaker 1: intersection of economic data and markets today? You know what? UM?

132
00:07:20,080 --> 00:07:22,520
Speaker 1: You know, so certainly after after the report, we all

133
00:07:22,560 --> 00:07:24,520
Speaker 1: took a step back to to really figure out how

134
00:07:24,600 --> 00:07:27,000
Speaker 1: much of it UM we should care about, how much

135
00:07:27,040 --> 00:07:30,160
Speaker 1: of it we shouldn't. And as I took a step back,

136
00:07:30,480 --> 00:07:32,280
Speaker 1: you know, I came to the conclusive and ultimately we're

137
00:07:32,320 --> 00:07:36,920
Speaker 1: still a stimulus driven market and that really hasn't changed.

138
00:07:36,960 --> 00:07:39,360
Speaker 1: So you know that that remains my overlay in kind

139
00:07:39,360 --> 00:07:43,040
Speaker 1: of the way I'm looking at asset values UM. The

140
00:07:43,200 --> 00:07:46,840
Speaker 1: data is showing that there is some resilience in the economy.

141
00:07:47,120 --> 00:07:48,960
Speaker 1: But again, you know, like you said, take it with

142
00:07:49,000 --> 00:07:52,720
Speaker 1: a grain of salt, because UM, things change quickly, and

143
00:07:52,720 --> 00:07:56,080
Speaker 1: they have been changing quickly even since UM that employment

144
00:07:56,600 --> 00:07:59,640
Speaker 1: survey was taken a few weeks ago. Just some headlines

145
00:07:59,680 --> 00:08:02,040
Speaker 1: coming across the Bloomberg again, the U S sanctions Hong

146
00:08:02,120 --> 00:08:05,400
Speaker 1: Kong's Carrie lamb U, the U S. Treasury listing actual

147
00:08:05,480 --> 00:08:08,400
Speaker 1: sanctions on its website, so we have more UH information

148
00:08:08,400 --> 00:08:11,520
Speaker 1: on that coming forward. But again, rising tensions between between

149
00:08:11,520 --> 00:08:13,600
Speaker 1: the US and China. So Marvin, that's kind of where

150
00:08:13,640 --> 00:08:15,760
Speaker 1: I want to go here. I mean, today's a day

151
00:08:15,800 --> 00:08:17,520
Speaker 1: we had the jobs number, of course, but we also

152
00:08:17,560 --> 00:08:21,280
Speaker 1: have just another example here of rising tensions between the

153
00:08:21,400 --> 00:08:24,600
Speaker 1: US and China. How does that play into your calculus

154
00:08:24,600 --> 00:08:27,280
Speaker 1: as you think about the markets? Yeah, I mean, I

155
00:08:27,280 --> 00:08:30,520
Speaker 1: mean certainly it highlights a risk that we all knew

156
00:08:30,600 --> 00:08:33,840
Speaker 1: was going to um get more intense and and that's

157
00:08:33,920 --> 00:08:38,200
Speaker 1: that's the risk around the elections. Between the aluminum announcement

158
00:08:38,559 --> 00:08:42,520
Speaker 1: yesterday around Canada again, the number of moves between the

159
00:08:42,520 --> 00:08:45,680
Speaker 1: administration and China. You know, this is going back to

160
00:08:45,679 --> 00:08:47,680
Speaker 1: the playbook UM and I think that we need to

161
00:08:47,840 --> 00:08:52,640
Speaker 1: be um aware that it's likely to continue and to

162
00:08:52,720 --> 00:08:56,719
Speaker 1: get worse, and UM, you know, it certainly has idiosyncratic

163
00:08:57,320 --> 00:09:01,360
Speaker 1: aspects around certain asset classes and certain um, certain companies

164
00:09:01,360 --> 00:09:03,160
Speaker 1: and asset types that we should be aware of. But

165
00:09:03,200 --> 00:09:06,120
Speaker 1: it also is you know, just political, you know, part

166
00:09:06,120 --> 00:09:09,840
Speaker 1: of the political process in a very very um you know,

167
00:09:09,920 --> 00:09:15,040
Speaker 1: challenging the election year, Marvin, what happens if this stimulus

168
00:09:15,040 --> 00:09:19,040
Speaker 1: debate gets protracted President Trump tries to sign an executive order?

169
00:09:19,040 --> 00:09:21,440
Speaker 1: I mean, does he even have the capabilities of sort

170
00:09:21,440 --> 00:09:25,959
Speaker 1: of directing government to pay out money like that? Yeah?

171
00:09:26,000 --> 00:09:28,720
Speaker 1: I mean, you know, I'm certainly not not a not

172
00:09:28,840 --> 00:09:31,600
Speaker 1: a political scholar from that perspective. Um, you know, I've

173
00:09:31,600 --> 00:09:33,760
Speaker 1: read what I'm sure everyone else has read, and it's

174
00:09:33,840 --> 00:09:37,320
Speaker 1: questionable whether or not he does have that authority. UM

175
00:09:37,360 --> 00:09:39,520
Speaker 1: you know, I think that I think that a plan is.

176
00:09:39,840 --> 00:09:43,320
Speaker 1: I think that, um, something's going to be reached fairly shortly,

177
00:09:43,360 --> 00:09:45,360
Speaker 1: you know, within the next week, just because it needs

178
00:09:45,440 --> 00:09:48,319
Speaker 1: to be in while um you know, political posturing is

179
00:09:48,360 --> 00:09:50,520
Speaker 1: that they're still far away. There's still is much more

180
00:09:50,520 --> 00:09:54,520
Speaker 1: agreement than we had a week ago. If in fact,

181
00:09:54,679 --> 00:09:58,200
Speaker 1: they don't um get anything done, and kind of these

182
00:09:58,520 --> 00:10:01,600
Speaker 1: executive orders UM are the only way to kind of

183
00:10:01,600 --> 00:10:04,360
Speaker 1: get through it. I do think it adds a risk

184
00:10:04,559 --> 00:10:08,880
Speaker 1: that the market has not fully absorbed into UM, into

185
00:10:08,880 --> 00:10:11,880
Speaker 1: where asset values are at this point. UM. You know,

186
00:10:12,280 --> 00:10:15,520
Speaker 1: the administration the ability to do it as question is questionable,

187
00:10:15,840 --> 00:10:17,960
Speaker 1: and if that kind of just slows it down, that

188
00:10:18,000 --> 00:10:20,839
Speaker 1: certainly is a risk. All right, Marvin, You know the

189
00:10:20,880 --> 00:10:23,360
Speaker 1: way I've kind of come to understand it as it

190
00:10:23,360 --> 00:10:24,920
Speaker 1: relates to the fet is, the fet is kind of

191
00:10:24,920 --> 00:10:29,120
Speaker 1: provided a quote unquote backstop for asset values, particularly risk

192
00:10:29,240 --> 00:10:33,680
Speaker 1: your asset values. Where given that there is some level

193
00:10:33,720 --> 00:10:36,320
Speaker 1: of obviously fed support here, where do you still see

194
00:10:36,320 --> 00:10:40,600
Speaker 1: opportunities uh in the marketplace? You know, I think I

195
00:10:40,600 --> 00:10:43,240
Speaker 1: think kind of that stimulus and UM, you know, fortunate

196
00:10:43,280 --> 00:10:49,400
Speaker 1: or unfortunate UM, the UM financial oppression that's created by UM,

197
00:10:49,440 --> 00:10:53,199
Speaker 1: by real yield, the weaker dollar gold, those trends remain

198
00:10:53,240 --> 00:10:56,079
Speaker 1: out there because it is still a stimulus driven market

199
00:10:56,120 --> 00:10:58,120
Speaker 1: and I don't think any of that's going to change

200
00:10:58,160 --> 00:11:02,400
Speaker 1: within the near term. So fairly powerful trend and UM.

