tv Whatd You Miss Bloomberg April 30, 2021 4:30pm-5:00pm EDT
♪ caroline: from bloomberg's world headquarters in new york and from london, i'm caroline hyde. joe: i'm joe weisenthal. caroline: romaine bostick is off today, but let's take a look at yields doing nothing, but the dollar is set to go higher, joe. joe: the question is, what'd you miss? caroline: we were telling you about the strong economic recovery, the gdp number, and
that number globally is uneven. the eurozone tipped into a double-dip recession in the first quarter and while the data highlighting the cost of the slow covid vaccination effort that has left britain lagging behind the united states, and things like lumber, semiconductors, we are hearing repeatedly of earnings calls. let's dig into technology a little more, with chips and big tech names. amazon at a record high at one point today. joe: i was joking earlier in the week that the analyst community seems to not have done a good job estimating how strong corporate earnings were going to be. i was right. there is no joke at all. massive's. the most record beats ever. 90% of s&p 500 firms beating their estimates. the flipside is, i guess a lot of the markets indicated [inaudible] this week.
but huge beats all week. quite impressive. caroline: quite impressive, but some companies actually smashed it, then did nothing in terms of the stock market reaction. joe: it was all priced in, apparently. let's bring in kriti gupta. kriti: you saw these massive beats across the board, and it kind of seemed like it was at the -- i am not sure what the word here is, but basically, the end of results of the way that stock moved ended up being more pressure on the risk assessment of that day than what the fundamentals digested. let me give you some examples to show why that's the case. the day the big tech beats translated, apple, facebook, google, but the day they reported, the market was up by a huge amount and tesla was outperforming that day anyway. today, you suspect goes leading, tech underperforming, and with
massive, good news coming out of the oil companies. stocks dropped in line with the broader market. to me, that signals more that people are looking at the individual stories day to day that might show up in the longer-term charting. caroline: and if you missed, you really got punished. we saw twitter up today 15%. if you beat, not much love, but if you missed, and absolute torrent. talk to us about what's happening broadly. the story of the week seems to be if you are affected by the supply crunch. kriti: you heard it from caterpillar to apple, and caroline, you mentioned this idea that a loss meant you were punished, but you are also punished if you didn't need by enough of a margin. if you weren't surprising investors or having these blowout numbers, you weren't rewarded. that's an interesting dynamic to keep in mind.
you see the chips on a tear, on a nonstock care for the past year, taking a bit of a breather, down 2.8%. the question here, how much does that constant demand and the constant need for that business really factored into the stock? it seems like it is taking a bit of a push back? how does it translate to the broader stock market? the big question will be not necessarily right now, but in the second quarter and third order, when that demand really ramps up? can companies and the likes of caterpillar and apple fill the demand that companies are seeing if they don't have to support it? caroline: it's amazing that it is going as far as cat too. pretty good to, thank you. let's talk about the chip shortage hitting earnings from apple to ford. hannah, you've been digging into the ramifications of this. i've heard so many opinions, whether this is going to be long-lasting, transitory, what
do you think? how long is this chip shortage here to stay? >> there was a recent report from intel and google suggesting that the chip shortage may last for years at this point, but i think it's really a question of how quickly capacity can be brought online and whether or not consumer spending is in line with the pandemic. it's a big part of what's driving this is a huge surge in demand, partially attributable to consumers needing to buy a new electronic goods as the pandemic keeps everyone at home, and partly attributable to a strong fiscal response to the pandemic, which has kept consumer spending strong. the question becomes, as the economy begins to shift back towards in-person s ervices, it's a good question,
how long this will be felt as a severe drag. but it could turn out to be substantially serious if things don't come online quickly. joe: alex, gdp growth in the u.s. is super right now. we -- there's chip shortages, i was looking on stockx, people paying above the retail price for graphics chips. is the economy strong enough on its own right now such that that will bring online more capacity through greater capital investment? or do we actually need a specific policy initiative to make sure that the demand and the shortages we have seen now get addressed by the deepening structure in the u.s.? alex: this chip shortage is something that has already been done, it's something that supply chains will adapt to in the near term. however, the real question is, what are we doing to prevent the shortage from coming around again in the future?
