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tv   Bloomberg Surveillance  Bloomberg  October 19, 2021 8:00am-9:00am EDT

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>> you are looking at the fed probably on hold next year. i think you get one hike, but i don't see to hikes next year at all. >> central banks aren't very good at being nimble when they are trying to catch up from being behind the curve. >> at the end of the day, the balance sheets are fine. the consumers are in great shape. the appetite is very healthy. >> if we slow to 3% next year, we are still growing well above potential. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.
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on radio, on television, a most interesting day. a market lift that has a different character to it. it is a market lift wrapped around fed speak. jonathan: where do the equity bears go? four days of gains into tuesday, striking distance of all-time highs on the s&p 500, and the fed speak front and center because we are doing this with increasing rate hikes at the fed. tom: it is going to be interesting to see how they do. they separate taper from rates. i think i am more focused on the rate chat than the taper chat. jonathan: totally. the taper chat is done. let's have a conversation about interest rates. they have not been successful. the objective is to separate the taper talk from guidance. they have not been successful increasingly pricing and interest rate hikes. that is what they need to push back against this week. tom: to me, it is about slower growth. you wonder, is there a fiscal
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drag if washington gets nothing done on infrastructure, nothing done on some form of social programs? jonathan: frankly -- lisa: frankly, even if they do come of fact that they will be rolled out over several years, the debate at the fed hinges on the lack of knowns. an inflationary backdrop that no one fully understands. we don't know how much is being driven by supply-side dynamics versus demand-side dynamics, and that matters tremendously for the federal reserve. tom: i really want to stop the show here. we are advantaged by mark gurman, the number one person in the world on apple and all of that. i have been talking about technology and our underestimation of it. this is from the production expert this morning, a first look at the engineering that cook and cupertino have done. this new toy which you need nears the performance of the 12
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core cheese grater. all you've got to know in consumer speak is this thing is a beast. we underestimate that going into 2025. jonathan: do i need the screen cleaning cloth for $19? [laughter] i sit here and i laughed. the problem is, they will be cutting that out in the earnings. what will they call that? cleaning cloths? lisa: cleaning experience for your macbook. tom: i am saying that the inequalities we are talking about everyday and the market guesses we are talking about have an overlay of technology that is unmeasurable. you saw that yesterday beneath the headlines of apple. lisa: although there is a limit to what people will pay, and it will be interesting to see whether people pay $19 for a cloths. jonathan: $19. lisa: the idea that they tried to make an apple watch premium that was how many thousands of dollars and people actually said, well, the technology is
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going to be obsolete in two years. tom: lisa, one of your offspring is going to be going, i need the loaded macbook m1x or whatever. jonathan: with the $19 cloth. lisa: when i say you better clean the screen, they will say, i've got something for that. [laughter] jonathan: i've got this. it comes free with your glasses. what is that about, tom? tom: whom i to talk about it? jonathan: we are in the wrong business. we've got to make some, tom. tom: mark gurman, thank you for your reporting on apple. i am reporting the data check, and i have got to say, oil has cratered. jonathan: cratered to what, $83? [laughter] there's people on radio who might not get the sarcasm. up on crude through $83.27. euro strength, your dollars
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$1.1655. now within 1% of all-time highs. tom: we have come up over 6% off the nasdaq bottom. in boston, washington, san francisco, and all across this nation and around the world, we say good morning. on radio and tv, it is about ok, now what? brent schutte is the officer of now what at the northwestern mutual company. what is the mood of your institutional and retail clientele that is worried, cautious, or flat-out scared? brent: we think there's been worries in the market since about mid may. everything was going well in this country. everything we tried to do over the prior year was coming to fruition. we had rising vaccinations, declining covid cases, and economic growth was strong. i think people wondered what could go wrong.