201
00:11:02,440 --> 00:11:05,120
Speaker 1: Even though we've got improvement in some of the economic data,

202
00:11:05,160 --> 00:11:06,839
Speaker 1: it shows that we've still got a long way to

203
00:11:06,880 --> 00:11:10,400
Speaker 1: go and m expectations for further stimulus, I think is

204
00:11:10,400 --> 00:11:13,760
Speaker 1: how you're supposed to think about approaching market that's really

205
00:11:13,800 --> 00:11:17,480
Speaker 1: been driven by, uh, you know, that factor primarily over

206
00:11:17,520 --> 00:11:21,760
Speaker 1: the last couple of months. Marvin, what is the one

207
00:11:21,840 --> 00:11:24,400
Speaker 1: question you're getting from your clients that you're finding difficult

208
00:11:24,480 --> 00:11:28,280
Speaker 1: to answer these days? You know? I think inflation is

209
00:11:28,360 --> 00:11:31,200
Speaker 1: really one of the most challenging discussions out there because

210
00:11:31,200 --> 00:11:34,280
Speaker 1: there certainly isn't any now we don't have the demand

211
00:11:34,320 --> 00:11:36,240
Speaker 1: that's out there, but we've got really yields that are

212
00:11:36,320 --> 00:11:39,679
Speaker 1: pointing to some real inflation concerns once we come out

213
00:11:39,760 --> 00:11:43,000
Speaker 1: of this um you know, are we are we structurally

214
00:11:43,160 --> 00:11:47,200
Speaker 1: changing this economy with more physical stimulus M to the

215
00:11:47,240 --> 00:11:50,800
Speaker 1: point where inflation can um you know, come back in

216
00:11:50,840 --> 00:11:52,800
Speaker 1: a way that we haven't seen in the last decade.

217
00:11:53,000 --> 00:11:56,040
Speaker 1: And if that's the case, you know, what's the implications, uh,

218
00:11:56,120 --> 00:11:58,280
Speaker 1: you know, longer term for all all all acts of values.

219
00:11:58,520 --> 00:12:02,160
Speaker 1: I do think that really olds are expressing a concern

220
00:12:02,200 --> 00:12:04,880
Speaker 1: around inflation once we kind of normalize, um, you know,

221
00:12:05,000 --> 00:12:07,760
Speaker 1: several years down the line, if you will, And it's

222
00:12:07,760 --> 00:12:10,120
Speaker 1: been a long time since we had it, so portfolio

223
00:12:10,600 --> 00:12:13,760
Speaker 1: just might not be positioned for that correctly. So Marvin

224
00:12:13,760 --> 00:12:15,600
Speaker 1: and Nicks, you know, third thirty seconds or so. I

225
00:12:15,640 --> 00:12:18,680
Speaker 1: know you're a global macro strategist. Where are the opportunities

226
00:12:18,679 --> 00:12:22,080
Speaker 1: outside of the US right now? You know? Certainly, certainly

227
00:12:22,280 --> 00:12:25,240
Speaker 1: emerging markets UM have some of the best really yields

228
00:12:25,240 --> 00:12:27,000
Speaker 1: around the world. So I think that's supposed to be

229
00:12:27,000 --> 00:12:29,920
Speaker 1: part of the thought process. UM. It very much is

230
00:12:30,240 --> 00:12:33,640
Speaker 1: kind of sucked in into the global risk on risk off,

231
00:12:34,080 --> 00:12:36,079
Speaker 1: But when you're kind of thinking about how to generate

232
00:12:36,120 --> 00:12:39,320
Speaker 1: income again once normalization occurs, I think that that winds

233
00:12:39,400 --> 00:12:43,120
Speaker 1: up being a big part of that discussion. All right,

234
00:12:43,280 --> 00:12:47,400
Speaker 1: And Marvin, you say, outside the US, do you get

235
00:12:47,440 --> 00:12:52,240
Speaker 1: to emerging markets at all in this cycle? Yeah, most

236
00:12:52,240 --> 00:12:55,480
Speaker 1: certainly it is. It is the emerging markets that will

237
00:12:55,480 --> 00:12:59,600
Speaker 1: continue to have higher growth rates UM going forward. And

238
00:12:59,720 --> 00:13:02,800
Speaker 1: you know they still do have UM interest rates that

239
00:13:02,800 --> 00:13:06,520
Speaker 1: that are relative to inflation, that that are positive. So UM,

240
00:13:06,720 --> 00:13:09,480
Speaker 1: that certainly is part of the discussion. I'm waiting to

241
00:13:09,520 --> 00:13:11,120
Speaker 1: hear somebody tell me that it's okay to go into

242
00:13:11,120 --> 00:13:15,080
Speaker 1: emerging markets. Marvin, is it okay? Um? You know, emerging

243
00:13:15,120 --> 00:13:17,720
Speaker 1: markets certainly are you know, it's it's it's it's a

244
00:13:17,760 --> 00:13:20,680
Speaker 1: wide landscape. UM. We can see what's happening in Turkey

245
00:13:20,800 --> 00:13:24,079
Speaker 1: right now, and you know it shows the risk associated

246
00:13:24,120 --> 00:13:26,040
Speaker 1: with it. But we do see you know, a lot

247
00:13:26,080 --> 00:13:29,000
Speaker 1: of a lot of interest in um uh in in

248
00:13:29,080 --> 00:13:32,720
Speaker 1: some of the Asian countries which have done a better

249
00:13:32,800 --> 00:13:36,040
Speaker 1: job dealing with the virus. So yeah, you know, certainly, certainly,

250
00:13:36,320 --> 00:13:39,760
Speaker 1: UM doing a research and understanding what regions and what countries,

251
00:13:40,240 --> 00:13:42,760
Speaker 1: UM is part of the work that one needs to go.

252
00:13:42,840 --> 00:13:45,640
Speaker 1: But yeah, it should be something that's part of the equation. Interesting.

253
00:13:45,640 --> 00:13:49,559
Speaker 1: I'm just wondering here as we think about emerging markets, Marvin. Um.

