China Isn’t Playing Games at the Olympics

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. So, the weekly death toll from COVID nineteen in the US rose for the first time since February, and infections climb for a fourth straight week even as vaccinations are surge. And we talked a little bit about what's going on in New York City for some of our audience. Uh, there's a lot going on here, whether you're here in the US or of

course in other parts of the world. England, by the way, reopening shops, pub gardens, gyms, and hair salons after months of a lockdown. So let's get into it with our daily check on COVID and the vaccine rollout. Welcome back, Dr Rachel Doo. She's co founder of Moody Health. She's with us once again on the phone in Los Angeles. Dr Dude, Nice to have you back with us on Bloomberg. How are you. I'm great. Thank you so much for

having me back, Carol. So tell me about the view that you're seeing in terms of patients coming into your office, what you're seeing when it comes to COVID nineteen cases, what you're seeing in terms of the vaccine rollout. Yeah, absolutely so. On the Moody Health platform, our practitioners have definitely been seeing an increase in people experiencing pandemic burnout and the need for emotional well being and support from our integrative life coaches as well as our mental health professional.

But we're also seeing a real uptick in people becoming more comfortable with getting vaccinated and really excited to move beyond the pandemic. One thing I will say is that you know that that pandemic exhaustion and burnout is really causing some people to stop wearing maths, stop you know, focusing on social distancing, and I think it's really important that we still stay the course and continue those safety precautions.

You know, it's interesting that you say that last week we had a COVID scare in my family turned out to be a false positive and after all this testing and I was sequestered last week, my daughter, my family, But it reminded us, like we were terrified that we had gotten it even though we were so careful, And it reminded us that, you know, this is real. It's

still out there. Uh, And the thought of having it really put some pressure and stress on my family, And it was great to know that we don't have it. But it's just a reminder that this is kind of the world we're living in. Yes, there's progress with the vaccine rollout, but it's still out there. We're not over it. Absolutely, So tell us in terms of you said, uh, more pandemic burnout up to uptake in up, you said people

getting more vaccines. But I'm curious about the burnout because that is something a topic that we've talked about a lot over the past year. What's changed, what's different? What are the numbers like in terms of the uptick. Absolutely, I think that what we're seeing is just a large amount of people being completely exhausted, right, everybody is ready to move forward. And people, you know, they've undergone such stress for such a long period of time, right, they've

been experiencing stress loss and transition. Really feeling that burnout is it's a normal response. It's a normal response for all of us. And getting support around emotionally processing what it has been for each person is important. And you know, there's also a few simple steps that everyone can be taking on their own to really reduce this this burnout and that you know, things like giving yourself permission to get more rest and the space to process the transition.

So treating yourself gently and increasing self pairent ways that feel helpful, practicing mindfulness, getting outdoors and moving your body again, continuing that faith, social distancing activities with friends and loved one so you can still feel connected. And then of course getting that support from a mental health practitioner or

an integrative life coach. You know, it's interesting too. Of the last week or so, we've talked about a couple of companies, a Real Bank of Canada and Toronto Dominion Bank giving employees and extra paid day off this year, and it's specifically um to avoid burnout what's changed. Do you think in the corporate culture that there's a heightened

sensitivity when it comes to burnout? Absolutely. I think that free pandemic, you know, at Motive helped we do a lot in the corporate wellness spase, and so pre pandemic, we were seeing a lot of companies were wanting to increase productivity and address wellness and well being so that

there could be a higher level of productivity. But during the pandemic, corporations, companies, organizations, institutions have been actually seeing over performance and burnout happening from people working from home and really over working and not having much work life balance, and so they're but is that new? I can. I know that there's going to be people saying this is

nothing new. We've always talked about, certainly those of us who work in the New York metro are always talking about our our our life, our work life balance and

how bad it is. What's different, Well, I think the pandemic has really shed light on the importance of work life balance, and I think that's been one of the positives to come out of the pandemic is a real reevaluation of what wellness and well being and health looks like mentally, physically, emotionally, spiritually, really that whole person, whole

