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tv   Bloomberg Surveillance  Bloomberg  December 20, 2021 8:00am-9:00am EST

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♪ >> what the remain balanced across -- we want to remain balanced across sectors. >> the fed wanted to raise rates slowly. it is long-term ok for risk assets. >> we will get the potential for a serious rate shock, which will i think be in the short term quite damaging. >> it is not so safe to move around the cabin. >> we don't think it is time to give up on equities as a whole. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. >> good morning. this is "bloomberg surveillance"
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on bloomberg television radio. what a day it is. already at 8:00 a.m. on monday morning here in the u.s., futures on the back foot. stocks down in europe. we have questions about fiscal stimulus, and we seem to have questions about the virus. guy: absolutely. you've got like volume here in europe -- in europe, but a lot of people are off. we've gone into the cycle with the expectation that the market will be supported. if this time different? kailey: i think that is the question. and how does that change the conversation and the calculation on capitol hill when it comes to fiscal stimulus? does the bottom build back better start to change if we see some kind of growth hit in the u.s.?
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gina: we are talking 60% of gdp in 2020, so clearly the rollback of these policies is going to have consequences for risk assets, for investments, for the financial markets at large, and we may start to see that now as we look forward into 2022. kailey: we are down about 1.2% on s&p. you aren't seeing a massive bid into the bond market. the 10-year treasury yield and the state only down by about two basis points. there remains a disconnect between the stock market and the bond market. it is also interesting, interesting behavior in the fx space. it is not the dollar really getting the haven bid. it is the euro, stronger by about 0.25%. crude getting absolutely hammered this morning. we are down 4.8% on wti. let's do more on all things markets with richard bernstein
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of rb advisors. when you are looking ahead to 2022, now that there's a question about the fiscal agenda in the states and a question as to how much of a growth impact we could see from the omicron variant, do you think differently than you did a week ago? richard: i think the markets right now are caught between a rock and a hard place. in the short term, we have a slew of bad news, whether it is build back better or covid or the fed from last week deciding they are going to be tighter. in the short term, you don't have a lot of good news. however, that short-term news could cause better longer-term outlook as we go through 2022 into 2023. i think the short term could be a little rocky, but i think to try and trade that may be full steam. guy: so what do you do? just wait, see what happens into the new year? richard: to some extent, that is absolutely right. it is always cute to say we can
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trade in, trade out, but very few people can actually do that. it is pretty clear that inflation is probably going to be higher than people think in 2022. i think that is the most important thing portfolios should be structured for right now. it is not going to look that way in the next two weeks perhaps, but if we do shut down, supply disruption problems we've already had just get worse. they don't get better. so the whole notion of inflation and the u.s. being a price taker just gets worse. gina: i want to dig into that inflation column. are you thinking that we see some more deeply embedded wage based inflation start to emerge? i think much of the inflation excuses are the inflation narrative around it being transitory have suggested that
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it is all due to the supply chain constraints. but how much of this is demand and how much of it becomes deeply embedded as we look into 2022 and 2023? richard: one thing is very important, they were transitory. it is important to understand the supply disruptions have already lasted an awful lot longer than the 1973-1974 oil embargo. that was a supply disruption. that changed the way people thought about inflation for basically the next 10 years. it wasn't the beginning of inflation, but it changed the way people thought about it. so our supply disruption is already much bigger, much broader and longer than what we saw. but to get your question explicitly, we are having a perfect storm in the labor market right now. there's no one issue causing the labor market to be tight, but you can think of, whether it is baby boomers retiring, covid restrictions, immigration
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restrictions, the rise of unions, all of these you can argue are good or bad, but you are getting a perfect storm tightening the labor markets, and i think that is a substantial change that is not going to go away. kailey: supply-side issues are not something that monetary policy is equipped to address. what the fed can do is tamp down on demand. the fed policy operates with a lag when we think about monetary policy, so how does the inflation conversation actually get solved in your view. richard: i'm not sure it does get solved. i'm not talking about 1970's type inflation, but think of it as an over/under bet. you are right, all monetary policy can do is stymie demand. it is politically acceptable, especially as we head towards the midterms in 2022.
