tv Bloomberg Markets Bloomberg December 28, 2021 10:00am-5:00pm EST
>> another rally on our hands. this is a special simulcast from bloomberg television and radio. matt miller in berlin. paul in new york to guide you through this light volume and sometimes high volatility market. we see things going up. it started three days before christmas but in the world of santa claus rally. peter: we have the s&p up .2%. nasdaq lagging a little bit. green on the screen despite some of the challenges we see the negative data points on the omicron variant. i think people are generally trying to look to the other side of that and that is where the
market is focusing right now. matt: absolutely. i will say that i think one of the pieces of news around omicron was positive. we got the most daily infections ever globally, 1.4 million new infections, but cdc guidelines saying after you've gotten infected if you are asymptomatic , then you can return to work within five days rather than having to wait 10 days. that has to be good news for airlines, retailers, manufacturers, etc. didn't other -- the other thing, are you not verified on twitter? peter: reveille not. why would i be verified? why would jack dorsey verify me? matt: it is confusing. i expect a person as important as yourself to be verified. peter: company can there be. when i was thinking about the quarantine being lessened, i was
thinking about sports, getting athletes back into the games so they can play the ballgames. i think it was driven by the nfl and nba and a lot of people saying, we need to get the players back because we are canceling too many games and the seasons are at risk. when i saw that news out of the cdc, i think the nfl maybe made a phone call or two. matt: i guess you can tell a lot by a person when you hear how he or she reacted to the news. i was thinking about the rouge ford production line and getting them out the dealer lots. there are so many -- so much damage that we are not -- there is so much a demand that we are not seeing get out. peter: ford f1 50 four you. matt: maybe.
i don't want to claim an allegiance. i am also looking at a gmc yukon. there is the possibility because they have a 6.4 liter. the biggest and light-duty trucks. i won't get into the car talk. abigail doolittle is standing by. abigail: your car talk is compelling. stocks are higher. another all-time high for the s&p 500 come up if it day in a row, along the street since early november. the bulls are out once again, but light volume, 40% below the 20 day moving average. also higher the nasdaq 100. mixed markets turning to green markets. speaking of green, oil up more than 1%, the best stretch, for a fifth day in a row, since the end of october. traders are relieving that may
be the omicron variant is not going to disrupt the economy all that much. moderna up as a vaccine maker. apple, don't ever so slightly. if the stock can somehow eke out , it could pass the $3 trillion mark. incredible that this is the world's largest company, simply up, up and away in the last three years. it has a larger value, market cap of eight country market caps. pretty ridiculous. bitcoin down 3.5 percent, below the $50,000 -- bitcoin down 3.5%, below the 50,000 mark.
marathon digital down 6%. microstrategy, of last from the past. a software maker, another have bitcoin on the balance sheet, down 3.2% in sympathy with the coin. peter: we appreciate that market update. looking at the spx year-to-date, up 28%. you have to say, what do we do as we flip the calendar for 2022? let's check out with anderson lafontant, from miracle mile advisors. what do i do in the equity market as i just had a riproaring 2021? anderson: we are saying the same thing. omicron is spreading like wildfire but it is clear that it is not as serious as delta. it is still a puzzling time for
investors. you look at 25 people you have -- two to five people you know have omicron and we have to find opportunities pay one area we like is energy. there has been significant diminishment and usage during the pandemic. we think it will take a few years for supply to catch up to demand. we expect a high in 2022 and 2023. we still think in a longer term there is room to run. we think this will be a good area that investors should looking -- be looking at for 2022. matt: you expect demand to despite the omicron variant? you think the severity of the disease will be relatively low enough that people will just
weather the storm for three to five days, a couple weeks and get back on the planes and get in the stores and hotels? anderson: exactly. i am definitely not a covid specialist for what we are seeing is they are just not as severe. we are just speaking about the cdc reducing quarantine from 10 days to five days. that is pretty positive in terms of a symptom editable that are vaccinated and boosted. if you go to the airport in terms of actual real-life experience, you are seeing many people, a shortage of employees and lines trying to check your bags and get on flights. we think this will continue to happen. omicron is a little scary when it initially came out in the markets reacted. now we are seeing you can live with it and move on. we think energy continue to outperform. peter: what are the risks for
2022, aside from the pandemic? there is a lot of geopolitical risk out there. rising interest rate risk, what is the biggest thing you are paying attention to as a risk in the coming year? anderson: the geopolitical risks with china are very real in terms of transparency, the relations with the united states. one of the bigger risks that you have been seeing in the headlines is inflation. it is really high for the lasting impact of the pandemic with the supply chain issues. people are having a hard time keeping up with increased demand, transitioning from working to home and now back to where they should be. an area where this is apparent is used car. if you have a cart you are able to sell it for higher than you originally purchased it three to five years ago. that continues to happen in lots
of areas. inflation is real. we will watch how it plays out in 2022 and 2023. matt: thanks so much for joining us, anderson lafontant, miracle mile advisors. i think she is right. as someone who has cashed out a few used cars, it looks like people are making money on them. peter: so you saw the porsche? that's epic. matt: let's just say it is out there. carnival cruise fleming 4.1%, the highest in over one month. this is bloomberg. ♪
david: this is an interesting book in the sense that it came from a series of lectures you game -- gave after someone who wasn't ideological opponent of some of your views, and that was justice scalia. were you a friend of his, even though you had ideological differences? >> i think so. we would debate those differences good i thought we had a terrific debate. in lubbock texas, there were several thousands who had never seen the supreme court justice. we talk about our differences. i say, if i had your theory, think george washington knew about the internet for free speech? and he would say, i knew that. good point. then he would say, i am not saying my theory is perfect. he would say, you know the two
hunters hunting bears and one is putting on his tennis shoes and said where are you going? set up there is coming. you can't outrun a bear, but yeah i can't outrun you. that was his view of my way of deciding cases. i never, and i still 28 years now, i have never heard a voice raised in anger and that conference room. i have never heard one justice say anything mean. david: no one is snide at the table? just as bayer just justice bayer -- justice breyer: we get on well personally. we are friends personally. we disagree on some things, not as many as you would think, plus
some. david: that has not always been the case there there was a supreme court justice who would first -- who would refuse to be in the presence of another. you have been saying since you have been on the court 28 years, people don't yell and scream at each other. justice breyer: they are not rude to each other. it is a professional job and do your best rationally. if you want people to listen, the best you can do is to think through this problem, and listen to where the other person is coming from and see what you can contribute. david: sometimes dissents are on the person who wrote it, no one takes that personally? justice briar: -- justice b
reyer: i got that a lot. i would say i know you are not aiming that question at me. ok, i get it. you don't understand that some people suffer from a disease. it is called good writers disease. before good writer finds a phrase, he won't give it up. let him destroy himself and the world come to an end, it is like a good comedian you can't give up that. he is a very good writer. he has this race and we all know it and don't take it personally. david: do you have a lot of unanimous decisions or do they not get a lot of attention or do you have 5-4 that gets all of the attention? justice breyer: what you read about is the ones that the press
thinks the public would be interested in which usually has a political content. one of the most important decisions i wrote this last year was called google versus oracle. it took a year for me to write that. it was about copyright and something called the programs interface programs. i was told that was very, very important. for me, it was like learning latvian.
matt: welcome back to the special bloomberg markets simulcast. we are broadcasting on bloomberg television and radio and we are happy to serve you throughout the christmas week, from christmas to new year's eve. there is not really a name for this what should be a vacation week. peter: i miss the email
requesting this week, so here i am but happy to be here. what is it like an berlin in regards to omicron? here, people are testing lines around the block. what seems different is people to set the attitude of, we are just going to live through this. matt: here as well. you can see the alarm has been raised, especially crossing into the borders. you are told in no uncertain terms you need to have a vaccination or proof of a covered infection. otherwise you have to quarantine . people are wearing masks anywhere, including on the streets. i think it is a requirement now. you certainly have to wear them anywhere else. the government is careful to not lock down the economy. unless you are unvaccinated in germany, you are not under any kind of official lockdown. peter: it is the same here.
this is a variant that people are just saying we have to learn to live with it. i think the hope and expectation is this will burn out faster than some variance and we can start making progress again. matt: we had seen interesting news items, apple closing all of its retail locations in new york city. you can still order online and pick it up but you cannot go into the retail store to shop around and you obviously can't go to a genius bar. goldman sachs is reversing is returned to work to office mandate. distill quote to the office, but you have to go to -- have a booster stop -- have a booster shot. let's go over to our wall street reporter who knows everything that is going on. how is wall street reacting to
this? sonali: right now it is anyone's best guest -- guest. goldman is saying that people have to be boosted by february 1 and test twice a week. they're trying to return as much to business normalcy but normal will look like it has a lot more rules around it as we try to guess -- get past this virus. a lot of restrictions we are seeing right now in terms of working from home were just through the holidays. you are going to see a lot more people say they want to work from home for longer. peter: as i think about bankers
in new york who have been aggressive in terms of getting people back to the office and to the other side with citi taking a laissez-faire attitude. our seeing any impact of that at all? sonali: if you want to come into the office, and remember it is hard for young people to get a new job and not have the mentorship, and you have goldman that has a lot of investment banking and traders saying that you need to be in the office to be more competitive. it is hard to know whether it pays off or not. if you look at the numbers, goldman has been winning by a landslide. they and morgan stanley are tied on deals as well.
they still want business, but the firms that have come in have definitely run business at a greater scale. so again, d want work for a bank that is fair or have the more laid-back attitude. it is a personal preference. time will tell. after omicron, a more -- if a more relaxed environment stays, then let's see what that means when things sort of return to normal. peter: i will always choose laid-back. sonali: i am the opposite. i want to be in the office. matt: i will go into the office but i want to dress like a
midwesterner. the cdc has reduced the guidelines, you now only have to wait five days after testing positive as long as you are asymptomatic to go back to work. previously the recommendation was for 10 my thought is that there will be a lot of companies and me -- maybe even banks on wall street that will have more conservative rules than the cdc recommendations what are you hearing? sonali: if you have people coming back into the office who are sick, then that risks other people getting sick and also means that business continuity is very difficult when you have a whole team that is out. you don't want a whole team not to show up because they have covid. that caution may be warranted in that regard could want to protect the people coming into
the building who you have asked to come in. but the cdc guidelines give managers cover to follow the bare minimum. it creates a lot of difficulty. peter: thank you for joining us and giving us the update on the back to school talk for investment banks. coming up, we will try to get smarter on the variants and boosters paid we will talk to rosanna peeling. this is bloomberg. ♪
there wasn't any at all. you would see the corpses of verses, cows, camels. it was scary and you felt pity for the animals. policymakers have areas in mind when it comes to talking about climate change. the deputy agriculture minister said efforts now are directed at solving the consequences of time at related disasters. experts worry this will never address the root of the problem. he says the problem is big because of the past couple of years that have been dry. most importantly, the pastures are not rejuvenating. while the russian government has drafted a more aggressive decarbonization plan setting the net zero carbon emissions by 2030, that may come too late for
the herders that make up the region. he said the main enemies are sand, wind, and heat. there has always been heap, but lately it is getting really hot in the summers in the winters are warmer. peter: welcome back to bloomberg markets. we are simulcasting on bloomberg radio and television. we will bring you the market action throughout the week. looking at the stream, mixed. the s&p and the dow up slightly about .5%. the nasdaq just a little in the red. let's get the latest on the pandemic and the variants and boosters good we can do that right now with rosanna peeling london school of hygiene and , tropical medicine director. thanks for joining us.
here in new york city, the lines for the covid test are literally around the block, but that being said, everybody has a mask on outside and that is something new. it just feels like here in new york and maybe elsewhere, that people are saying i am going to live with this variant. i'm not locking down. i am not shutting down here and how you feel about this variant and how the response should be? rosanna: i think everybody should do everything they can to stop or slow the spread of this variant because with the numbers we are seeing, eventually the health care system would be really stressed. we really need to think about even if possible wearing a mask, distancing, and also hand
hygiene, and washing your hands as much as possible. it is for personal safety and also for not compromising the health care system so that those who need care can really get it. peter: what kind of data do we have on omicron? matt: what percentage of omicron cases end up in the hospital was because people are getting infected left and right and not really dropping like flies. everyone seems to be getting it but nobody is going to the hospital. rosanna: i think right now because many people are doing rapid testing themselves, they may not necessarily report them to the authorities. so case rates are not as accurate as before when you had
everyone going to testing centers. in terms of estimating the percentage of those infected, going into hospitals, that estimate will not be as accurate, we do know that even with the amazing kate -- case rates, we are not seeing hospitals overwhelmed the way they were at the beginning of the pandemic, with quite a few people being sick and having severe disease. i must say that for those people who are vaccinated, even though the omicron may not as susceptible to the neutralizing antibodies that are induced by vaccines, the vaccines still protect. i think that we are fortunate in that respect in that many people
in vaccinated or plan to be vaccinated and quite a few people are ready getting boosters. matt: do you know how many days after getting this roughly you are still infectious and liable to give it to someone else? we just had new cdc guidelines and they have reduced the amount of time if you're asymptomatic from 10 days to five days. does that make sense? rosanna: i think so. if you are cautious in the beginning of the pandemic for the virus we said that you could be infectious and pass the infection onto others to do three days before you are symptomatic and maybe you could be infectious up to eight days afterwards. but then most infections within three to five days after the
onset of symptoms, i think the cdc is recommending five days so that you can allow the economy to recover and allow people to go back to work. it is a balance between risk and benefits. i agree with the cdc recommendation to cut the isolation by up to five days. we are now in the. were most people are infectious. peter: when we get to the end of the omicron variant, are we going to be left with two populations, one who is fully faxed and boosted -- vaccinated and boosted in the other population will be those who have been infected? rosanna: that is the scenario.
as this virus eventually becomes one of the seasonal coronaviruses, eventually everybody will get the kind of immunity we see with the common cold viruses and hopefully it may be that the vaccines will be kept up the way we keep up with flu vaccines so that we have better immunity against the common cold rather than the way it had been before this pandemic. matt: it is interesting. i was talking to you in the break and pointing out that i haven't gotten a cold or the flu since this thing started. i guess that is just a result of the increased hygiene and attention that people are paying these things. great to get some time with you. thanks for joining us. rosanna peeling is the director
of the international diagnostics center at the london school of hygiene and tropical medicine. hopefully we will turn to and dominic -- endemic. peter: the question is, where do we go next and the question that most people will have some antibodies? matt: hopefully we will get the greek letters everyone knows how to pronounce correctly. we will have more when we come back. this is bloomberg. ♪
david: most who have been successful in how they would as writers have been wightman. new came along -- have been white men area when you came along, you are not either, was there termination that you felt at the time or was it subtle? >> to find it to be difficult and i say that because i don't know what it feels like to be a white man. i don't know how men were being treated but i always know how i have always been treated. i was raised very clearly by my parents to be a person who did not look at things as obstacles. when anybody treated me in a way that was not 100% respectful, i was taught that that was there problem and they need to be put in their place and i should move forward. i am sure i experienced a lot of things that were not probably
what other people experienced, i just chose not to be defeated by them. david: so today given how prominent you are in the entertainment world, do you feel discrimination at any point now or you don't feel any discrimination? shonda: there is an insularity that comes with the in a certain position in hollywood but it does not change the fact that if somebody doesn't know who you are they still see you as just another person of color. the racism in this country is racism in this country, unfortunately. david: so the events that led to the murder of george floyd affected our country in the african-american community particularly. how did you respond to that? you are a prominent african-american figure in the country. did you feel like you had an opportunity to speak out? shonda: i still -- i think the
events -- i think the entire george floyd situation did a couple things. one, like everyone else, i felt nothing but rage and frustration. i also felt real dismay that a lot of people use to that event to finally discover that racism existed. that was disturbing to me that it took being that horrific for people to be like, wait, there is inequality. there was -- that was upsetting for me. i don't feel a guy had a particular obligation to do anything more than any other person did. a lot of people were marching and protesting. i think the beauty of what happened was how many average citizens stood up and did something. i think the power of that moment hopefully will continue to be the power of that moment.
i also feel like whenever i am asked this question, i never know how to walk the line between saying here is what i did in here is what i think is important, because i feel like it might let people off the hook a little bit because it suggests that racism is the problem of people of color and i feel like i always want to say, that is not what i did to work on the george floyd problem and racism. to me, that is to question.
problem and radio. we are doing it on radio and television for one week only. we don't know. the powers that be could be watching and thinking that this is the kind of content we need more of. peter: this could be the future. you think bloomberg markets simulcast throughout. that would be great. matt: tom keene, who basically is the creator of the bloomberg surveillance brand -- i remember when they first simulcast. we were rebuilding the television studio and the tv people said, what do we do and they said let's simulcast the radio program. it was a massive hit. they still do six hours a day of surveillance. peter: and they do bloomberg businessweek in the afternoon. matt: also a fantastic vehicle, property there. let's take a look at markets.
