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 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:22,800 Speaker 1: and on Bloomberg dot com. So I mentioned yesterday that 7 00:00:23,000 --> 00:00:25,080 Speaker 1: we saw the Dow sell off six point nine percent, 8 00:00:25,160 --> 00:00:27,720 Speaker 1: the SMP down five point nine percent, then as Jack 9 00:00:27,800 --> 00:00:31,159 Speaker 1: down five percent. John authors Bloomberg opinion piece earlier on 10 00:00:31,200 --> 00:00:34,720 Speaker 1: the President being at least partially responsible. He says this 11 00:00:34,840 --> 00:00:37,280 Speaker 1: the chief culprit isn't Powell or fear of a second wave. 12 00:00:37,320 --> 00:00:40,680 Speaker 1: The best single narrative is that Trump's growing political problems 13 00:00:40,680 --> 00:00:43,360 Speaker 1: and the prospect of a democratic majority's ability to enact 14 00:00:43,479 --> 00:00:47,080 Speaker 1: market unfriendly policy reached a critical mass. Let's get to 15 00:00:47,120 --> 00:00:50,720 Speaker 1: somebody now who also shares at least some of this opinion. 16 00:00:50,880 --> 00:00:54,160 Speaker 1: Barry Banisters, head of Institutional equity Strategy at Stevel Nicholas. 17 00:00:54,160 --> 00:00:56,800 Speaker 1: He's lowering his target on the SMB five hundred to 18 00:00:58,400 --> 00:01:02,680 Speaker 1: December precisely because of election risk. Very great to chat 19 00:01:02,680 --> 00:01:05,240 Speaker 1: with you this morning. Now, you are lowering your target. 20 00:01:05,280 --> 00:01:07,360 Speaker 1: But is it too early for the market to be 21 00:01:07,400 --> 00:01:11,200 Speaker 1: positioning this way. No, not really. I mean a lot 22 00:01:11,240 --> 00:01:14,240 Speaker 1: can change in five months until the election. But we 23 00:01:14,280 --> 00:01:20,160 Speaker 1: had a amazing rally off the bottom in March. I 24 00:01:20,160 --> 00:01:24,479 Speaker 1: mean we were up on NASDAC and SMP five. If 25 00:01:24,480 --> 00:01:27,120 Speaker 1: you annualized those seventy seven days, it was four hundred 26 00:01:27,160 --> 00:01:31,800 Speaker 1: and sevent annual gain. Um. I would say yesterday felt 27 00:01:31,840 --> 00:01:35,080 Speaker 1: like a fever breaking in this case of speculative fever 28 00:01:35,840 --> 00:01:39,800 Speaker 1: and our view as the market consolidates recent gains, awaiting 29 00:01:40,040 --> 00:01:44,160 Speaker 1: more clarity on second half growth prospects. So Barry, give 30 00:01:44,200 --> 00:01:46,399 Speaker 1: us your sense. I mean that the last twenty four 31 00:01:46,400 --> 00:01:48,440 Speaker 1: hours in the market, it's just been extraordinary again as 32 00:01:48,520 --> 00:01:52,480 Speaker 1: Vanney was describing as exceptional declines yesterday in the markets. 33 00:01:52,560 --> 00:01:55,240 Speaker 1: Now we bouncing back and I don't see any material 34 00:01:55,320 --> 00:01:57,960 Speaker 1: news out there. How do you think about the volatility 35 00:01:58,000 --> 00:02:01,600 Speaker 1: just over the past couple of days, Well, it is 36 00:02:01,640 --> 00:02:04,880 Speaker 1: a little disturbing. Um. I've been doing this a long time. 37 00:02:04,960 --> 00:02:08,560 Speaker 1: I remember, for example, just in the last two major tops, 38 00:02:09,520 --> 00:02:12,640 Speaker 1: we had large swings in the NASDAC in March of 39 00:02:12,680 --> 00:02:15,519 Speaker 1: two thousand as it was topping at five thousand before 40 00:02:15,560 --> 00:02:19,280 Speaker 1: falling something like seventy In the next two years, I 41 00:02:19,320 --> 00:02:21,720 Speaker 1: believe we were up and down four hundred points day 42 00:02:22,000 --> 00:02:24,800 Speaker 1: day on day back to back, which at the time 43 00:02:24,880 --> 00:02:28,359 Speaker 1: was more than five six seven percent days um. Also 44 00:02:28,520 --> 00:02:32,840 Speaker 1: in the two thousand seven eight nine financial crisis, as 45 00:02:32,880 --> 00:02:35,760 Speaker 1: we topped out in oh seven, you would see financial 46 00:02:35,840 --> 00:02:39,760 Speaker 1: stocks up and down thirty and in a day back 47 00:02:39,800 --> 00:02:42,920 Speaker 1: to back. So when I see this kind of volatility 48 00:02:42,960 --> 00:02:45,920 Speaker 1: at the top and the speculative fever like Hurts, which 49 00:02:45,960 --> 00:02:49,840 Speaker 1: is bankrupt considering a one billion dollar equity offering because 50 00:02:49,880 --> 00:02:53,520 Speaker 1: of the speculative buying that's going on. Or Chesapeake on 51 00:02:53,560 --> 00:02:56,360 Speaker 1: the weekend of the sixth and seventh of June rising 52 00:02:56,400 --> 00:03:00,120 Speaker 1: a hundred eighty two percent despite being nearly bank up. 53 00:03:00,680 --> 00:03:04,079 Speaker 1: I think it's just too much money chasing too few 54 00:03:04,120 --> 00:03:08,400 Speaker 1: good ideas. Venture J. Powell was asked that towards the 55 00:03:08,440 --> 00:03:11,440 Speaker 1: end of the news conference the other day, asked if 56 00:03:11,639 --> 00:03:14,400 Speaker 1: the FED was worried about a bubble or at least, 57 00:03:14,440 --> 00:03:17,760 Speaker 1: you know, severe fraltiness. He didn't really answer the question 58 00:03:17,800 --> 00:03:21,280 Speaker 1: in great detail. Is the FED worried about it? Well, 59 00:03:21,760 --> 00:03:24,040 Speaker 1: the FED has to be somewhat political. They you know, 60 00:03:24,120 --> 00:03:28,840 Speaker 1: they can't say things that are not socially correct, but 61 00:03:29,080 --> 00:03:31,760 Speaker 1: the reality is uh and we analyzed it in a 62 00:03:31,840 --> 00:03:34,520 Speaker 1: report that came out last night. There's a concept in 63 00:03:34,600 --> 00:03:39,920 Speaker 1: bonds called convexity. It's abnormally strong bond price changes as 64 00:03:39,960 --> 00:03:43,760 Speaker 1: you reach lower and lower levels of yield. The same 65 00:03:43,800 --> 00:03:47,240 Speaker 1: applies to equities. We have what's called a negative real yield, 66 00:03:47,360 --> 00:03:51,800 Speaker 1: meaning the ten year yield minus inflation is a negative number. 