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it would be a lot for the fed to really start intervening. guy: is that actually the case? my impression certainly, and listening to the narrative coming out of d.c. at the moment, democrats in particular are focused on this idea that he needs to tamp down inflation. it was interesting to see the pivot we got from jay powell post his reappointment. the democrats, and i agree we have never really seen this before, the politics eight that they want inflation brought down. so are we in a different kind of picture here relative to previous cycles where we have seen inflation coming through? richard: i will use my analogy again, a rock and a hard place. i think the biden administration is caught in a rock and a hard place on inflation because they reappointed jay powell. we made the argument many months ago that if he reappointed jay powell, he owned inflation. if he didn't, it was the previous administration that would own inflation. jay powell was appointed by the
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previous a adminstration. i not reappointing powell, he would say we have a clean slate. we have to fight inflation. but now he owns it. so i think the rock and the hard place is the right way to think about it. gina: talk to us a little bit about your investment strategy. if we are going to have a more deeply embedded inflation, if we are going to have faster inflation, but maybe not 1970's inflation, what you do with your asset allocation, and specifically within the equity market, what is your mix? richard: obviously we want to have pro-inflation assets in the portfolio, and i think most investors are very underweight pro-inflation assets. but at the same time, getting to some of the other questions we were just talking about, one has to renumber that inflation really pops up in a late cycle environment. so i think you want to have spare tires in the portfolio. we are overweight energy and industrials and some emerging
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markets, all of the traditional perrault inflation -- traditional pro-inflation type assets read but the other things are consumer staples that we have started to add to the portfolio. kailey: jon and tom aren't here, and that means we have not talked about football yet. when i think football, i think a very different kind of football. but i know you like the spurs, or as tom keene would call them, the tots. do you have any thoughts you would like to share with our television and radio audience this morning? richard: well, any spurs fan out there will know that being a spurs fan is like being sisyphus. we get to the top of the hill and then we seem to roll back down. if new yorkers think it is hard being a mets fan, the spurs are -- on one's personal psyche. guy: i've got to say, 2-2
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against liverpool, i thought it was a good game. it was a fairly controversial game. richard: he's a very good manager. we will see what happens. but that's the spurs story. there's always hope. we will see what happens. kailey: richard bernstein leaving us with a little bit of optimism in the sports world. thank you so much for joining us, and happy holidays to you and yours. there's also some breaking news we want to touch on. novavax's covid-19 vaccine has gotten a positive recommendation in the eu. it just days ago got the emergency from the world health organization, but that obviously giving a nice lift to that stock. stocks by and large not getting a lift this morning. gina: i think it is going to be taft -- going to be tough. the market has already been butting up against resistance, with concerns about growth emerging while inflation remains
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hotter than expected. as they continue to battle between these two fundamentals, we have kind of gone nowhere since late october. it is hard to imagine we get much higher in the face of all these concerns. kailey: one of those concerns is what is going to happen with fiscal stimulus in the u.s. representative alexandria ocasio-cortez in the house has been speaking on msnbc. she says bidens agenda is not beyond repair, but also says democrats have every right to be "furious" with joe manchin, who said he was a no on build back better over the weekend. we will cover this story and how it translates into economics and the markets. and we had a trays, academic policy director at veda partners, will be joining us next. s&p 500 futures down 1.3%. the 10 year right at 1.38%. this is bloomberg. ♪ laura: with the first word news, i'm laura wright.
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senate majority leader chuck schumer says senators will vote on tax and spending legislation next year, and warns that if republicans use the filibuster, they will change the rules. this comes after joe manchin announced he would not support it in's plan -- support biden's plan, essentially fatal in a 50-50 senate. goldman sachs lowered its gdp outlook for 2% in the first quarter, 3% in the second, and two point 75% in the third quarter. the world economic forum in davos, switzerland has been postponed because of the outbreak of the omicron coronavirus variant. organizers are now planning to hold the event next summer. moderna says a third dose of its coronavirus vaccine did antibody levels against the omicron variant. the company describes the results as reassuring. that adds to a growing body of evidence that three shots will
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be needed to neutralize omicron. moderna is also working on a vaccine tailored to the new string. bank of montreal is spending billions to expand its presence in key u.s. growth markets. it has agreed to pay 16 billion dollars to buy bnp paribas' bank of the west units. bnp paribas plans to return some of the cash to shareholders through a buyback. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm laura wright. this is bloomberg. ♪
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>> if i can't go home and explain it to the people in west virginia, i can't vote for it.