we are in rally mode once again. for those of you on radio, i am reminded that you can't look. in terms of the s&p 500, up .2%. not a huge gain, but that seven points pushes us to 47, 98 seven. we could be looking at that today. peter: let's take a look at we had a good print recently on holiday sales, up 8.5%. people were out there buying stuff. the question is, how do you reach younger folks out there and get them into the purchase mode? we have so many who knows how to do that, quynh mai, moving image
and content founder joins us. these are the nine to 24 years of age. how are they buying stuff? are they going to stores or clicking on amazon? quynh: it is completely different from the generations before. they are thinking about three categories. they care about money. they were raised by gen x and they know that money makes the world go around. so buying things like cryptocurrencies and nft's and also their social currency and persona. they are thinking about making money when they purchase and thinking about social media and things that they saw online on tiktok, instagram, which gets them talking about purchasing.
they also shop with their values. they put their money where their mouth is. they grew up during this turmoil we have had in america. they buy based on value. they care about climate change and they five brands with their values. matt: you bring up ring lights. not everyone will know what they are. they are the elimination devices you use if you want to broadcast on youtube or instagram stories or a snap chat or something i have never heard of. how important is social media in terms of retail presence? do they just have to put out hashtags or by advertising? do they need to monitor something with brand wash --
watch to see the trends? quynh: i would say all of the above. the shopping against at home with them scrolling through to talk and looking at hashtags. tiktok's made me buy it has a lot of views. they have began their journey at home. that is a recommendation from a friend telling them you should check this out. once they see the buzz around it, then they actually get off and go to a store and find the product. they like shopping because they understand that too much screen time is bad for them. and too much time on social media is having adverse effect on their wellness and mental health. peter: gen z probably groep thinking a lot about student debt and maybe the generation before them being overwhelmed by
that. are they saving more, spending more? how are their habits developing? quynh: they are completely changing the game. they are saving more. they don't want debt. they are finding great ways to empower their inner entrepreneur. the reason they are so keen on nft's and crypto as they have been living in a metaverse. they have been in videogames for almost their entire lives. they see these things may have value, so buying things that will allow them to accumulate money over time. they are entrepreneurs because with ring light, you can take pictures of the clothes you don't want anymore and resell them. they are becoming boutique owners by selling the close of of their backs on websites.
matt: i am taking notes. what is that? quynh: it is a community like an ebay for gen z but instead of pictures you take videos and photos of yourself. you model the clothes, put them on and people bid and buy clothes off of you. imagine every gen z kid is an owner. they can buy close they like off of the backs of their internet friends. peter: i guess i am behind the times. matt: we have all heard of the shortages of employees. companies are reaching out and doing everything they can to get kids to come in, but they just aren't, not in all cases, moving. what do they need to get? quynh: flexibility and value. gen z is 24 at the oldest, just
coming out of college. they know how to hustle. they want a job that gives them flexibility. because on top of doing their 40 hour per week job, they are selling products. they want a job that allows them flexibility to manage mental health and wellness but also to manage their side hustle. matt: great to get intelligence from you quynh mai. we learned a lot. she founded moving image and content to help us figure out gen z retail trends. back with more on the rallying markets. this is bloomberg. ♪
matt: this is a special edition of the program. we typically host a radio program. you can listen to it on terrestrial radar. -- radio. you can listen to it on bloomberg. we are simulcasting on bloomberg television for one week only. paul: we are on tv, whether they like it or not. matt: london is typically guy johnson and alix steel. london is closed for a second holiday in a row. they got their christmas holiday on monday even though christmas was saturday. they've got boxing day today. it's fantastic. you never really understand the socialism of the u.k. until you get out there. paul: we don't get anything for
new year's. we get nothing in the states this year. matt: that's what it's all about in america, work is much as you can. paul: i don't get it. we are here. matt: we do have a rally underway again. this the fifth they have gains for the s&p 500. we are up 1% wednesday. 1% and more on thursday. then a slightly weaker game on friday. that huge rally again it yesterday. we are up at an all-time high in terms of stocks right now. it's a pretty good -- i guess santa claus barely caught the curve. paul: santa claus is delivering again. matt: i will point out something interesting i was looking at this morning with jonathan ferro, we have a lower valuation than this time laster. last year, we were trading at 31 times earnings. now it's only 26 times earnings.
investors are not willing to give this market the same multiple they were last year. i was talking today with him, we are going to boost earnings i 20%. paul: 2021 had some extraordinary earnings growth. when i look at my friends on wall street that trade credit, how do you make a living? i'm looking at the 10 year. it's at 1.46. it's been there forever. i do know how you make money in these credit markets. our next guest does. she joins us from london. deborah, what's the credit strategy for you in 2022? how are you thinking about generating returns? deborah: thanks for having me.
although it's boxing day in london, i am in the office. the way we are seeing it, we are going into next year. it is almost 2 trillion, the appetite for new deals. balance sheets are strong. we just came out with a record year of new issues. is it going to be the same level ? that's with the banks are saying. this is going into next year. it would create some potential for us. the growth is well, the company is generating record profits and
sustaining that. that is fueling more demand. i have seen that so far. going into next year, there will be a lot of demand for high yield. that is how we are positioning year. matt: in terms of the central bank changes, you are in london. we got a surprise rate from the bank of england. the u.s. central bank is expected to raise rates at least twice, maybe three times year. as these big institutions take their foot off the accelerator, at least lifted a little bit, what does that do for the credit world? deborah: i think that's a good question. we see the risk going into next year.
there are two things we are focused on. we are starting to see companies report. that astarte put some pressure on margins that could create some -- we are very careful since we are credit investors. the second piece of it that you mentioned is interest rates. if it's the fed or the boe, they are going to take longer. we think it creates challenges, especially on fixed assets. it creates potential opportunities. it levels of the risk-free rates for us. matt: albacore capital is one of
your leading alternative investment managers, $9 billion in assets. when i think about alternative investments, one of the things i look at is private credit. how are you thinking about that business going into 2022? deborah: it's an interesting part of the business. we are priced for liquidity as well. this shows an ability to offset and react better. that is compared to the investments for example. we are seeing the valuations are still quite high as you mentioned before we started talking. that creates the sponsor community.
that is constrained, that's the reason for the public market. all this put together, we have a decent time going into 2022. matt: is that pipeline going to stay full? what kind of issuance are we talking about? you had some of the participants come to market in 2021. deborah: i think the metric has been pushed out. you still have something that could come. especially in europe. on the new issue pipeline, we see the dry powder looking for
new opportunities. that should work for some m and date. is it going to reach the 2021 level? that is still pretty healthy going into next year. thank you so much for joining us. we appreciate it. that is looking at alternative on investors. i know a lot of people are looking for people to. you can't find in some of the alternative investments. whether it's a leverage loan or private debt, things like that. that's were a lot of people in fixed income are looking for yield. matt: maybe that demand gets even stronger.
i was looking at a chart on the bloomberg. we have had seven years of double-digit gains. we are looking at a 20% gain in the equity markets right now. we had 17% last year. they are going to look to get some returns. that's what i think it was so interesting to talk to deborah. paul: i came to know albacore over the last six or seven years. they are big in europe and they are aggressive. it's great to get thoughts from deborah. we will check in with her. ♪
>> my mom owned mary pearsall owns in the states. i basically grew up in a hair salon. there was no playground or any of that. my mom had to work. she had to do what she had to do. she did it. i just fell in love with that. here we are. >> she took out a small business loan to take out the land. a recent study found that only 51% of latino business owners
received funding when they applied for national banks compared with 77% of white business owners. >> you can't help but wonder, are we not good enough? what about the people in control of the money, what are they thinking? how can we change the narrative on that. >> the study found that latino owned businesses gave $700 billion to the economy annually. >> i think people have the entrepreneurial spirit. you come here with the hope and dream of a better life. not only for yourself, but your loved ones and parents. going back to march, we were fighting. we were seen over 100 people a day. we knew there was going to be a shutdown.
everyone was angry. i was nervous. i was scared. we had to come out strong because it was about a revenue loss. it was huge hit. it wasn't the full amount. it was very necessary. it was important. >> 3% of latino owned businesses got partial ppp loans. 7% of white counterparts got one. >> we are only 7% down. the way that i project, we will be right on track. my advice is you can do it. they are out there. pick up the phone, i will help you. we should be rooting for each other.
side of the atlantic ocean. we are simulcast today. to the great pleasure of us, we hope you are enjoying it as well. we have seen a rally, it continues today. it's at a much weaker level. the s&p is only up 0.1%. it's just about three points. it is still on the green side of the line. the dow is up one hunter 50 points. it's not the kind of gains we saw earlier. we see a little bit more volume today. we are down 34%. that is to be expected. if this continues, it will be the fifth day of gains in a row. paul: not bad. that's what we call a santa rally. we will take it. we have some headlines coming
across. the cdc has 59% of cases from 73 percent. they are updating how the model of covid variant propulsion's in the u.s.. omicron does -- omicron is the game. matt: i hope we can stop with this needle video. my preferred method of consuming bloomberg content is the radio. not just because of this. the big advantage you have is you don't have to see people getting injected with needles. paul: matt: that's the world we live in. i'm not sure if this is a bad news or good news story. you could argue it's not great. a lower percent is omicron.
omicron has lower severity in terms of the disease. i would think you would want to see a larger percentage of cases. paul: i think it's a matter of timing. i think we will be there in the blink of an eye. omicron will squeeze out the delta variant and that's a good thing. matt: that's exactly where i was going. it would be nice if it would do it faster. i'm always talking to our friend in san francisco, greg jarrett. his doctor is telling him more this thing spreads, the more mutations we could see. they are not necessarily in the right direction. it could mutate the wrong way. paul: let's bring in gina, she is a smart voice on these equity markets. she covers the equity strategy stuff.
she's got decades of experience. it was like we are going to be up 28% on the s&p 500. gina: i think we can expect the market to move higher. 2022 will probably be a slower pace than we had in 2021. our model suggests we could easily get up to 5000 based on a conservative assumption the fed does tighten policy. we continue to see economic growth. we will see economic growth. we will see orders improved. we will see the unemployment rate fall. as long as we move into the recovery phase from what has been a robust recovery for the economy, we will probably get double digit earnings growth. matt: i've been banging on about
this all day. we were talking about the big picture blog. he had cited someone who cited jack vogel talking about the way you get to forecast is estimating what you think earnings are going to be. what you think the market is going to put on that. the third part seems to be the most difficult. right now, we are 26 times earnings on the s&p. what kind of multiple are you putting on a 22? gina: our model suggests we should be between 23 and 25 times earnings. as we see short-term interest rates, there is a subtle increase in the second half of the year. that means the treasury rate will go higher.
it flattens a little bit. the combination of those two factors along with persistence and economic growth suggest they should be paying 20 primes -- times earnings. as long the discount rate is very low, should be willing to pay more. as the rate goes higher, he was two or three rate increases, we are still talking about low interest rates, that should be fairly valuable, around 21 times the earnings level for 2022. paul: thanks much for joining us. you've been constructive on these markets for a long time. you've been absolutely right. we always appreciate your thoughts. she is bloomberg intelligence
chief equity markets strategist. we are fortunate to be able to get her to join us. looking at the markets, the s&p -- the dow is up 145 points. 30 6000, 450. it's a pullback on the nasdaq, maybe a smidge of a rotation. we are going to pay attention to these markets. more is coming up. this is bloomberg. ♪
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>> cryptocurrency is one of those things, it's like the blind men and the elephant. people get distracted and carried away and energized. we view it as a technological transformation. there is a fundamental right through happening. it's an area of conspiracy. it's the ability to be able to form trust relationships. >> money is one application. it's only one of those applications. many of the smartest people in computer science are going into the field. they are pushing it forward in a rapid rate.
it looks like it's the architecture change breakthrough. we take it very seriously. >> your view is not whether bitcoin is good or not, you insist the technology underlying bitcoin is going to transform the world. >> is a new kinds of computers. bitcoin is an internet computer spread out all over the world. it runs without any central location. it processes transaction. at of that comes the ability to exchange money. that comes the token that is a representation of the system. it's a new kind of financial system. >> to people invent something, they might say i did something nice. how come the inventor hasn't surfaced publicly. >> i would say most people don't
realize how important it is at the time. whoever this person saying -- whoever invented this thing, they knew the importance of what was from the very beginning. matt: welcome back. this is special markets coverage on bloomberg radio. we are going to do it every day this week. we are going to bring in markets. we are going to preview 2022. we are going to this simulcast all week. i think it's a pretty cool look. it's a quiet week, not a lot going on, not a lot of volume. markets are moving. matt: the s&p is 47. it is still game.
we've had another record high. it's not coming down. it doesn't look like it's progressing a lot further right now. you've still got 2.5 left in trading. the dow is up one hunter 47 points. you can argue we had some relatively good news from the cdc this morning. we kind of knew that was coming. jonathan ferro was talking about the idea that they could reduce their quarantine guidance from 10 days to five days. that got them back to work on the plane. i think that's good news for the economy. it's bullish for markets. the rumor was bought and the news was sold. it does look like there's a lot
of momentum left. paul: it's quite after a couple of decent days. in the states, it is to shots. the booster is your third shot if you are but during or pfizer. in israel, its unique. they are starting a fourth shot. i think that's really interesting. i wonder if that is somewhere the u.s. or the world will go. let's get some more on what's going on in israel. the chair at the national experts advisory on covid-19 response. it's the largest provider of public and semi private health services in israel. this is the place you want to go. talk to us about the fourth shot the folks in israel are getting. it was the thinking behind that. >> israel was the first country to start the third shot.
we did show -- so at the early stage. had the delta wave earlier. waning immunity has hit israel before it hit other countries. we were the first to take the decision and begin the wide third shot that was exceedingly successful, over 80% have been vaccinated quickly. now, we're the only ones in the world having 80% of our population with a third shot. what we see is there is very clear signs of waning immunity. people that have received those three shots, they are being infected despite having the vaccine and despite being very well protected a few months ago.
this combination of omicron being really infective and more adaptive to overcome some of the protections, it makes us understand that we want to protect the most vulnerable and exposed segment of overpopulation. that is older individuals. in order to get their antibodies back to the point where they can most likely protect them, the only way is the fourth shot. it's a very tough call for the medical community. we did not like to make decisions in absence of a clear trial. we are doing two things. one is a large clinical trial that has begun today.
the other thing is we are considering not waiting for the results of this trial and potentially offering the fourth shot through the older age groups. that decision has not yet been made. the minister of health is considering this for the last few days. matt: you look at it in terms of the waning immunity after you get the shot. it makes sense to stock up. it makes sense. about the social messaging? there is a concern where skeptics will say i'm i supposed to get a booster every three months? how much does that were you? lex very much so. the most important thing we have is the trust of the public. we must do everything we can to be worthy of this trust.
we need to maintain full transparency. while i do understand the problematic message, we hoped this would give you great protection for longer periods of time. it is still the point where these vaccines have saved so many lives preventing severe illness. it is clear right now. it's not as good as it used to be. we are offering protection, and is much as we had hoped. whether or not we will need additional shots, that remains to be seen. we may have some residual immunity. many people will not be exposed to it.
for the time being, we have what we have. we have to use that judiciously. matt: it's great to get some insight from you, chair of the experts advisory on covid-19. it's good to get his thoughts on what up fourth dose will do. you're going to start to see these everywhere. they tend to spread from the elevators. this is bloomberg. ♪
kouachi added that many jobs? why was business so good? >> it's really interesting when you think about what happened. there was -- we all moved online. since 2013, we've been building our capabilities. at the time of covid, we became relevant and critical for the leading companies. when you look at this year, we had more clients who had over $100 million in booking in the first three quarters of the year then all of last year. this is driven by what we call compressed transformation, the need to digitize all parts of the business. >> one of your competitors, a company called mckenzie. they say we don't want to be a
publicly traded company. it it's easier to do this when you're not a public traded company. you have a market cap of over $200 billion. what about the view that consultants should be privately owned? >> it's an interesting question. for us, the markets are an important element of discipline. we are giving our results every quarter. we think it attracts talent. it's a huge part. we have a culture that is tied to creating value for all of our stockholders. it served us well in terms of contracting great talent. question it tried to steal people from private equity? >> they are hiring a few people and acquiring a lot of professional services these days. >> that's why you see a lot of
acquisitions. you are doing this from washington. it's a great place. if the capital of our country. it's not knows a place for running global businesses. while you headquartered in washington we have not had a headquarters for 30 years. pre-covid, we were probably the largest organization run itself remotely. the de facto headquarters is always been wherever the ceo is. the last was in paris. before that, it was boston. d.c. is a great place to be based. as the first time the ceo and the cfo are out of the same office. i'm fortunate have casey with me in d.c.. >> did you go into the office? did you work remotely? >> i worked remotely.
we've got a look at the markets for us. >> we are trading flat on the s&p 500. we are trading on lower volumes, below the 20 day average. we still have four straight days of gains on the s&p 500. if we have time today, it will be the 70th record close for the s&p 500 this year. that despite the fact that we've got a new daily record. we are slower today on that second day of the rally. the average is 3%. this is the best start going back to the year 2000.