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the inflation commentary was to have today, you had the two little crowd. china, evergrande, with the economy rollover. then valuations. our stocks to strong? have a rally too much? as you move towards the end of the year, investors will focus on economics and earnings fundamentals which will push stocks higher. i think that is what you're seeing right now. earnings are coming in strong. the economy is still strong. there has been a week batch because of covid, but i think that elite -- a week batch -- a weak patch because of covid, but i think that, where are you going to put your money? right now i find the narrative odd when people worry about inflation, thing the fed is going to do nothing, and they tell you to invest in bonds. to me, i still think there's plenty of room in equities. i think especially in the more cyclical areas which we have all given up on after a brief six
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months rally, after we see things like be $19 apple cloth you talk about. jonathan: i have been asking guests over the last week what are the pillars of support that will persist we can lean on through next year, not just into year end. blackrock said pent-up demand will persist and pricing power. do you share that view? brent: i do. the consumer has spent the prior 13 years deleveraging their balance sheet. their debt to net worth has gone from contee four to 12. the cost of that debt has gone from 18 to 12. the consumer has pent-up demand, and i think they will continue to see spending. the question is on these supply chains. can those snarls alleviate a bit? i think they will into new year. so you have a set up or equities continue to push higher. i don't expect the same push that you had post-covid, but on a relative basis, stocks are still attractive relative to bonds given the economic outlook
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and where the fed is. lisa: when you were saying there's a lot of pessimism in markets, where are you seeing that pessimism? brent: for example, the questions i get are not where we go right, but where we go wrong. but if you look at the aaii bullish sentiment survey, it peaked around may. we had people trading on a daily basis. we had optimism go above $50 which just kind of rare air. it spent the next three or four months falling to 22 in september. it is starting to rise again, and i think people will get warmed up to the fact that the economy is still pushing along, and i don't expect this time to be in a different. lisa: when clients hear from asset manager after asset manager that it is a stock pickers market, what do you tell them? that the index is doing pretty well and supported by a number of different pillars, or that you should be very selective or pay very big fees to somebody to invest your money on a stock
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level? brent:brent: with him to pull -- brent: we attempt to pull both levers. we tilt our portfolio towards those cyclical names i mentioned in my opening comments. jonathan: brent, always fantastic to catch up with you. always constructive on the outlook. brent schutte of northwestern mutual. i mentioned this quote a little earlier on the program. "your to date, 80 8% of the s&p 500 have experienced at least a 10% drawdown. on a closing basis, the index has only corrected by 5%. that is a historical anomaly. that from morgan stanley. a 5% move, that has been the maximum drawdown, and we are almost within 1% of all-time highs. tom: that is the rotation story here. i will say it comes within the oddity of this natural disaster of a global pandemic. part of it is this overlay. did we see this six weeks ago, this commodity left? bart malik with td bank of
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canada, running their commodities, he just recalibrate soil once again higher to $90 a barrel, but he's very cautious on china growth. he vamps it into debasing 2022 -- into the beijing 2022 winter olympics, where china will have to get their air pollution issues together to have an olympics. he says metals could come off the bid because that is a very sophisticated note from td securities. jonathan: right now, metals have not come off the bid. lisa: and this goes into the oil story and the sense that it is getting more expensive to produce oil. when you talk about the fact that opec can just bring more supply online, can they, as quickly as they are saying? because they have been raising production and not being able to meet it because there hasn't been investment in places like nigeria, etc. that really are not able to meet the targets, so this really raises the question
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about how much supply can meet the demand on a sort of incremental, marginal basis. jonathan: this always comes down to places -- down to two places, saudi and russia. they can do something when it comes to energy. lisa: the question is, do they want to? they have a lot of political reasons perhaps not to. jonathan:jonathan: this administration are caught up in the middle of this with some of their own views. tom: this is the province of ed morse. his next note is going to be important on this, on the lift up, and may the market recalibrate's. jonathan: $19. can we wrap that one up? are you buying a $19 cloth to clean the screen? come on. how much is the mac? tom: the macbook loaded, i bet you're up to $4500. jonathan: so an extra $19, why not? is that the view?