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and i cannot vote to continue with this piece of legislation. i just can't. this is a no on this legislation. kailey: democratic senator joe manchin of west virginia says he is a no vote for the build back better plan. jan hatzius at goldman sachs quick to react to that news, downgrading his growth forecast for the u.s. economy for the first quarter, second quarter, and third quarter, seeing a failure to pass build back better has negative growth implications. guy: it was a fairly swift response. 100 bips coming up there forecast. if you pairing up with omicron, you think about the impact of what is happening there, the fiscal response is not there anymore, the monetary response isn't there anymore, maybe we are heading into a lower growth environment. my question is, are we heading into a higher inflation environment? kailey: all questions that
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investors are weighing this morning. as they do so, they don't want to be holding risk assets. you are seeing some safe haven buying coming into the euro, which is stronger against the dollar by about 0.25%. a little bit of a bid in the u.s. treasury market, down about two basis points on the 10 year, while oil is done more than 4% on wti to $67 seven nine cents -- $67.79 a barrel. henrietta treyz of veda partners joins us now. it does not seem like this is entirely a done deal. chuck schumer wants to put build back better to a vote in january. do you agree with goldman that if it doesn't pass, we are going to see a real readthrough into growth in the u.s.? henrietta: i think that is a perfectly valid argument and good akamai policy thinking. the child tax credit alone, one of the biggest component
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changes, would not benefit -- when that benefit lapses, if it moves to an annual payout, never mind the drop from $3600 a year to $2000 a year, it is that monthly payout that so many families use to spend on food, i think that is going to have a material impact to disposable income. i think that is going to be a major driver. then the near-term impacts of incredible amount of investment across all kinds of energy sectors, the health-care space, it is hard not to see what this touches, so i think it is very appropriate to have a downgrade to the akamai forecast on the back of this. guy: were you surprised how strong the language was from the white house over the weekend post to the fox interview? it feels like bridges are being burned here. if they are, is there a way back ? how do they reconnect the white
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house in joe manchin after this? henrietta: i spoke with a number of democrats in the immediate hours after joe manchin's commentary, and i think the white house felt very stabbed in the back that they had meetings and conversations with senator manchin, with president biden hearing the new secondhand from a tv screen instead of getting a heads up was a huge blow. obviously detentions have been fraught, and senator manchin has an election coming up, and i think it makes sense for him to cross the rubicon into bnn but -- into being an impotent -- into being an independent. i think that is the pass he is drawing for himself, and it makes political sense for him, but absolutely burns bridges with the white house. you see that from the press secretary's response and majority leader schumer's response as well.