254
00:13:49,640 --> 00:13:52,640
Speaker 1: The issue here for is is so much is dependent

255
00:13:52,720 --> 00:13:55,559
Speaker 1: upon China and a good relationship where I guess a

256
00:13:55,679 --> 00:13:59,000
Speaker 1: functioning relationship between the U S and China. How are

257
00:13:59,000 --> 00:14:01,520
Speaker 1: you concerned? Are you about some these tensions that we

258
00:14:01,559 --> 00:14:04,840
Speaker 1: see even today, you know, with the Hong Kong carry

259
00:14:04,920 --> 00:14:08,079
Speaker 1: lamb and and some sanctions. Yeah, again, you know, I

260
00:14:08,600 --> 00:14:11,080
Speaker 1: do frame it around the political discussion. UM, so kind

261
00:14:11,080 --> 00:14:13,880
Speaker 1: of that that's always in the backdrop. UM. You know, China,

262
00:14:13,960 --> 00:14:18,000
Speaker 1: China has bounced back from um, you know, the economic

263
00:14:18,040 --> 00:14:21,000
Speaker 1: malaise much quicker than anywhere else in the world. So

264
00:14:21,520 --> 00:14:25,160
Speaker 1: the fact that they have a handle on things um uh,

265
00:14:25,200 --> 00:14:27,680
Speaker 1: you know gives them a foot up and from a

266
00:14:27,720 --> 00:14:30,760
Speaker 1: regional perspective that certainly helps, you know, kind of having

267
00:14:30,840 --> 00:14:34,880
Speaker 1: having better relationships obviously with the two superpowers is important

268
00:14:34,880 --> 00:14:37,680
Speaker 1: in that discussion. But China, you know, China does have

269
00:14:38,160 --> 00:14:43,440
Speaker 1: the wherewithal to to respond and um uh, and and

270
00:14:43,520 --> 00:14:47,400
Speaker 1: control to economy that that you know, can can withstand

271
00:14:47,480 --> 00:14:49,560
Speaker 1: some of the some of the rhetoric that's going on

272
00:14:49,680 --> 00:14:55,600
Speaker 1: right now. Marvin Earnings season, did you get surprised at

273
00:14:55,640 --> 00:14:58,200
Speaker 1: all by any of the groups? I mean, you know,

274
00:14:58,280 --> 00:15:00,880
Speaker 1: I'm not just talking big tech, although there was definitely

275
00:15:00,880 --> 00:15:03,560
Speaker 1: the possibility of being surprised they're a big tech. I'm

276
00:15:03,600 --> 00:15:06,280
Speaker 1: also talking about things like, you know, the home improvement retailers.

277
00:15:06,320 --> 00:15:08,160
Speaker 1: We've got Home Deep with the best performing stock in

278
00:15:08,160 --> 00:15:12,720
Speaker 1: the DAO for example today. Where were you pleased? Yeah,

279
00:15:12,760 --> 00:15:16,160
Speaker 1: I mean certainly, certainly, um you know, it showed that

280
00:15:16,400 --> 00:15:20,400
Speaker 1: if if there was a thought process around what companies

281
00:15:20,600 --> 00:15:23,840
Speaker 1: could do you know, could do well in this type

282
00:15:23,840 --> 00:15:26,720
Speaker 1: of environment, that that to a certainly we did occur.

283
00:15:26,880 --> 00:15:30,920
Speaker 1: So um, you know, the fundamental work is encouraging because

284
00:15:30,960 --> 00:15:32,960
Speaker 1: that's ultimately what we do. We spend a lot of

285
00:15:32,960 --> 00:15:34,600
Speaker 1: time on you know, take a step back and looking

286
00:15:34,840 --> 00:15:37,760
Speaker 1: and thinking through kind of a bit of the fundamentals. UM.

287
00:15:37,920 --> 00:15:40,680
Speaker 1: What's been surprising to me, however, is given the uncertainty

288
00:15:40,760 --> 00:15:44,800
Speaker 1: that's out there, um Ford expectations with earnings didn't really

289
00:15:44,880 --> 00:15:47,800
Speaker 1: change much, which we could certainly take some comfort in

290
00:15:48,040 --> 00:15:51,600
Speaker 1: and that things haven't gotten worse and or it's just

291
00:15:51,680 --> 00:15:54,640
Speaker 1: still difficult um to kind of come up with estimates

292
00:15:55,040 --> 00:15:57,600
Speaker 1: for the time being. UM. It does kind of support

293
00:15:57,640 --> 00:16:00,520
Speaker 1: the view that you know that companies I'll have a

294
00:16:00,560 --> 00:16:02,560
Speaker 1: handle on on what the next step is, or at

295
00:16:02,600 --> 00:16:05,040
Speaker 1: least the analysts have an idea of where they think

296
00:16:05,240 --> 00:16:07,920
Speaker 1: things might be going. UM. But you know, there's still

297
00:16:07,920 --> 00:16:09,720
Speaker 1: a lot of uncertainty out there when we hear that

298
00:16:09,800 --> 00:16:12,760
Speaker 1: from from the CEOs. But you know, at this point,

299
00:16:12,840 --> 00:16:15,840
Speaker 1: it seems like the estimates are holding in there pretty well.

300
00:16:16,880 --> 00:16:19,120
Speaker 1: Marvin is always a pleasure to speak with you, particularly

301
00:16:19,200 --> 00:16:23,480
Speaker 1: on non farm Payrolls Day. Marvin Lowe is a senior

302
00:16:23,520 --> 00:16:26,880
Speaker 1: I'm sorry, Global macro. Let me do that again. Marvin

303
00:16:26,920 --> 00:16:29,840
Speaker 1: Lowe is senior global macro strategist at State Street, and

304
00:16:29,880 --> 00:16:32,880
Speaker 1: he's coming to us from Boston Worth State Street is based, Marvin.

305
00:16:33,000 --> 00:16:38,240
Speaker 1: Thank you. Now let's get to the Carry Lamb news

306
00:16:38,360 --> 00:16:41,400
Speaker 1: and the sanctions news more broadly, and bringing Nick Wodams,

307
00:16:41,480 --> 00:16:44,680
Speaker 1: national security reporter here at Bloomberg. In fact, he's in Washington,

308
00:16:44,760 --> 00:16:47,440
Speaker 1: d C. Nick. Things seem to have escalated just a

309
00:16:47,440 --> 00:16:51,920
Speaker 1: little bit overnight. But what's what's the point in sanctioning

310
00:16:51,920 --> 00:16:53,680
Speaker 1: Carry Lamb of all people? I mean, she's been the

311
00:16:53,720 --> 00:16:57,920
Speaker 1: scapegoat for China, for you know, the Communist Party, She's

312
00:16:57,920 --> 00:17:00,680
Speaker 1: been the scapegoat for Hong Kong resident who thought that

313
00:17:00,760 --> 00:17:02,800
Speaker 1: she might have their back, and now she suddenly the