life approach. Well, And what would you be your advice to someone who's listening, who's thinking about this, and maybe they haven't reached out to somebody, how do they know if they've really got kind of a burnout problem and just got about forty seconds, then we'll come back and

talk some more. Yeah. Absolutely, if you're feeling is austed, if you're you know, seeing a decrease in quality of sleep and a decrease in your emotional well being, you're probably experiencing some burnout or some fatigue from the pandemics, and really addressing it now is incredibly important to get

the help you need. Doctor do One thing I did want to ask you, and when I kicked off our conversation in the previous segment, I said, the weekly death toll from COVID itune the US rose for the first time since February, and infections climbed for a fourth straight week. Even as we see vaccination search. When you see a summary and headline like that, what do you think about where we are when it comes to COVID nineteen and

getting to the other side of it. I think back to that pandemic burnout and people feeling like they are done following precautions, they're done dealing with it, they're done hearing about it. But again, you know, even as we're rolling out these vaccines, they're not a hundred percent effective, and we're all not vaccinated to the level that we need to be, and so it's important to continue following those safety protocols no matter how exhausted we are with it.

You said, the vaccines is not a hundred percent effective, which is just a reminder that even if the there is that slim chance right that you can get it or there's still some concerns. Absolutely, and so getting fascinated, I believe is a really important part of the recovery process and getting past the pandemic. You know, really watching out not only for our own health, but also the health and wellness of our neighbors and co workers and friends and family members. So what about when you hear

about variants and double variants. I mean, it was very much a big part of our discussions last week, and I know there's this kind of race to get the vaccine to as many people before we start to see too many variants and possibly one that could be a lot more contagious and a lot and contagious and a lot more serious. How do you approach that? How do you think about that? I think about that in the

sense that we do need to really be steadfinced. We really need to move forward, and as many people as possible getting vaccinated as soon as possible is going to be key in being able to be prepared for any additional variants. What are the kind of cases that you guys are seeing UM, either on your platform or coming you know, what, what are you hearing in terms of the type of COVID cases that are coming out, because we've been hearing that it's getting to a younger population,

younger demographic. But I'm curious about what you're seeing. Absolutely definitely seeing that, and we sort of see two major categories. We see people who are experiencing what we call mild cases, and then we're seeing much more extreme cases. Obviously we refer those out. Some people need to be hospitalized or

have specialists for treating them. But you know, really, on the multi health platform, what we are really trying to do is UM a combined traditional medical and natural approach to treat and also optimize health and well being post COVID as well. What might be kind of the protocols in that combination in that if someone comes to your platform and whether it's stress and they're dealing with things, how do you combine kind of the traditional with kind

of a more innovative form of healthcare? Absolutely such a great question. On our platform, people are able to build their entire care team, so it's really a whole person care team approach, so they're able to see both a natural path doctor or functional medicine doctor as well as a traditional primary care physician or specialist in traditional medicine, and then also different types of health coaches or wellness coaches, nutrition, mental health because it's so important to take a look

at that full picture and support the whole person. Just got about forty fifty seconds left here. You know, I have conversations with friends, family, and we say some who are able to spend more time on their wellness side, whether it's exercising at home or what have you, but they're concerned about when everything gets up and running again, how do you continue to do that? What's one quick piece of advice and forgive me, you just got about

thirty seconds left here. Yeah. Absolutely, I think that balance is something that's unique to each and every individual. So figuring out ways that work in your life to address mental health, emotional well being, physical health, and you know, really taking care of the whole person. And that again is going to look very different for different people, different budgets, different time availability, and that's what we really aim to

address on the Moody Health platform. No matter where you are in your journey, what your needs are, we can help. All Right, Well, good to check in with you again, Stay safe and be well. Dr Rachel Do, co founder CEO of Moody Health, with us on the phone from Los Angeles. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. Certainly, one of the big stories of the day is the