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the scenario where he becomes an independent that caucuses with democrats makes a lot of sense to me. guy: if that is the case, that he's going to be an independent, how should we thing about what the president can do next i read a lot over the weekend talking about the fact that what we can do here is fewer programs that are smaller, but last longer. what can be reformulated here to make it work that is actually going to provide some benefit to the american people? henrietta: i think you have a really big problem that beyond policy, the senator manchin voice yesterday at about the 10 minute mark, he said he doesn't support the current strategy, the process of reconciliation. he said we should move through the original committee process. what you're talking about there is abandoning a democrat only package and going in a scenario where you need at least three or four or maybe even 10 republicans to get on board
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before senator manchin will support anything. that is a huge hurdle and will have more material implications than just the policy. on the policy front, i think you are not going to be in a situation where you have a permanent child tax credit increase. that bill alone will be $1.6 trillion. so the period of time where you get one to three years worth of policy is par for the course. it is very normal in washington. it was part of the 2017 tax bill and basically other piece of legislation i've ever seen. so to anticipate that this will all be short-term makes sense. i think that senator manchin has an issue with the overall size of the bill, so what i see as the path forward from here is you take the current package, which has a host of key provisions in it, clean energy, retrofitting for your home, and also the business expense deduction that expires in the 2017 tax bill, cobble those together, get a portion of the child tax credit, strip out the
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salt deduction, and try to put that bill on the floor may be at about $700 billion, and see where that get you. gina: so where is the dollar figure? if we are going to have this cobbled together bill that is substantially smaller, has less provisions within it, what is the total dollar figure for spending from the government coming in 2022? henrietta: somewhere between $300 billion and $700 billion is my range, down from $1.6 trillion. now that we are going to potentially need republican votes, we need to make this bill smaller. 700 billion dollars is probably the top line, and $300 billion is the smallest. one thing i would encourage investors to keep an eye on is an emergency supplemental out of the tornadoes that hit kentucky and nearby. that is legislation you can get republican votes for, so it is not outside the bounds of
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conventional thought to see a bill passing with 60 votes in the first quarter of next year, and if you can tag on a host of at the other components that have bipartisan support, you can get that done. kailey: thank you so much to henrietta treyz for joining us this morning. that raises the question, what dollar amount is priced into equities at the moment, and how much may we need to see them come off if it is smaller? gina: i think it certainly is less than $1 trillion. he whispers in the conversations i had with my clients over the last three weeks is that there is no way this is getting passed in december anyway. it is going to get kicked into january. so i am early suspicious as to whether this is really about build back better or if it is predominately about omicron, and then build back better as another excuse to sell risk assets because i don't think the equity market is counting on a tremendous amount of spending coming of the federal government anytime soon. kailey: people may just be taking profit as we get closer to year-end, but maybe it is not going to be a sleepy year end
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like some of us may have hoped. there's a lot going on. we will continue to talk about the economy, the implications of fiscal and monetary policy starting to wane here in the states. s&p futures down about 1.25%. on tv and radio, this is bloomberg. ♪
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♪ kailey: good monday morning to our audiences on tv and radio. this is "bloomberg surveillance. " market facing twin threats on the omicron and on waning monetary and fiscal policy. the s&p 500 futures down 1.3%. 4549 is where we sit at the moment. some haven bids coming in. the 10-year treasury yield down just about a basis point. oil down to $67.79 a barrel. we have to talk about what is going on in turkey. we have seen multiple circuit breakers triggered in the session this morning as erdogan makes more comments about his continued push for lower rates
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to fight inflation. this time saying islam demands that he take this policy stance. guy: we are seeing a huge impact into the currency market, but i think the difference this time around is that we are now seeing negative reaction coming through into the equity market. the chart we just had up on the wall goes back to 2017. it flags this real parabolic move we have seen, which has been an area that a lot of people in turkey have used two park funds, protect them from the currency volatility. we are now seeing the volatility from the fx market coming into the equity market, and not come i have to say, is a fairly -- and that, i have to say, is a fairly big development. kailey: of course, turkey is going a way that a lot of central banks are, that tightening is the name of the
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game. the fed looks to raise rates potentially three times next year. how does the omicron variant maybe change that calculus? lara rhame of fs investments joins us now. given how rapidly this variant seems to be spreading and given the likelihood that the build back better agenda in its current form may not be passed on the fiscal side, does the fed have to think differently than it did just a week ago on wednesday? lara: i think the fed is well aware that the pandemic and variance will continue to be a challenge, and these are going to come fast, and they could also happen fairly quickly. i think what they are really focused on now is inflation. of course, step one is this really rapid taper. they want to get that out of the way to give themselves the flexibility. getting the taper out of the way and put march on the table as a rate hike option, i think that
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is where we start to get more specific with timing in thinking about the variant, where we are coming to end how resilient we have been in the face of these challenges because as rapidly as the iris continues to evolve, our ability to work around it also continues to improve. kailey: so we are getting better at handling the virus side of things, but we've also had monetary and fiscal stimulus at our backs for most of this pandemic. now the monetary side and theory is going to start to wane. goldman sachs downgraded its views on u.s. growth for not just the first quarter, not just the second quarter, already out to the third quarter on the basis of back better not getting past. you agree with that thesis -- do you agree with that thesis? lara:lara: i think it is strong to say that adding bill but better to the physical plan adds 1.5% to gdp. my forecast was for 4% in the first half and 2.5% of the
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second half. i think our economy, while still growing at a healthy clip, is just going to be decelerating back towards our long-run potential. that is a combination of the lower labor force participation and the fact that these myriad tailwinds are dissipating. you look at the fed rate hike cycle, that is going to be ahead of the economy. maybe not next year specifically , certainly towards the end of next year that could materialize , but i do think we are on a trajectory for slower growth, which is going to feel weird after six quarters of extraordinarily supercharged exponential growth. gina: in the interest of trying to get a sense for how much build back better contributed to optimism in the asset markets and contributed to forecast optimism, how much are you talking to clients about build back better specifically?