314
00:17:03,120 --> 00:17:06,760
Speaker 1: scapegoat for the United States. Is she really the problem? Well,

315
00:17:07,480 --> 00:17:09,600
Speaker 1: that's a great question. I think if you look at

316
00:17:09,600 --> 00:17:11,680
Speaker 1: it from the U. S side, what what you see

317
00:17:11,840 --> 00:17:13,840
Speaker 1: is you have to put this in the context of

318
00:17:13,880 --> 00:17:16,840
Speaker 1: a whole host of actions. I mean, it almost feels

319
00:17:16,880 --> 00:17:19,080
Speaker 1: like a day does not go by now that we

320
00:17:19,160 --> 00:17:23,480
Speaker 1: do not get one too. Sometimes three punitive measures announced

321
00:17:23,480 --> 00:17:26,719
Speaker 1: by this administration against China. They had said for a

322
00:17:26,720 --> 00:17:31,440
Speaker 1: long time that they wanted to punish China over what's

323
00:17:31,480 --> 00:17:34,639
Speaker 1: been happening in Hong Kong, and uh, you know, Carry

324
00:17:34,680 --> 00:17:36,840
Speaker 1: Lamb has said she has no assets in the United states.

325
00:17:36,880 --> 00:17:39,880
Speaker 1: She doesn't plan to travel here, so the sanctions will

326
00:17:39,880 --> 00:17:43,919
Speaker 1: not have any immediate impact on her. But um, you know,

327
00:17:44,000 --> 00:17:47,080
Speaker 1: she she is as symbolic as a as a big

328
00:17:47,119 --> 00:17:49,879
Speaker 1: target for this administration, and they have been telegraphing that

329
00:17:50,000 --> 00:17:53,600
Speaker 1: they would do this for some time. Uh, So it

330
00:17:53,680 --> 00:17:58,520
Speaker 1: was seen as somewhat inevitable. And you know, my impression

331
00:17:58,600 --> 00:18:00,119
Speaker 1: in a lot of ways is that they are just

332
00:18:00,240 --> 00:18:04,080
Speaker 1: really smacking the hornet's nest in China with a big stick.

333
00:18:04,200 --> 00:18:07,159
Speaker 1: And this thing is not nearly over. So, Nick, how

334
00:18:07,240 --> 00:18:10,240
Speaker 1: much of this from the U. S side is political

335
00:18:10,320 --> 00:18:12,960
Speaker 1: for the Trump administration positioning itself is tough on China

336
00:18:13,280 --> 00:18:16,160
Speaker 1: ahead of the election, or is versus kind of real

337
00:18:16,240 --> 00:18:19,399
Speaker 1: statesman craft coming from foggy bottom about boy, this is

338
00:18:19,400 --> 00:18:22,440
Speaker 1: a real coordinated strategy here to put pressure on China, Dick,

339
00:18:22,480 --> 00:18:28,800
Speaker 1: get some of our stated aims achieved? Well? Uh, if

340
00:18:28,840 --> 00:18:32,520
Speaker 1: if you look at the if the ultimate goal were

341
00:18:32,600 --> 00:18:36,240
Speaker 1: to want China to back down in Hong Kong, to

342
00:18:36,320 --> 00:18:39,080
Speaker 1: back down in Shinjiang, to back down in the South China,

343
00:18:39,160 --> 00:18:45,280
Speaker 1: see all of these areas on intellectual property, theft, everything else. Uh.

344
00:18:45,640 --> 00:18:50,000
Speaker 1: Taking a very very aggressive approach like this is according

345
00:18:50,040 --> 00:18:52,880
Speaker 1: to a lot of the administration's critics really unlikely. Uh,

346
00:18:53,160 --> 00:18:55,880
Speaker 1: this is not something where China is gonna suddenly say, okay, hey,

347
00:18:55,920 --> 00:18:58,760
Speaker 1: I'm going to back down. I mean, the administration theory

348
00:18:58,800 --> 00:19:01,800
Speaker 1: of the cases. Listen, we need them to uh take

349
00:19:01,880 --> 00:19:05,119
Speaker 1: so much punishment that they change the calculus and stop

350
00:19:05,200 --> 00:19:07,879
Speaker 1: doing stuff that admittedly everyone agrees they've been doing for

351
00:19:07,880 --> 00:19:12,159
Speaker 1: a long time, ramping up repression, um continued I P

352
00:19:12,320 --> 00:19:15,600
Speaker 1: s F, stewing American trade secrets, whatever it may be.

353
00:19:15,840 --> 00:19:19,520
Speaker 1: But um, when you go so hard like this on

354
00:19:19,640 --> 00:19:23,640
Speaker 1: so many fronts, with with such a rate of intensity, um,

355
00:19:23,640 --> 00:19:27,280
Speaker 1: it's it's hard to see how that achieves a Dayton

356
00:19:27,560 --> 00:19:29,960
Speaker 1: or any goal of coming to some sort of compromise

357
00:19:30,000 --> 00:19:34,520
Speaker 1: with Beijing. So very very heavy political element here, what's next,

358
00:19:34,760 --> 00:19:37,960
Speaker 1: I mean, what can be done, you know, without serious

359
00:19:38,000 --> 00:19:40,040
Speaker 1: retaliation on the part of the Chinese. And by the way,

360
00:19:40,080 --> 00:19:43,360
Speaker 1: I'm sure we're waiting on that, are we. Yeah. It's

361
00:19:43,440 --> 00:19:47,439
Speaker 1: it's fascinating because the the U s has come in

362
00:19:47,600 --> 00:19:50,320
Speaker 1: so hard and so fast that I think you've seen

363
00:19:50,440 --> 00:19:53,040
Speaker 1: China a little bit on the back foot. You know,

364
00:19:53,080 --> 00:19:56,680
Speaker 1: how can it retaliate so quickly? And of course there

365
00:19:56,680 --> 00:20:00,440
Speaker 1: are big things it could do that could really actually

366
00:20:00,600 --> 00:20:04,760
Speaker 1: jeopardized the broader trade relationship and the U. S economy.