67 00:03:52,000 --> 00:03:55,080 Speaker 1: Imagine that's a starting point for a discount rate for 68 00:03:55,120 --> 00:03:58,720 Speaker 1: earnings that gives you an enormous valuation. So what we 69 00:03:58,800 --> 00:04:01,880 Speaker 1: have seen through convey City in the equity market with 70 00:04:01,920 --> 00:04:05,680 Speaker 1: negative real yields is a huge spike in the price 71 00:04:05,680 --> 00:04:09,720 Speaker 1: to earnings ratio in just the last few months. And 72 00:04:09,760 --> 00:04:13,560 Speaker 1: that's well in front of the growth and earnings and 73 00:04:13,640 --> 00:04:16,520 Speaker 1: so I I think it would be wise to step 74 00:04:16,520 --> 00:04:19,520 Speaker 1: back a minute and just wait for the growth signs 75 00:04:19,520 --> 00:04:21,720 Speaker 1: in the back half. We did a lot of damage 76 00:04:21,760 --> 00:04:23,800 Speaker 1: to the economy with the shutdowns, and we'll see what 77 00:04:23,920 --> 00:04:26,920 Speaker 1: the damages as we try to grow in the second half. 78 00:04:27,640 --> 00:04:29,919 Speaker 1: Al Right, Barry, So, as you know concerns amount in 79 00:04:29,960 --> 00:04:32,800 Speaker 1: the marketplace, here are we kind of going back to 80 00:04:32,880 --> 00:04:35,400 Speaker 1: that strategy where let's get out of some of these 81 00:04:35,400 --> 00:04:39,120 Speaker 1: cyclical sectors and maybe into more defensive sectors such as 82 00:04:39,279 --> 00:04:42,960 Speaker 1: utilities and so on. Mm hmmm, Well, growth is its 83 00:04:42,960 --> 00:04:46,640 Speaker 1: own defense. But then the growth relative to value which 84 00:04:46,680 --> 00:04:49,040 Speaker 1: you think about is like high price to book relative 85 00:04:49,080 --> 00:04:53,040 Speaker 1: to low price to book stocks or technology relative to financials. 86 00:04:53,040 --> 00:04:56,479 Speaker 1: For example, growth relative to value is that one of 87 00:04:56,520 --> 00:05:01,279 Speaker 1: only three levels of overbought seen in one hundred years 88 00:05:01,400 --> 00:05:03,520 Speaker 1: of monthly data that we have going back to the 89 00:05:03,960 --> 00:05:08,760 Speaker 1: early nine twenties. So growth is its own defense. Yes, 90 00:05:08,800 --> 00:05:11,080 Speaker 1: you can grow, and you deserve a high multiple for it, 91 00:05:11,120 --> 00:05:13,440 Speaker 1: but you're paying an awful lot for that relative to 92 00:05:13,480 --> 00:05:18,600 Speaker 1: these sort of cyclical industrial value names. On the defenses 93 00:05:18,839 --> 00:05:23,800 Speaker 1: which you mentioned, like utilities or healthcare or food companies 94 00:05:24,120 --> 00:05:29,000 Speaker 1: and so forth. We have seen cyclicals vastly outperform these 95 00:05:29,000 --> 00:05:34,160 Speaker 1: defensive stocks since the top of defensives in March nineteenth, 96 00:05:34,240 --> 00:05:38,080 Speaker 1: which was only two days before the market bottomed, two 97 00:05:38,120 --> 00:05:41,480 Speaker 1: trading days. And so in effect, I do think we're 98 00:05:41,520 --> 00:05:45,760 Speaker 1: over bought on cyclical and oversold on defensive. And I 99 00:05:45,839 --> 00:05:50,440 Speaker 1: do look for, uh, some disappointing news to cause the 100 00:05:50,480 --> 00:05:52,880 Speaker 1: market to pull back within a range, but not a 101 00:05:52,920 --> 00:05:55,359 Speaker 1: big one. So we're saying around a five percent trading 102 00:05:55,440 --> 00:05:58,719 Speaker 1: range of yesterday's close is what we had expect into 103 00:05:58,720 --> 00:06:01,440 Speaker 1: the summer. Hey, Barry, thanks so much for joining us. 104 00:06:01,480 --> 00:06:05,360 Speaker 1: We always appreciate your thoughts and insight. Barry Banister, he's 105 00:06:05,400 --> 00:06:09,200 Speaker 1: had a uh institutional equity strategy at Steeple based in 106 00:06:09,360 --> 00:06:12,840 Speaker 1: Charmed City, that's Baltimore, Maryland. Vannie, I look at the 107 00:06:12,920 --> 00:06:14,880 Speaker 1: volatility here and I'm just not sure. You know, we've 108 00:06:14,880 --> 00:06:19,520 Speaker 1: had that just extraordinary sell off yesterday that really felt significant, 109 00:06:20,040 --> 00:06:22,440 Speaker 1: um and you know, not just a normal saut but 110 00:06:22,560 --> 00:06:25,200 Speaker 1: something different. Yet we bounced back today and I'm not 111 00:06:25,240 --> 00:06:28,000 Speaker 1: sure on what news per se, but it's just interesting 112 00:06:28,040 --> 00:06:31,039 Speaker 1: to note, if nothing else, the volatility definitely is shaking 113 00:06:31,040 --> 00:06:34,760 Speaker 1: out of positions. You heard Barry, though, there's going to 114 00:06:34,839 --> 00:06:37,120 Speaker 1: be a trading range of five percent, so we may 115 00:06:37,160 --> 00:06:39,599 Speaker 1: see many many more days like this through the summer. 116 00:06:39,640 --> 00:06:42,120 Speaker 1: And interestingly, Barry, while he's lowering his target, he's still 117 00:06:42,120 --> 00:06:44,960 Speaker 1: looking for thirty one by December, which we should note 118 00:06:45,040 --> 00:06:47,679 Speaker 1: is above where we are right now on the SMP exactly. 119 00:06:47,680 --> 00:06:50,479 Speaker 1: We're thirty sixty eight on the SMP. We're up two 120 00:06:50,480 --> 00:06:53,400 Speaker 1: point two percent today on the SMP. This is Bloomberg. 121 00:06:56,120 --> 00:06:58,560 Speaker 1: So let's get to our next guest, now, somebody who 122 00:06:58,560 --> 00:07:00,799 Speaker 1: knows a lot about what's going on around the country 123 00:07:00,800 --> 00:07:04,800 Speaker 1: in terms of the virus. Lawrence Hour is JOHNS Hopkins University, 124 00:07:04,800 --> 00:07:08,640 Speaker 1: a system professor of emergency medicine doctors. Our thanks for 125 00:07:08,720 --> 00:07:11,560 Speaker 1: joining us once again, always thrilled to get your updates. 