we will have to see if that does hold true. we are actually seeing tack down it, pressured by some of the heavyweights like apple. they will be opening act into play here. the cruises were hit yesterday. they are leaving us hired to date despite the fact that we do have 830 flights canceled in the u.s. again today. we are seeing that coming back in it. united airlines is up after being pressured yesterday. after the cdc came out and said they are investigating some of these claims over the coronavirus. matt: thank you so much for
that. the update, i'm thinking 2022, i'm looking for returns and yields. i wonder if i should look at emerging markets. let's check in with a professional. dexa is the first private equity manager to be fintech in brazil with $200 million in assets. thank you so much for joining us. give us your thought or your outlook on emerging markets. is that where you are telling clients to allocate capital? oscar: it's a pleasure to be back on the show. when we think about 2022, i think we are going to see a repetition of what was 2021. that was not a beta play. we are still going to see a lot of volatility in the markets.
this is a markets going sideways or low. we are still going to see this huge digital transformation that's happening. we see companies that are more tech driven. basically taking over the or traditional companies. this year, we have seen $15 billion being invested. that's more than last six years combined. i do see a lot of capital being invested. matt: i'm sitting here in germany for a couple more weeks. this is a cash focused civilization. they don't like or they didn't pre-covid use cards. they preferred cash.
paul sweeney was the same way himself. both paul and germany have moved from cash to cards or even touchless payments. what is it like in brazil? oscar: here in latin america, we are talking about 700 million people. when you look in terms of internet usage, it's higher than china and india. we see millions and millions of people not using cash. that is really impacting these opportunities across all different sectors. even health care has been affected by that. paul: miami is trying to establish itself as a fintech hub. how is it establishing in
brazil? oscar:. i think it still very challenging it. when we look in terms of what these un-banked people are coming to the markets now, that's where the growth is happening. these double digits. i will give you an example, last year when the government wanted to give the severance package to help covid it, those are numbers that we were not seen elsewhere in the world. i think this is something that is impacting why these big investors are coming to the region. matt: you mention health care. i think it's interesting. you can see a link between the growth in fintech and the
migration of health online. oscar: definitely there's a link there. the more you facilitate the payments, the easier for people doing prepaid insurance. even to their employees. health care, having a better payment solution is going to facilitate health care for all of these pop -- populations. 30% of this are poor. paul: thank you so much for joining us. we appreciate chatting with you. we are talking a little fintech and emerging markets. you think about in the states, miami has made a big push to become a fintech hub in the states. paul: we've been hearing a lot
more about brazil and latin america with regard to fintech. and the shift in neo-banking. to me, it's a fascinating space. i would love to hear more about it. in markets, the s&p 500 is starting to gain back a little bit more ground. we are getting back to that level. the dow his added almost 200 points. it is 36,493. the gains continue in these markets. it's the fifth day in a row. we are simulcast on bloomberg television and bloomberg radio. we will be doing it all week. this is bloomberg. ♪
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all of our platforms. we will be here every day this week, cutting through all of the action. we are looking ahead to 2022. paul, we've got to start off with a mixed bag in the markets. at one point, it was above 4800 for the first time ever. paul: i like the nice round number. it's moving higher there, up 0.5%. nasdaq is lagging a little bit, so enough about 0.1%. when we talk about the santa at rally, we got off to a good start yesterday. we will see how it plays out. there are a lot of crosscurrents out there. there is news coming out of the cdc. there is a lot to stay on top of. romaine: we have another light volume on the week like this. it's a holiday week for some
people. abigail doolittle is keeping nine what's going on in the market. abigail: on the open, we had some solid green and it gave way to these mixed moves. on the open, tech was lower after opening higher. the stock is down 1%. maybe some questions of valuation. what is working with these concerns around omicron it, the reopening traded. we had the s&p 500 a higher. we had capital goods higher. that is counter intuitive's. maybe omicron is the worst of what we hope. as for the annual gain, you were just pointing out a good start. on the year, i think it's 27%.
it's the third up year in a row. romaine: there is a risk off field in crypto. we've got bitcoin off 0.4%. pulling back on some of those crypto tokens. abigail: you have bitcoin going back below $50,000. there is a little bit of uncertainty. it's not a fully risk on day. we also had crypto rising. today is a more mixed feel. apple the last time i checked was down slightly. when this happened a couple of weeks ago, it's not happening. if it does happen, it's just incredible the rally the stock is had. in order for apple to it the $3
trillion, this is the largest company. it is gained $600 billion in market cap this year. that's more than most companies we talk about. paul: the numbers are staggering. the big tech names continue to put up some huge numbers. abigail doolittle, thank you so much for joining us. let's get over to an expert on these markets. we have the s&p up. that begs the question, when we going to do for 2022. let's bring in the federated manager. steve, heck of a 2021 for a lot of investors. where are you looking for 2022?
steve: you talked about the run number 4800, it came down to the wire. it looks like we got in. we look forward to next year. we have a 5300 target for next year. our view is multiple's are not going to get with us. the fed is getting started with rate hikes. we think the upside is limited. we think this offered some clues as to what it might look like. we think tax -- tech flags a little bit. this may be the worst from the economic perspective. romaine: is there any sense as we talk about the longer-term effects of whatever the pandemic
has done, shifting i guess where the economic growth is, steve: i think it's counterintuitive. shirley the first take on the pandemic was technology was going to be important for how we ran the economy. you saw that reflected in tech shares. i think what we are seeing is because companies want to on short, we've had a pickup in the pace of retirement. people have decided to leave the workforce. there is a bit of a shortage of labor. they are starting to see themselves for the first time in 30 or 40 years. that's going to be one of the legacies. that's why inflation is more
persistent and is it going to roll over. it is something we will contend with. they are approaching 3%. that's the world we will likely be in. that's one of the things it will assert itself again. paul: what you think about 2022? do i just say short duration? i'm hearing about higher interest rates. i've got my 10 year. steve: sometimes you feel like you've got a handle on things. 6% inflation, we've got a 10 year. you've get inflation and interest rates. you can't continue to have 1% interest rates on 6% inflation. both of those are going to
moderate. we still have cpi next year. we think rates come up somewhat. we will see. a lot of this is the messaging. if the fed it can convince the markets, by moving earlier, they can continue at a measured pace. i think you will see the yield curve move up. the markets are going to price in this fear that they will move too quickly and kill the expansion and the yield curve will flatten. that's the battle between now and a lift off in rates in the second quarter. romaine: we are contingent to see that flattening of the curve. over the next three weeks, we are heading into an earnings season. before we get there, we've got to take a look at the economic data.
retail sales, cpi data. how important are those numbers in terms of the specific data points in setting the tone for 2022. steve: that's a great question. i don't expect you are going to see some monster jobs numbers. i don't think there is a large group of people on the sideline. i think you're going to see continuing steady in the labor market. retail sales may surprise in january. gift cards are redeemed, not when they are purchased. when it comes down to is how is this going to affect the federal reserves? other than a nasty downturn in the data, i think we are on pace
for a taper that ends in march. that environment, that's where we are going to look at data. i expect markets to be good in the first quarter. we've got a rally healer -- here that is starting. you might see some volatility and pickups. paul: if we are heading into a modestly constricted year, mi long to big growth names that have worked for me since the great financial crisis? mi sticking with some of the trades of done well during the pandemic? steve: we are looking at 4% gdp growth. you want to be sure. you want to be overweight credit. you want to supplement your fixed income. we want the -- like devalue
cyclicals. we think tech and growth is it going to be terrible. tech was ok. the value cyclicals did much better. we will see a repeat of that flavor in the market. romaine: how are you candy capping what's going to end in washington with build back better and other expending programs. steve: i think they've got a tough time. any leverage they had on the moderates is gone. the moderates got their bipartisan infrastructure plan. the government is funded. the debt ceiling has been lifted. the moderates are more popular in their purple states than the president's. you've got a midterm election coming up.
there are three indicators. net approval rating of the president, the right direction wrong direction. if you look at those and run them through a regression historically, you're not looking at a red tsunami. that would dwarf 2010 or 94. i think it's going to be a tough time. you're going to see a lot of symbolic votes. i think this party is likely going to have to run on what they've already done. i would be surprised. romaine: it's always good to catch up with you. he is talking right now about what's going on in washing. next, we will dive deeper into what's happening down there. you are -- tuned into special
paul: here we are, bloomberg markets. we have extended coverage and simulcast radio and tv. we are going to be doing this all week. we are keeping you up on the markets and taking a peek ahead at 2022. the areas we have to stay on top of his what's going on in washington dc. we have some people to do that for living. joe mathieu covers all things washington for bloomberg news joins us.
i guess i wanted to start with the pandemic. and the perception that the by demonstration might be losing its grip on its handle on dealing with the pandemic, whether it's testing or messaging or just dealing with the variant. what's the feeling these days? joe: the new cycle is slow. the president is in delaware with the first lady right now. his comments about federal responsibility versus state responsibility. that is created a bit of a flop. that's what we've been exploring. it does not signal a formal change in policy. this brought us back to yesterday. the president met with lee governors association. one of them was asa hutchinson for markets.
he was asking the president to be careful not to block state efforts to get more testing. the testing component has become a real part of the conversation. there are concerns of the president may have said something that he didn't mean. it was about the specific acquisition of at home tests. a source at the white house tells me this was not a change in direction. he was responding to that specific comment. the governor went on to complement the way the white house has been working with states in a more broad sense. that is something we are considering as we wait for this case to get to the supreme court, workplace mandate whether workers will be required to get a vaccine or test. romaine: in fairness, this is
causing confusion. it seems like every day the messages shifting because the covid crisis is shifting. we heard from the senator from connecticut suggesting that cruise lines should stop sailing. joe: this was the nice comment that richard blumenthal made. when you start hearing different stories, different ideas from different orders, it brings memories from a year ago when there wasn't as much continuity on all of this. your memo the trump administration dealing with angry governors who were begging for help and said they were competing with the white house then being out bid for ventilators. we are not in the world the president was and when he began his tenure. things have gotten better since last winter.
this variant has thrown a lot of questions about where we are going to be in january. paul: we always appreciate your perspective on things happening inside the beltway. let's stay down in d.c.. let's pivot toward some of the economic data out there and the government response. did with peggy collins. she is covering the u.s. economy in washington. thank you so much for joining us. the federal reserve made that pivot to accelerate tightening, to raise rates. inflation is still out there. it's eating into the pocketbooks of a lot of americans. what's the feeling as to the economic outlook?
peggy: it's bifurcated. in part because of the monetary and fiscal stimulus to help companies in the markets as well as people on the streets. we have seen some of that federal aid. we see a ton of job openings. it is eight workers market for finding jobs. what we didn't expect was the omicron outbreak at the end of the year, which is putting a? over how much it may impact fourth-quarter growth depending on how many companies may have pared back on their business. in general, we see signs that there are good things happening in the economy, including some data on holiday spending. romaine: the date it was great
on holiday spending. we have dated this morning showing home prices which moderated from 19% down to 18.4%. peggy: that's the same thing that jumped out at me. it's cooling a bit. the u.s. home prices cooled for a third straight month. it's a big jump upward. the other thing that's interesting to note is there are some cities that are seeing strong growth. tampa, florida, really strong growth. the housing market has been one of the biggest beneficiaries of the aid from the fed. romaine: when we going to hear
about the federal reserve? peggy: we are on bated breath. the fed has three open seats right now. the by demonstration said it would get to it before the christmas holiday. it may not happen until early january. it is important. the fed has three open seats. they need to get these people on the board in order to have a full slate of voters. paul: peggy collins, thank you so much for joining us. we will have more conversation on these markets, on inflation. that's all coming up. this is bloomberg. ♪
romaine: we welcome our bloomberg audiences across television radio back here to a special simulcast. keep and i on the day-to-day moves. some of the big interviews we've had over the course of the year, the goldman sachs ceo warned about the potential recce times ahead. we sat down with francine in singapore last month. >> i think we are turning the environment back on. because of the crisis, we've had a massive amount of policy around the world that is having an impact. it's having an impact on inflation and asset prices. i think markets generally when i step back and thick about my career, there have been periods of time where greed has outpaced fear. we are in one of those periods.
my experience says they are not long-lived. something will rebalance it and bring more perspective. given that it feels like inflation is above the fringe, interest rates will move up. that will take some the exuberance out of the markets. >> you are optimistic on china. do you get pressure from washington to grow less fast in china? >> we are very committed to building our business in china. goldman sachs operates globally all over the world. we serve governments and institutions all over the world. given the importance china plays economically in the world, you can't beat goldman sachs without participating in that. i wouldn't say there is direct pressure.
is it possible something goes on geopolitically, there is pressure or director for us to do certain things differently? that's a possibility. paul: that would -- was david solomon at the new week economy form in singapore. it just struck me, that was a different time and place. people were having big conferences. davos is postponed. romaine: we had the news yesterday about some of the measures goldman and the banks are placing on their employees if they come back. we'll have more coming up. this is bloomberg. ♪
audiences across all of our -- all of our audiences. i know your kids probably enjoy the dodge ram you at them for christmas. is everybody spending like that? paul: it seems like the consumer is in good shape. the good thing but the question is how long is it going to last. romaine: i guess the bigger question is where is it being spent. at some point does the consumer get tapped out? paul: when the stimulus checks run dry and the savings come down, then what happens. we note but he who does this for a living.
we are joined by stacey widlitz from sw retail advisors . how would you categorize how we are experiencing 2021? stacey: the numbers are incredibly strong, up 11%. those are great numbers. it is important to point out the word inflation. three quarters of that number is lack of discounting. you are hearing so many retailers that have average of 40% and units are down. if you look at the overall picture, apparel, jewelry, luxury, we saw nice -- this holiday.
romaine: we talked about this last year and there was concern that if you didn't buy your gives in october or the temper people going to be out of luck. i wonder how much that factors into the data showing that growth. stacey: i think it is a huge factor. this last holiday was where the consumer was being hit over the head with headline saying if you don't buy it now, you will not get it, your kid will be crying. that worked. we saw that globally in the u.s. and the u.k.. i would say even after the holiday, start that i haven't been in, they are still packed in certain cases. the consumer is still out there for the in demand products. paul: sometimes when i walked to
penn station, i will walk down 5th avenue or madison and it seems like a lot of the luxury stores were packed over the last several weeks. give us a sense of what is going on in the world of luxury. stacey: luxury has been incredible. that wealthy customer has not been traveling, so they have more in their pocket and the muddy is -- the money is ready to come out and that is where they are spending. so many of them, lines had an hour wait. you have to remember that they are controlling traffic. you can't just walk in the store and browse. they are controlling who comes in the store and is creating a sense of fomo. romaine: i saw them all lined
up. i saw paul out there one day. beyond luxury goods, the other big items we talk about our electronics, computers, phones. i know that was big in our household as far as the christmas lists go. does that sustain itself into 2022? stacey: i think it does. you have seen constrained inventory. you look at a company like best buy, in september and october at the shelves were empty and the people working were single online we are not even going to get it in the stores because we are tight on inventory. when that loosens up into 2022, we will see a bounce back. for a company like best buy, their inventory is up double digits and they are well issued for this holiday and will beyond. you have to inc. about the companies -- and you have to
think about the companies needing consumers where they are. paul: you mentioned earlier that the retailers did not have to offer a lot of promotions. will we have allowed earnings? stacey: absolutely. we will see continuation of what we have seen over the past year. record growth margins and operating margins because there has been very little product in the market. this has been the greatest retraining of the consumer. two years ago we were talking how low can you go and now we are talking about shut your eyes and pay. the question is, does that last a year from now when inventories normalize and companies are able to reorder goods and they have to estimate demand again. romaine: talk more about the structural issues going forward here, because when we talk about supply chain issues, there are a
lot of people saying we will never go back to the model we had before, making relatively cheap goods in china and vietnam and getting them shipped quickly , that there has to be some degree of onshore to make this work over the long term. stacey: i think that is true and retailers have learned a lesson that if we are going to see continued disruptions for years to come in the supply chain overseas, you will see more coming home. also, labor costs have been increasing overseas, not nearly what it would cost in the u.s. but if you want to produce to meet demand and do it in a timely fashion without adding stop with stuff that shows up too late that you have to discount and don't, that will be movement for retailers. romaine: thank you so much for joining us. stacey widlitz the president of
and negative territory. bitcoin and crypto's under pressure. bitcoin up more than 6%. romaine: that move on the s&p was a sharp drawdown. who knows what is driving that, but you saw a lot of big tech names push into the deeper, apple, alphabet, adobe and nvidia leading some of the declines. paul: let's get a little smarter on the pandemic and where we are in these iterations and variance that come along. omicron has everyone's attention. i just got an email from a viewer/listener, he is saying it is in the rearview near nothing but a bad head cold and stop focusing on it.