367
00:20:04,800 --> 00:20:09,000
Speaker 1: They could dump US treasuries, for example. So it's it's

368
00:20:09,040 --> 00:20:11,480
Speaker 1: this weird situation where you have all of these actions

369
00:20:11,480 --> 00:20:15,240
Speaker 1: and all this punishment back and forth, visa bands, sanctions,

370
00:20:15,359 --> 00:20:18,320
Speaker 1: things like that, but then you see both sides still

371
00:20:18,800 --> 00:20:21,120
Speaker 1: holding off. I mean, if the US were to sanction

372
00:20:21,240 --> 00:20:23,800
Speaker 1: the big four Chinese banks, for example, that would be

373
00:20:24,520 --> 00:20:27,280
Speaker 1: a whole other realm. China could dump treasuries. They haven't

374
00:20:27,280 --> 00:20:32,320
Speaker 1: done that. New tariffs, Um, there are a lot of like,

375
00:20:32,440 --> 00:20:34,080
Speaker 1: you know, if they really wanted to bring out the

376
00:20:34,119 --> 00:20:36,760
Speaker 1: elephant guns, they could and they haven't done that yet,

377
00:20:36,960 --> 00:20:41,120
Speaker 1: which me suggests there's there's a heavier political element here

378
00:20:41,200 --> 00:20:45,239
Speaker 1: than the actual substance. All right, Nick, what's the the

379
00:20:45,280 --> 00:20:47,600
Speaker 1: feeling within the State Department here? I'm sure there are

380
00:20:47,640 --> 00:20:50,720
Speaker 1: dozens and dozens of career diplomats that have, you know,

381
00:20:50,840 --> 00:20:54,399
Speaker 1: built their careers on building relationships and building knowledge of China.

382
00:20:55,080 --> 00:20:57,800
Speaker 1: Are they still in dialogue with their counterparts in China?

383
00:20:57,880 --> 00:21:01,680
Speaker 1: Despite all the headline risk that we see out there,

384
00:21:01,800 --> 00:21:04,480
Speaker 1: is there still kind of day to day Let's keep

385
00:21:04,520 --> 00:21:07,080
Speaker 1: the channels open, Let's try to work towards something. What's

386
00:21:07,119 --> 00:21:10,560
Speaker 1: this day to day like, Well, I've spoken a lot

387
00:21:10,560 --> 00:21:13,480
Speaker 1: of people about this. Folks in China say it's gotten

388
00:21:13,600 --> 00:21:17,080
Speaker 1: essentially totally stifled. It's it's impossible to have any of

389
00:21:17,119 --> 00:21:22,480
Speaker 1: those real contacts with with Chinese officials that are not antagonistic,

390
00:21:22,800 --> 00:21:25,840
Speaker 1: nothing like the context that you would have had in

391
00:21:25,880 --> 00:21:29,119
Speaker 1: the past. There's a real sense of gloom among folks.

392
00:21:29,160 --> 00:21:31,479
Speaker 1: I mean, listen that there is no question that people

393
00:21:31,520 --> 00:21:37,359
Speaker 1: believe a strategic reorientation was necessary, that this notion of

394
00:21:37,680 --> 00:21:40,600
Speaker 1: increased wealth in China making it more democratic and a

395
00:21:40,640 --> 00:21:43,840
Speaker 1: more open society was not working there there needed to

396
00:21:43,880 --> 00:21:48,159
Speaker 1: be a readjustment. But uh, the real belief among the

397
00:21:48,240 --> 00:21:50,480
Speaker 1: career folks is that listen, when you when you come

398
00:21:50,520 --> 00:21:53,520
Speaker 1: in so hard against China, you're only going to make

399
00:21:53,560 --> 00:21:56,840
Speaker 1: them angry. And this is not the way to actually

400
00:21:56,840 --> 00:21:59,160
Speaker 1: achieve your ends. This is you know, these are diplomats.

401
00:21:59,200 --> 00:22:02,200
Speaker 1: They want to talk, they want to achieve a solution

402
00:22:02,280 --> 00:22:04,680
Speaker 1: that that makes both sides happy, and there's no room

403
00:22:04,720 --> 00:22:07,840
Speaker 1: to have that conversation. And states in terms of forcing

404
00:22:07,960 --> 00:22:10,600
Speaker 1: bite Duns to get rid of its US operations, does

405
00:22:10,640 --> 00:22:13,520
Speaker 1: that just open the playing field now? For China to

406
00:22:14,000 --> 00:22:17,400
Speaker 1: pick whatever US company at once or all of them

407
00:22:17,480 --> 00:22:22,480
Speaker 1: and say okay, but interternationalized here in China, right, I mean,

408
00:22:22,680 --> 00:22:26,200
Speaker 1: there's a lot of China could do because very arguably

409
00:22:26,359 --> 00:22:30,360
Speaker 1: US companies are much more dependent on China, fact much

410
00:22:30,359 --> 00:22:33,280
Speaker 1: more dependent on China than Chinese companies are on the

411
00:22:33,359 --> 00:22:36,920
Speaker 1: United States. So, uh, there's a there's a great deal

412
00:22:37,000 --> 00:22:39,400
Speaker 1: that China could do. You know, when you look at this,

413
00:22:40,080 --> 00:22:43,760
Speaker 1: the criticism is also, hey, now the Trump administration is

414
00:22:43,880 --> 00:22:46,960
Speaker 1: essentially doing what China has done for a long time,

415
00:22:47,000 --> 00:22:51,760
Speaker 1: where when when foreign companies come in, they demand joint ventures,

416
00:22:51,760 --> 00:22:55,560
Speaker 1: they demand access to their intellectual property. Um, they put

417
00:22:55,640 --> 00:22:58,840
Speaker 1: very severe restrictions on on those foreign partners working with

418
00:22:58,960 --> 00:23:02,560
Speaker 1: Chinese companies. Now there's this sense that that this is

419
00:23:02,680 --> 00:23:05,480
Speaker 1: essentially what what President Trump is doing, and it's really

420
00:23:05,480 --> 00:23:09,560
Speaker 1: going to poison the well. So um a certainly grounds

421
00:23:09,560 --> 00:23:14,159
Speaker 1: for China to retaliate very hard against American company. And

422
00:23:14,240 --> 00:23:18,280
Speaker 1: is that the expectation, nick Um, that we're going to

423
00:23:18,359 --> 00:23:21,600
Speaker 1: get some serious retaliation as opposed for you know, some

424
00:23:21,640 --> 00:23:24,200
Speaker 1: of these things maybe that are not that impactful. Is

425
00:23:23,960 --> 00:23:26,919
Speaker 1: there is there concerned within the State Department that you know,

426
00:23:27,600 --> 00:23:30,680
Speaker 1: there could be something really unexpectedly and this could really

427
00:23:30,760 --> 00:23:35,399
Speaker 1: ratch it up. Well. I think there's a hope among

428
00:23:35,520 --> 00:23:38,880
Speaker 1: some of those folks that China will exercise some restraint

429
00:23:39,000 --> 00:23:43,320
Speaker 1: until after the election, and the belief that um a

430
00:23:43,320 --> 00:23:46,840
Speaker 1: Biden administration would be a little more willing to engage.

431
00:23:47,000 --> 00:23:49,000
Speaker 1: But you know, one of the theories I've heard is

432
00:23:49,119 --> 00:23:51,480
Speaker 1: very simply that listen, when you hit China so much

433
00:23:51,520 --> 00:23:55,080
Speaker 1: on so many fronts, you actually lower their desire to

434
00:23:55,600 --> 00:23:58,160
Speaker 1: exercise any restraint because the feeling is, well, no matter

435
00:23:58,200 --> 00:24:00,760
Speaker 1: what we do, they're just going to go after us anyhow.