chip meeting at the White House today. We've all already heard from the President, President Biden saying the US needs to address chip shortages. Meantime, the Intel CEOs the White House will work with Congress to get funds and specifically are seeing support for chip production specifically in the United States. Keep in mind, the CEO is a four GM Intel and Google. We're all at the White House today for

that summit. With that in mind, and the current issue of the magazine, Bloomberg's Ian King and Tom Giles dig into Intel's new hail Mary when it comes to the semi conductor industry and specifically for their company. Toma's Bloomberg Technology Executive editor joining us from San Francisco. Also joining us Bloomberg Business Week editor Joel Webber on the access line in Brooklyn. And Joel, if you think about the semi conductor industry, the global semi industry, you gotta include

Intel in any discussion. Yeah, it's really um you know, Intel has just been a powerhouse um in this industry for for decades, so they kind of go hand in hand. But but what Tom and um Ian really dug into with the story has been sort of the slow decline, especially over the last decade, as Intel has gone from sort of this um M vaunted um uh symbol of American technology and and manufacturing and and management and actually have watched it sort of slowly fade uh and and

kind of into this existential moment. And that's certain really where this story came into being. And you know, we've had so much attention on on chips in general. UM, we have to kind of talk about the American elephant in that room, which which is Intel. UM tom twenty billion dollars they've laid out as sort of their path to the future. UM. How much hope do you put in that number? Well, you know, look until has the money, UM, and they still throw off a lot of cash from

their existing business. UM. So I have no doubt that they're going to throw a lot of money at this problem. UM. The challenge for them is that they have slipped in production of the most advanced ships. And just how quickly can you You can throw a lot of money at the problem, but how quickly can you get these new um fabs, these new ship production plants up and running UM. And how quickly can you fix the technology that they've

fallen behind? You know, making these chips smaller and smaller every cycle becomes harder and harder and harder to do at the scale that Intel needs to do it. Remember, they're the main supplier to the to the to the servers and the computers around the world. UM. And the fact of the matter is other companies have just gotten faster and better than they are at cranking these things out at scale, and that's the that's the real challenge

that they have. Right now. What's great about this story, Um, there's so much and I can only imagine the individuals you talk to it because there's so much insight into the different CEOs and the different stumbles that Intel did after just kind of owning I feel like the semiconductor industry you talk specifically, I feel like about a major blunder Tom and that was Apple's the misstep it did with Apple by not linking up with them. How big of a how how much did that set them back? Yeah?

So when it comes to mobile chips, um, that is an area where Until just tried and tried again many times to get a told in that market. One of the early one of the early instances that we talked about in the story is when the former CEO, a guy by the name of Paul o'dalini, was you know, this is before the smartphone introduction, right in the mid two thousands. This is when Steve Jobs, the founder of Apple, came to Intel and said, Okay, we want to cut a deal with you to make chips for our phone.

And Paul and Paul o'dalini just just balked at it. He said he wasn't pleased with the terms of that. That ended up being a really um, you know, really landmark decision and one that has worked against them, mainly because what it did is as this business went to other companies, first Stamp Sung and then later this company in Taiwan called Taiwan Semiconductor Manufacturing Company. When you win the contract to supply Apple, a lot comes with that.

You get, part of you get, you get into this ecosystem, and you gained the ability to really be the point, the point, the supplier for this incredibly you know, fast moving market which was smartphones. I mean, remember what it was like when when you know, fifteen years ago, when these when this was taking up, everybody was just rushing to get these and that created a lot of business for the semiconductor industry. So so Tom, you know, they missed that moment which became sort of the beginning of

the mobile revolution. Um And you know, as you as you both write in the story, you know, Intel's predicament didn't come about overnight. It's been a consequence of a decade's worth of missteps. One of my most favorite elements of this story and what I think we do, especially while the magazine are these sort of like case studies and and this one really feels like a management case studies.