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from your perspective, how much optimism was tied to this package getting past? lara: i think the optimism has slowly been fading. i think for economists, we have just been hammering that we need infrastructure spending, and it is good not only for the economy in the near term, but for long-run productivity growth. for the markets, there's been a real focus on real assets, and that has been happening partly because of inflation because it is an underappreciated sector, and i think build back better has -- that optimism. real assets is a place that we see a lot of interest, but i think at the end of the day, people have been seeing this bill struggle along for the better part of a year now, and the reality is that optimism i
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think has faded some time ago. it is really tempered, cautious hope that something will get done. gina: when you are talking to those clients about the biggest upside and downside risks to the economy going into 2022, what are you talking most about? lara: inflation is the topic. i am trying to get them to move away from just focusing on inflation and how we manage that in investing because what we actually see is that inflation, in a high and rising inflationary environment, is what is detrimental to equities. it is the place where investors typically underestimate the impact of inflation on forward valuations. for that reason, we really need to rotate out of this traditional index funds and into something more active and really captures the fact that equity markets for a long time now have
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seen this huge dispersion underneath. we have a small number of supercharged arch cap equities holding the whole thing higher, and underneath, there are a lot of equities which are struggling at this point, and annual returns are not looking as good. from that perspective, fixed income is really one of the strong points here. gina: i'm glad you brought up the divergence within the equity market because a clear divergence has emerged between small caps and large caps as well. when you're thinking about capitalization going into 2022, and follow that on with style, how would you recommend crafting that allocation going into the year ahead? lara: for us, we are really focused on the inflation protection, so focused on real assets. i think focus on energy, which has come a long way, but i think is still relatively undervalued. it is a place where, given that it is just starting to feel really late cycle, i think the
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economy is going to be able to handle rate hikes. i am just not sure the market is going to be able to handle it. we need to brace for that volatility. i think for us, it is a twofold story because we really want to keep investors grounded in opportunistic credit, in lower duration credit options, and we want to maintain the health on the equity side when it comes to the inflation challenge. guy: cannot just take you back to the taper? how much flexibility do you think the fed currently has in the way it is thinking about that paper? it has -- that taper? it has accelerated it. but if we do see omicron taking off in january, how much flexibility is there any process? can the fed may be backloaded a little more, maybe deliver more on the monetary front if we have to deal with that in january or february, and really push hard
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into the end of that taper and into ultimately where they were a few days back? lara: if i were the fed, i would be kicking myself for not having to taper significantly earlier. i think now they need to get it out of the way. they feel like they want to really pivot. the levers they can pull that will do something to the underlying economy is really more a financial market help. thought this point, i think they really need to address the inflation and be able to give themselves the flick's ability -- the flexibility to do that. i've heard your guests talk about how the fed is between a rock and a hard place, and i think this is the moment where they need to give us clarity on how they are going to manage what is absolutely going to be financial market volatility.