126 00:07:11,920 --> 00:07:16,360 Speaker 1: Talk to us about how reopenings and even the protests 127 00:07:16,480 --> 00:07:20,280 Speaker 1: may have impacted the spread of COVID. Absolutely so, we 128 00:07:20,360 --> 00:07:24,280 Speaker 1: are seeing states moving UM towards reopening broadly across the 129 00:07:24,320 --> 00:07:28,680 Speaker 1: country UM, all the while still seeing hotspots continuing. The 130 00:07:28,760 --> 00:07:31,520 Speaker 1: hot spots seemed to be moving from major cities UM 131 00:07:31,600 --> 00:07:35,840 Speaker 1: in some circumstances to more rural areas. But we're seeing 132 00:07:36,760 --> 00:07:39,360 Speaker 1: I think as many as fourteen states across the country 133 00:07:39,400 --> 00:07:41,960 Speaker 1: having their highest seven day average in new cases, which 134 00:07:42,040 --> 00:07:44,560 Speaker 1: is concerning since many of those are the same states 135 00:07:44,600 --> 00:07:48,680 Speaker 1: that are you know, broadly reopening. The protests will definitely 136 00:07:49,040 --> 00:07:52,040 Speaker 1: continue to to be a factor in driving spread and 137 00:07:52,080 --> 00:07:56,400 Speaker 1: transmission UM, although we've heard reports that processors are working 138 00:07:56,480 --> 00:07:59,040 Speaker 1: very hard to ensure that they're doing the best they 139 00:07:59,040 --> 00:08:01,360 Speaker 1: can to social distance in the protest to continue to 140 00:08:01,400 --> 00:08:04,080 Speaker 1: wear face coverings UM but we do know that these 141 00:08:04,120 --> 00:08:07,680 Speaker 1: events will be drivers of transmission. Is there anything that 142 00:08:07,720 --> 00:08:11,200 Speaker 1: we've learned about some of these newer cases. Are they 143 00:08:11,240 --> 00:08:13,920 Speaker 1: any different from the original wave or is it just 144 00:08:14,040 --> 00:08:17,520 Speaker 1: that same old virus UM. The virus we've heard is 145 00:08:17,520 --> 00:08:22,120 Speaker 1: not actually mutating that much from from the recent research UM, 146 00:08:22,200 --> 00:08:24,560 Speaker 1: so it is the same virus. I think what we're 147 00:08:24,640 --> 00:08:26,800 Speaker 1: learning is how to care for these patients better. We're 148 00:08:26,840 --> 00:08:29,120 Speaker 1: learning a lot more about how the virus acts in 149 00:08:29,120 --> 00:08:32,040 Speaker 1: the body and then how to manage patients UM. We 150 00:08:32,080 --> 00:08:35,640 Speaker 1: also are seeing that the social distancing and masking and 151 00:08:35,720 --> 00:08:38,840 Speaker 1: other public health interventions are working. So that's really important 152 00:08:38,840 --> 00:08:42,400 Speaker 1: to driving down that UM spread and flattening the curve, 153 00:08:42,400 --> 00:08:44,280 Speaker 1: which we are still working to do. We have to 154 00:08:44,320 --> 00:08:47,280 Speaker 1: continue to protect hospitals and health systems in the second wave. 155 00:08:48,280 --> 00:08:52,000 Speaker 1: Should lockdowns be continuing? Dr Saur, I mean if if 156 00:08:52,040 --> 00:08:54,800 Speaker 1: if it was only a question of public health, would 157 00:08:54,800 --> 00:08:58,320 Speaker 1: you suggest that that should be the case. I think 158 00:08:58,320 --> 00:09:01,120 Speaker 1: we need to be very careful when we think about reopening. 159 00:09:01,200 --> 00:09:03,319 Speaker 1: We don't have a ton of new tools in our 160 00:09:03,360 --> 00:09:05,600 Speaker 1: tool kit right. We don't have a vaccine yet, we 161 00:09:05,640 --> 00:09:07,800 Speaker 1: don't have a lot of new therapeutics that we know 162 00:09:07,880 --> 00:09:10,800 Speaker 1: work very well, um, and we do have a very 163 00:09:10,840 --> 00:09:14,400 Speaker 1: susceptible population still, so a lot of people across the 164 00:09:14,400 --> 00:09:18,120 Speaker 1: country still have not gotten COVID. So we have to 165 00:09:18,280 --> 00:09:23,240 Speaker 1: consider the fact that as lockdowns are relaxed, that we 166 00:09:23,320 --> 00:09:26,080 Speaker 1: will see another increase. Now it may be that we 167 00:09:26,120 --> 00:09:28,679 Speaker 1: see in warmer weather less spread. We we don't know 168 00:09:28,760 --> 00:09:32,440 Speaker 1: a lot about, um how the seasonality will affect this virus. 169 00:09:32,480 --> 00:09:34,360 Speaker 1: But given the fact that so many people in our 170 00:09:34,360 --> 00:09:37,120 Speaker 1: population are are still susceptible, we have to be really 171 00:09:37,120 --> 00:09:41,240 Speaker 1: careful with how we consider reducing lockdown. So, Lauren, I 172 00:09:41,280 --> 00:09:43,800 Speaker 1: think you know, most Americans are at this point now, 173 00:09:43,800 --> 00:09:46,320 Speaker 1: and maybe many government officials are at the point where 174 00:09:46,360 --> 00:09:48,760 Speaker 1: we have to weigh, you know, the economic impact of 175 00:09:48,960 --> 00:09:52,360 Speaker 1: complete lockdowns versus um you know, the health risk of 176 00:09:52,559 --> 00:09:55,360 Speaker 1: reopening here is it is it the belief within the 177 00:09:55,400 --> 00:09:59,680 Speaker 1: medical community that you know, our reopening can occur, but 178 00:09:59,760 --> 00:10:02,720 Speaker 1: it's has to be following the protocols of mass of 179 00:10:02,880 --> 00:10:06,840 Speaker 1: social distancing, of you know, tracing, tracking and tracing. Is 180 00:10:06,880 --> 00:10:09,960 Speaker 1: that probably the preferred way to go? Yeah, I think 181 00:10:10,040 --> 00:10:13,280 Speaker 1: no one, you know, especially us in the health field 182 00:10:13,320 --> 00:10:16,080 Speaker 1: and in the public health field. We we understand the 183 00:10:16,080 --> 00:10:19,520 Speaker 1: impact that these lockdowns can create on on many other 184 00:10:19,559 --> 00:10:22,800 Speaker 1: aspects of health and public health to not just the economy. 185 00:10:22,840 --> 00:10:25,800 Speaker 1: So we understand that the lockdowns have to stop. I 186 00:10:25,800 --> 00:10:28,640 Speaker 1: think the challenge is that we have to make sure 187 00:10:28,679 --> 00:10:32,439 Speaker 1: that people are willing to reverse course if necessary if 188 00:10:32,480 --> 00:10:35,079 Speaker 1: we start to see massive amounts of new spread UM 189 00:10:35,120 --> 00:10:37,800 Speaker 1: and our health systems get bogged down. And I think 190 00:10:37,880 --> 00:10:41,400 Speaker 1: people have to take these other activities seriously. Social distancing 191 00:10:41,440 --> 00:10:46,040 Speaker 1: wherever you can, UM not you know, not leaving your 192 00:10:46,040 --> 00:10:48,240 Speaker 1: mask at home and running to the store anyway, or 193 00:10:48,800 --> 00:10:51,920 Speaker 1: UM making sure that you're using those good hygiene practices. 194 00:10:52,000 --> 00:10:54,120 Speaker 1: So those have two people have to be really diligent 195 00:10:54,160 --> 00:10:58,199 Speaker 1: about that if we're going to safely and carefully reopen talk. 196 00:10:58,280 --> 00:10:59,560 Speaker 1: So I'm not sure if you had a chance to 197 00:10:59,600 --> 00:11:01,480 Speaker 1: have a look at the Wold Street Journal reward that 198 00:11:02,000 --> 00:11:04,880 Speaker 1: New York's response to the coronavirus actually made the pandemic. 