it is iterating and changing and we need to stay on top of it aired we have a lot of experts. albert co., -- albert ko, from the yale school of medicine, thank you for joining us. how are you framing out this omicron variant? is it something we have to learn to live with, or do we locked down, shut down to try to put an end to it? where on the spectrum are you? dr. ko: thanks very much for the invitation to come on this interview. because of the high transmissibility of covid we will never get rid of it. what we can hope for is to get to an endemic, where it is not
having long hospitalizations and deaths. paul: for those of us who are not as smart as you are understand the science and medicine behind this, it still seems scary. we are seeing a record number of cases worldwide and hospitalizations tick up. still significant. how do we come to terms with this from the science and medicine side? dr. ko: this is an important question that you are raising. i don't want to underscore the loss of life and the growth of cases in the country. it will lead to surges and
hospitalizations. even if it turns out to be less severe it we will still have a large burden of disease. what we need to do in the long-term is get out of the reactive mode and think about ourselves being interconnected. you saw how omicron where delta exploded. we have to not leave anyone hind with vaccines. we have to control transmission and all parts of the world so we can prevent new variance -- variants such as omicron. paul: where are we in terms of this area and -- this omicron variant? will this burn out sooner than some of the others and maybe
this will be measured in weeks? do we have any evidence of that? dr. ko: for now our crystal balls are not shiny so that we can look into next week or next month. we know this variant is twice as transmissible as delta. this will work through many parts of the population. we don't know if this is less very learned causes less severe disease but we certainly are concerned that just because a large number of people will be infected that will translate into hospitalizations and deaths . if we had the future, it will be a wave during winter months where people generally stay-at-home and there can be more close contacts that occur. i am predicting this will be with us for the next month or
two. our experiences tell us this will probably not be the last variant we will face. romaine: and we should point out that we have updated numbers out of the cdc giving the percentage of cases that are to be to -- that are attributable to omicron and delta and the number has flipped in favor of delta. i am curious about the measures sump folks are proposing. we have heard from senators in the u.s. proposing that cruise lines should stop sailing and we have heard other proposals that we should almost go back to a lockdown of what we saw in the spring of 2020. is that necessary? dr. ko: let's call it for what it is. we are in the middle of a wave with a variant that is twice as transmissible.
we have to go to the meat and potatoes of what works, vaccinations, not only getting people vaccinated. the second part is testing. if we learned anything through the waves of the pandemic is that testing is the key way to mitigate the harms that the variant have done. when we are in the middle of a wave, systems are being pressure tested, we need to go back to the bag of tools we had in the past, such as face masks are key . with respect to cruise liners, it is a risky behavior appeared whenever we have congregate
settings, we can have super-spreader's. as we go into wave -- the wave, we have to push all these levers to prevent hospitals from being overwhelmed. paul: on of those are therapeutics, treating folks who have the virus. where are we and what should we be looking to? dr. ko: unfortunately the regeneron antibodies have been taken off because they want to be effective to omicron. we have monoclonal antibodies in short supply. we have the new oral antiviral agents which hold great promise in how we are going to deal with this pandemic in the future. the problem with those is supply chain. it is not going to help us during this current omicron wave
because it will take several months to get supplies to meet increased demand. romaine: we really appreciate you taking time to be with us. dr. albert ko that is, yellow school of medicine -- yale school of medicine. we will talk to martin adams from bloomberg intelligence for it update of the markets. you are listening to and watching a bloomberg special simulcast. this is bloomberg. ♪
romaine: a special simulcast for our bloomberg tv and radio audiences. who better to talk markets then gina martin adams? she is at bloomberg intelligence . help us make sense of the wind down of 2021 and what we are looking forward to in 2022. gina: it is really starting with the earnings season, the third porter picking up in october. we got signals that 2022 may be more difficult than 2021.
we are expecting hundred 70 dollars in earnings and likely to get 200 and earnings. incredible in the first half of the year. companies started to guide us to expect tougher times come the fourth quarter. that will likely be the story for 2022. everything will no longer be 100% correlated it. we'll have to do more homework in terms of investing and pick stocks carefully into 2022, as the rising tide will no longer lift us off. different asset classes are likely to perform much better than others. it will not be a one sided story of recovery into expansion. we will still see growth but we will not see the riproaring recovery continue. romaine: i am an investor -- if
i have to get more selective, what are the sectors that you suggest i take a look at? gina; on the sector scorecard we run for the large cap market, it suggests sectors like energy and tech ant financial are best positioned. it is an odd combination, particularly compared to the last generation. the return to normal trade, low valuations, the cyclical story through most of 2021 becomes more mixed into 2022. this is not a one-sided market as it has been for that much of the last two years. romaine: the biggest asset has
been bitcoin with the big headline which is below 48,000. i am curious when you look at the technical levels and action in pricing in bitcoin and other cryptocurrencies, do you see this as concern? gina: in terms of broader risk assets, we have an environment where bitcoin and equities are together. looking at correlations, the rising tide of risk tolerance listed all assets together. crypto as well as equities rallied over the course of the last two years. i think you can throw crypto into that that going into 2022 that they may not all rise. maybe we have an environment work correlations start to fall.
bitcoin is one of many cryptocurrencies and as the market becomes more investable, you would expect to see a little correlation declined and maybe bitcoin may or may not be the winner. there is a lot of competition, as wrist tolerance moves in more fits and starts, you would expect winners and losers to emerge. paul: inc. you so much for joining us -- thank you for joining us. coming up are going to priya chat with priya misra from td securities. this is bloomberg. ♪
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paul: this is bloomberg markets, special coverage. we welcome all of our audience crossed -- across all of our platforms. another low volume for the major equity indices in the u.s.. you could call it a down day. s&p had been higher. check is in the red and the is why you are seeing the s&p in the red. paul: we have red and green on the equity side. the cryptic -- crypto side, we have a little bit of a selloff. the volatility we are used to with this asset class, and we should know that. romaine: a lot of people paying attention to technicals with
regard to what is happening with bitcoin we want to get some insight with priya misra, joining us from td securities. i want to ask you about all the little things that paul likes to pay attention to. i am going to start off with a serious note with omicron, the idea that people are freaking out and some people are saying we are paying too much attention to this that the symptoms and severity of omicron is relatively mild and should not crimp economic activity in any way. we are hearing about lockdowns and potential curbing in travel. do you factor this into your outlook right now for 2022? priya: we are absolutely factoring that in. there is a regulatory lockdown question and then a human behavior question. do people cut back on going out
now or after the holidays good we are tracking reservation data and that is showing a big drop off in new york and florida and nationwide. we are seeing consumers pulling back. it could be voluntary or the fact that there are worker shortages and it will have an impact on consumer spending. this was the year when we were supposed to move from good spending to service spending. it might make the fed cautious around raising rates. romaine: there are some people that would argue that if we do recross with regards to staying at home and working from home that some of that spending makeshift back from goods. you see that happening? priya: i think at the start of the pandemic if we bought the
screens and chairs and you're not spending on that anymore. perhaps that will be little less. the fed has a mandate that if we start to see momentum celebration and in flaying staying high, they can be more cautious. the fed would want to highlight it when they start the hiking cycle that they continue as opposed to the market which is pricing in a strange hiking cycle of a cover -- a couple of hikes this year and then accompanied sharon that is it. that explains why the curve is flat. if the market sees the fed is forced into hiking because of inflation but growth creates a truncated cycle, that is what they would want to push back against. i think we are going to track
high-frequency data, mobility data, even reservations, we will be looking at sea if the consumer spending -- looking at to see if the consumer spending is slowing. the front and is solidly priced for the first hike in may of next year. does that get pushed out and have implications? paul: as you say on the short end, they are getting a rate hike discussion. i got the two-year at 75 basis points, the front end is getting the message, but looking at the 10 year, i am stuck at 1.46% pay should i be seeing a higher 10 year yield? priya: i think it is linked to the start of the cycle as well. later they can push out the start of the cycle the more it can be more hiking cycle.
the earlier they start, the more the chance they would have to stop the hiking cycle. i think the market is pricing in more of the scenario where they are forced to start early and the long and cannot price it if the fed can start later kumutha the reds -- later, we think the rates will raise. we have auctions and that will ultimately have to move rates higher to attract people from other asset classes. it is a combination of a later start for the fed hiking cycle as well as the end of fed buying that should put pressure on lung and rates. romaine: do you think the economic trajectory will get the
feds a luxury of waiting? there are a lot of people be at a more aggressive rate hiking cycle because they think inflation will be too far out of control for the fled -- for the fed to slow walk. priya: they have responded by ending tapering earlier. for hikes, they do have more stringent assignments for the labor market. our view is if growth slows down not just to omicron but fiscal drag. a lot of the recoveries was because of the fiscal stimulus. even if the bill back better bill gets done, it is not enough fiscal support. there will be drag and that will also slow down recovery. for the hike, the fed might have to rely on the growth or labor market momentum. that is what we think they have
enough leeway to extend it out. romaine: can they pull this off without triggering eight recession? priya: that is the key question. if that was the fed, that is the last thing i would want to do is start to pull back stimulus and delay recovery, which is why it will all be about communication and can we handle higher rates. i think the first few hikes probably does not impact the economy or risk assets that much , as long as economic momentum stays ok. are we slowing from 5% gdp 23% for are we going to 1%? it will be omicron and fiscal drive. in the first half of the year, hopefully we will get a sense of that. if we are headed to 2.5% gdp,
then i think hikes will not delay. i think we are in an uncertain environment given omicron. that is why the fed can be more patient until they know where we are settling down. paul: i am an old equity investors and not and expert like you -- not an expert like you, but i feel like it has given us a heads up and what they wanted with rate structure. i feel that i shouldn't have to worry too much that they are going to blow this. am i overthinking it or under thinking it? priya: it is a fair point. they were communicating well in terms of ending tapering earlier. they prevented a taper tampering.
they have done that well. they have socialized the first few hikes here what is unclear is the endpoint of the hiking cycle. the market is rising in 1.5% and the fed is saying 2.5%. there is a big disconnect there. if they continue to say they are going to hike up to 2.5%, conditions right take that more seriously. does the fed have confidence in where they will be a few years from now, given the fact that we are in the midst of a pandemic, i don't think they are trying to drive home the point. they are talking about hiking -- next year it three times in 2022, yet equities are where they are. most people see it as a gradual move of accommodation and i think risk complex is doing ok. it is the endpoint i am, what if
it priced in higher endpoint, that could be a risk to investors. paul: priya misra, thank you for joining us. she is the global head of rates. we want to get a sense of where the fed will go. we have pretty well telegraphed their intentions. romaine: when you listen to her and our other guests, they are not united in this. some people really do think we will see not only a rate heart -- rate hike hikes come fast and then she makes some great points about maybe the need for the fed to slow walk this in order to make sure everything works out as planned. i guess there is the potential that some but he will be shocked. paul: when we started talking about actually tapering here,
>> the digital future is in progress. even as technology creates efficiencies, there are areas of rising costs on the horizon. after making deep staff cuts in 2020, marriott needs to rebuild its workforce. cracks the most painful part of this entire pandemic was about the furloughs and layoffs we had to do. it was necessary to survive, to make sure we got through to the other side. >> now the company not only faces competition from workers, trying to do it while waging the industry and when customer and employee expectations are in a state of flux. >> one of the thing that sets hotels apart from a home sharing platform like airbnb is the services they offer they guessed. there is tension as they work
through what the expectations are and what their place in the market is and what their labor cost needs are. >> i do think they need to leverage technology to reduce the number of unskilled jobs in hotel operations. need to provide jobs that require a high level of skills so that they can reallocate part of the payroll to fewer workers. >> we have been able to hire 40,000 people since the beginning of the year in 2021. where you see it is in certain hot markets, wait-and-see that shortages but generally overall it is improving. >> technology may help marriott meet this challenge. a rolling out a new labor-management system that will more precisely match tapping to customer demands. >> this labor-management system
allowed a hotel to assign labor in time and you can see what is coming over the next couple of days and work the ships in a way that gives more flexibility but makes the staffing levels more appropriate. it used to be that it would be more, i will plan for all of next month. done, your work shift and i know what is peer now there is more flexibility and adaptability.
not much moving. looking at the markets, the s&p just off a little, the dow up 92%. -- the doubt of a little bit. there are some who say you have to just live with the omicron variant. lots of discussion pay let's get the latest data and numbers. we do that with madison mills she joins us. thank you for joining us. a lot of numbers piling up pit what is the latest? madison: this is really concerning because we are seeing worse numbers than we ever have in the entirety of this pandemic. think about the worst days we have had in march 2020 and 2021, things are worse now than ever
and we can't emphasize this enough. global case numbers over 1.4 million yesterday. unfortunately that number is only expected to rise as we start to get data from people testing positive after holiday gatherings. i went to point out a big shift in guidelines in the u.s. from the cdc. they changed isolation guidelines for a symptomatically people who test positive. before you remember we had ice light for 10 days if he tested positive, even if you were a symptomatically. that has dropped to five days. a lot of health experts are thrown off by that decision given the numbers i mentioned earlier. romaine: look at the record numbers of cases worldwide, particularly in the u.s. and here in new york city. there are a lot of people that would say look at the case count but look at hospitalizations and deaths. what is that data showing us? madison: i love to ask the
public health experts, what data points should i be looking at to get hope in the darkness and they say hospitalizations are the key to indicate where we are going to go with omicron in particular. right now in the u.s., 75% of icu beds and use right now small percentage of that is in use specifically for covid patients. the concern is that people may have delayed going to the hospital because of the holidays and delayed getting tested because of the holidays. that hospitalization number is going to be key for us to watch in the coming days to see how we are doing and the response to omicron. a lot of hospitals struggling with staffing shortages because of hospital staff testing positive as well. paul: thank you so much for joining us. i headline, france reports a record 179,807 covid cases in 24
hours. more reporting on that. let's go to our bloomberg wall street reporter, because investment banks with aggressive company saying get back to work. what is the latest on what you are hearing from some of the big investment banks? sonali: some have definitely pressed the pause button on returning back to the office. you see others like goldman sachs in particular going full steam ahead, with new rules, the idea that you have to get a booster shot by february is interesting, because the question is, it does that become the norm among the firms? we don't see that at very many. jeffries is also another one who is requiring a booster. and what does this mean in terms of other restrictions.
goldman has a role that have to test twice a week starting in early january, down from once a week. morgan stanley asking employees to wear masks in the office after so long of not mandating that to happen. you are right, people are coming back, including in january with new rules. romaine: there is a general sense that as they bring people back, they will inevitably have to deal with positive cases. do they have contingency plans in place for dealing with that so they don't go back to sing, now we are back at home because we had an outbreak? sonali: i think that is the contingency plan, going back from home there is not much the banks can do about the spread of a virus. what i keep hearing from executives is we want to go forward, not backward.
we are at a different place now than before. we have more medications becoming available, more vaccines. let's see how this plays out. january is a big question mark. many places didn't debate -- didn't get back until fall. the firms that had people coming back did not have them coming back five days a week, so it wasn't full to begin with. romaine: paul, we make light of this somehow, but there are a lot of people who look at this and say, maybe omicron isn't as severe as what we saw with delta and the other variants, maybe we can learn to live with this and
be safe enough to go to work and just live our lives paul:. -- our lives. paul: my inbox is getting crowded with listeners and viewers saying that is exactly where we are. we have to just live with it. i think i go back to what the experts said. it is not about the cases, it is about the hospitalizations and that is still a stress on hospitals. romaine: we will talk industrials when we come back with andrew obin. this is bloomberg. ♪
>> in the european union, proposals that not only standardize price for each device but ensure pricing is reasonable. that is where apple comes in. they seem to be getting ahead of the legislation with their own proposals. the devil will be in the detail of what the solution looks like. how expensive are the parts going to be? also how easy will it actually be to do this yourself. >> there are videos online to
explain how it is done. we estimate on 5% of customers will actually prepare their own device, where 95% will go to a professional. if you get it wrong, it is quite costly. in many ways they have become easier to repair. there are also risks involved including one damage to the logic board or one tear of a cable could render a significant part of the device damaged entirely. >> right now to get a screen fixed from apple will be in the area of $260. it is different and doing it at home will be an important data point. for the longest time apple said
it opposed repairs being done with anyone unlicensed or doing it at home. it said it was dangerous and risk catching fire. this is a huge turn and does a lot for their green credentials. paul: we are back with eight special version of bloomberg markets, simulcast with television and radio we are going to do it every day this week here checking in on the markets, urine trading, and getting outlooks is a cool segment. i love industrial american companies like caterpillar, general electric, cool industrial american companies. usually when we do that we
bother someone from bloomberg about we have a special guest, andrew obin from bank of america securities. when i think of industrial companies today, one of the topics that is top of mind is this supply chain that girds all of america. talk about the therm of reassuring some manufacturing back to the u.s. -- talk about the term of reassuring some manufacturing back to the u.s. andrew: isn't issue of the volatility and strategic reliability of the supply chain. that is the big -- it is an issue of the voluntary and strategic reliability of the supply chain. there is a national security
necessity to move some production back to the u.s.. it is on the technology side that we see the most reassuring. romaine: how does that balance out? most of the companies paul mentioned are still international companies. how do you balance that out? andrew: we do think the biggest driver will be manufacturing. if you go back to 2000, the value of manufacturing was $.7 trillion, $400 billion was taxed. when i started out, all the companies were dealing with technologies. today, tech is down to 200 billion out of $1.6 trillion. the biggest source of off shoring over the past two decades has been tech, and tech coming back will be the biggest driver of reassuring in north
america. we think another driver will be less off shoring and the benefits from the stimulus bill which we expect will drive the biggest industrial growth in two decades. paul: so given that backdrop, what are your place for 2022? andrew: 2020 you is a complex year. there is a lot of -- 2022 is a complex year. what we are focusing on our quality companies, trading at the low average valuations with about average management teams. across-the-board industrial markets will be strong. what we are betting on is good management teams and stocks trading below average. romaine: when we talk about the base of customers, a lot is dependent on the continued growth in his nest spending.