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what is the margin on a $19 cloth? tom keene, lisa abramowicz, and jonathan ferro. futures up 015%. it is a nightmare for parents everywhere. this is bloomberg. ♪ leigh-ann: with the first word news, i'm leigh-ann gerrans. as finance meters met with reddish leader -- with british leader boris johnson, they agreed that the problem needs markets and markets need new rules. barclays ceo jes staley spoke with bloomberg television. >> from the prime minister to the chancellor, they want the u.k. to be a leader in addressing the climate issue, and they are dedicating their resources of the british government and the city of london in order to do that. so they want a leading role. they got the ability to take a
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leading role. the banking community and the financial community should be supportive of the british government doing that. leigh-ann: today's gathering has drawn criticism from climbing -- from climate groups, who say the fossil fuel financing of attendees undermines global attempts to fight climate change. president biden will continue courting democratic progressives and moderates today as he seeks to reach a deal to advance his economic agenda before the end of the month. west virginia democratic senator joe manchin, whose vote is pivotal in the 50-50 senate, said yesterday there is little chance that congress completes work on bidens agenda by the end of the month deadline set by party leaders.
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>> there's no question that the bilateral relationship between the u.s. and china is complex,
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and it is going to continue to evolve. we are watching it closely, but with a long-term lens. china is an important part of the global economy. goldman sachs is a global player, so in the long-term come our presence there will be very important. jonathan: great to hear from david solomon there, sitting down with francine lacqua in london. from new york city this morning, good morning. equity market up 21, advancing 0.5 percent. there's a lift. four days of gains on the s&p, the longest winning streak when back to august. yields are lower by a basis point to one point -- to 1.80% -- 1.5880% on tens. up $0.60 on wti on the session. tom: whether you own or rent, housing data, we see that
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in 12 minutes. we go on to other housing data. all that matters is oer. linzie p aqsa -- lindsey p iegza joins us, chief economist at steeple nicholas. what is -- at stifel nicolaus. what is oer, and what does it mean for our viewers? lindsey: it is the fed's attempt to stake rising prices, essentially trying to capture overall shelter costs. for the fed, this is creating somewhat of a conundrum because we have seen oer on the rise, and the fed continues to tell us this is part of that transitory component of inflation. tom: ok, stop there. how in god's name is rent
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transitory? lindsey: rent itself they are not saying is transitory. consumers and businesses feel that right away. we pay rent on a monthly basis, save the short period where we could see a moratorium on evictions. but from a monetary policy standpoint, what the fed is saying is that the pressure on rental costs, the pressure is on food costs, the pressure is on lumber costs. the pressures will prove transitory as the economy recalibrate's to a new normal level as businesses are able to access supplies and materials because supply chain disruptions are smoothed out. so the fed is saying from a monetary policy standpoint, this is just a matter of patients. it is not a matter of adjusting policy to correct the disruptions we are seeing on a temporary basis as a result of recovering from a global pandemic. lisa: that said, it seems like the right inflation really got the attention of fed officials
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more than other types of inflation. why is this potentially more concerning to memory of the fed rather than energy costs or the price of milk? lindsey: i think the price of milk certainly is a big concern. fed officials do get concerned. but we are very used to volatility in food and energy costs which is why we often exclude them from the inflation metrics and look at the underlying core metrics. that is excluding food and energy. underlying rental costs, this is -- or housing costs, i should say -- this is an extremely large component of the overall household balance sheet. if we start to see these prices rise, this could quickly eat into consumers' ability to go into the market place and use discretionary income, thus undermining demand, and by extension, potentially the broader recovery. lisa: basically, this is something that fed officials and central bankers don't have control over because this is a supply side story and these have
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to do with disruptions that will eventually abate. at what point do central bankers have to pay more attention and say we have to respond, even if it is not our fault, and even if we can't really get ahead of it directly, but perhaps indirectly can take some of the froth or the heat out of the market? lindsey: i think we are at that point. fed officials have been clear that at this point, it is appropriate to begin to roll back some of those emergency measures put in place to combat weakness as a result of the global pandemic. but at this point, the consumer is losing some momentum from the start of the year, but still very solid footing. we have seen the housing market strong, manufacturing well above expansionary breakevens. we see a number of sectors really signaling that the was economy is on sustainable footing, so the question for the fed is what problem are you trying to solve a continuing these emergency measures. for many fed officials, they are saying there isn't a problem. tom: with that said, what is
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your glide path for gdp, back to where the equity market is now the vix? have you extended out the past from a boom economy back to whatever normal is? lindsey: we have not adjusted our forecast very much. looking at forecasts, we have seen expectations come down more near our realistic expectation. i don't want to say pessimistic. let's say realistic. we did believe that momentum would wait into the second half of the year. driven by a still solid consumer, when you were talking about fiscal stimulus waiting, there is very little expectation that the economy will be able to maintain that robust 6.5% pace we saw at the start of the year. if we are looking in the 3% to 4% range at the back half of the year, still positive.