So when you step back and you know, having covered this company for years now, if you approach it through that case study, lens, what are some of the big management take takeaways that you think, um, you know readers will find most interesting here. And please talk about Brian kay sure. Well, before we talked about Brian Cresentits, you have to go back to Andy Grove. He was one of the original founders of Intel and one of its longest lasting CEO. And he was legendary UM specifically for

he was very demanding. UM. He you know, he was he was very disciplined, UM. And he ran Intel. You know, he was seen as a one of the early management guru UM, after whom many of the biggest tech executives out there right now patterned their management style. UM. The thing that was interesting he could be very demanding, but he was also he also insisted on listening to people tell him about what was wrong with the company. He called them the Cassandra's right. These are the people who

otherwise wouldn't get listened to. And they were the ones who were, you know, on the front lines of talking to customers. For example, they would come and say, hey, this is what's wrong with the company, this is what's wrong with what's happening. Later in Intel's life, a CEO came into you know, came rose to the top, Brian Krisanitch. He hadn't been steeped in as closely in Andy Grove's Philosophy of the World's Andy Grove's view of how to manage a company. He had a lot of space in

Intel's capabilities, some of which was well founded. Intel was an incredibly capable company. But what started to happen is people came into his orbit who started to tell him, um, we're seeing problems in our ability to keep producing these really band's chips, arms are are basically our factories are not up to the town. And he was very dismissive

of that and failed to listen to the cassandras. So a takeaway here is find people in an organization who will be honest with you about what the company is doing well and what it's doing poorly, and when they come to you with bad news, don't be dismissive of it, listening to them and find out is there reason for this? It is an incredible read through and I highly recommend

it and I'll retweet it out on Twitter. But so much interesting and in depth information about what went on at Intel to kind of get it to where it is today. Um, guys, thank you so much. Tom Giles, Bloomberg Technology Executive Editor, Joe Webber, Editor Bloomberg Business Week. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stenovik on Bloomberg Radio. You are listening to Bloomberg Business Week. I'm Carol Master Mica. Host Tim

Stanovic is out today. Well. One of the things, though that has definitely been on my radar is just watching all of the back and forth between the US and China and the relationship. The ascent of China specifically, though not a new concept, and yet the approach taken by China has provided a lot of fodder for discussion. In his latest column, Bloomberg New Economy Editorial director Andy Brown notes that the Summer and Winter Games in Beijing book and a period of history when it comes to China's

approach to the rest of the world. We love this. We talked about this and his column a lot on our planning call this morning, and he joins us on the phone in New York City. UM, Andy so talked to us about this because the idea that Beijing is going to be hosting both games. I mean, there's a lot going on here in terms of what we can feel, you know, kind of Beijing's approaches to the world at large. It's not just about the Olympic Games. It's it's not

just about the Olympics. The Olympics obviously the massively political it's it's it's it's It's worth noting though that that you know, Beijing is going to be the first city in the world to host both the Summer Olympics, which you did in two thousand and eight. I was there at the time, and the Winter Olympics, which are coming

up in in February next year. UM. It's also worth noting that, um, they're going to repurpose quite a few of the buildings that these iconic structures that were built for two thousand and eight, like the water Cube, which was this amazing sort of box covered in bubble wrap that was the host of the swimming and the diving competition that's not going to be. So the water cube

is not going to be the ice cube. Uh. And the bird's nest, which was wrapped up in the sort of all these you know, this intricate steel lattice looking like twigs, Um, that's now going to be you know, repurposed as the venue for the opening and closing ceremonies of of the Winter of the Winter Olympics. That's what's going to be the same. The politics and the context

between these two events could not be more different. As I said in the column, they bookend this period of history where China goes from being quite deferential um to the rest of the world, particularly to to the West and the United States, to being very much defiant and um, you know taking this you you you know, you you we we are not going to We're not going to tolerate a boycott. Well what's really wild is, you know, just going back to the earlier games, you talk about

how they really embraced Western architects. I mean they really were kind of you know, a big hug to the world to say, yep, we're doing this, but we love you the world. At the same time, but this time around, it's got a different feel. It was amazing watching Beijing being reinvented for the two thousand and eight Olympics. They took the axis of the city which on the Mao and subsequent leaders had gone east west. They sort of

along the Avenue of Eternal Peace. They built a lot of the old ministries, Ministry of Telecommunications, museums, hotels, and so on. And they literally spun Beijing around so that it sits down and on a north south axis which accentuates all of these historical venues in Beijing, the Forbidden City, the ancient gateways, some of the palaces. But the guy who did that, the architect who did that was a German, right, Uh?