especially with this looming geopolitical question, the advance of ever larger na tural disasters because of climate change, the u.s. needs to seriously think about developing resilient supply chains, and semiconductors as well as other commodities. these random events will becoming more and more frequently, and it's not always going to be a problem that's a demand-side problem, which is honestly a good problem to have, all things considered. caroline: they talk about building out the resiliency in some way. we hear about subsidies coming on board, whether it be here in europe or the u.s., trying to force people to build back in the united states, but is that an efficient use of capital? how else can we build resiliency in the supply chain that doesn't lead to building it at home? alex: one of the trickiest things is that the government needs to bring online capacity for monitoring supply chains,
not just for making direct investment as soon as there is a problem. there is an instinct to see a problem and immediately do something about that problem, but the issue is, with globalized value chains and these structures where, for cutting-edge chips, there are individual factories that are capable of doing things like stream ultraviolet -- extreme ultraviolet photography, and before the government really puts capital online, it's actually critical to develop the capacity to see where those chokepoints are and where those vulnerabilities are, and develop a thorough map of the supply chain for semiconductors. joe: so we have seen this issue of the chip situation -- is there a rare moment where democrats and republicans in d.c. -- there is quite a bit of alignment on this topic, this need to invest more.
when you look at the policy response so far, and we have seen the biden administration announce executive actions, some bills move forward, what do you like and what's encouraging that you have seen? what should we be focused on? alex: like i said, supply chains are the critical question here, but that should not let us lose focus that research and development money in normal science policy framework is a very, very important part of whatever policy response. the endless frontiers act, which allocates a tremendous amount of money to grafting a technology directorate on to the national science foundation, has some very exciting aspects. the chips act, which focuses on the ingres -- on the on the ground infrastructure. the biden administration takes
on both of these independent bills, but one gets the sense that this is not the last set of bills about the semiconductor shortage that we are going to see. joe: we will see what comes next. our things to -- thanks to alex williams, and you can hear more extensive conversations with alex on the podcast, which comes out monday. find it wherever you listen to your podcast. caroline: a bit of breaking news coming at match, of course, a company that is controlled by -- to a large of spent -- extent, but is also all about dating. the chairman is standing down due to time constraints related to his other business activities. he is replaced by another member of the board, thomas m ckerney, so keep an eye on
caroline: today, we are focused on the unevenness globally in this economic recovery. joe, we got chatter today that showed how far behind europe is trailing in terms of the gdp perspective. joe: exactly right. yesterday we had the strong u.s. gdp report for q1. at least the eu is not throwing it in, slipping a little bit. you can see this divergence happening in the u.s. and the eu, bouncing after last year. at least at the start of the year, we know there with the different pace of vaccinations. you see a pretty marked
difference in the trajectory. caroline: germany is still basically in lockdown and they are really ramping up the vaccine now, but gdp down, better than expected, but still down versus the incredible growth we have seen in the u.s. joe: for more on this divergence, i want to welcome the chief economist for bloomberg markets, tom orlik. q1 divergence -- is not about to change? will things get more synchronized in the quarters ahead, particularly as we have seen the vaccinations in europe ramp-up? tom: this is a dark moment for europe, joe, but is not the moment to give up hope on european growth. our view is that by may, or towards the end of may, we will see a significant part of the elderly and vulnerable population in the euro area vaccinated. that's going to open the door to reopening, so we think that yes, we had a contraction in the
first quarter. we see growth coming back in the second quarter and are penciling in 1.6% expansion for the euro area. does that close all of the gap with the united states? no, for a couple of reasons. firstly, the united states just naturally has a faster growth rate than the euro area, just because the covid crisis is over does not mean the euro area is going to escape the kind of -- that has dragged on growth before. the biggest reason is stimulus. the biden administration is pumping so much stimulus into the u.s., that will be driving performance this year and next year. europe it's not a laggard on stimulus that europe is not a lack art on stimulus -- europe is not a laggard on stimulus, but they have not put in as much. caroline: the ecb has been
talking about listening more to the fx rates, concerns about where this is going. what are they thinking about sending pat, is particularly since fed chair powell? tom: there will be a meeting coming up in june. the first question for them, how is the recovery going? if things are moving in line with our forecast and the vaccinations are rolling out, that's going to embolden the hawks on the ecb board. even so, we think what we are going to see is the pace of ppp , pap purchases, coming back later in the year. we think the european central bank, if the recovery is in place, if there are new concerns about bond yields, they wie confident to pull tack little bit. joe: when you think germany,