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how they are going to manage through that, because it is just a question of when during their rate hike process. they are going to be focused on inflation. needs repair markets for that so they don't just plank in the space of volatility -- just blank in the space of volatility as we have seen in the past. kailey: thank you so much to lara rhame of fs investments. i think it raises a really interesting question when we talk about the tools the fed has at its disposal. it is not just finishing the taper, pushing towards rate hikes. they also have an $8 trillion balance sheet that is going to have to start rolling off at some point. guy: absolutely. qt, wind we wind up getting to that point? at the moment, the sequence is fairly clear. you end up with a paper, then you end up with rate hikes, then you end up with qt. i wonder whether we could switch
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that around a little bit, but certainly that qt process, as somebody much smaller than me once said to me, you buy when the fed is buying. you do the exact opposite the other way round. so i think that could be a critical moment as well. kailey: there has been this conversation as to whether tapering is tightening. is tapering tightening for the equity market? gina: absolutely not because the fed is still throwing cash at the equity market. but qt is absolutely tightening, and that is the critical moment we want to watch for. does the conversation change to qt going into 2022, or does it not? because that could be very meaningful for risk assets. kailey: and will it translate into the bond market? the 10 year at 1.3970%. this is bloomberg. ♪ laura: with the first word news, i'm laura wright. the u.s. senate will vote early
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next year on president biden's economic agenda, despite democratic senator joe manchin's rejection of the nearly $2 trillion package. in a letter today to fellow democrats, majority leader chuck schumer made it clear he will force mention to go on record with his objections. losing support is potentially fatal in a 50-50 senate where republicans uniformly oppose it. president biden's top medical advisor doesn't expect coronavirus lockdowns will be necessary again. still, dr. fauci told abc that hospitals will be tested by the likely rush of cases from the omicron variant. infections have hit pandemic hi records in some states, including new york. in chile, the main stock gauge opened five points lower today following the election. there's a mandate to push for higher taxes, green energy, and greater equality. airlines in the u.s. are ramping
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up for the new 5g wireless service. they say the whiteness -- the wireless signal threatens to into craft -- threatens to interfere with aircraft. the wireless industry insists those concerns are unfounded. elon musk says he will pay more than $11 billion in taxes this year. that could be a record payment for the u.s. internal revenue service. the world's richest person and tesla ceo has been selling millions of shares to cover taxes related to his excise of tesla stock options. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm laura wright. this is bloomberg.
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>> herd immunity is kind of an elusive goal that was going to
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leave a lot of people very sick or worse, so i think all pandemic and at some point. this one will, too, but we have many more months to go and potentially new variants done the way. kailey: how close are we to the end of the pandemic? that was johns hopkins center health security's senior scholar, trying to help us understand the threat posed by the omicron variant. we are joined by dr. peter hotez, dean of the college of medicine at baylor. great to speak with you. from your view, are we overestimating or underestimating the threat of the omicron variant right now? dr. hotez: i think it is not so much that we are over underestimating -- over or underestimating. i think we are missing the third rail, and that is where our vulnerability is. let me explain. the first rail is the delta
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variant. that is still with us. that is surging. now you've got omicron, which is so highly transmissible. now would you are starting to see a lot of people getting infected and semester ordinary numbers put out there by the nih director over the weekend, and terms of number of new cases on a daily basis. but here's the third pace that i think it's our greatest fuller ability, and that is our health care workers who are getting symptomatic covid. not necessarily sick enough to be hospitalized, but sick enough to be knocked out of the workforce for a period of time so they can't come into work. that is happening on an already depleted health system infrastructure. we have lost some say 18% of the workforce already. now when you have these health care workers at home sick with rick through covid because the immunity wanes pretty quickly against a couple of months, according to new data coming out
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of imperial college, that is the weak link. we are not going to have the health care personnel to take care of all of the sick. gina: let's dig into that little bit. i have two questions that naturally result from your commentary. the first is where is the link the weakest? nationally, are there areas of extorting their weakness in this country that we need to be concerned about, either regionally, suburban versus urban? and does that weak link necessitate shutdowns? i say this because it does seem that risk assets are generally assuming that the u.s. economy will not have to shut down again , we will not be forced into isolation. but i just wonder, if our links are weak enough as we ultimately have to protect the health care workers, is the mechanism of shut down the only way to do so? dr. hotez: the surges are happening in both rural and urban areas, so here in texas, and the panhandle, we are already seeing pretty bad surges