there has been a lot of talk about spending and to a certain extent the lack of it in certain corners. what is your general outlook for overall capex and how it feeds into the companies you cover. andrew: i am one of the biggest bowls of capex -- bulls of capex. over the last decade, average capex spending was 2%. if you look at the capital spending by semiconductor companies, with think industrials underestimate tech spending on. that is another percentage point. with the stable mix of imported goods, no more off shoring is another percentage point. and if on top of it you have had what happened in the structure stimulus or just stimulus
overall, that is another percentage point. you add it all up. we average let's call it 3% in the last decade or so. we think capital spending can easily go to 6% or 7% or even higher through the middle of the decade on a sustainable basis. paul: have to get your call on china, because it is such a wildcard. you think of china as part competitor, part customer. how do you think about china over the next couple of years? andrew: our analysis indicates for the first time in many years it is the u.s. and not china is going to be the primary driver of global capex. china is going to be left -- less important. we think investors are not thinking enough about china reopening. china is probably more closed than people realize because of what is happening with covid.
we think availability of the mrna vaccine in china early next year is a potential positive versus expectations, because part of the reason supply change are so god up is china -- grabbed up is because china has regulations. china is working hard to have wide availability of mrna vaccines probably after the olympics. we think the margin will be positive. we think over the next several years the u.s. is the primary driver, not china, and it is really a function of the factors in the u.s. that i described and if the structure stimulus and less off shoring. romaine: i want to get your thoughts on esg concerns by investors and how some industrial companies are adapting. there is a shift by investors
and governments and corporations worldwide. andrew: esg is really about doing better. industrial companies are absolutely instrumental in doing better. i will give you one example. oil and gas, part of the reason we operated aspen tech is because company like aspen tech and emerson will let companies improve utilization of their assets. it will help oil and gas companies in the process transition to clean technologies. from that perspective, we think the industrial sector is very esg friendly because what automation is about is utilizing your assets better. if you utilize your assets better, you can make the world a better place. from that perspective, we think investors underestimate how esg and from these -- how esg
industries are. paul: what is your ge call? nevertheless, your ge call. andrew: we are cognizant of the fact that industries are worried about this purgatory and now we have to sit here and wait until things happen. aviation, commercial aviation, will probably start recovering nicely in 2022. the stock is dirge cheap. with -- is dirt cheap. we think that it is underestimated to generate strong cash over the next for years. think aviation is undervalued. we think investor concerns about valuation are not to overstated because you do not need a large value and from that perspective
which is below 48,000. we are still well above where we were to start the year. abigail doolittle is standing by for more on what to expect. abigail: from a market perspective, mixed markets that you have been looking at all afternoon. everyone expecting we will see a record closing high for the s&p 500, but we had the s&p 500 down slightly. the dow up .3%. the nasdaq more than .5%. that is true for the russell 2000. the fact that the dow is higher suggest that the value cyclical trade is on and the growth traded not so much. the s&p 500 having another banner year, a third up you're in a row. everybody wants to know, can the s&p 500 and other indexes repeat the performance in 2022? we won't know but a wide range
we are looking for. on average, there is expected to be again with the end of year target on average being above 4900, the low is 4400 and the highest above 5300. it will be interesting to see where it comes in with the s&p 500 earnings the driver. the high is 240 five dollars, the low is $212. -- the high is $245, below is $212. peloton, one of the big losers of the year, down 75%, moderna is down 50% from the summer peak. stocks that are typically thought of as growth stocks are down but cyclical stocks doing better.
romaine: we appreciate that roundup as we wind down on 2021. let's make the switch to crypto. here is a function that i learned from matt several months ago. all the crypto stuff you need in one screen. we have a crypto reporter at bloomberg news. she joins us. thanks for coming on. is this just another day in the life looking at crypto when you get 5% and 6% moves? >> yes, it very much is. bitcoin has been one of the best performing asset classes this year. it is still down more than 30% of the height it reached a month
ago, which should give you some sense of the volatility inherent to the stock. my colleague did a story a couple weeks ago about the fact that bitcoin has had more than 19 days when traded more than two days away from its average and that volatility haven't been decreasing. romaine: this was one of those years were we finally started to see more event embraced by i guess traditional finance, the reawakening of clients demand something and if you are a broker you have to give it to them. how much further does that go into 2022? are the traditional finance companies falling on this? >> i wouldn't say they are all in, but if someone is twisting their arm they are embracing it more than they did 18 months ago.
we have certainly seen across wall street and various places around the world, more and more job openings and really high salaries opening up with people with crypto expertise. paul: one of the things that surprised me is i would guess the reluctance to fully embrace crypto by some of the larger financial institutions, and also jamie dimon. his view is shared by others in the traditional finance service companies pick what do you make of that? -- companies. what do you think of that? >> he says you do what you want it i think it is worthless. but his bank is one that is stopped -- stocking up on crypto. whatever their personal
preferences are, they know they have to make money for themselves on behalf of the client. and crypto is a class that you can make a lot of money. romaine: we are a long way from what was once a niche product. as you sort of try to figure out what crypto is doing on any particular date and what it could do, is this more of just looking at technicals for are there fundamental factors that you can look at that might give you insight to where it will go next? >> there are people in crypto that pay a lot of attention to cyclical but there are times you will have people say there was an interesting discussion about technology upgrade that is happening and then you get into a conversation of migrating from a proof of work to provoke stake.
bitcoin likes to talk about the permanent fixed supply. that as -- that is an example where stepping from using crypto as a comfort to really driving down specifics is where you get more insight. romaine: a lot of people talking about the underlying technology. she helps lead our coverage for all things crypto, doing great work. my guess is it will be a big story in 2022. paul: a big story, tim stenovec will be in. he is stepping up his game. it used to be the friday business casual. romaine: you are wearing a tie. paul: i am. as i walked by, i always say if
you knew fourth i'm your guy. you need to be dressed to take advantage of that we are hard at work and wrapping up the week and the year. romaine: are you done for the day? paul: five hours is plenty. romaine: we have more coverage coming up. we have an eye on the market, the s&p 500, flat on the day. pulling back a little bit. we have a lot of great guests coming up to break down all of the market action and coverage. and paul, i know you are going to play golf but i want you to tune in. this is a simulcast and it is on radio. this is bloomberg. ♪
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romaine: this is "bloomberg markets." a special simulcast and welcome audiences across bloomberg, tv and radio. romaine bostick alongside tim stenovec and kriti gupta. you have the s&p 500 open higher and it one point we had an interesting milestone. would take about 4800 and pulling back just a little bit now. the nasdaq down 5/10 of 1%. we will talk about what we are seeing in bitcoin and the pullback in chinese tech stocks. tim: i got to get used to this. i am going to say over and over again with the year to date is on the s&p 500. romaine: has it changed from yesterday? tim: we are flat. when we are talking small moves like this it does not really matter in the context of what we saw. just pretty much flat right now. kriti: we have to talk about
this though, methane liquidity down 1/10 of 1%. that will cause the rally. something to keep in mind as we continue the rest of the week. romaine: just a few other metrics to keep an eye on. the two-year yield slides higher right now at 74 basis points. let's get a broader look at the market and jump over to abigail doolittle. abigail: we are looking at small losses for the major averages. but the real decline is in big tech as you were highlighting. the nasdaq 100 down half a percentage, worst day in more than a week. hard to know what is behind this. some were talking about some sort of rotation out of tech. holzer, eab, he is saying this is the rotation back into value he has been expecting because the dow is the only index that
is higher. as for the big laggards for the nasdaq 100 it is the high flyers and the big laggers on the year. nvidia up on the year. down 2.4%. peleton down once again today. moderna down 50%, 3.4% on the session. i believe it is the fifth down day in a row. a competitor to tesla down 4.6%. but we have more weakness in the creekas we have been talking about this afternoon bitcoin down over 6%. worse today since early december. a rough december and you know i love the technicals. hitting the 200 day moving average of will be interesting to see whether bitcoin and hold the average. likely to wrestle with it for a
time. if it should slice below that long-term area of support, it could be sort of interesting in early 2022 for bitcoin and the whole crypto space. romaine: abigail doolittle with that update. we will talk about bitcoin later on in the program. right now, we want to get onto the first guest. michele schneider, managing director of the marketgauge group and author of "let your money tree." -- "plant your money tree." how do you grow going into next year? do you have confidence the gains we saw this year will persist into 2022? michele: what is so interesting about the coming year's we have more questions about what is going to happen versus 2020 to 2021. we knew we had a change of administration but we knew the federal reserve is going to stay
accommodative and going into 2022 we know that is changing. we also know we have an infrastructure program coming up in the possibility of more government spending and the unknown of how far inflation will continue. when you put that altogether it looks like what the market is playing out is a scenario where, as we see big tech can continue to lead although it came off today, we have a situation where small caps, the russell 2000, literally have gone sideways from february 2020 to date. we look at iwm 204 and 207. what that is saying is though even though transportation is outpacing it we look at the potential of not much growth in industrial manufacturing which we desperately need to continue to grow gdp. tim: let's take this one step further and talk about what our
audience wants to know in terms of where they should allocate their portfolio in 2022. give us your picks for the year. michele: really very bullish right now in oil. i think if oil goes up as it seems like it will, we can then look at alternative energy. there is a correlation between electric vehicles which have been strong, but if you look at the alternate energy space it is still relatively weak. if oil goes up, there will be more interest i think in etfs like pbw. we are looking at mountain pass in terms of rare earth minerals as something that could double in 2022. that is one big area for us. another is at some point this whole pandemic thing has to at least be absorbed when normalcy comes back and that lee's opportunity in travel and -- leaves opportunity in travel and leisure.
and we are looking at consumer staples which already gone up and made a new all-time high. particularly companies that have pricing power like medical devices. some of those high tech that cathie wood looked at could be immune to inflation. finally we are very interested to hear in the whole medical space -- here in the whole medical space but looking at medical supplies. the last thing i will say is precious metals have been stacking well and as inflation kicks in, which it still can, it could be a good year for gold and silver. kriti: you took the thought right out of my head. i want to point out to viewers you were one of the first female traders on the new york commodities exchange which makes me want to draw on your commodity experience. talk to us about gold. since it hit that 2000 level in
july it has been hovering in a trading range. what helped gold break out in the face of this long list of worries? michele: we know that gold is going to be reactive to any geopolitical concern. at this point we don't have anything strong happening but we do have the underpinnings of russia and ukraine that can always be rough. besides that we know it is an inflationary factor and that is where you have seen so many people looking at inflation through cryptocurrency or through food commodities or industrial. gold could actually erupt if inflation gets to the point where people will think it is much more out of control than where a lot of people are saying it has peaked. those areas and it has been this transitory number. sitting right about 1800. if we can get back to 1840, it
is possible people who ignored it could come in and start by. romaine: that is the hedge though. the fed does not do anything. if the fed does start to raise rates and normalize policy and do so aggressively, does that take gold off? michele: yes but i don't think that is going to happen. first of all, they have to finish the taper so we are looking at march. in terms of aggressive action they have a price to pay if they get too aggressive. they still think the whole inflation narrative is transitory. maybe we are looking at max a year. i don't think they will do anything to aggressive until they wake up one day and realized things have gotten out of control and they will put the kabbalah on any economic growth -- kabosh on any economic growth. romaine: great stuff. michele schneider, managing director of the marketgauge group kicking off the simulcast on this day. keep an eye on the markets and
the covid cases. these are new york cases. 77 new covid deaths and reporting hospitalizations rising 647 to 6173. make of that what you will. we will put this into greater context after the break. i think we are going to talk about not only the data but the measures, including cruise ships. senator blumenthal from connecticut saying they should shut down. the cdc saying you have 89 cruise ships that reported some degree of covid cases. we talk about that in detail right here on bloomberg. ♪
>> the 12 and a half years you held was arguably the most powerful job on wall street. what is it like now being the former ceo of goldman sachs? >> bit of a relief. i am not sure it was the most power but i spent a lot of time arguing against that. i thought to myself, gee, if i am so powerful, how come i am taking so much abuse? >> how are you keeping busy? >> here we are chatting. somehow i am not scheduled, i don't set my clock most mornings, and somehow i get to the end of the day and i've been busy the whole day. i spent a lot of time reading, i try to learn stuff. originally i thought -- and i would not preclude going back and doing something else more intense than the life i am leading now -- but i originally thought and was advised to take a gap year. when i finished my gap year the country decided to go on its own gap year. one year plus so those
consecutive years leave me in this place. i would say the longer you are not setting your clock in the morning the less you want to set the clock. but, you know, after 40 years of running around the world and living in the macro markets and knowing the price of everything all the time and knowing that anything that could go wrong anywhere in the world would affect us and have huge consequences, it is a little bit hard to drop it. there are parts of it that i admit i never thought i would miss but i do. >> what are those things? what do you miss? >> even as i say i feel a little bit relief at not having -- i mean, i miss the background noise. even of having things to fret about all the time. >> is there such a thing as a substitute for that? >> well, i am sure, you know,
there are people that work at great organizations and have quite fulfilled lives and give their all and they are not it goldman sachs. there is a lot of other things that one could do. if you were asking me have i found a passion -- i am a commercial person. i am involved in philanthropy stuff and elevated my involvement in some things. i enjoyed that and you can be quite commercial in those places. you can be a commercial person and government in terms of getting things done and taking risk and pushing things along and you could be that way in a philanthropy. but i am a p&l guide. i like the immediacy and intensity of that. >> your four predecessors as chairman of the firm all went on to serve in government. >> john whitehead. >> there was also john white
weinberg. what about you? >> i would say among the many reasons i have not been asked -- that would be one of the prominent reasons. it is a little bit of a charged environment. i would not say when you look at the administration you are finding a lot of people from finance and business backgrounds even in traditional roles in which they were occupied by financial people or commercial people or business people. i would say it is not something i mourn but i would have considered public service because what else is left? i worked at a high level goldman sachs 37 years. you want to do something different and make a contribution. but i am not mourning it. >> i hear janet yellen is looking for an exit. what about treasury secretary?
would you throw your hat into the ring if you thought they were interested? >> who offered that job would decline that? you would have to be preparing for your end-of-life or jumping off the cliff or something like that. of course, to make that kind of contribution and be at the fulcrum of that large lever you would want to do it. but i have no real connection to that. we can go through this but i don't think that is going to happen. ♪
order to retain them to prevent them from going to competitors like facebook meta-platforms. mark will join us just a few minutes with more but $180,000 in bonuses for some engineers. it shows these talent wars are not just on wall street but in silicon valley. romaine: you sort of missed one key detail. a lot of the bonuses were surprises to the people who got them which i thought was interesting. tim: you have not gotten your surprise? [laughter] thank you for your service. romaine: i would not know. is mike watching? tim: mark reporting of late apple has been the victim. meta hired 100 engineers from apple in the last month. romaine: this gets to what we have been talking about on our shows about this idea of not only the competition for talent but at all levels. we talk about it from the lower wage workers but when you talk
about these higher paid, white-collar workers it is just as fierce. tim: you know what is interesting? part of the narrative that has emerged in recent years is that meta has a hard time retaining talent because of what it does. perhaps people don't want to work there. that is not the case with this latest report. we will get into it with mark gurman. we are following the latest developments with the virus. before the break we give you updated numbers in regards to covid, patients hospitalized in new york, rising to 6173. it is not just new york. case records across the u.s. let's get the latest from madison mills. help us sort through the data because we are seeing record number of cases but is this the right metric for us to be watching? especially if we are seeing reports that show the omicron variant is not as virulent as some of the other variants?