Is that it's actually I believe it or not. It was Albert Speer, who was the son of Hitler's favorite architect. He designed this, this this massive north north south axis, um so. And this was all intended to sort of divert the world's attention from the sort of China's revolutionary blood you know, blood soap, turmoil, you know, uh, turbulent

recent history. There skips over all that and and focuses the world's attention on China's sort of glorious ancient civilizations and its culture and Buddhism and Confucianism and so on. And the message very much was you know, we are not a threat. Don't forget. This was the coming out party, right, this is whin To announces itself the world's next. Right, you can on superpowers. You don't have anything to work to worry about. Right, we're old ancient civilization. So that

was really a big part of the message. And the slogan was one world, one dream. Right. But but it's interesting, is you kind of wrap up your column. You finished off saying that, you know, President she has let it be known that she doesn't really like these Western inspired buildings anymore, or maybe didn't to begin with. Right, Well, that this was the way back in two thousand and eight. This was the way they sort of defined modernity. It was very much in Western terms, right, sort of Western

architectural idioms. They got ramcool House and Zaha Hadid and you know, you saw all of these amazing futuristic buildings going up in Beijing. He hates that. I mean, he said, uh, some years ago he thought it was old chee cheek like why, which is Mandarin means got a weird odd right, he doesn't like this at all. They don't want the web they you know this. The message back then is we're going to join the world as it is, the Western dominated US lead global order. And that was very

much the message. We're going to sort of, you know, fit right on in. Forget it. The message now is, you know, it's it's it's it's the world on China's tongues, right, and that's how you're going to come to Beijing this time,

you know, forget that, forget the efforts. Right. Well, what's interesting too, um as you know, and you and I have talked about it a lot, you know, concerns about human rights violations, concerns about how the weaker Muslims have been treated, a lot of companies, you know, everybody's playing it very delicately in terms of companies or sponsors pulling out, in terms of the U S saying we're not going

to send our team. Is that unlikely? You know, we've had a history of this, right so in the UF boycott hit the Moscow Olympics in protest at the Soviet invasion of Afghanistan and seventy nine and then four years later you know, the Soviet Union boycotts the l A Games. Right, this is really a dismal history. It doesn't do much, It doesn't change much except a sort of basically chat at the dreams of the ambitions of of athletes who've trained their whole lives for these events and to peak

at exactly the right time. So I don't think. I mean, of course, there are a lot of human rights groups that say, you know, they're talking about the genocide Olympics and protests, boycott it over that. Um, you know, there are some of the most sensible ideas around there around Romney. Romney is saying, you know, let's boycott it diplomatically, let's boycott it commercially, but you know, let's not penalize the athletes.

Well it's a great read, and what a turn from two thousand eight to until to Andy, Thank you really appreciate it. Bloomberg New Economy editorial director Andy Brown. Check out his latest column. You can find it on the Bloomberg terminal and at Bloomberg dot com. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. Well, big deal today and this is among our most read stories on the Bloomberg as well.