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on hospitals in places like amarillo. in houston, our texas medical center, there's a lot of heft here, so it is probably going to happen here in houston last because we have so much potential for capacity. even in new york and new jersey, where you are seeing very high rates of omicron accounting for the variance, i am really worried about that. the problem is the country has no appetite for shutdowns. i think that is why you are seeing tony fauci hold back on even talking about that. there's just too much political pushback right now on doing that. so i put out an article in "the l.a. times" over the weekend to see if there's some out-of-the-box things you can do to keep our help -- our health care workforce in the workforce, and one of them is should we consider a fourth immunization, a second boost, because we are
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seeing the very dramatic drop off from data from the u.k. and germany after the pfizer boost. it is good for a couple of months against omicron, and then drops off very quickly. so would a second boost keep everybody in the health care workforce for that period of time, knowing it will only last for a couple of months, but key people on the job? guy: in terms of the infrastructure to deliver that, is it in place? how easy would that be to manage? dr. hotez: i think it wouldn't be that hard to manage. i think the problem is the public perception because you are hearing from dr. fauci, from dr. collins and others, from the cdc director over the weekend, how hard it is to even encourage americans to get a third immunization, to get that booster. only about 30% of those who have gotten two doses have gotten three doses. i think there will be a lot of hesitation to make that recommendation because it would
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just add to the confusion and maybe turn people off of getting a third immunization. so a lot of this is optics and how you communicate that to the american people and the health care workforce. kailey: you mentioned the situation here in new york and new jersey, and i have been seeing lines wrapped around the block for covid testing. and it was friends waiting a week to get a pcr tests back. as we face this threat of a more rapidly spreading variant, do we have the testing capacity to respond to it appropriately, for people to be notified that they are positive so they can take the proper steps to isolate themselves? dr. hotez: i think you entered your own question just by telling me that people are going around the block, and the end's are is obviously not. we have never figured out testing. i don't understand why. why you can't walk into cvs or rite aid or duane reade or wherever you live, lay a couple of bucks on the counter and say give me a home testing kit that will last me a dozen doses.
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not without a doctor's prescription. it was never rocket science to know what we needed to do. i just don't know why we could never organize ourselves as a nation to do so many things about this covid response that other countries have. kailey: thank you so much for your extreme evaluable insight. he's joining us from the baylor college of medicine. i was just speaking about the situation i see playing out here in new york. in the u.k. in particular, this tuition is arguably a whole lot worse. i wonder if we are going to be just a couple of weeks behind you. guy: that has always been the argument, but that point on testing does seem to be really important. the u.k. has done many things wrong, but testing, we are actually able to access for free tests in fairly plentiful supply. that is critical, particularly going into the holidays. it allows families to manage that process into christmas. are you positive or not
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positive? can we meet? can we not meet? that is one of the critical factors for the next few weeks. people need visibility on what is happening. kailey: what is not positive this morning's equity futures. do you think that it is this omicron risk that is really weighing on the market, or is it the physical conversation and joe manchin saying he is no to build back better? gina: i think it is pretty elite omicron -- it is predominantly omicron. it has been very weak for two months now, but friday's price action was quite weak leading into a weekend that is weak. i think investors may take it vented of the fiscal news as a sort of trigger to lighten up positions based upon the deteriorating growth outlook as a result of the virus spreading very rapidly, and particular here in the northeast. kailey: people may be taking a chance to take some profit as we get closer to year-end. if this morning is anything to go by, it will be quite an interesting last couple weeks of the year. they cue so much for joining us on bloomberg television and radio.
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coming up, alec steele will be joined by lori calvasina, the u.s. equity strategy had at rbc capital markets. s&p futures are down about 1.25% at this point in the session. this is bloomberg. ♪
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alix: from new york city for our viewers worldwide, i'm alix steel in for jonathan ferro. "the countdown to the open" starts right now.
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>> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. alix: equity futures deeply in the red. let's begin with the big issue. a rocky conclusion to 2021. >> there'll will be a bit of a roller coaster ride. >> a continuation of volatility. >> the cycle is about the change in tone. >> the fed is trying to buy some optionality. >> they left a lot of options open. >> the timing of things is been a bit complicated. >> the market is still uncertain about how to process the variant news. >>

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