madison: definitely a downer following the news about the bonuses but i want to remind us of that these hospitalizations are what we want to watch when we are looking at where we are going with this variant. in the u.s. in particular we are already at 75% of icu beds at capacity. a big number i got this afternoon from an epidemiologist at harvard is about 50% of an increase has been happening for kids hospitalized. this is something to keep in mind when we are talking about are we all going to move into a phase of accepting the pandemic is here to stay? that leaves our most vulnerable, the children who cannot get vaccinated, at risk of hospitalization. the good news out of the u.k. is that hospitalizations are going by really quickly. once you are in the hospital, once you get treated and hopefully things turn out well, you are able to get out of the hospital faster with omicron. that is the good news i can give
you. tim: madison mills, we will have to leave it there. thank you for the update. kriti: we will switch over to more on the washington front. we are joined -- this after democratic senator called first ships deposit services saying they were petri dishes of covid infection. kasha, tells about the washington approach to dealing with the virus? >> thank you for having me. as you mentioned already the global covid cases have reached a new record and definitely lawmakers in washington know this, specifically when it comes to cruise ships. we are reading about people being stuck on ships with infections spreading and even missing their destinations
because the ports will not let them in. senator blumenthal urged the ships to take a pause and raises the issue with the cdc. tim: is there any indication the cdc will do this or regulators will put a pause on cruise ships? it is up to a lot of people up to the passengers. this is a risk they want to take. kasia: great question. however, they are investigating. they have reports on infections on almost 90 ships now. as you might have noticed earlier the cdc has taken another action just yesterday in a different direction. it says people who have covid-19 infections no longer have to isolate for 10 days but five days. that is good news for the travel
industry and the airlines. we have yet to see what people will do. romaine: even with all the rhetoric out of washington there seems to be a general, i guess, willingness to let this economy do its own thing even if that comes at the expense of a higher case count. i am wondering what the conversation is like trying to achieve some sort of balance between the two. kasia: i think that is a heated conversation. the cruise ships, air travel, we had dr. fauci on yesterday saying some mandates for vaccinations for domestic travel should be also discussed. i think health experts in washington are looking at this on a daily basis. definitely the biden administration wants to keep the economy going, to keep things open. again, the fact the cdc said if you do not have symptoms, you
can come back to work after five days. that is in the spirit of trying to make sure things keep going. romaine: we had seen earlier a rebound in the travel and cruise lines. taking a dip deeper into the afternoon. kasia klimasinska giving us an update on what the thinking is down in washington. romaine bostick alongside kriti guba and tim stenovec this is a global simulcast if you can believe it. keep an eye on the market. call it flat on the day. jason walter coming up after the break. this is bloomberg. ♪
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♪ romaine: this is special bloomberg markets simulcast across tv, radio and youtube. romaine bostick alongside tim stenovec and kriti gupta. we are going to settle higher for a fifth straight day. phenomenal run with 11% higher over the five day stretch. that is the start of the new session for folks watching. natural gas futures down for a fifth straight day down 3/10 of
1%. the smallest decline over the five days. gold futures pulling back. call it unchanged. remember when we talked about lumber all the time? it doubled and then we started off this year in the first four months with a doubling of the doubling and then it cratered. back above $1100, up 4% on the day for a fourth straight day. well off the high of 1700 earlier this year. but a year and a half ago we were $300. kriti: interesting that you bring in lumber because that is where i want to go. timberland agricultural land there is no shortage. pun not intended. jason walter national land realty founder and ceo. let's talk about the lumber picture.
timberland is really important when it comes to the commodity space. what does it look like in 2022? jason: we see it continue to go up. the prices have caught up with the lumber prices to an extent. we see that through the first half of 2022. romaine: when we talk about the distortions earlier this year, how much of that was specifically driven by the housing market and how much was driven by speculators? jason: a lot of it was by control and supply. a lot of the sawmills and timber companies controlled this starting four or five years ago. that is what drove it up. the housing market is on fire but things are starting to settle more across the markets. tim: when you say things are starting to settle and even out across the markets what is the
timeframe you are giving for a cycle top? jason: we are looking at topping out in the second quarter. part of the issue you have is supply across the board. it is getting harder and harder to find the land so that is going to become an issue the latter part of 2022. kriti: how is this viewed abroad for somebody making a hedge against inflation? is land where they could look to do that in the long-term? jason: yeah, i mean, it has historically outperformed everything even twice as much as gold. there is no better place to put your money period. especially in the commodity driven timberland, recreational land. we have seen incredible numbers. i think in 2022 i get asked
every day when is the market going to slow down? i don't think demand will slow down but supply is going to become the real issue. it is already becoming an issue and there is only so much land. the prices are just getting outrageous. romaine: there is so much competition. we talked to a lot of wealth managers who talk about this idea of looking at real estate whether it is at the hedge but also as an alternative form of earning interest in capital. how do you make the assessments? i am looking at it more from the perspective of the rank and file investors, those who not experienced in real estate. what are they looking at? what did they use that could potentially be profitable? jason: a lawn of our clients are driven by -- a lot of our clients are driven by recreational use. they are looking to build a house on it one day but they are hunting on it, fishing on it and that is 80% of our clientele.
as far as the pure timber ag investors, you are either a sophisticated investor or you're not. it is not like the stock market where you can fiddle. tim: a big part of the narrative that emerged the last let's say 20, 22 months has been this idea of family searching for more land, more space so they can do things outside. do you see this as a permanent shift or something when we finally get to the other side of this pandemic we will see prices go down and demand go down a little bit? jason: i do think -- it settled down in the beginning of april and may of 2020. you had people going to the extreme. they wanted to move from a neighborhood to owning 100 acres of land 60 miles out of town. we see that settle out. instead of moving into urban areas to 60 miles out they might
buy 10 or 20 acres 10 miles out. it is like anything else, you have extremes in the early stages and then things settle down. but i believe we will see people have gotten used to isolation and some people really enjoyed it. tim: jason walter, national land realty ceo and founder. thank you for taking the time. another story that caught our eye earlier in the day had to do with space. beijing complained to the united nations about near misses its space station had with spacex satellites. this the sign tensions are rising between china and the u.s. the idea is that the chinese space station had to do evasive measures in two instances to avoid these spacex satellites which are part of the starling system meant to deliver internet to spacex starling subscribers. romaine: there is like 1600.
do you know how many satellites are out there? i am fascinated. it is like thousands. what's interesting is that these near misses occur all the time and there were experts and scientists that say it is a matter of time before you have something more catastrophic. there are a lot of calls now for policing this and i guess they really is no police right now. kriti: we have so many players, virgin galactic, blue origin, spacex, and to have the government be held responsible for what these companies are doing something to watch. tim: coming back we chat about the apple tech talent war with mark gurman. this is our special simulcast of bloomberg tv, bloomberg radio and watching on youtube. this is bloomberg. ♪
spreading omicron variant. we bring in emily. she rode up the story about the key measure of american corporate health which is earnings. what are earnings estimates looking like for 2022 and will the power stocks higher? emily: my colleague and i have been dissecting what is behind the upward move in stocks. we continue to grow higher even though we have widespread inflation, expectations of a hawkish fed, at uncertainty around the very. we observe even though we have these headline risks they have not weighed on the forecast. 2022 earnings estimates in the benchmark index have actually risen the last month. even after we had a hawkish pivot from the fed. this is underscoring that a lot of the focus right now for stocks for the new year is that we will have strong earnings. hope that we will. kriti: talk to us about the kind of company that might be behind this.
are we relying on big tech or is there something else to it? emily: when it comes to those companies that can generate profits i spoke to one strategist who is focused on any type of company that has strong pricing power. even if a company's input cost, whether it is wages or shipping raw materials, they can pass those costs onto the consumer. they can raise the cost of the good and the consumer is still going to buy that good. they don't care it is more expensive. he said consumer staples in companies with strong pricing power also have a basket of stocks with strong pricing power. it has out priced other companies by 7% this quarter which is more than march of 2020. romaine: the headline on that story lives on. reporter emily graffeo for
bloomberg news. apple paying out bonuses of $180,000 to retain engineering talent. mark gurman joining us now. this is not just 180,000 dollars in cash is it? mark: these are in restricted stock units. they will give these grants out in january, about a month from now, they will invest every year annually for four years. some are reporting under $50,000, some in the 60,000 dollar, $70,000, $80,000 range. these go out to individual contributors, those without direct reports. individual engineers working on products like apple's upcoming mixed reality headset, silicone engineering, mac, and all apple devices. a subset into engineering as well as people in the operations department. these bonuses are out of cycle.
these are random and unusual in many cases. people received them and were taken aback. these are not part of the normal compensation packages. this is not something i believe apple has done before. this is in an effort to retain key talent. apple is losing talent right now. more than usual the number of people leaving. people don't want to return to the office. other companies like meta and google who will be more lax about policy return. meta is paying out base salaries that, in many cases, are higher than the base apple and others are paying out. they have been recruiting apple engineers given their shifter hardware in the metaverse. this is an effort to stop that and retain the key people that push out these products that are core do developing the apple devices on an annual basis. tim: you reported on defections from apple's self-driving car team in recent months as well as this most recent news.
i am wondering if this is going to be enough to get people to stay at the company. you did say there are higher salaries at companies like meta for example. mark: the hope for apple giving out these are as you -- rsus will offset the recruiting for a time for meta and other companies. 100,000 to 150,000 is a lot of money and that could offset the higher base salaries. apple is nearing the $3 trillion threshold. these bonuses will only be more valuable as apple stock rises. some of the price targets we are seeing says there will be a rise in stock price of $100,000, $150,000. rsus could be double that they are today. kriti: talk about the other was apple can play employees -- pay employees. working from home with the more flex schedule. where does that fit in in a hot
market when it comes to finding a job and a market where other big tech names, i'm thinking amazon, are dealing with unionization? mark: for decades the perks apple offered employees in many cases are not as substantial. steve jobs liked to frequently say 10 plus years ago that you have to buy your own lunch at apple whereas meta and google provide free lunch. it is a simple thing but that is important too. a lot of the engineering talent in terms of the normal perks you expect from a company, 401(k), vacation. these bonuses are higher in many case. apple in terms of benefits is extremely generous even down to retail employees. during the height of the covid pandemic when all of the apple
retail stores globally were shut the employees were still being paid and they were able to work from home as customer service agents for online. employees are also not happy with the company, not happy with the leadership or management. they have been feeling underpaid on base salaries compared to meta when they see coworkers getting offered gigantic pay packages. you are seeing employee concerned about return to office plans and having to work in the office if you are a hardware engineer. they are expecting engineers to be back four days per week or full-time with the deadline mid next year. the date is to be determined but aiming for next year. you are seeing all employees needing to be in the office three days a week whereas other companies are fully remote for many of those roles. what we are seeing is apple may need to up benefits in addition to the money to retain top engineers. romaine: great scoop today
giving insight into the talent war in california and beyond across the tech sector. mark gurman as always all over it. he talks about the rsus and what it can mean. we will watch for the $3 trillion market cap any minute. every analyst on the street thinks it is going higher next year. tim: they are bullish on it. one thing that stuck out to me was the benefits beyond rsus and working from home becoming a benefit that is attracting people. kriti: to your point we are talking apple shares. the biggest weight on the s&p 500. romaine: the s&p 500 you can call it unchanged. a lot of the big cap tech names are moving lower. all springs global investment head of equity will join us in just a minute. this is bloomberg. ♪
tim: this is bloomberg markets special coverage simulcast this week on bloomberg television, radio, and youtube. taking a look at the marketeer, relatively flat on the day. apple moving a little lower. you're seeing a bit of a rebound in the travel stocks, including the retail stocks continuing to do their thing. we will talk about bitcoin and crypto later, down about 6%. tim: coinbase down as a result of what we are seeing from crypto moving lower. i guess bringing up an idea of the technicals of bitcoin, bumping down to the 200 day moving average. let's get deeper into the markets with kriti gupta. kriti: the rally that all
investors had their heart set on is not coming as easy as they thought. a lot of that is driven by tech. it can always take away those gains. the best kind of indication of that is what you're seeing in the nasdaq, a five day chart showing that momentum ending. a lot of that has to do with the movers. you look at the classic semi stock, the heavyweight in the s&p 500, and the nasdaq as well. but it is not alone. the dharna is going to be your poster child for that stock. not only is it a member of the s&p 500, but since its peak, it has reversed gains, down 50% from its record high in august. that follows the massive boom in 2020 off the development of the vaccine. let's take a look at the laggards in the nasdaq. nvidia and moderna are not alone. you see the chinese tech stocks under pressure.
jd is going to be your poster child for that. when you see some of the chinese tech stocks, some of the trade gets put in with the ev space. it is all interconnected. it all has to do with this text trade. we are in a world where tech hits every sector. romaine: tech is basically everything right now. let's get more insight into what is going on with the markets. ann miletti, head of active equity at all sprinkle one vestments joining us. -- of allspring global investments joining us. give us an idea of what you're looking out for in 2022. are you hopeful, worried? ann: it is a great question. certainly we are sober about potential headwinds that could still be coming, even the rest of this year, but early in 2022. we know there are a lot of factors changing. the fed is going to be raising rates.
that will change things with the market. there is the potential for the bill back better plan to come through. that will change things a little bit, too. but i think we are also hopeful because, as you look at a lot of the economic data, it remains strong. so we are trying to stay focused on the fundamentals and stay away from reacting to emotion. tim: you are sober on the outlook. you gave us some potential positives and potential negatives. what is the most frightening thing about 2022? what derails everything you just said? ann: certainly if the fed made a policy mistake and they did not move fast enough, or they don't move fast enough and tamper down inflation. i think that is the biggest known for your out there. but -- the biggest known fear out there. but often the things we do not worry about are what hurts us the most. it is the things none of us saw coming.
that is what happened with covid. that is what has happened in the past, 911, the financial crisis. those are the things that tend to hurt the market even more. this is somewhat predictable, something that investors cannot wrap their hands around a little bit. but the timing can be very tough to get right. kriti: let's talk about something that several guests on the show talked about today and that is pricing power. when we think pricing power, we think big tech. at what point does that switch into becoming a negative for the average consumer, for those sales, for those profits at a time when the impact of fiscal spending is weaning? -- is waning? ann: it is an interesting question. what we saw historically and what worked in inflationary time periods as opposed to this time around may differ because there has been a lot of innovation. there has been a lot that has changed both secularly and
cyclically in the economy. i do believe that tech, there are names within the technology space that you do not want to ignore because as companies continue their capital cycle they will look towards spending that mostly in technology to become more productive, just like we have seen companies become the last two years. but investors should look for companies that not only have pricing power but can avoid really high reinvestments of their cash flow. that reinvestment gets particularly more expensive during inflationary time periods. if you can avoid those and look toward pricing power, it leads you to two industries primarily -- energy and health care. interestingly enough, health care underperformed as a sector in the broader index so far this year. romaine: some of that related to covid, so maybe if we get to the other side of this crisis we
will get more normalization there. can you expand on the idea with regards to energy? i assume you have to have an eye on commodity prices. the run-up we saw this year in oil, we are up 50%. do you see that going higher this year? ann: there is sometimes correlation between energy prices and the stock prices, and a sometimes that correlation breaks down. we have seen that happen throughout 2021. investors do want to focus on more climate friendly investment. but despite that, i think the return, there is potential for return in energy because you have that pricing power typically in inflationary time periods. but consumers need that energy. we need to heat our homes. i need to heat my home regardless of what is going on with pricing. we need fuel for our cars,
airplanes flying more, so that demand is increasing. they can pass that through. more importantly, though, the energy companies, of all sectors in the economy, they have been starved in terms of getting capital to them in a time where capital is pretty much free for anyone, and there has been opposition to drilling. for those reasons, if you don't have to worry about the high capex spending. tim: what are sectors to avoid in 2022? ann: i think it is going to be a little tougher for the utilities sector, most likely, probably a little bit harder for consumer discretionary. we are going to hit a point where this growth just does not continue. the growth path that we are on across the economy is not sustainable. it is going to slow down. i think those sectors will be a little more challenged.
certainly consumer discretion will be more challenged as we face that. tim: ann miletti, marco alvera --allspring global investments. thank you for joining us this afternoon. delta airlines expected to cancel upwards of 250 flights today. we know that u.s. companies, u.s. airliners, have canceled thousands of flights since the holiday weekend and they are continuing not just to grapple with weather issues but crew shortages due to the omicron variant. jr welcoming the cdc changes -- they are welcoming this easy changes. romaine: they were dealing with these labor issues back in the summer. now you have this mu variant coming in and that is knocking -- this new variant coming in and that is knocking things back. you talk about a revival in travel and airlines, it will be determined by the service they give. tim: do consumers by based on
service when it -- buy based on service? romaine: you buy based on your last experience. if your last experience took eight hours on what would normally be a one or two hour flight, you would be hesitant to get a ticket again. i talked to my brother yesterday. tim: he is another day without a flight back to los angeles. romaine: is he just living in the airport? tim: fortunately my brother and his family are there. romaine: it is snowing in milwaukee. it is about 50 degrees here. kriti: we will go -- tim: we look out from the midwest to china after the break. we will talk about proactive measures to stabilize the economy in the year ahead. this is bloomberg. ♪ this is bloomberg. ♪
software is >>. recurring revenues, high rates of growth, growth margins that are 90%. you have the potential for big cash flow margins. it is a fragmented industry where you can consolidate markets. and software is becoming the business of everything. >> software was definitely hot before the pandemic, but now it is on fire, right? and money is pouring in. tell me about the competitive landscape. >> we have always had great competitors coming. our competitive advantage in the market is that we have been doing this for 22 years, and of the process of buying 300 software companies we have
developed operating know how that adds value to the businesses we are partnering with. and most of the industry to this day, while you have seen great innovation and software is leading the world, most of the industry today is unprofitable. to buy a whole company and a private equity deal based on fundamental investing, which is what we do, you have to re-create that and turn these great innovative companies into also cash producing businesses. you have to combine the best of both. if you have been doing it for a long time and you have an operating model, you are able to achieve that. that is what keeps many players really on the sidelines of this great software industry to this day. >> it's true that many players are on the sidelines, but increasingly there are firms that want to compete with you, right? some of the largest private
equity firms in the world are raising growth equity firms. they want to be the next softbank. hedge funds are becoming serious players in late stage venture capital all of a sudden. tiger global, d1, others. if that changing the competitive landscape? it has to be. >> kit is making it better, and this is why. competition is a very good thing for us, it is a very good thing for our peers, because when there is competition we alone don't have to create the market. when a company receives many types of proposals, maybe a growth round proposal, they feel better about where they should be valued at work where they should trade. >> if software is as attractive as you say it is, and i believe you, and furthermore you have a track record to back it up, why hasn't and everybody -- why
hasn't everybody figured this out? >> the lack of profitability in the industry overall keeps many players out. we started when we were very small, so you are doing small deals, but you can take the risk of learning operations and learning how to run partnerships when you are investing $50 million. are you ready to take that risk when you are investing $7 billion from the first time, taking a company from -10% to 40% while not hurting the growth rate? that is a tall order. the second reason, which you astutely pointed out, it is interesting how things work in our favor when it does not seem like they should, which is the high valuations. those are natural barriers to entry in this space. if software today traded for 12 times more, we would have 40 competitors. but that in essence keeps many players out of the business.