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now as we turn the calendar page into 2022, it is very likely that growth slows to about 2%, bringing us back to that prepend him with level of growth. i think it is important to remember that the u.s. economy was already losing momentum before the crisis. we were slowing from a 3% pace down to 2% by the end of 2019. so barring the scenario of unlimited government spending and debt creation, i don't think it is realistic to expect the u.s. economy to return to a sustainable growth rate much beyond that pre-pandemic level. jonathan: lindsey, thank you. started with a conversation on housing. that data about six minutes away. on the earnings side of things, netflix after the close. lisa steam -- leases -- lisa, the stifel team putting this
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together. the stock up since "squid game." lisa:lisa: if you think about what a sleeper it was, made for a south korean audience that has gained global acclaim. don't you know everybody is watching it? jonathan: guess what? i don't have netflix. [laughter] paramount+ for italian football, peacock for english football, hulu live tv for the rest of football, hbo max for "succession." that wraps it up. there's no room. amazon prime in their because you get it for amazon. tom: even less than you, jon. i canceled one literally yesterday. jonathan: i canceled a couple of newspapers yesterday. you know what we need, lisa? a bundle. don't we? lisa: i thought we were talking about "good game. -- about "squid game."
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frankly, it is a deep commentary on society. jonathan: you watch it for us. lisa: i will. jonathan: tom keene, lisa abramowicz, jonathan ferro. housing data just around the corner. mike mckee to break that down. this is bloomberg. ♪
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jonathan: live from new york city for our audience worldwide, the economic data seconds away. the price action looks like this. equity futures advancing .4% on the s&p 500. four days of gains. with your economic data here is michael mckee. michael: good morning. a weaker start to housing starts in september. privately owned housing starts at a seasonally adjusted rate of 1.50 5 million, one point 6% below the august estimate. 7.4% above where we were last year at this time. single-family homes unchanged from the revised august figure of 1.0 8 million. the september rate for multifamily dwellings, 467,000.
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a little bit worse as well. building permits up -- actually down 7.7%. the single-family permits down .9%. september not a good month for housing overall, although given the problems we have with the potential for higher prices in construction, it is hard to know whether this means people are backing off because they are afraid of the cost or because they cannot afford it. jonathan: are prices hurting demand? that is the theme of the quarter. no big changes off the back of this. positive .4% on the s&p. the front end of the bond curve has been pinned, yields in three basis points. the story since september 22 is the move at the front end, two year yields higher. a ton of fed speak in the mix. what you think the pushback will look like this week?