cars, we know the global situation with cars is not going to be resolved anytime soon, and that's the way semiconductors are hampering production. how big of a drag is that, the industrial disadvantage due to all the things we are seeing, particularly around semiconductors, but other bottlenecks and logjams throughout the economy? tom: that's a good question, joe. one thing we have been puzzling over is this semiconductor shortage, is it a global macro story or is this a country by country, company by company story? if this persists and is global, that will be bad news for japan and germany, bad news for the united states, and as germany is trying to limp out of its lockdown, the timing of it is clearly not ideal. caroline: certainly. bring us up to speed with -- is
it all about the vaccine rollout? is it all about the reopening and therefore -- we worry about india having its fourth wave of coronavirus. there are issues in eastern europe where many people are worrying that they are opening up too quickly. is it generally felt that it will be good news from here on out? tom: there has been a series of false stories on the coronavirus, caroline. we thought we had it under control, we opened it up too early, the virus came back and there was a double-dip at the beginning of the year. this year, we thought vaccines would be solving the problem globally. it's been great news in the u.s. and the u.k., continental europe, not so great. india, clearly moving sharply in the wrong direction. i think it would be foolhardy to make bold, confident claims that
the worst is over, but certainly, this is the best baseline projection that we can make, the pace of vaccination in europe is now picking up. we think by the end of the second quarter, the elderly and vulnerable population will have had their vaccine, and that will open the path to easing lockdowns in germany and elsewhere. yes, we saw the contraction in the first quarter. we expected to come back from the second quarter on. caroline: thank you so much, for keeping us global and our economic perspective. tom orlik, have a great weekend. we look ahead to next weekend the big economic data points -- yes, joe's favorite. the u.s. jobs report, we college. what you need to know. this is bloomberg. ♪
caroline: as we wrap up the week, it's time to look ahead to the next one. the u.s. jobs report set to be released a week from today, joe. payrolls should be coming in just shy of a million? joe: another huge number expected. i have seen some estimates that think it will be over one million, but there is the expected report card. 975 k, another 60 k on manufacturing. your change in average hourly earnings will make attention, but the low-paid services jobs collapse last year. the return of those will drag down the average hourly
earnings. caroline: and whether you're starting to see it in jobs and the labor market too. joe: joining us to discuss with more is reade pickert. what are you watching next friday? reade: we are expecting a solid report next week. i'm interested in the breakdown of payrolls. while we are expecting to see strengths, especially as the economy reopens and we see hospitality jobs come back, i am curious about government payrolls, given the fact that more kids are heading back to school, are going back for in person learning, and it will be curious to see what those mean for overall payroll prints. caroline: you said more restaurant and service workers will be coming back.
will we see any inflationary pressure buildup? we hear anecdotally that restaurants cannot get staff, flight attendants, airlines not being able to bring back supply quick enough. is pressure building were not just yet? >> to that point, participation remains a challenge. we have seen companies anecdotally talk about signing bonuses or offering incentives for people to come back to work. right now, we are still in a place where a lot of folks are worried about contracting the virus. others are taking care of kids or elderly parents. you also got people in a position where if they were working very low wage jobs, unemployment benefits are giving them a chance to be, to haps be a little bit pickier and look for jobs that they want to be working. they've got the unemployment benefits, stimulus that we see as well, and then a very unique
saying that came up, that two of my colleagues had a great story out today about, and i mentioned this on wednesday as well, we have also seen certain groups drop out of the workforce to retire early, as we have seen stocks surged to record highs and a surge in home values as well. while there is some chance, obviously, that impression area -- inflationary pressures build from a wage perspective, i am not sure how much we are seeing that across the board yet. yes, anecdotally, but in terms of the overall picture, i'm not sure we can make an exception on that yet. caroline: reade pickert, focusing in on the nuances in the labor data. so much more to come next week. and a reminder to subscribe to our weekly podcast, what'd you miss, this week. it's available wherever you listen to podcasts. we are getting news that we will
have 75% of restaurants open in new york soon. where do you most want to go? joe: i am just going to be listening to our podcast. i really want a steak. i want to eat a steak at a bar. maybe i will do that. caroline: while watching the kentucky derby. joe: "bloomberg technology" is up next. have a great weekend. ♪
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