there is a big celebration happening at the airport. as you can see, there is a red carpet for the private chairman. there are balloons. it is the only operator of boeing 737 max airplanes. tim: this is a special markets coverage some cast on bloomberg television, radio, and youtube. i am tim stenovec. more proactive measures part -- sparked by surging infections in
a worsening property slump. let's bring in been curtis, who leads fx rates and emerging markets coverage. ben, what exactly do the people think china is doing to stabilize growth next year? ben: thanks for having me. it is important to think it is not just china. they have taken some measures already. they have allowed the banking sector to unleash some extra credit into the system by cutting lending rates by a few basis points. they've also reintroduced their lending program. the important thing is it is not just the people's bank of china, it is all the ministries, the administration is a whole working in a coordinated effort to ensure not only growth next year but i stabilization of the current situation. i think that is what is most important for the chinese administration. there were headlines this year about evergrande and things going a little bit awry.
a long shot from the double digits we saw a while back. more importantly, engineered in a climate and economy that is good for people and providing stability that works not only with economica ends. kriti: not only do you head up the coverage, you used to be on the market lives team, which means we can throw any question that you and you will ace it. let's talk about not just chinese growth recently but in the last couple years. zoom out the chart. chinese growth has been decelerating for years. what happened with supply chains -- when supply chains became shorter, bringing production closer to the consumer? how does that hit china's bottom line? ben: it is part of a longer evolution of what has been going on with the chinese economy.
as you say, not just since the pandemic, but the longer decade. the old question is does it get old? it is struggling to remain that. it is still a massive powerhouse of the global economy, one of the most important that we have. as supply chain kinks get worked out, hopefully they will provide some relief for the chinese economy. but they are, as we are in the u.s. and everywhere else, dealing with the pandemic. romaine: a topic that no one is talking about, that is libor. at one point, i was told it was very popular. it is being phased out. we are talking but the london interbank rates. back in the day, you would call somebody up and say, what is the libor rate? they would tell you 1% or 1.25%
and that is what you took. there were some issues with that, i am told, and now they are moving to another system. it has been for years in the making. ben: it is an understatement to say there were issues. i think you are hitting it on the head that nobody is talking about it. i think that is the way the regulators want it. they want a nice, quiet, uneventful end to libor. the end of this year has been flagged for several years as the endpoint for what has been a bit of a scandal plagued rate. but it is coming to an end for the most part. there are a few exceptions, a few of them in the u.s. dollar space will remain until mid-2023. but by and large, people will start writing new contracts on these things and a to other things. it is better for the regulators. romaine: it has been quiet.
some of the disruption when this was first proposed, there were concerns about the potential market disruptions that you would have with this switchover. that does not appear to be the case. ben: yeah, there have been a lot of people putting time, money, and effort into this transition. there are still some kinks to be worked out and nuts and bolts to be talked about, but for the most part we've got functioning derivative markets and contracts that have changed over for a lot of things into these new alternatives. this is hopefully an uneventful thing that will come next monday morning when there are no more libor readings across many currencies. it hopefully will not be a huge problem. romaine: it will be interesting to wake up on that day and see how much our life has changed. ben purvis, a big transition coming up this friday. do you know what else is going
on? tesla, shares were higher. they are going higher now, up 0.3%. dan ives says they will go higher. tim: i got this note yesterday and said another note about tesla, watched has look closely to the trading day. i am surprised that is not moving quicker. he said it could rise 30% next year on china's demand. the chinese story when it comes to tesla has been a really important one because of the size of the central market. but it goes back to what we were talking about with spacex and the space station. romaine: the satellites. tim: how do they keep the tesla from hitting it? the tesla is still up there. romaine: so we are just launching things into space. some would call it space junk. wonderful. [laughter] tim: is it going to hit anything? i am not up there right now but there are people who worry about space junk. i do want to get back to tesla here.
i at have a $1400 price target. you know i love talking tesla. they have gained 55% through yesterday's close. kriti: it is not just about tesla right now, but what are their longer-term credentials, not just about making electric vehicles and lithium batteries, but creating recycling centers for those lithium batteries? this is a long-term plan that has a lot to play out on. romaine: we have more to talk about. we will talk about the m&a boom in 2021. 34 minutes to the close. this is bloomberg. ♪
>> what do you worry about? do you worry about think news? we all worry about fake news, but it is one of the most pressing issues. fake news is one of the worst things because you are not fighting or talking about facts. whose responsibility is it to right that? >> social media companies have failed. they have done a terrible job of managing the problem. they have this attitude of they are not responsible, yet they are responsible. i don't think there is any tech
company right now that trades in information that i would call a responsible company. they all fail. they get a failing grade. it is sad and it is bad for democracy. >> beyond the satisfaction of your own goals being the key, what does this symbolize for the company and all those children who were present earlier? >> for the children, we have just started building as many spaceships as we can as fast as we can so one day they will have the chance to have a similar experience to the one that i had.
and that will do. we also launched this today so it is $10 for a pair of tickets so they can go up. but that money will hopefully enable many people to go up who could never afford it. romaine: this is special markets coverage all week long. romaine bostick along with tim stenovec and crete he cooped up. we have been talking about it all day long, $5 trillion plus in deals in 2021. we want to bring in our roving m&a reporter. this is a record year for mergers and acquisitions. i asked him from what i have read over the last year that most of this is being fueled by private equity. reporter: certainly a decent
proportion of private equity and a more high position -- proportion that we would see. a lot of these sponsors have a huge amount of capital they have been raising on the funds and we have been in this extraordinary market for a long time where we see extremely high valuations. they are in an opportune -- they are a position where they have returns. so we see them come to the market in a much more aggressive way, structuring larger deals and it deals where you sometimes see a sponsor teaming up with a strategic companies and sovereign wealth. kriti: how much catches up to corporate america in 2022? the example i am thinking of is
oracle and their massive purchase of sterner. ed: it is a great question. we have been expecting that to catch up year after year, the availability of debt as an external function of this m&a cycle and of this economic cycle. the obvious thing is to say that 2022 it will become available, interest rates will go up, it will be a harder thing to get done. but the last two years have proven that not to be true and companies continue to be able to borrow at historically low rates and lock in low financing.3 that is an accelerant to the kind of deals being done, these highly leveraged deals. we see one or a number of banks taking enormously big risk and being able to syndicate that debt into the market. tim: what does that portend for 2022? you mentioned it, but i wonder
if your sources are thinking that the momentum continues into 2022 nbc another record year. ed: i think the momentum definitely continues into the first quarter of 2022. nobody has much stability beyond a quarter out because there is lag time for a deal when the dialogue starts. you usually have three to six months. people are looking at the first half of the year as being fairly robust. that can obviously change quite quickly if we have interest rate rises. it would be the most obvious one people would be looking out for. but i think people feel good. they are going into this year feeling confident. dialogue is still there, the pipeline is strong, the availability of all the things that made this market as robust as it has been. you could say, if the pandemic begins to ebb, you will see that momentum pickup through the beginning of the year.
but as i said, what happens later in 2022 is anyone's gas. --anyone's guess. tim: we could perhaps see more deals in 2021. thank you to ed hammond for joining us. i want to bring in sonali basak for more on one -- on wall street's return to work plans. we talked about goldman sachs making booster shots mandatory in its return to office land plan. what are others telling you? sonali: on one hand, when you look at one bank and a rival, they consider all of the possible options, including what i think is the most interesting one, which is whether to require booster shots before entering the office. but with that said, we have seen the banks diverge on this topic. we continue to watch them diverge on the topic.
and it continues to slow walk a return into next year, at least for a part of wall street. romaine: we talk about the testing side of this equation. the companies seem to be ramping up that effort as well. sonali: the testing is a really interesting part of this. we mentioned that goldman is requiring two tests per week, not just one test per week. that is more than we have seen in the past. there are a lot of questions around how the banks are going to react around the cdc guidance. will they start to require even more tests should somebody in the health world test positive, should somebody get a symptomatically and test positive? there is a sense that the banks will be cautious because you don't want to have an entire trading floor out. that is a disaster. but also, remember some of these rules. if you are testing twice a week already -- anyways, it meets the guidelines. kriti: i want to ask you about
the momentum we heard early on in the pandemic, this idea that a lot of senior people in these wall street banks said you have to come back to the office, especially if you are younger or newer, there is no other way to learn. how has that mentality shifted atul? -- shifted at all? sonali: a little bit because people are taking very interesting responses. we have heard banks using automated reality, augmented reality, to teach people from far away to get to know each other over a.r. we have heard of young bankers living together so they have some sense of camaraderie during this time because not everybody is back in the office. even some of the more aggressive banks, like morgan stanley, not everybody is in every day. there is a lot of inconsistency and people are trying to find their way around it. romaine: should ali basket -- sonali basak giving us that
update. a lot of folks will be called back to the office. we are 21 minutes away from the end of the trading day on this tuesday afternoon here in new york. it basically flat on the day. the nasdaq down slightly by about 0.4%. at the dow jones industrial average hanging out in the green as our transport, 10 year yield down. we are slightly higher right now with the two-year guilt. it is flattening out. i guess you could call this an awful day. it is down 6%. but still well above where it was at the start of the year. this is bloomberg. ♪
toes into the old world, and it is not something that i gravitate to. and i can think of a lot of reasons why it won't work. but i remember when they were auctioning off spectrum for cell phones and they said, why would anyone need a cell phone? you pull up to a phone booth. who would carry that clunky thing? the point is, there were a lot of things in this world that have worked out awfully well. >> you found for somebody -- you sound for somebody who used to run a bank constructive. >> i am open to it. i ran a bank. you have to separate fact from opinion. nobody knows the future. there are all sorts of things that move in directions that i couldn't and wouldn't have
anticipated and no one else would have either. so to come out and say that i market that is already in excess of $2 trillion that faces all these regulatory headwinds that a lot of people really don't like and would enjoy seeing crushed somehow managed -- every day it does not look like it is forcing, but on no day does it look like it is dying. >> are you all in on crypto? >> no. ♪
bit today by about 0.7 percent. airlines rebounding nicely from yesterday's selloff, up about 1.7%. retail stocks also higher. keep your eye on arc innovations etf, down by 1%, down for a second straight day. you go back to the beginning of the year, this outperformed the market. outperforming the s&p by 20 percentage points. as of right now, it is heading into the end of the year trailing the s&p 500 by something like 50 percentage points. tim: it is remarkable and it raises the question, and kathy will defend this over and over again. she was talking about how well the fund is going to do in 2022 and she got some heat for it area but was 2020 an anomaly for the fund? i think it is a fair question to ask. kriti: it is a high test play. it is not something that will be specific to 2020 alone. it is something we will see more funds stop into around the world
as people see the defense, whether it is now or in five years. romaine: in fairness to cathie wood, she has made clear she is a moonshot type of person, that this is more than just short-term gains that she is making bets on. some structural changes in our society and fintech technology. lets talk with the broader market and bring in katie nixon. she is joining the program now as we count you down to the close on this tuesday afternoon. about 10 minutes to go. we are wrapping up the year. whatever gains we lock in over the last few days here are immaterial to the narrative we have seen leading up to this. what everybody wants to know is how confident, how optimistic are you heading into 2022? katie: thank you for having me on today. i would say we are pretty constructive. you cannot deny the strength of fundamentals right now in
corporate america in particular. even in the economy. we are having some starts related to this omicron variant, but we have said before this could create demand delayed but not destroyed. we are expecting above trend growth. tim: what about inflation? does it turn into something that is beyond fits and starts that causes more supply chains to shift spending? we have seen this before, shifting spending from services to goods? katie: it has been a year of deja vu after deja vu. the interesting thing right now is the way that modified and figured out ways to live with covid. the reason cdc guidelines changed is really interesting. it will probably mitigate some of the supply came concerns, as we saw omicron ramp
up. i think we will see the issues prolong, but not as long as we feared when this latest version of the virus came into view. supply constraints will continue, but we think we will get past them in mid-2022. kriti: we just came out of 2020 with this massive rebound, thriving in value, then a switch to a lot of those defensive growth plays, yielding sectors in the back half of 2021 going into 2022. do we get closer to that scary our word, which is recession, equip sing the 10 year long recessions we have had and going back to the historical norm of a recession every five years? katie: we do not have a recession in our five-year forecast. our point of view is that the fed is going to be very much on hold. maybe we will get one or two
rate hikes next year, but the cycle will be short in terms of fed policy. we are constructive on growth going forward. what i would say is the value growth debate is interesting because it has been a year and i think investors who have tried to pivot between growth and value have gotten burned because the cycles have been really short. at the end of the day, now is a great time for investors to think about quality. you mentioned quality dividends. the intersection between those two will be interesting for investors going forward. you have the defensive nature of the quality stocks. they have a sustainable profit margin. then you've got the dividend, the bird in the hand to provide current income. romaine: four our bloomberg audiences, in conversation right now with katie nixon, chief investment officer at northern trust wealth management. she is sticking with us as we cap towed to the closing bells,
about 7.5 minutes away. treaty, you -- kriti, you're looking at the markets. kriti: it was supposed to be an easy day. we had it in the bag until you sawtek play a role. they take us to the record highs and can take us to some drops. that is what we are seeing today. the s&p 500, the nasdaq, and the russell low on the day but not by much. as we have six minutes going to the close, does the s&p 500 barely make it into the green and hit that 70th record high? i want to quickly hit what some of those forecasts are for 2022 in particular because if you look at the average estimates, 49.50 versus 53.30, and the low, 44.00, those are wide gaps. we saw that with quite a bit of growth following the surge in commodity prices. do the analysts have it right? if we had this conversation a
year ago about 2021, nobody would believe we are nearing the end of the year near 4800 on the s&p 500. here we are doing just that. it seems like the forecasts are hitting a wide spectrum, which brings me to something people have been trying to predict, cryptocurrencies. what does volatility look like? you are looking at a bloomberg galaxy index down about 6.8%. i believe bitcoin was down about 4% earlier, just one standard deviation move, but dropping below the key roundabout levels. it brings into question, how much of it becomes part of your portfolio in 2022 now that you start to see the correlations in line with breakevens? romaine: five minutes to the closing bells. katie nixon still with us. we are focused right now on the countdown to the close of u.s. markets, but i want to get your thoughts on some of the markets outside the u.s., particularly in the developed world, particularly in europe, and
whether you see anything attractive over there? katie: we are favorable to europe for a couple reasons. first of all, we think monetary policy will continue to be accommodative, and we have some fiscal policy adding to the mix in 2022 as well. then you also have this interesting dynamic in the european equity markets, where the markets themselves, the benchmarks, are pretty high leveraged in cyclical stocks. if you are a believer in global growth, you want to be in those areas that will take advantage of that. i will add, we have fiscal stimulus in japan as well, so we expect to see economic growth there that can be pulled through . we are favorable in general right now. tim: let's say somebody is watching this simulcast or listening to us on bloomberg radio and they have been hesitant to put money into the markets, waiting for a pullback. i know professionals advise against timing the market, but is it fair to say that you think
there will be some pullback or opportunity to get in when it is not hitting a record high? katie: i would say there is always the opportunity for a pullback. a 5% or 10% correction are normal features. tim: not in 2021. [laughter] katie: we have not had a lot of volatility. your point is a good one. we anticipate we will have volatility next year because we are in a year of transition areas we have had a one-way bet for a couple years. strong physical, strong monetary, liquidity. those things will slowly be put in reverse. so you can anticipate that will have volatility. market timing is so difficult because when you do have those strong pullbacks, those tend to be very difficult times for the individual investor to put money into the markets. our advice always is, cite your strategic plan, align your assets with your goals, and get
invested as soon you can. this year has been a cautionary tale against people who have tried to time the markets. kriti: you mentioned you're in the camp of global growth momentum. let's talk about the international playbook, especially when it comes to tackling not only covid-19, like china with their policy, the u.s. dealing with vaccinations and boosters and testing, but you have different rate pass when it comes to emerging-market central banking for the fed or the boe. how does this all come together? katie: i am glad you raised emerging markets, and i think the big source of uncertainty there is china. the implications of not just a year of covid policy on chinese economic growth, but also on supply chain. the regulatory crackdowns this had on some of the high-growth sectors, and clearly the trying to tamp down the speculation of property markets. those are really strong headwinds to economic growth. we have started to see chinese authorities at the pboc provide some stimulus.