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michael: i think the fed will take the same tack it has taken all along and say we believe this is transitory, it is not embedded in the economy yet. we've already seen markets back off a little bit from where they were yesterday. we will see if we can talk them back off the ledge. lisa: there is a question about the fed's influence over higher prices. it is hard to see how we have a role in higher metal prices. however housing is a different story. how much has been drawn about fed support for housing prices at a time when prices keep climbing and perhaps are climbing too high for many? michael: this is an argument that has been going on for it while. fed officials have tended to reject it, saying overall rates are affected and that means you will get lower rates and the fed is not targeting housing. their mortgage bond buying is
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not a major reason we are seeing this. there is also not much they can do about it. they cannot just target one area. the general consensus of people in the market seems to be if they can stop the mortgage bond buying it will not raise rates that much. tom: the battle center around the date not that far out, november 3, i believe that is when the red sox take the world series. how critical is your timeframe to november 3? give us the nuance and what you are watching. michael: the real issue will be the pce inflation index at the end of the month. right before the fed meeting. tom: we get that key data. michael: the cpi is already out and shows higher inflation and the fed does not seem to be reacting. most of the data that will make a difference is already out. they will not have the payrolls report by the time they meet. jonathan: michael mckee on softer data on the housing side.
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our higher prices going to -- we have caught up with goldman sachs's leader in london. also in london we have con up with boris johnson. john micklethwait of bloomberg news sitting down with the british leader. take a listen. p.m. johnson: china is a gigantic part of heart economic life and will be for our lifetimes. that does not mean we should be naive and the way we look at our critical natural infrastructure. you mentioned nuclear power, you mentioned 5g technology, those are legitimate concerns for any government that many governments have. i've said this many times. i am no sinophobe. john: you think you do are the
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last sinophile in the cabinet? p.m. johnson: china is a great country. john: what about wind power? p.m. johnson: you would have to look at what was defined as strategic or critical. our trading relationship with china, in spite of all of the difficulties, in spite of all of the angry conversations were difficult conversations about the dalai lama or hong kong, we will continue to stick to our points. we will continue to stick to our views. trade with china has continued to expand for a long time and probably will continue to expand for the rest of our lives. that does not mean we should be cautious about how we handle c
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and i and how we handle fbi from china. -- fdi from china. tom: the prime minister of the u.k. ready to greet those at cop26. joining us is john micklethwait. i put up a new shirt and set up straight for this discussion. there will be johnson, there will be scotland, there will also be the hope for a future perfect, your wonderful book of too many years ago. we need to redo. at the back end of the book, i want to talk about the backlash of globalization. what will be the backlash of climate change that the prime minister and others face? john: that is quite a good comparison. if you look at the issue in britain, the heat pumps which
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from a green point of view people are trying to put it low energy heat pumps into their houses and everyone thinks that is wonderful and green, but what is happening is consumers who are quite keen on green things, these will cost $5,000. what is happening with greenery is similar to globalization. it is something everyone thinks is a good idea. there was an era when people thought opening up economies was great and everyone approved globalization, until it happened to them. everyone approves of fighting climate change until suddenly it means the price of petrol rises. that is where it hurts. it is where the heating for your house hurts, it is where things that affect people hurt really come and johnson is caught in the middle. you can look at the democrats in congress. tom: to the elites know that at this cop26 they have to sell
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to a public that is hugely skeptical? john: one example of the elite as her majesty queen elizabeth and she was caught talking about that that nobody was coming and it looked very difficult. some people are aware of that. in general, no, it is one of those areas. you look around the world. every time it has come up and it has hit the elites harder. remember when emmanuel macron change the seed limit on various roads and ended up with the yellow vest. you look around parts of america and the debate about what happens with infrastructure and so on. i think it is a worrying area from the point of view of a global elite you. lisa: meanwhile they are hosting
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cop26 at a time there are a lot of questions about how much to open your borders. that has been an issue of serious disagreement and a lot of consternation. at this moment the uk's hospitalization and death rate from cove is actually going up after being celebrated as one of the big winners from the pandemic. how does he respond to that? john: you look at the numbers for covid sufferers, those have been rising rapidly in britain. you're right that the hospitalization and death rates have not gone up, but so far as far as you can see, the vaccine protection thing is holding current levels around 40,000 a day people are catching it. you'd expect to see many more people dying given the gruesome way in which this works and it does not seem to be happening given it is ripping through young people. everyone has schools, people we are working with, people are
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stuck at home because their children have suddenly got it. there is a degree of that, but there is also the general sense that as to do with opening up economies, people being there. the fact that we are in margaret -- in margaret thatcher's study there's a picture of her glowering down. that was the culture from which boris johnson came. he still has some quite strong libertarian instincts. at the same time he is increasing the size of government formidably. he blames that on covid. is also trying to do a version of industrial policy to push the british economy towards manufacturing. jonathan: the football stadiums are full again.