It's about Microsoft buying speech technology company Nuanced Communications. You've heard Charlie and others talk about it on Bloomberg Radio. It's an all cash deal valued at nineteen point six billion. It's a big bat, massive bat in fact, according to our Dina Bass on healthcare artificial intelligence. So here with what you need to know is Dina Bass. She's Seattle bureau chief and g joins us on the phone in Seattle. Um, Dina, good to have you here with us, So tell us

about this deal. Makes sense for Microsoft to do this because they've been working with this company for a few years now. Yeah. Absolutely, I think you know, over the courses here we've had some some Microsoft getting involved in some possible deals like TikTok, where people were a little bit scratching their heads as to how it fits. Nuance is sort of the opposite of that. I think, you know,

most analysts and investors looked at that. Um, you know when we broke the news yesterday here at Bloomberg that this deal was was going to happen, and and said, you know, that makes sense. And Microsoft has been working with Nuance for two years. Microsoft is very focused in the speech AI sector, and Microsoft has also been increasingly over the last few years focused on healthcare um and what they can do to make healthcare easier with technology,

cloud software and artificial intelligence. And they can say take that Amazon, right, because Amazon's is this kind of a shot at Amazon as well a little bit because Amazon does have an Alexa you know, some Alexa deployments and healthcare as well, but Alexa is still for the way most people use it is still really a consumer play it's in your kitchen, uh, you ask you to play music while you make dinner. This is much more focused

in industry and very specifically in the healthcare industry. Nuance is looking at some other industries for for its software, but it really is very focused on on healthcare and how to make sort of Asian appointments and you know easier for clinicians. You know, and usually when you see your doctor now they spend half of the appointment typing away on a computer trying to get all of your information into your medical record. This is an attempt to

get rid of that need makes me crazy. So talk to us about where Microsoft is going with healthcare because I do feel like, you know, we had the partnership and then came a part of Amazon and Buffett and um JP Morgan, right, and that kind of came undone. But I do increasingly see high tech companies, you know, aggressively looking at that healthcare space. It's one of those areas that hasn't quite been disrupted yet. That's right, and people have been trying for a long time. I asked

Accadella that question this morning. You know, a lot of tech companies have come in and said week and fix healthcare, and and they's kind of this trail of people who failed. It is a challenging space. It took a long time even to get the electronic medical records going. Microsoft is very focused on providing cloud tools. They don't want to replace authority there, they want a partner. And you know, they've been trying to get these tools into the hands

of doctors and they had some hospitals. They've been working for several years on AI tools for things like triage chat bots, you know, the things that ask you your symptoms and try to funnel you in the right direction, or you know, things for software for help with clinical trials, things like that, and as I mentioned this Nuance system tries to help caregivers with getting the information that patients give them into electronic medical records more easily through you know,

speech recognition and then synthesizing with your records. But you could imagine a situation in the future. Microsoft and Nuances are very interested in where the AI search us through your health record for certain words or certain triggers that might indicate what's going on with a patient and make some suggestions to the doctor or helps the doctor, you know, find a better idea for care or things they should

be looking at. And so that that's always out but that's kind of what you know, some of what they're thinking in the future as well. Do you you know from talking to the Alice community investors who follow Microsoft, do they think Microsoft moving more aggressively into AI and specifically AI healthcare makes sense. Yes, they do. And again it's partially because Microsoft has been moving in that direction on its own for the last several years and messaging

that it's a really lucrative space. And I think the pandemic and everything that's gone on in the last year has only reinforced the idea that this needs to needs to happen more aggressively and more efficiently. I want to go back to because I think I'm thinking about our audience who are listening, and they think of Microsoft and they get about you know, Microsoft Teams and all of their you know, the things that we know Microsoft for so much. But you were talking about already what Microsoft's

been doing in the medical space. Talk to me a little bit more about it. You talked about triage software, and you talked about other things. What have they been doing when it comes to healthcare? Actually you mentioned teams as well. Teams is an important healthcare product for them too. They have a you know, a version of Teams that's meant for for healthcare teams. So for example, when you're in the hospital, there's a care team, and often when you walk into a hospital room, you see that the

care team exchanges information via whiteboard. Right. It's very low tech um and you have to rely on different members of your care team to talk to each other or keep you know, whoever with the patient keeps repeating what's going on with the patient. They're trying to get care teams to communicate more through Microsoft Teams. So that's one thing they've been doing. Uh, They released a healthcare cloud product in May, which sort of takes versions of various