it has been slower than we anticipated, so we think in 2022 we will have a much stronger policy action from china as a way to reignite interest in emerging-market equities. but until that happens, i think emerging markets remain a big area of uncertainty from an investor's perspective right now. romaine: in conversation with katie nixon over at northern trust. sit tight for one second. we are going to wrap up the markets as we get closer to the closing bell, a little less than a minute away in new york city. one interesting thing i just noticed, i was taking a look at the boards, the dow jones at one point today traded above its record high. it looks like it will close a little below that, but right now camped out around 33,000, up around zero .2%. tim: jarring moves, it does not look like it will not the 70th high of the year. kriti: industrials are actually
driving a big chunk of the game today. if you don't have tech on your side, you have those heavyweights that are reflecting in the dow. tim: for all of our bloomberg audiences, you are hearing the closing bells in new york. about 40% below s&p 500 opened higher in trade, the first time and has done that in its history. it will close down on the day by about .10 percent. the nasdaq closed down .6%. the dow jones on a five day winning streak, the longest streak going back to the end of october or beginning of november, up by .2%. the russell 2000 closing loves her by about .7%. what's -- tim: what stuck out to
be was the narrow range it is focused on. even when it was higher or lower. kriti: it brings you to the point, what is driving these gains? we're seeing some of the yielding sectors at the top of the pack, consumer staples, some of your retailers. the laggards today, that bundled tech trade. industrials leading the decline. the question is, today's gainers were yesterday's losers, and the question is, is that where you start to see the volumes and liquidity pattern for the rest of the week? romaine: carnival cruise lines was higher, at one point up more than 4%. growing signs of the omicron variant leading to milder
infections. finishing the day down by .2%. i have to throw in krispy kreme. romaine: are doughnuts hot again? tim: short-sellers may be covering positions after a forced exit point according to one analyst. modernity shares finishing lower, down 50%, for a time with august. nvidia up more than 130% so far this year. romaine: something we haven't talked about today is ford, closing higher on the day, or slightly down by about .2%. gm fell more than that so ford actually overtaking gm for the first time in five years. an interesting milestone.
we talk about tesla and all these stocks, ford has been a sleeper stock this year. up 136% year on year. tim: absolutely a sleeper. 2021 has been an incredible year for them. romaine: this is the most excitement anyone has had about ford for years. that got the ford lightning coming out. i forgot the exact number but they were committing to a couple hundred thousand in production. when you look at the preorders, people are excited about it. tim: you make a good point about american trucks. when those things go electric, that is a huge opportunity for them. the cyber truck is still not out there.
it is not in driveways anywhere in the u.s. right now. romaine: that's pretty much the wrap up. apple lower by about .6%. still patiently waiting. katie, when you look at the outlook for the broader market and you try to start picking sectors you want to gravitate to in whatever 2022 brings us, do you find, not just safety but real growth attractiveness in some of those big cap tech names? the apples of the world, meta-platforms or whatever it is calling itself now. the older stocks like ford that
seem to have now found its way into the what the new future is going to be. katie: you cannot ignore the power of these large tech stocks. the last two years it has illuminated a resilience of their business models, their ability to maintain pricing and margins or contributions to the margin expansion is meaningful and it could be secular, not cyclical. at the same time, as you are looking for value, you have to look for software more recently price. for a longer investor, it can anchor your expectations for return. cheaper stocks have a higher expected return, so you want to balance the growth and the value stocks in your portfolio so you get the best of both worlds. romaine: the nasdaq higher by 22%.
that is rare, the s&p 500 outperforming the nasdaq. what is the biggest risk that could keep markets from continuing this momentum into 2022? katie: when you ask investors, nobody says covid is the biggest risk. tim: why is that? katie: i think that investors have come to grips with the fact that we are learning to live with the virus, and not only have survived but many have thrived. i think investors are comfortable that almost regardless of what is happening with covid, and things seem to be getting better in some ways in terms of hospitalizations and we have therapeutics and we have mass testing and changing cvc requirements. that is a bit on the back burner. what is on the front burner is
hiking rates too quickly and too much and then coming back to the question we got earlier about a recession, pushing the u.s. economy over that tipping point. that is something that is a big risk and the biggest risk case scenario that we have. we get into a series of rate hikes and that is a bridge too far for an economy that will face inflation as we get to the latter part of 2022. kriti: where does the dollar fall into all of this? you listed some scenarios that would signal haven flows going into the dollar. how does that ripple effect happen across everything with the dollar price? katie: we've seen this divergence in expectations for
monetary policy here in the u.s. against elsewhere in the world. we have also seen the inflation issue here in the u.s. and those have been tailwinds. we expect those to come to a boil next year. while it's difficult to try to guess short-term movements, i would say we expect stabilization of the dollar in 2022 and not at the percent we saw in 2021. tim: katie nixon, thank you so much for joining us on this tuesday afternoon. we talked a little bit about bitcoin and the move lower. bitcoin is lower by 7%. it could be close to that 200 day moving average. romaine: what does that look like on a logarithmic scale? kriti: when you talk about bitcoin, it's hard to put it into perspective of technicals
and valuation. essentially what is normal is a 4% move, in any other asset that is really unheard of. romaine: you talk about how a lot of people were calling for the death of crypto toward the end of last year. bitcoin was around 26,000 at that time of the year. then when it came back down and hit that moving average and bounced right back up. tim: it did. we will talk more about bitcoin in just a few minutes. we will talk all things bitcoin and cryptocurrency. you're listening to our special simulcast on bloomberg tv, bloomberg radio, and bloomberg. this is bloomberg. ♪
here are the numbers on the day. the s&p down by .10%, the nasdaq down about .6%. despite all the turmoil we've had this year the vix at a low point and at the bottom of your screen, your bloomberg dollar spot index slightly higher on the day. an interesting story on the year, up about 5%. this is the first time we've seen that type of string in the last couple of years. that is the strongest we have seen in at least five or six years. we are at the flattest level on the curve as we have been on your long. a lot of people look ahead to next year and what the fed is going to potentially do.
a lot of people projecting those rate hikes for march. keep an eye on what is going on in commodities. brent crude up about 57% on the year. gas futures up 67% so if you are driving that big hummer, you are really feeling at this year. and coffee beans, this has hit hard in my household. up 65%. tim: we get our coffee once a month from a small shop in new york and they have not raised their prices yet. kriti: don't say that too loud. tim: i am shocked because i haven't raised their prices yet. one of the biggest stories affecting markets and all of our lives is the covid-19 pandemic.
hitting a record yesterday. we welcome madison mills. throughout the pandemic we've looked at other parts of the world to get an idea of what they are going through, could be what we are going through in a few weeks. what is the latest from the u.k. ? >> some good news, we had an increase in hospitalizations which is a data point we need to focus in on, but people are only staying in the hospital for an average of three days, down from five days throughout the majority of the delta variant spread across the u.k. remember march 2020, all we talked about really was the ventilator shortages, a huge issue. in the u.k., most people who are in the hospital are not being
put on ventilators. they are getting treated and released three days later, so that is a really encouraging sign. when you look at south africa for an example of this going well, there's a big drop off in hospitalizations and positive cases. south africa seeing encouraging signs, there was a big spike and then a huge drop-off. we are starting to see signs of that in the u.k.. in the next week or two following the holidays we need to see more that continued to feel the optimism we all want to feel about the worst of this variant cooling off. kriti: let's talk about breakthrough infections in particular. to what extent should those who are vaccinated be concerned about this variant? >> it is concerning. i just spoke with a pediatrician who implored me and all of us to pay attention and change our actions to address the omicron variant. she is seeing record numbers of
kids who are unvaccinated under the age of five, and those are the ones who cannot get vaccinated, in her hospital right now. so it is less a concern for yourself, it is a concern for others. just to let people know who have been vaccinated, from pfizer, you are at about a 35% chance of still getting a mild to moderate infection. that is not ideal, we want to not get this virus in any way. romaine: you mentioned earlier where we were in 2020, and response from government officials and corporations was basically to shut it all down. we are not seeing that to the same degree this time around. there was an announcement for new york city that schools were going to start on time on january 3. so this seems to be a little more resilience that we have to push through this and learn to live with it.
>> i'm so glad you bring that up, because we've learned so much about how to contain this thing ineffective ways without having to go back to a full shut down. that messaging will be really important for making sure people don't get what is called pandemic fatigue. you don't want to put people in a position of having to adhere to things like walking through grocery stores in a specific line. romaine: no one ever paid attention to that, they always went the wrong way. >> it's like, you are already in an extreme panic attack, i can't pay attention to arrows in the grocery store. they are doubling down on testing, they will not make kids isolate if someone tests positive in their classroom if they don't have symptoms. just making those adjustments is
really important, considering the longevity of this virus. tim: i had pandemic fatigue back in 2020. thanks to madison mills for giving us the latest on the virus around the world. talk about bitcoin moving lower today. it seemed quite the selloff since its record high a of months ago. we will get into all things crypt go -- crypto in just a few minutes. your listing to broom bug radio and watching us on bloomberg tv and bloomberg radio. this is bloomberg. ♪
users in more than 170 countries, you are perfect guy to talk to when it comes to bitcoins price moves, down from november, why? graham: the arc of history is long. bitcoin at the start of the year wasn't doing so great and over the course of the year it has increased pretty nicely. a lot of what is happening in the world, over time bitcoin in's up being a pretty secure asset to invest in. romaine: it obviously goes further than bitcoin itself. when you talk about all the various use cases beyond a speculative asset here, how far along are we in that process here with regard to the way people use it and utilize it rather than just invest in it? graham: what is not really that
clear to the world at large, to the mainstream, is that what is really happening with bitcoin, ethereum, the whole bucket of technologies, blockchain and cryptocurrency, it is really a revolution in software development that's happening. blockchain development is a new way to build and distribute software. whether it's e-commerce, social, all of those verticals are being attacked by blockchain, cryptocurrency based applications. we will see that continue not just through 2022, but beyond. kriti: talk about how you market to an individual that is still concerned about that volatility? the newest generation entering the world of investing, they are not necessarily looking at just
stocks, they are looking primarily at cryptocurrencies. how do you talk to someone who might be the polar opposite of that? graham: that's a tough one. part of it may be talking about the price of the u.s. dollar and how that has changed over time. at one point, usd bought 100 bitcoin, now one usd buys .0002 bitcoin. it continues to decrease in value. that's part of the way that you tell the story, especially with respect to bitcoin. it is somewhat inflation resistant, at least over the long term. so that is a good way to talk about it. tim: i want to go back to what you said about the underlying technology, we were promised years ago that this would revolutionize property
transactions and medical records transfers. in 2021, we are still faxing medical records. what are some real world examples how blockchain has changed the way we do things? graham: from a finance standpoint, over the last two years we've seen a lot of development going into what we all call d5, it allows you to trade and lend and borrow assets without intermediaries. a big part of the reason why there hasn't been broader impact in the ways you are talking about is that it is still a nascent technology. a lot of the teams building these applications are not as focused on user experience. computer scientists, basically crypto bankers are not necessarily known for focusing on building a great user experience. as a gaming vertical, it is
starting to move in that direction. games need to be great from the user experience standpoint. they have to be good, otherwise people aren't going to use them. that is one frontier where we will see a lot of adoption. romaine: some of my best friends are crypto bankers, they are not all bad. [laughter] but your point is taken here. talk a little about the role of government. all your long we've been talking about potential new regulations, at least here in the united states as well as europe and now the potential i did that some central banks might want to create their own coins as well. graham: a lot of people are looking at what is going on in el salvador as being potentially a template. i'm not really thinking the u.s. government is going to follow
the lead from el salvador into crypto but what they are doing is interesting in terms of building all the infrastructure to enable seamless bitcoin transactions. i think that is really exciting. there's a lot of like-minded folks that are supportive of the crypto industry in congress. we've spent a lot of time working with those folks and helping them. everybody is still learning. i feel like we will get there, there is definitely a lot of support in congress. in the long haul, we will see a lot of support. romaine: with regard to some of the transparency issues, how are you faring with that right now? graham: that's a big deal for us. we got our start with regulatory
compliance, we continue to do so. it becomes a little more challenging but for folks like us, we're in it. romaine: a lot more coming up on the big simulcast. we have new voting members coming in at the start of the year. we will talk about that. and what it means not only for fed policy for rate hikes by what it could mean here in the political sphere as well. this is bloomberg. ♪
joining us to talk about the calculus about what the fed does next year and how they handle themselves in the face of rising inflation. it will all come down to the folks that will be voting here. three new members will be voting in three seats are yet to be filled by the biden administration. >> thanks for having me on the show. this is a favorite fast time for fed watchers. there's a couple of rules we want to remember. regardless of the changes, an important vote will stay the same and that is fed chair jerome powell. he will be leaving the fed and has already led the fed and quite a hawk is pivot -- hawkish pivot as we saw at the meeting in december. and we have three open seats at
the board of governors that president biden is expected to name pretty soon. they are likely to be more dovish than the people they will be replacing. that aside, the incoming voters will have votes on some key decisions, the timing and pace of rate hikes and also issues around the balance sheet, how quickly they start to allow that to run off. tim: what do we know about who could potentially feel those three empty seats? we have progressives in the democratic party that have been very vocal about what they want to see. >> we've reported the administration is looking closely at former fed governor and u.s. treasury undersecretary , cecilia rouse is also being looked out, raphael bostic,
president of the atlanta fed who is one of the voters last year and exactly on the more hawkish side, those are some of the names they've looked at. then there is lisa cook, an economist at michigan state. there is a strong slate of candidates they could pick from and there are likely -- they are likely to be more dovish than the people they replace. so the two outgoing governors, though one does not go till the end of january. they were trump appointees, he picked them, and while you would not call them rapidly hawkish by any means, they have been very measured. the incoming governors are probably going to be more dovish. kriti: you've built your career reporting on central banks from iraq all the way to the ecb and the fed. >> behind the bank of england in
that sense, but the fed is not leading the way. it's going to be really interesting. the fed being ahead of the ecb is going to have some interesting implications for the dollar that could reverberate to the u.s. economy and that could be come -- become a factor. markets are not really price for an aggressive fed. that was raised as an issue by one of your previous guests. with the tapering ending the bond purchase program in march they plan to lift off as early as march, that could see them with a gradual cautionary pace. that will be interesting. tim: thank you for joining us.
from the fed to the u.s. economy, let's bring in our guest, a senior u.s. economist for bloomberg economics. you were listening to our conversation just now, i'm wondering how you are incorporating these annual rotations happening as well as these open seats and how you are thinking about your year ahead predictions. >> i think he is quite right that it will bring that fed to a more dovish inclination. what matters to me is what happens to rate hikes and 22 and what happens going forward. our analysis shows that it will not change, whatever the pixar, it will not change the trajectory of rate hikes next year in 2022. or it will significantly reduce
the number of rate hikes in 2023. especially because the hawkish members of the committee, we will probably see three or maybe four rate hikes next year, but the big question is, what happens next? the economy will absolutely be fine, the trajectory of rate hikes going forward. i think it is important to know that the labor market is very much on a solid trajectory right now. romaine: talk a little bit more about the labor market and how that factors into the equation. no it is tight, we have seen the data so far. how much of that sways the fed to do something, or do they need to see more? >> if you look at the consensus forecast for payrolls next week,
it's around 400,000. the projection is for 300,000, the lower number. but even that is just enough for them to get to 3.5%, the forecast for the end of 2022, the fed forecast for the end of 2022 just requires 225,000 to get there by june. romaine: does that bring us out of the hole that was dug because of the pandemic? >> we will continue to see the participation rate falling behind what we saw back before the pandemic. it's really going to take a long time, even if it goes back to that level. but for the fed, they have a dual mandate and it's about for employment and price stability.
right now the data indicate we will achieve full employment soon, employment is high and the gains are strong. it is still going to be full employment. romaine: that will be a big data point in about a week and a half's time. a senior economist over at bloomberg economics, we will catch up with her soon, i'm sure. she brings up a good point, we have a lot of data coming out within a couple of weeks when we come back in the new year that will really define how we start off. tim: you bring up a good point about labor force participation and digging out of that hole. kriti: you have to take into account the economy as well. romaine: romaine bostick here, tim stenovec and kriti gupta.
>> a quick check on the stories we are tracking today. an advisor for the u.k. government says hi covid death rates are history. university professor john bell said the average length of a hospital stay is down to three days. u.k. infections have jumped by more than a quarter million in the past week but the government says it will not tighten restrictions. and the seven day