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were you at lester manchester united last weekend? john: very sadly i missed that. my wife -- my life is happy because i saw brendan rogers in a restaurant. none of this will mean anything to people like tom. jonathan: right work is always. john micklethwait, bloomberg news editor-in-chief sitting down with the prime minister. what a win for leister last weekend. tom: i watched three minutes of it before i got bored and moved on. jonathan: cap and you get bored of that match? 4-2. tom: you know. jonathan: i'm just going through the fixture list. united-liverpool on sunday. tom: the manager of manchester united. jonathan: trying to keep the old player at the top of the club but getting harder. i knew we would get to the
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important stuff eventually. tom keene, lisa abramowicz, jonathan ferro on this equity market which keeps delivering. how about this s&p? emily roland, the chief strategist at john hancock investment management. this is bloomberg. leigh-ann: president biden will continue courting democratic progressives and moderates today as he seeks to reach a deal to advance his economic agenda before the end of the month. west virginia democratic senator joe manchin, whose vote is pivotal in the 50/50 senate said there is little chance congress can complete work on bidens agenda by the end of the month deadline. a couple who broke covid-19 rules to enjoy china's tourist
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sites has become the focused of the country's latest virus crust or. huge contact tracing and testing efforts are underway after the two retired university lecturers from shanghai continue to travel even after being told their test results were abnormal. where than 1500 close contacts have been identified. it going continues its climb towards all-time highs bolstered by optimism over the upcoming launch of the first bitcoin futures etf in the u.s. the largest cryptocurrency has more than doubled in volatile trading. the april record is under $64,000. this is bloomberg. ♪
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>> we are calling for yields to continue to rise in treasuries
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but believe the fed rate hiking path will be relatively shallow. the market is trying to figure out whether policymakers will lean against the inflation we are seeing. our view is currently there is too much rate hikes priced in for 2022. tom: scott thiel, blackrock, with another good opinion. we will stop the show and do what we do too often. i do this with the major hat tip to anyone thinking about the retirement industry. maker shot up to the center for retirement research at boston college which at -- a major shout out to the center for retirement research at boston college which has done great work on america's failed retirement system. barry ritholtz has done great work saying here is the reality. the birthday boy joins us, one year closer to retirement in a
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few day. let's start, i need to be 60/40 and have a carefully balanced portfolio. that has been thrown out the window. what do i do to get to retirement if i have the gray hair you and i have? barry: i'm not quite 60. my birthday is still if you days off. lisa is not quite 40. that 60/40 is not there yet. you have three options you can do if you're looking to get more returns. first, your 60/40 become 70/30 given how low rates are. when people talk about there's no alternative come that means there is no alternative to equities if you're a bond investor. second, you have to consider alternatives. that is everything from structured notes to farmland. you have to look beyond
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traditional municipal bonds that are only yielding an after-tax return. jonathan: lisa is long copper. barry: the third thing you have to do is go out on the risk curve, go out on the duration curve, use leverage, do all sorts of tricks, which if you paid attention in 2008 to 2009, you do not want to do. that is starting to creep into more portfolios. i'm not a fan of that third choice. lisa: how much of moving to a 70/30 is that stops are better than bonds when it comes to potential returns versus bonds no longer offering the ballast they have in the past? they will not necessarily gain in a risk off environment. barry: let me push back a little bit. bonds are still a ballast. if stocks fall, we have been within 5% of all-time highs for almost a year. if we get a 25% drop or a 30%