436
00:24:00,800 --> 00:24:03,000
Speaker 1: And there are some people who say that's exactly why

437
00:24:03,080 --> 00:24:05,320
Speaker 1: China has clamped down on on Hong Kong, that they

438
00:24:05,440 --> 00:24:07,520
Speaker 1: felt there was nothing they would be able to do

439
00:24:07,720 --> 00:24:12,520
Speaker 1: to avoid us punishment. So but right now I think

440
00:24:12,520 --> 00:24:15,400
Speaker 1: it's there's really a hope that that China will will

441
00:24:15,480 --> 00:24:19,560
Speaker 1: hold off. But as they've shown, um, they've retaliated in

442
00:24:19,560 --> 00:24:22,159
Speaker 1: the past and are almost certainly going to do so

443
00:24:22,200 --> 00:24:24,639
Speaker 1: again very soon. Yeah, I mean, you have to imagine

444
00:24:24,680 --> 00:24:28,800
Speaker 1: that with the potential for administration change in coming months,

445
00:24:28,960 --> 00:24:31,520
Speaker 1: China can just have some fun now if it wants,

446
00:24:31,560 --> 00:24:34,480
Speaker 1: If if it takes that sort of attack. I want

447
00:24:34,520 --> 00:24:37,840
Speaker 1: to pivot, though, Nick, to another story that's been percolating,

448
00:24:38,200 --> 00:24:42,119
Speaker 1: the Trump administration's State Department lifting the travel warning literally

449
00:24:42,160 --> 00:24:45,239
Speaker 1: for everywhere. So you know, if you want now as

450
00:24:45,240 --> 00:24:48,639
Speaker 1: an American and you abide by the quarantine rules of

451
00:24:48,720 --> 00:24:53,120
Speaker 1: the other countries, you can travel. What was the significance

452
00:24:53,160 --> 00:24:55,879
Speaker 1: of this was this, you know, a potentially a Trump

453
00:24:55,920 --> 00:24:59,120
Speaker 1: directed directive. Would the State Department have done this under

454
00:24:59,160 --> 00:25:04,240
Speaker 1: any other president? Well, I asked them that yesterday when

455
00:25:04,240 --> 00:25:06,840
Speaker 1: they unveiled this, this new approach, and they said, listen.

456
00:25:06,840 --> 00:25:10,320
Speaker 1: Though there was no pressure from the administration, the State

457
00:25:10,320 --> 00:25:15,119
Speaker 1: Department cast this as a simple recognition that coronavirus, the

458
00:25:15,160 --> 00:25:18,920
Speaker 1: coronavirus pandemic is being brought under control in some countries.

459
00:25:19,000 --> 00:25:21,400
Speaker 1: And when you had this blanket, it was a non

460
00:25:21,480 --> 00:25:24,879
Speaker 1: binding travel advisor. When you had this blanket, not advisory

461
00:25:25,000 --> 00:25:28,280
Speaker 1: saying don't go anywhere in the world. Coronavirus is still

462
00:25:28,280 --> 00:25:32,560
Speaker 1: out of control. It's incredibly dangerous. Uh. That wasn't really

463
00:25:32,760 --> 00:25:34,800
Speaker 1: an accurate reflection of what's going on. I mean, you

464
00:25:34,800 --> 00:25:36,960
Speaker 1: have a lot of countries now that have brought it

465
00:25:37,040 --> 00:25:41,760
Speaker 1: under control. New Zealand for example. Um, certain, you know,

466
00:25:41,800 --> 00:25:44,679
Speaker 1: other countries so um, they say what they're doing is

467
00:25:44,720 --> 00:25:47,879
Speaker 1: just a more accurate reflection of the risk it's out there.

468
00:25:47,880 --> 00:25:50,720
Speaker 1: Of course, the the the irony is that Americans aren't

469
00:25:50,720 --> 00:25:52,520
Speaker 1: really allowed to go a lot of places. I mean,

470
00:25:52,520 --> 00:25:55,800
Speaker 1: there's still a European travel ban against Americans, so they

471
00:25:55,840 --> 00:25:57,800
Speaker 1: may be free to go, but they're not going to

472
00:25:57,840 --> 00:26:01,080
Speaker 1: be let in. Well that's the thing. I mean, I

473
00:26:01,119 --> 00:26:04,280
Speaker 1: guess the State Department is considering risk to Americans. It's

474
00:26:04,280 --> 00:26:10,159
Speaker 1: not considering risk of Americans. Correct, that's a that's a

475
00:26:10,200 --> 00:26:13,480
Speaker 1: great way to put it. Yes, Um, I mean the

476
00:26:13,520 --> 00:26:17,280
Speaker 1: State Department, it's if a travel advisory for American citizens.

477
00:26:17,320 --> 00:26:19,920
Speaker 1: Another reporter on on a call we had yesterday with

478
00:26:19,920 --> 00:26:23,359
Speaker 1: with officials, said well, what would you rate the United States?

479
00:26:23,400 --> 00:26:27,040
Speaker 1: If your level advisories are level one being you know,

480
00:26:27,119 --> 00:26:30,040
Speaker 1: no threat to level four being do not travel you know,

481
00:26:30,119 --> 00:26:34,560
Speaker 1: Afghanistan or Somalia type conditions, what's your threat assessments for

482
00:26:34,640 --> 00:26:39,000
Speaker 1: the United States. They of course refused to bite on that,

483
00:26:39,160 --> 00:26:42,960
Speaker 1: but certainly, um, if if they were assessing the United States,

484
00:26:43,000 --> 00:26:46,560
Speaker 1: we have I think now the second most cases every

485
00:26:46,680 --> 00:26:51,080
Speaker 1: new cases every day behind India. Um UH contributed a

486
00:26:51,160 --> 00:26:55,360
Speaker 1: quarter of the world's cases. UM the threat would be

487
00:26:55,440 --> 00:26:58,119
Speaker 1: considered very high, and a lot of people do not

488
00:26:58,200 --> 00:27:02,520
Speaker 1: want to travel. So yeah, an ironic moment. Nick Wadhams,

489
00:27:02,520 --> 00:27:05,359
Speaker 1: thanks so much for joining us. We appreciate your thoughts. Uh.

490
00:27:05,440 --> 00:27:08,640
Speaker 1: Nick Wadhams covers the State Department today getting the update,

491
00:27:09,200 --> 00:27:11,600
Speaker 1: uh for what's going on with China and and and Vanni.