199 00:11:04,960 --> 00:11:08,760 Speaker 1: Worris studied that the Wolstreet Journal conducted, And would you 200 00:11:08,800 --> 00:11:12,560 Speaker 1: have any insight into whether that's now changing, whether responses 201 00:11:12,600 --> 00:11:16,080 Speaker 1: will be different in future to pandemics. I haven't seen 202 00:11:16,120 --> 00:11:19,160 Speaker 1: that um that Wall Street Journal article yet, but I 203 00:11:19,800 --> 00:11:23,440 Speaker 1: caution against sort of armchair quarterback in the New York response, 204 00:11:23,480 --> 00:11:25,239 Speaker 1: I mean, I think it was one of the earliest, 205 00:11:25,640 --> 00:11:29,360 Speaker 1: you know, largest hits on a major city, and UM, 206 00:11:29,440 --> 00:11:32,400 Speaker 1: many people in New York did a ton of work 207 00:11:32,480 --> 00:11:35,839 Speaker 1: to ensure that we save the most lives, that people 208 00:11:35,880 --> 00:11:40,440 Speaker 1: were protected, and that rapidly issued guidance was implemented effectively. 209 00:11:40,520 --> 00:11:42,120 Speaker 1: I think we're going to learn a lot of lessons 210 00:11:42,160 --> 00:11:44,360 Speaker 1: from the New York response, and I think people are 211 00:11:44,400 --> 00:11:47,040 Speaker 1: already making changes based on what we saw working and 212 00:11:47,120 --> 00:11:51,800 Speaker 1: not working. UM, But I hesitate to say that that 213 00:11:51,920 --> 00:11:55,240 Speaker 1: it made things work. So Lauren, just give us an 214 00:11:55,320 --> 00:11:57,839 Speaker 1: update on kind of where what you're hearing within the 215 00:11:58,240 --> 00:12:01,839 Speaker 1: medical community, the HEALTHCARECUM energy about kind of where we 216 00:12:01,880 --> 00:12:06,960 Speaker 1: are with some treatments UH and maybe even some vaccines. Yeah, 217 00:12:06,960 --> 00:12:10,080 Speaker 1: there's a lot of work being done in both areas. UM. 218 00:12:10,160 --> 00:12:12,320 Speaker 1: You may have seen the recent news that the rem 219 00:12:12,400 --> 00:12:15,760 Speaker 1: doze vere drug that has was um on in multiple 220 00:12:15,800 --> 00:12:19,880 Speaker 1: clinical trials UM early in the pandemic UM has some 221 00:12:19,960 --> 00:12:24,240 Speaker 1: really promising UH data and that it that it may 222 00:12:24,360 --> 00:12:29,880 Speaker 1: reduce UM morbid immortality and may UH improve hospital stays, 223 00:12:29,920 --> 00:12:33,040 Speaker 1: which is great. UM. I think that's it is preliminary data, 224 00:12:33,080 --> 00:12:34,559 Speaker 1: and I think we have a lot of lessons to 225 00:12:34,640 --> 00:12:37,240 Speaker 1: learn about or sorry, a lot of research to do 226 00:12:37,440 --> 00:12:39,320 Speaker 1: on um Rem does a vie, but it is a 227 00:12:39,360 --> 00:12:42,559 Speaker 1: promising drug that we now have under emergency use authorization 228 00:12:42,679 --> 00:12:45,520 Speaker 1: in our toolkit UM. There's a lot of other drugs 229 00:12:45,520 --> 00:12:49,280 Speaker 1: being studied in clinical trial. We're looking at convalescent plasma 230 00:12:49,280 --> 00:12:52,040 Speaker 1: as a possible option UM and those studies are running 231 00:12:52,040 --> 00:12:55,199 Speaker 1: broadly across the country and across the globe. And people 232 00:12:55,200 --> 00:12:58,480 Speaker 1: are doing a ton of work on various vaccine options, 233 00:12:58,600 --> 00:13:02,040 Speaker 1: different platforms, testing vaccines that may be further down in 234 00:13:02,080 --> 00:13:06,599 Speaker 1: the pipeline, and developing new models for vaccine development and distribution. 235 00:13:06,920 --> 00:13:09,760 Speaker 1: A ton of work left to do, but some promising option. 236 00:13:10,280 --> 00:13:13,280 Speaker 1: Briefly dr antibody testing. Is it to the point yet 237 00:13:13,320 --> 00:13:16,440 Speaker 1: where we can trust results? I think there's still too 238 00:13:16,480 --> 00:13:19,760 Speaker 1: many questions of antibody testing UM, particularly in what it 239 00:13:19,800 --> 00:13:23,720 Speaker 1: means for lasting immunity and so what what do you 240 00:13:23,800 --> 00:13:26,199 Speaker 1: do with that information that you get from an antibody 241 00:13:26,240 --> 00:13:29,640 Speaker 1: test UM. I think it's it's very early in what 242 00:13:29,720 --> 00:13:32,600 Speaker 1: antibody tests can and can't be used for and how 243 00:13:32,880 --> 00:13:35,800 Speaker 1: UM reliable and valid the results are. And there's so 244 00:13:35,800 --> 00:13:38,640 Speaker 1: many different types of antibody tests out there, Um, it's 245 00:13:38,679 --> 00:13:41,560 Speaker 1: really hard to message what that information means for the 246 00:13:41,600 --> 00:13:44,960 Speaker 1: person receiving it. Lauren Sour, thanks so much for joining us. 247 00:13:45,040 --> 00:13:48,640 Speaker 1: We appreciate it as always. Lauren Sour, Assistant Professor of 248 00:13:48,720 --> 00:13:53,040 Speaker 1: Emergency Medicine at Johns Hopkins University. We are so fortunate 249 00:13:53,040 --> 00:13:54,920 Speaker 1: to have the smart folks at Johns Hopkins and others 250 00:13:55,120 --> 00:13:57,720 Speaker 1: join us to give us the medical perspective. The Bloomberg 251 00:13:57,720 --> 00:14:00,400 Speaker 1: School of Public Health is supported by Michael Bloomberg, founder 252 00:14:00,400 --> 00:14:06,800 Speaker 1: of Bloomberg LP and Bloomberg Philanthropies. It is time for 253 00:14:06,880 --> 00:14:10,560 Speaker 1: Bloomberg Opinion. We're joined by Bloomberg Opinion Comms Jim Bianco. 