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drop, i am confident bonds will rise. their main purpose in a portfolio is to not fall and issue yields. it is the second aspect, the coupon on bonds, that is problematic. as to 70/30, i could give you a couple of rationalizations. the best is probably for the most part the investor class lifespans have extended, it is not unthinkable that a lot of people who are pretty well invested in the market are going to live beyond 72. jonathan: better already -- tom: better already. barry: and the old days you would go 60/40 or 50-50 when someone was 65. people are engaging in high-risk exposure for longer with the expectation that i need to do this if i do not want to outlive my money. lisa: and the old days people
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cared a lot more about the dow jones industrial index, the idea that some of the old behemoths where the powerhouses of an economy that is much changed in a market that reflects that. i wonder about some of the leaders. netflix being a prime example, about report earnings, having grown dramatically, shares up almost 100% year to date. what is the risk of technological disruption to a market that hinges so much on the prowess of some of these giants? barry: start out with recognizing netflix was the technological disruptor. they went from dvds by mail to streaming and now they are just over 50% of the market, and everybody else, disney plus, apple, amazon prime, at them together and they are still not as big as netflix. eventually netflix will have to give up some market share. it is just a matter of time.
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that said, i do not know with the nest -- what the next disruption will be to streaming. netflix may or may not be in it. if we look at the 10 largest companies by market cap in the s&p 500, look at a five year basis. i through this chart up on the blog last week. you can see that changes pretty dramatically. 20 or 30 years ago it was dominated by oil companies. today six or even seven if we want to say visa is technically not a pure financial but a technology company, they are all tech companies. apple, amazon, google, facebook, nvidia. tech is what dominates these, not oil, not energy, not even consumers. tom: we are out of time. i have 18 more questions on what we do with our money in the plan for it. barry ritholtz running for bloomberg opinion with a terrific podcast that garners thousands of listeners each
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week. lisa, it is an absolutely unusual time. what i find stunning besides the simplicity that the crew has been humbled is we have seen it dovetail with a commodity left. i did not expect that. lisa: i'm trying to get my head around the idea of what is driving the inflationary push we are seeing. the fact that people have so much cash in their savings account and how much is the supply chain disruption the idea we are seeing, just people not getting back into the workforce after the pandemic. this to me is a determining factor with transitory or not. i am struggling to understand how to look at a market that looks vastly different than the one we saw 10 years ago. tom: we make jokes about $19 -- i do not even know what apple is doing. the bottom line is there is a technology overlay over everything we do. in my right that those winners
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will go out and issue debt like it is almost a layup? they will announce again jillian debt offerings? lisa: what will they do with the money? it depends what tech giant we are talking about. they buy back their shares this goes to the question of where does the potential growth go going forward, and are those tech giants and the advancements there, is that inflationary or disinflationary? tom: i have off the bloomberg, this is great function, weighted average cost of capital, they have data 6.6% and ample ability to move out of something else. lisa: i'm sure they can sell a lot cheaper than that. right now i do find it fascinating that is everybody talks about stocks, if everybody goes back to bonds, yields remain low and that it is right back into stocks. tom: future is up 18.
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we had a 15 handle earlier. 16.06. stay with us through the day on bloomberg radio and bloomberg television. good morning. ♪
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jonathan: from new york city our audience worldwide, good morning, good morning. equity futures with the left. we advance one third of 1%.
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the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: from new york, we begin with the big issue. looking for earnings to counter inflation concerns. >> there's a lot of talk around inflation. >> the inflation rate is the supply-side. >>looking for earnings to countr inflation we have not seen a hue impact from the supply chain disruption. >> a catalyst to get the markets to recover. >> look at the earnings story for the s&p 500. >> outright inflation should dissipate. >> it blew expectations out of the water. >>

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