492
00:27:11,680 --> 00:27:14,399
Speaker 1: It just seems like almost every day we have a

493
00:27:14,440 --> 00:27:16,080
Speaker 1: new piece of news on one side or the other

494
00:27:16,119 --> 00:27:18,800
Speaker 1: between the US and China in terms of ratcheting up

495
00:27:18,800 --> 00:27:21,560
Speaker 1: the well, the pressure between the two countries. It's funny

496
00:27:21,560 --> 00:27:24,119
Speaker 1: because you've got self pressure and hard pressure, right, and

497
00:27:24,200 --> 00:27:26,800
Speaker 1: I suppose you know, everyone in the world wants the

498
00:27:26,840 --> 00:27:29,919
Speaker 1: hard pressure part of things, the hard power tools to

499
00:27:29,920 --> 00:27:33,680
Speaker 1: be avoided, so self pressure can be you know, just fine.

500
00:27:33,880 --> 00:27:36,080
Speaker 1: But the problem is it only takes one move, and

501
00:27:36,480 --> 00:27:38,760
Speaker 1: you know, at some point China just won't take this anymore.

502
00:27:38,800 --> 00:27:43,520
Speaker 1: I think today is jobs today. The US labor market

503
00:27:44,000 --> 00:27:48,080
Speaker 1: did continue to regain ground in July, beating expectations for

504
00:27:48,160 --> 00:27:51,120
Speaker 1: jobs at it, but the pace was at a slower

505
00:27:51,200 --> 00:27:55,720
Speaker 1: rate UH than previous months, and unemployment rate stubbornly sticks

506
00:27:55,760 --> 00:27:58,520
Speaker 1: at ten point two that's down from eleven percent, but

507
00:27:58,600 --> 00:28:01,080
Speaker 1: still ten point two percent, So there's something in there,

508
00:28:01,080 --> 00:28:04,960
Speaker 1: I guess for everybody. Let's see what Michael McKee, international

509
00:28:05,000 --> 00:28:08,000
Speaker 1: economics and policy correspondent for Bloomberg News things, Mike, what

510
00:28:08,040 --> 00:28:11,040
Speaker 1: were key takeaways here? Well, I think the job's report

511
00:28:11,280 --> 00:28:13,640
Speaker 1: is not bad. Put it that way. I don't. It's

512
00:28:13,680 --> 00:28:17,240
Speaker 1: not great because even though we beat the number of

513
00:28:17,320 --> 00:28:21,359
Speaker 1: jobs estimated, it's still less than half the number of

514
00:28:21,440 --> 00:28:24,359
Speaker 1: jobs that were created in June and significantly lower than

515
00:28:24,400 --> 00:28:26,919
Speaker 1: the number in May. And we still have, according to

516
00:28:26,960 --> 00:28:31,240
Speaker 1: the Labor Department, at least seventeen million people who are

517
00:28:31,240 --> 00:28:33,520
Speaker 1: out of work and in the labor force, so we

518
00:28:33,560 --> 00:28:36,040
Speaker 1: still have a long way to go. That said, we

519
00:28:36,080 --> 00:28:39,280
Speaker 1: did gain jobs. Again, you have to cavy out this

520
00:28:39,360 --> 00:28:42,000
Speaker 1: by saying this measures from the middle of June to

521
00:28:42,040 --> 00:28:45,080
Speaker 1: the middle of July, didn't measure the rest of July,

522
00:28:45,280 --> 00:28:48,880
Speaker 1: and so the anecdotal evidence seems to be that we

523
00:28:48,960 --> 00:28:52,200
Speaker 1: maybe have lost jobs since then. Yeah, it's one of

524
00:28:52,240 --> 00:28:55,880
Speaker 1: these reports where you know, your eyes and your brain

525
00:28:56,320 --> 00:28:59,920
Speaker 1: have to work differently because obviously, you know, the monu

526
00:29:00,000 --> 00:29:02,520
Speaker 1: facturing jobs have already come back, and to the extent

527
00:29:02,560 --> 00:29:04,200
Speaker 1: that they were going to come back, we didn't get

528
00:29:04,280 --> 00:29:07,320
Speaker 1: that much gain in manufacturing this month twenty six thousand

529
00:29:07,360 --> 00:29:11,120
Speaker 1: in July. So it's obviously the service industries, Michael, but

530
00:29:11,280 --> 00:29:13,200
Speaker 1: it doesn't seem to be the case when you look

531
00:29:13,240 --> 00:29:15,479
Speaker 1: around as you walk home or as you walk around

532
00:29:15,640 --> 00:29:17,960
Speaker 1: that there are many service industry jobs back either. But

533
00:29:18,000 --> 00:29:21,840
Speaker 1: I guess around the country there are. Well. The country

534
00:29:21,880 --> 00:29:25,400
Speaker 1: opened in different ways in different times, and in many

535
00:29:25,440 --> 00:29:29,040
Speaker 1: of the Sun Belt states they opened up restaurants, not

536
00:29:29,200 --> 00:29:32,160
Speaker 1: just outdoors as we have in New York, but indoors

537
00:29:32,200 --> 00:29:34,880
Speaker 1: as well. Now that led to a lot of pandemic

538
00:29:34,920 --> 00:29:37,040
Speaker 1: problems and many of them had to reclose again, so

539
00:29:37,080 --> 00:29:39,680
Speaker 1: people who went on to payrolls went off. There were

540
00:29:39,720 --> 00:29:43,960
Speaker 1: about six hundred thousand people who were hired in the

541
00:29:44,040 --> 00:29:48,840
Speaker 1: restaurant and bar category during July, and the question now

542
00:29:48,960 --> 00:29:51,400
Speaker 1: is how many of those people still have those jobs

543
00:29:51,720 --> 00:29:54,800
Speaker 1: that they had at the time the survey was taken. So, Mike,

544
00:29:55,160 --> 00:29:58,160
Speaker 1: you know, this job's number comes out, I'm not sure. Coincidentally,

545
00:29:58,440 --> 00:30:02,120
Speaker 1: with the backdrop of more discussions in Congress with the

546
00:30:02,120 --> 00:30:06,680
Speaker 1: White House about more fiscal stimulus, here from an economic perspective,

547
00:30:07,000 --> 00:30:10,480
Speaker 1: how critical is it that we get another meaningful round

548
00:30:10,480 --> 00:30:14,480
Speaker 1: of fiscal stimulus here very critical. Uh, I mean you

549
00:30:14,480 --> 00:30:16,880
Speaker 1: can just sort of do the math. Uh. There are

550
00:30:17,360 --> 00:30:20,440
Speaker 1: thirty million people the Labor Department tells us getting some

551
00:30:20,560 --> 00:30:23,920
Speaker 1: form of unemployment benefits. So thirty million times six hundred

552
00:30:24,600 --> 00:30:27,360
Speaker 1: dollars a week is a significant amount of cash that

553
00:30:27,400 --> 00:30:29,080
Speaker 1: will come out of the economy. But it's coming out

554
00:30:29,080 --> 00:30:31,880
Speaker 1: of the economy now. No longer they take to replace

555
00:30:32,040 --> 00:30:34,280
Speaker 1: at least part of it. The bigger the hit to

556
00:30:34,480 --> 00:30:37,200
Speaker 1: consumer spending power is going to be. And since consumer

557
00:30:37,240 --> 00:30:40,120
Speaker 1: spending is three quarters of the economy, it's going to

558
00:30:40,200 --> 00:30:44,480
Speaker 1: be a significant problem for the economy if we don't

559
00:30:44,520 --> 00:30:48,040
Speaker 1: have that kind of replacement money because at this point, uh,

560
00:30:48,280 --> 00:30:50,560
Speaker 1: we don't have all those people working, so their salaries

561
00:30:50,560 --> 00:30:53,000
Speaker 1: are not being paid. It also hurts state and local

562
00:30:53,000 --> 00:30:55,800
Speaker 1: governments because there's tax money that's not going to be

563
00:30:55,840 --> 00:30:58,160
Speaker 1: collected from the sales that won't be made. And we

564
00:30:58,200 --> 00:31:00,320
Speaker 1: know they're already in trouble and if they don't get

565
00:31:00,360 --> 00:31:03,960
Speaker 1: additional assistance, they're probably going to be laying off workers.