254 00:14:10,640 --> 00:14:13,840 Speaker 1: He has a president and founder of Bianco Research. Jim, 255 00:14:13,840 --> 00:14:16,400 Speaker 1: thanks so much for joining us here. I want to 256 00:14:16,400 --> 00:14:20,080 Speaker 1: get a sense, you know, you've been a very cautious 257 00:14:20,160 --> 00:14:23,520 Speaker 1: outlook on the economy and on the markets. Here. I 258 00:14:23,520 --> 00:14:25,960 Speaker 1: want to get a sense of kind of what your 259 00:14:26,080 --> 00:14:29,440 Speaker 1: takeaway is from, you know, the equity market trading we've 260 00:14:29,440 --> 00:14:31,800 Speaker 1: seen over the past couple of days yesterday seemed to 261 00:14:31,840 --> 00:14:35,160 Speaker 1: really signal uh and awakening by the market of the 262 00:14:35,320 --> 00:14:37,360 Speaker 1: risk too that are really out there in terms of 263 00:14:37,400 --> 00:14:39,680 Speaker 1: the economy yet today we kind of bounced back. What 264 00:14:39,720 --> 00:14:40,640 Speaker 1: do you what do you make of what's going on 265 00:14:40,680 --> 00:14:43,840 Speaker 1: in the market. Yeah, yeah, I have been a bit 266 00:14:43,880 --> 00:14:46,920 Speaker 1: cautious on the economy, and I think that has been 267 00:14:47,960 --> 00:14:51,000 Speaker 1: more correct than not, and that has translated into a 268 00:14:51,000 --> 00:14:53,880 Speaker 1: cautiousness in the in the equity markets, and that has 269 00:14:53,920 --> 00:14:58,320 Speaker 1: not been more correct than not until yesterday. I do 270 00:14:58,440 --> 00:15:02,240 Speaker 1: think what you've seen happened in the stock market in 271 00:15:02,400 --> 00:15:07,800 Speaker 1: bigger picture has been a federal reserve and a federal government, 272 00:15:07,880 --> 00:15:09,880 Speaker 1: let's not leave them out of the equation, the Treasury 273 00:15:09,880 --> 00:15:15,760 Speaker 1: Department promising bailouts, promising support, basically telling everybody that we 274 00:15:15,800 --> 00:15:19,040 Speaker 1: need the markets to go back up. Chairman Paul underscored 275 00:15:19,080 --> 00:15:22,240 Speaker 1: that at his press conference earlier this week when he 276 00:15:22,640 --> 00:15:25,160 Speaker 1: refused to even answer Mike mckie's question about the stock 277 00:15:25,200 --> 00:15:28,520 Speaker 1: market being overvalued, suggesting that they don't care. They're more 278 00:15:28,600 --> 00:15:33,560 Speaker 1: interested in getting markets up in order to give confidence 279 00:15:33,800 --> 00:15:36,960 Speaker 1: and financing to keep the economy going, and they fled 280 00:15:37,000 --> 00:15:40,280 Speaker 1: to a big speculative rush in the markets, which I 281 00:15:40,320 --> 00:15:43,640 Speaker 1: think reversed yesterday. Down six percent in a day. Doesn't 282 00:15:43,720 --> 00:15:46,080 Speaker 1: happen because you had you had bad news about a 283 00:15:46,200 --> 00:15:50,480 Speaker 1: second wave. It also happens because you had a lot 284 00:15:50,520 --> 00:15:54,120 Speaker 1: of speculative fever in the market that rushed out yesterday 285 00:15:54,160 --> 00:15:57,480 Speaker 1: as well too. But Jim, if markets carred that much 286 00:15:57,840 --> 00:16:00,280 Speaker 1: about trying to tell the Feds on things, to give 287 00:16:00,280 --> 00:16:02,160 Speaker 1: the FED a message, would they really be back up 288 00:16:02,200 --> 00:16:07,080 Speaker 1: two percents already today, unless, of course, you know, we'll 289 00:16:07,120 --> 00:16:09,680 Speaker 1: thinking of markets as a monolith with that question, and 290 00:16:09,720 --> 00:16:12,760 Speaker 1: they are not a monolith right now. There is a 291 00:16:12,920 --> 00:16:16,520 Speaker 1: certain aspect of the market that is, and that is 292 00:16:16,600 --> 00:16:19,200 Speaker 1: that small retail trader that is really rushed into the 293 00:16:19,200 --> 00:16:22,360 Speaker 1: market in the last couple of months, maybe even in 294 00:16:22,400 --> 00:16:25,640 Speaker 1: the last year or so. Yes, they matter. They're big 295 00:16:25,800 --> 00:16:30,160 Speaker 1: in total, even though their trades individually are small, and 296 00:16:30,360 --> 00:16:33,000 Speaker 1: prices are set at the margin, and they are the 297 00:16:33,000 --> 00:16:36,080 Speaker 1: player at the margin, so they are in the market. 298 00:16:36,160 --> 00:16:39,600 Speaker 1: So I wouldn't necessarily look at the market day to 299 00:16:39,680 --> 00:16:43,200 Speaker 1: day machinations, even when it's followl like this and suggest 300 00:16:43,240 --> 00:16:46,840 Speaker 1: that there's a big economic meaning to it. Jim. You know, 301 00:16:46,960 --> 00:16:50,680 Speaker 1: we seen, as you have noted, you know, the FED 302 00:16:50,760 --> 00:16:54,040 Speaker 1: kind of being early, being aggressive and kind of quote 303 00:16:54,120 --> 00:16:57,120 Speaker 1: unquote backstopping this market. And we've actually also seen some 304 00:16:57,640 --> 00:17:01,160 Speaker 1: decent federal stimulus at three trillion dollar stimulus bill was 305 00:17:01,240 --> 00:17:06,480 Speaker 1: just historic. Does the market need to have another federal 306 00:17:06,520 --> 00:17:11,440 Speaker 1: stimulus bill um coming out of Washington. I think it's 307 00:17:11,480 --> 00:17:15,159 Speaker 1: gonna need to see either signs that the economy is 308 00:17:15,440 --> 00:17:19,560 Speaker 1: seriously rebounding or it's going to need more stimulus. In 309 00:17:19,600 --> 00:17:22,200 Speaker 1: other words, if if it gets that rebound, it won't 310 00:17:22,200 --> 00:17:23,880 Speaker 1: need it. Now, let me be clear on what I'm 311 00:17:23,920 --> 00:17:27,520 Speaker 1: talking about. I'll give you a statistic. One statistic. At 312 00:17:27,520 --> 00:17:31,520 Speaker 1: the bottom of the two thousand eight recovery, output in 313 00:17:31,560 --> 00:17:35,159 Speaker 1: the economy was of what it was at the two 314 00:17:35,200 --> 00:17:38,440 Speaker 1: thousand seven high. We only dropped four That was enough 315 00:17:38,480 --> 00:17:40,400 Speaker 1: to have the stock market and produce a ten percent 316 00:17:40,520 --> 00:17:44,840 Speaker 1: unemployment rate. This time around, we're thinking that the economy 317 00:17:45,200 --> 00:17:51,159 Speaker 1: dropped at its worst point. Maybe it's getting better, but 318 00:17:51,240 --> 00:17:56,600 Speaker 1: if it doesn't get back to ent of output, uh, 319 00:17:56,680 --> 00:18:00,840 Speaker 1: it will be a very bad recession. Mar de Blasio 320 00:18:00,960 --> 00:18:03,640 Speaker 1: said that, Uh, this writership on the New York City 321 00:18:03,640 --> 00:18:07,760 Speaker 1: subway was up in the last week. It's still off 322 00:18:07,760 --> 00:18:10,560 Speaker 1: of its high. It's got to get back to in 323 00:18:10,680 --> 00:18:13,240 Speaker 1: order for there to be some kind of semblance of 324 00:18:13,320 --> 00:18:16,840 Speaker 1: normal returning. If you get that, you don't need the stimulus. 