566
00:31:04,000 --> 00:31:06,920
Speaker 1: So well, and there's data that we don't usually see

567
00:31:06,960 --> 00:31:09,360
Speaker 1: that sort of you know, is going onto the radar

568
00:31:09,600 --> 00:31:13,160
Speaker 1: to an extent and might be helping in in this environment. So,

569
00:31:13,200 --> 00:31:16,360
Speaker 1: for example, an estimated of adults in the US missed

570
00:31:16,400 --> 00:31:19,200
Speaker 1: their rent or mortgage payment for July. Presumably some of

571
00:31:19,200 --> 00:31:22,480
Speaker 1: that payment went on things like food or supplies from

572
00:31:22,480 --> 00:31:25,480
Speaker 1: home depot. Where we're seeing, you know, sales rise. It

573
00:31:25,520 --> 00:31:28,840
Speaker 1: doesn't mean that there's enough money out there, doesn't know,

574
00:31:29,040 --> 00:31:32,720
Speaker 1: It doesn't there's definitely not enough money out there, even

575
00:31:32,760 --> 00:31:36,200
Speaker 1: though I think the figure that was estimated is sixty

576
00:31:36,240 --> 00:31:38,239
Speaker 1: eight percent of the people who are getting unemployment, we're

577
00:31:38,240 --> 00:31:41,360
Speaker 1: getting more than they made on the job, but there's

578
00:31:41,400 --> 00:31:43,800
Speaker 1: no evidence that that kept them from going back to work.

579
00:31:43,800 --> 00:31:46,400
Speaker 1: There's just no jobs for them to go back to,

580
00:31:46,640 --> 00:31:49,400
Speaker 1: is the problem. And so if this continues, it's going

581
00:31:49,440 --> 00:31:52,400
Speaker 1: to be a major hit to the economy. And the

582
00:31:52,440 --> 00:31:55,680
Speaker 1: eviction thing um. You know, there's there's questions about what

583
00:31:55,800 --> 00:31:58,960
Speaker 1: Donald Trump can do by executive order or not, but

584
00:31:59,640 --> 00:32:02,760
Speaker 1: we we know landlords are already failing to evict people

585
00:32:02,800 --> 00:32:06,400
Speaker 1: from their homes, and that only exacerbates the problem. It's

586
00:32:06,400 --> 00:32:07,560
Speaker 1: hard to have a job if you don't know a

587
00:32:07,560 --> 00:32:11,320
Speaker 1: place to live. And the Fed, Mike kind of going

588
00:32:11,400 --> 00:32:14,239
Speaker 1: to be status quo for them. They can't do anything more.

589
00:32:14,280 --> 00:32:16,720
Speaker 1: At this point. Interest rates are as low as they're

590
00:32:16,720 --> 00:32:19,640
Speaker 1: going to get, and so the Fed is just going

591
00:32:19,640 --> 00:32:21,600
Speaker 1: to be committed to finding ways to make sure interest

592
00:32:21,680 --> 00:32:23,640
Speaker 1: rates are going to stay low. But right now that's

593
00:32:23,680 --> 00:32:26,360
Speaker 1: not a problem. It's sort of helicopter money, Mike. I mean,

594
00:32:26,400 --> 00:32:29,320
Speaker 1: is there any possibility literally just dropping money from the

595
00:32:29,360 --> 00:32:33,200
Speaker 1: skies at this point? Um, there's an anecdote that says

596
00:32:33,200 --> 00:32:36,040
Speaker 1: the money is too heavy for helicopters to carry. But

597
00:32:38,320 --> 00:32:41,280
Speaker 1: that's what we're doing basically, I mean, the helicopter money.

598
00:32:41,320 --> 00:32:43,960
Speaker 1: Aspect of it is that the FED would just buy

599
00:32:44,040 --> 00:32:45,680
Speaker 1: up the bonds and get rid of them, and so

600
00:32:45,720 --> 00:32:49,080
Speaker 1: there wouldn't be a debt level. That doesn't appear likely

601
00:32:49,120 --> 00:32:51,840
Speaker 1: to happen. But the Congress is talking about just giving

602
00:32:51,840 --> 00:32:53,920
Speaker 1: people money. That's what they did in the first round,

603
00:32:54,080 --> 00:32:57,480
Speaker 1: and that's what they did back in the financial crisis

604
00:32:57,480 --> 00:33:01,160
Speaker 1: and the post financial crisis time as well. Michael McKee,

605
00:33:01,160 --> 00:33:06,080
Speaker 1: thank you, International Politics and Economics correspondent, much much appreciated.

606
00:33:06,200 --> 00:33:08,480
Speaker 1: A lot to happen over the next twenty four hours,

607
00:33:08,480 --> 00:33:12,000
Speaker 1: and of course President Trump promising to do something unilaterally

608
00:33:12,080 --> 00:33:14,000
Speaker 1: if nothing happens. But of course we also just got

609
00:33:14,000 --> 00:33:17,680
Speaker 1: word the Congress can sue the President. Now it may

610
00:33:17,720 --> 00:33:20,840
Speaker 1: not be on this particular issue, but an appeals court

611
00:33:20,880 --> 00:33:23,640
Speaker 1: has said Congress has the right to sue the White House.

612
00:33:24,240 --> 00:33:27,080
Speaker 1: So we'll see. We'll see. There's a power struggle going on,

613
00:33:27,200 --> 00:33:32,000
Speaker 1: and presumably something will happen before the weekend. Thanks for

614
00:33:32,040 --> 00:33:35,520
Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen

615
00:33:35,560 --> 00:33:39,080
Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform

616
00:33:39,120 --> 00:33:42,560
Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn.

617
00:33:42,720 --> 00:33:45,400
Speaker 1: And Paul Sweeney I'm on Twitter at pt Sweeney. Before

618
00:33:45,440 --> 00:33:48,280
Speaker 1: the podcast, you can always catch us worldwide at Bloomberg

619
00:33:48,360 --> 00:33:48,600
Speaker 1: Radio