325 00:18:16,840 --> 00:18:19,239 Speaker 1: Short of that, I do think that the market and 326 00:18:19,320 --> 00:18:23,080 Speaker 1: the economy will be disappointed if there is a not 327 00:18:23,280 --> 00:18:27,760 Speaker 1: any more stimulus coming now, Jim, Treasury yields of un 328 00:18:28,080 --> 00:18:31,520 Speaker 1: run this movement in stocks right, was this also response 329 00:18:31,560 --> 00:18:35,920 Speaker 1: to the FED chair? Uh? Yeah, I think treasury yields 330 00:18:36,320 --> 00:18:39,320 Speaker 1: have two things going for them. Are are bigger picture 331 00:18:39,359 --> 00:18:41,199 Speaker 1: going for them, and that is there's gonna be a 332 00:18:41,320 --> 00:18:45,359 Speaker 1: tremendous amount of issuance three trillion dollars just this quarter, 333 00:18:45,720 --> 00:18:49,040 Speaker 1: which we're working through right now. What has happened over 334 00:18:49,080 --> 00:18:52,400 Speaker 1: the last eight ten weeks is the Fed had been 335 00:18:52,400 --> 00:18:56,200 Speaker 1: buying more than had been being issued. So this bond 336 00:18:56,200 --> 00:18:58,639 Speaker 1: market was in an unusual situation that it was actually 337 00:18:58,640 --> 00:19:01,639 Speaker 1: shrinking in size when you remove the Fed out of 338 00:19:01,680 --> 00:19:05,000 Speaker 1: the equation, and that had been holding prices very steady. 339 00:19:05,480 --> 00:19:07,960 Speaker 1: It was in the last two weeks or so that 340 00:19:08,320 --> 00:19:10,959 Speaker 1: issue its started to overtake what the Fed was doing 341 00:19:11,040 --> 00:19:15,080 Speaker 1: in yield started up. But Wednesday, Chairman Paul said that 342 00:19:15,440 --> 00:19:19,000 Speaker 1: their bond buying has probably found the floor and around 343 00:19:19,000 --> 00:19:22,160 Speaker 1: a hundred and twenty billion dollars a month, so it's 344 00:19:22,200 --> 00:19:23,960 Speaker 1: not going to get any lower than that. A trillion 345 00:19:24,000 --> 00:19:26,119 Speaker 1: dollars a year is what that works out to. You know, 346 00:19:26,160 --> 00:19:28,320 Speaker 1: it's a hard number to understand, a trillion a year, 347 00:19:28,800 --> 00:19:31,360 Speaker 1: and that I think gave the market some support, which 348 00:19:31,400 --> 00:19:34,320 Speaker 1: is why you saw the rally and bonds right after that. Oh, 349 00:19:34,359 --> 00:19:37,239 Speaker 1: we just found for sure we've got at least a 350 00:19:37,320 --> 00:19:41,000 Speaker 1: trillion dollar buyer of bonds as we move forward, helping 351 00:19:41,040 --> 00:19:44,240 Speaker 1: to alleviate some of that crush of supply that's coming. 352 00:19:44,560 --> 00:19:47,080 Speaker 1: And that's what I think was the positive news for 353 00:19:47,119 --> 00:19:50,000 Speaker 1: the bond market this week. Jim, it is always fascinating 354 00:19:50,040 --> 00:19:52,199 Speaker 1: to speak with you. Thank you for that. Jim Bianco 355 00:19:52,320 --> 00:19:55,040 Speaker 1: is president and founder of Bianco Research, of course also 356 00:19:55,119 --> 00:19:59,000 Speaker 1: Bloomberg opinion columnist and Paul. It is fascinating because the 357 00:19:59,040 --> 00:20:02,000 Speaker 1: worst of the corporate spreads have seen a retracement this 358 00:20:02,040 --> 00:20:05,520 Speaker 1: week of almost fifty percent, so they've been big moves 359 00:20:05,640 --> 00:20:09,200 Speaker 1: underneath the hood of the bond markets. Also, what Jim 360 00:20:09,320 --> 00:20:11,639 Speaker 1: was talking about their the retail Trader. We have a 361 00:20:11,680 --> 00:20:14,199 Speaker 1: fascinating story on the Bloomberg today about the bar Stool 362 00:20:14,280 --> 00:20:19,200 Speaker 1: Sports founder who's find him on Twitter. It's kind of fun, yeah, 363 00:20:19,280 --> 00:20:22,000 Speaker 1: I mean it's it's just a strange story. Apparently, you know, 364 00:20:22,080 --> 00:20:25,800 Speaker 1: he's he's bringing huge numbers of people into the retail 365 00:20:25,920 --> 00:20:29,280 Speaker 1: day trading side of things. But he's now decided that 366 00:20:29,280 --> 00:20:30,880 Speaker 1: he's going to be a buy and hold kind of guy. 367 00:20:30,960 --> 00:20:36,000 Speaker 1: So we'll we'll see what Dave Portnoy does next. Well. 368 00:20:36,000 --> 00:20:40,000 Speaker 1: One of the most key fallouts from an economic perspective 369 00:20:40,000 --> 00:20:42,520 Speaker 1: of this pandemic has been the job loss is just 370 00:20:42,640 --> 00:20:47,000 Speaker 1: extraordinary job losses across the US and across the globe. 371 00:20:47,000 --> 00:20:49,919 Speaker 1: One of the questions for investors and economists is how 372 00:20:50,000 --> 00:20:52,680 Speaker 1: much are those or how many of those jobs are 373 00:20:52,720 --> 00:20:56,399 Speaker 1: temporarily lost and they'll come back as the pandemic wains, 374 00:20:56,440 --> 00:20:58,840 Speaker 1: and how much of those are structurally lost at i e. 375 00:20:59,040 --> 00:21:01,680 Speaker 1: They will not come back. To answer that question, we 376 00:21:01,800 --> 00:21:04,720 Speaker 1: welcome you Van Roya. He's a senior global economist for 377 00:21:04,760 --> 00:21:08,000 Speaker 1: Bloomberg Economics. He's based in Frankfurt, Germany. Ifan, thanks so 378 00:21:08,040 --> 00:21:09,960 Speaker 1: much for joining us here. I know you guys have 379 00:21:10,040 --> 00:21:12,480 Speaker 1: done some work here on kind of taking a look 380 00:21:12,480 --> 00:21:15,679 Speaker 1: at the unemployment and you know it's kind of the 381 00:21:15,720 --> 00:21:17,919 Speaker 1: structure of that unemployment. How much is temporary and how 382 00:21:17,960 --> 00:21:22,800 Speaker 1: much is permanent? What did you guys find? Yeah, many 383 00:21:22,880 --> 00:21:25,840 Speaker 1: thanks for having me up all um. Yes, indeed, we 384 00:21:25,880 --> 00:21:29,879 Speaker 1: have looked at at unemployment increases in advanced economies, and 385 00:21:29,920 --> 00:21:32,480 Speaker 1: as a as an example, we took the United States 386 00:21:32,920 --> 00:21:37,919 Speaker 1: and we have found busily that the probability of about 387 00:21:37,960 --> 00:21:39,800 Speaker 1: certain percent of workers to have a lot of their 388 00:21:39,880 --> 00:21:42,680 Speaker 1: jobs is very high that they will remain an unemployment 389 00:21:42,680 --> 00:21:45,159 Speaker 1: while certainly percent of the workers that have lots of 390 00:21:45,160 --> 00:21:48,000 Speaker 1: their jobs are likely to get im back to employment 391 00:21:48,080 --> 00:21:51,600 Speaker 1: very soon. We would that result in in terms of 392 00:21:51,640 --> 00:21:54,439 Speaker 1: the overall numbers, It wouldn't be obviously a thirty resented 393 00:21:54,520 --> 00:21:59,119 Speaker 1: employment rate, would it. No, No, it's the absolute numbers 394 00:21:59,200 --> 00:22:02,000 Speaker 1: of the people who love their jobs. So we're talking 395 00:22:02,000 --> 00:22:05,160 Speaker 1: to in the COVID nineteen crisis in the United States, 396 00:22:05,160 --> 00:22:08,439 Speaker 1: for example, about nineteen million people, so as third of 397 00:22:08,480 --> 00:22:12,720 Speaker 1: it basically, which would translate into six million people where 398 00:22:12,760 --> 00:22:16,119 Speaker 1: the probability in getting back to employment will be elevated 399 00:22:16,359 --> 00:22:19,679 Speaker 1: to remain an unemployment. So pre what are we going 400 00:22:19,720 --> 00:22:22,080 Speaker 1: to get a sense of kind of how this plays out. 401 00:22:22,119 --> 00:22:24,240 Speaker 1: I know you guys are again kind of forecasting here, 402 00:22:24,280 --> 00:22:26,639 Speaker 1: but is this something that we're just gonna have to 403 00:22:26,640 --> 00:22:28,920 Speaker 1: wait for the numbers to come in and to see 404 00:22:28,920 --> 00:22:32,680 Speaker 1: whether you know, those furloughed workers are brought back or 405 00:22:33,040 --> 00:22:36,440 Speaker 1: you know some of the service sector employees are brought back. 406 00:22:36,800 --> 00:22:38,159 Speaker 1: Is it just something that we have to wait and 407 00:22:38,200 --> 00:22:40,399 Speaker 1: look at the data. We're not hearing much from the companies, 408 00:22:40,440 --> 00:22:44,520 Speaker 1: are we Yeah, So how we think about it, we 409 00:22:44,560 --> 00:22:49,080 Speaker 1: can decompose basically the job losses that we have observed 410 00:22:49,200 --> 00:22:52,880 Speaker 1: into three factors. The first factor, basically we are demanded 411 00:22:53,160 --> 00:22:56,199 Speaker 1: lie factors. When you think about shops just closing and 412 00:22:56,280 --> 00:22:58,800 Speaker 1: people are not able to buy in these jobs, the 413 00:22:58,840 --> 00:23:01,359 Speaker 1: workers will lose their job. At the moment when the 414 00:23:01,359 --> 00:23:05,080 Speaker 1: shops open again and uh and people gain more confidence 415 00:23:05,280 --> 00:23:08,800 Speaker 1: and uncertainty is reduced of their future income for example, 416 00:23:08,920 --> 00:23:12,440 Speaker 1: people will start buying again and these jobs are likely 417 00:23:12,480 --> 00:23:16,360 Speaker 1: to come back very quickly. The second one is what 418 00:23:16,440 --> 00:23:20,280 Speaker 1: we think about is outside option of undeployed workers. You 419 00:23:20,280 --> 00:23:23,120 Speaker 1: you think about the Cares Act, which is quite quite 420 00:23:23,160 --> 00:23:26,240 Speaker 1: generous in the United States, so a lot of workers 421 00:23:26,280 --> 00:23:30,200 Speaker 1: do not really have the search efforts for employment at 422 00:23:30,200 --> 00:23:34,320 Speaker 1: the moment. Once this is being reduced, the search efforts 423 00:23:34,440 --> 00:23:37,480 Speaker 1: to get a new job are also increasing. So this 424 00:23:37,560 --> 00:23:40,880 Speaker 1: is another another thing where where we think that employment 425 00:23:40,880 --> 00:23:44,080 Speaker 1: can resume very quickly. The problem is that the third 426 00:23:44,400 --> 00:23:48,720 Speaker 1: source of unemployment, which is we call a reallocation of 427 00:23:48,800 --> 00:23:52,280 Speaker 1: workers and perms. So when you think about now the 428 00:23:52,400 --> 00:23:58,080 Speaker 1: behavior of people not going to restaurants anymore, um ordering 429 00:23:58,720 --> 00:24:01,080 Speaker 1: via e commerce, we have seen a lot of job 430 00:24:01,119 --> 00:24:05,480 Speaker 1: creation actually in these uh these companies. Amazon has hired 431 00:24:05,520 --> 00:24:08,719 Speaker 1: a lot of workers because they face higher amount At 432 00:24:08,760 --> 00:24:12,399 Speaker 1: the same time, the mortar and bricks retailers have have 433 00:24:12,560 --> 00:24:19,080 Speaker 1: lost substantially their job there. So if this will will persist, 434 00:24:19,520 --> 00:24:22,919 Speaker 1: it's very difficult for for people who who lost their 435 00:24:23,000 --> 00:24:25,960 Speaker 1: job due to this reallocation shark to get back into 436 00:24:26,000 --> 00:24:29,280 Speaker 1: a ployment because they simply lack the skills to get 437 00:24:29,800 --> 00:24:32,399 Speaker 1: to get a new employment. So this is how we 438 00:24:32,480 --> 00:24:35,640 Speaker 1: think about it. Iftent is due to this reallocation shark, 439 00:24:35,720 --> 00:24:39,480 Speaker 1: it will be a painful re restructuring of the economy 440 00:24:39,520 --> 00:24:42,159 Speaker 1: and it's very likely that this will firstist with the 441 00:24:42,480 --> 00:24:45,760 Speaker 1: second half of the year. Beyond those six million people 442 00:24:45,760 --> 00:24:47,840 Speaker 1: that you say won't go immediately back to work, which 443 00:24:47,880 --> 00:24:51,560 Speaker 1: is a phenomenal number of people. What about wages do 444 00:24:51,680 --> 00:24:54,560 Speaker 1: they hold up at a time when companies and small 445 00:24:54,560 --> 00:24:56,760 Speaker 1: businesses in particular are under a little bit of pressure. 446 00:24:59,119 --> 00:25:02,040 Speaker 1: That's a very good question, and how how wages will 447 00:25:02,040 --> 00:25:04,280 Speaker 1: evolve on the on the one hand, you have the 448 00:25:04,320 --> 00:25:08,200 Speaker 1: wage pressure going going down because of the increased pool 449 00:25:08,200 --> 00:25:11,960 Speaker 1: and unemployed people. This naturally give downward pressure on wages. 450 00:25:12,600 --> 00:25:15,960 Speaker 1: On the other hand, you have you highest in more 451 00:25:16,000 --> 00:25:18,600 Speaker 1: productive industries. So this is also due to the reallocation 452 00:25:18,640 --> 00:25:22,920 Speaker 1: shock I just mentioned. So in Amazon, basically wages are 453 00:25:23,119 --> 00:25:26,199 Speaker 1: usually higher than in the in the unproductive factors that 454 00:25:26,840 --> 00:25:30,600 Speaker 1: now recently are are being exposed. So the overall, if 455 00:25:30,600 --> 00:25:33,360 Speaker 1: you look at hourly wages for example, on the employed 456 00:25:33,400 --> 00:25:36,600 Speaker 1: work for it. At the moment, they have significantly increased 457 00:25:36,640 --> 00:25:40,800 Speaker 1: in in April in the United States because simply productivity 458 00:25:40,960 --> 00:25:45,240 Speaker 1: in these new new uh new jobs created are higher. 459 00:25:45,280 --> 00:25:48,359 Speaker 1: So in the short term I would say, um that 460 00:25:48,680 --> 00:25:52,000 Speaker 1: the average wages are increasing. In the medium term, it 461 00:25:52,080 --> 00:25:54,040 Speaker 1: remains to be seen what we see in the numbers, 462 00:25:54,160 --> 00:25:58,280 Speaker 1: which which factor basically is dominating and how quickly people 463 00:25:58,320 --> 00:26:01,080 Speaker 1: can go back to work. If puran what's this mean 464 00:26:01,119 --> 00:26:04,200 Speaker 1: for policymakers as we come out on the other side 465 00:26:04,359 --> 00:26:09,160 Speaker 1: of the pandemic, what do you guys expect to see. Yeah, 466 00:26:09,200 --> 00:26:13,080 Speaker 1: it's a very challenging situation for policy, economic policy, both 467 00:26:13,080 --> 00:26:17,280 Speaker 1: for monetary as as well as fiscal policy. So in 468 00:26:17,320 --> 00:26:21,480 Speaker 1: the in the first hit of the shock on to 469 00:26:21,560 --> 00:26:26,359 Speaker 1: the shutdown, to the lockdown measures. UM. Monetary policy has 470 00:26:26,400 --> 00:26:28,800 Speaker 1: provide a lot of liquidity, which was the right thing 471 00:26:28,840 --> 00:26:32,600 Speaker 1: to do to try to keep the economy above water. 472 00:26:33,320 --> 00:26:35,480 Speaker 1: As well as fiscal stimulus. We have seen a lot 473 00:26:35,520 --> 00:26:40,200 Speaker 1: of a lot of very large fiscal spending programs UH 474 00:26:40,240 --> 00:26:43,720 Speaker 1: and and this is very very appropriate to UH to 475 00:26:43,880 --> 00:26:46,200 Speaker 1: fill the gap of the short falls from the demand 476 00:26:46,240 --> 00:26:49,760 Speaker 1: and the supply shock. So the first type of shock 477 00:26:49,880 --> 00:26:52,959 Speaker 1: that we have seen, for the real location shock, you 478 00:26:53,000 --> 00:26:56,800 Speaker 1: want to have a policy mix UM that says, Okay, 479 00:26:57,520 --> 00:26:59,679 Speaker 1: we have to keep the economy above the water, but 480 00:27:00,040 --> 00:27:02,800 Speaker 1: in the same time we have don't have to provide 481 00:27:02,840 --> 00:27:05,600 Speaker 1: a structural change when it's happening in the economy. So 482 00:27:05,680 --> 00:27:07,960 Speaker 1: you don't want to keep firms alive that have a 483 00:27:07,960 --> 00:27:13,760 Speaker 1: business model which is UH pre pre pandemic style. So 484 00:27:13,760 --> 00:27:16,600 Speaker 1: so there there's a mix of a balance that that 485 00:27:16,720 --> 00:27:21,200 Speaker 1: economic policy has to address going forward. To strike a 486 00:27:21,240 --> 00:27:23,880 Speaker 1: balance between okay, we have we will have to see 487 00:27:23,880 --> 00:27:27,160 Speaker 1: some bankruptcies and a new structure of the economy, while 488 00:27:27,160 --> 00:27:30,360 Speaker 1: at the same time not losing too many jobs and 489 00:27:30,480 --> 00:27:34,679 Speaker 1: UH and and have a high structural unemployment al Right, Well, 490 00:27:34,720 --> 00:27:36,920 Speaker 1: we will be watching the data very very closely, and 491 00:27:37,000 --> 00:27:39,600 Speaker 1: luckily we get weekly initiatables claims as well as obviously 492 00:27:39,640 --> 00:27:42,960 Speaker 1: the monthly payrolls report, and we're waiting on each with 493 00:27:43,160 --> 00:27:46,359 Speaker 1: beated breath, as will you. Born van Wyre, Senior Global 494 00:27:46,400 --> 00:27:49,439 Speaker 1: economist at Bloomberg Economics, SEE is based in Frankfort. And 495 00:27:49,440 --> 00:27:53,640 Speaker 1: of course problems with employment in Europe as well post pandemic, 496 00:27:53,680 --> 00:27:55,600 Speaker 1: and indeed we don't even know for a post pandemic 497 00:27:55,680 --> 00:27:57,560 Speaker 1: or when we will be a post pandemic, so all 498 00:27:57,600 --> 00:28:01,919 Speaker 1: of those questions yet to be answered. That said, we 499 00:28:02,080 --> 00:28:04,120 Speaker 1: can say that there was a little bit of good 500 00:28:04,119 --> 00:28:06,240 Speaker 1: news in the initial jobless claims in the sense that 501 00:28:06,320 --> 00:28:09,760 Speaker 1: continuing claims came down just ever so gradually. Paul, Yeah, 502 00:28:09,800 --> 00:28:12,240 Speaker 1: exactly right. I mean, I think the for the tenth 503 00:28:12,240 --> 00:28:14,359 Speaker 1: week in a row we had a lower job was 504 00:28:14,440 --> 00:28:17,200 Speaker 1: claims number. Still million a half is a million and 505 00:28:17,200 --> 00:28:19,879 Speaker 1: a half too many, but again kind of this, you know, 506 00:28:20,480 --> 00:28:23,000 Speaker 1: slowing growth in the job's claims, and that's kind of 507 00:28:23,000 --> 00:28:25,800 Speaker 1: the silver lining. Yeah. And obviously, you know, at a 508 00:28:25,800 --> 00:28:28,080 Speaker 1: time when worker safety is important, we do need to 509 00:28:28,119 --> 00:28:30,080 Speaker 1: keep an eye on wages too, because there shouldn't be 510 00:28:30,080 --> 00:28:33,879 Speaker 1: a trade off one for the other. Indeed, thanks for 511 00:28:33,920 --> 00:28:37,400 Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen 512 00:28:37,440 --> 00:28:40,960 Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform 513 00:28:41,000 --> 00:28:44,440 Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn. 514 00:28:44,600 --> 00:28:46,960 Speaker 1: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 515 00:28:47,040 --> 00:28:49,719 Speaker 1: Before the podcast, you can always catch us worldwide at 516 00:28:49,720 --> 00:28:50,480 Speaker 1: Bloomberg Radio.