cloud software programs that Microsoft has and tailors them for healthcare. Uh. You know, we talked a little bit before about software for clinical trials. Um. You know, they really do want to be a software provider to all of the major healthcare companies. But you know, it's all emphasized to me that that they do not want to compete with those

healthcare companies. I know there was some noise this morning about whether this deal meant that Microsoft wanted to compete with EPIC ANDCERN or who the too big electronic medical records companies. He said to me very firmly, you know, absolutely not. We want to partner with them if you can as them. Okay with that right right, right right exactly, UM, to just to make it more efficient. You mentioned it's been difficult and again we've seen that that pandemic and

it's been difficult for Microsoft too. You know, their their record is not spotless here. They helped several states with vaccine rollout platforms and appointment platforms, and some of those went well as in a Oklahoma. Some of those those in New Jersey went very poorly. Indeed, yeah, hey, listen, great stuff. This is what I was hoping hoping to bring to our audience. So thank you so much for

joining us. Tina Bass, she is Seattle bureau chief at Bloomberg News, as she mentioned Bloomberg breaking that story on Microsoft on making that big bet on healthcare AI by buying Nuance Romco a journal now, but you let me drive, No, no, no no, honey, please, I'll do the right vel. I want to drive, just drive. It's the questions dry use the drive to the globe. Thanks, we'll dry us Dawn

on Bloomberg Radio. Indeed, everybody, just about nine minutes left in today's trading day, Let's get to the drive to the close. Back with us. Managing director of Senior Portfolio Manage at Wells Fargo Asset Management Market PTEL with about six hundred three billion in assets under management over at Wells Fargo Asset Management, Margie back with us on the phone from Boston. Margie, how are you very good? Carol? Well, nice to have you here with us. Um this is

a big week. I feel like, into some extent, I feel like equity investors are taking a little bit of a breather because you've got big banks coming out with their earnings, and they're going to talk about the outlook, the visibility, what the market environment is like, how do you see it this week? Well, it's interesting because I can ever think of another quarter where we're absolutely convinced

that this will be an extraordinarily strong quarter. We feel that way too, and it will be interesting to see are their cross currents from these very very high expectations. Uh one, will companies talk about a continuation through the rest of the year very strong earnings, Well, they shade as little as we get to the third or fourth quarter of the year. And then the other kind of big unknown is what happens to interest rates and inflation.

We'll see a pickup, will that roll over and continue to depress some of the values of the gross stalks. So there's a lot of cross currents. Well, kidnap, Yeah, we'll talk to me about those earnings expectations, um our. Dave Wilson was just breaking down the number were expecting higher in the first quarter when it comes to E P s and the S and P five year over year up in the second quarter if those companies and those are big bounce backs, but obviously from a year

ago when the whole world just fell apart. But if there is some disappointment or misses, how strongly do you think investors on the equity side of things will react to that? Oh? I think this is going to turn out to be an extremely volatile quarter in spite of those dynamic increases in earnings for this quarter next quarter, so I think that we're people expecting even more of a blowout number, and will people be disappointed? Some sectors

will be a little depressed. For example, with the chip shortage, some of the auto related companies may well have disappointing earnings because they simply haven't been able to produce enough because they haven't had enough chips. Well, the market look past those, so I think we'll see some some cross currents. Are results going to be blowout? Results going to be

good enough for the market? Yeah, Investors trying to make sense of it just want to mention a headline crossing US Treasury Secretary Janet Yellen, of course, former head of the fed uh saying that they plan to spare China from the currency manipulator label. And we often have seen the back and forth on that over the past few decades. UM having said that maybe you know, let me bring that into our discussion, Margie, that there are lots of

political concerns going on right now. Any of them that you think get in the way of uh investor psyche that makes them a little bit nervous. Uh No, because I think the two biggest players, the US and China, have a pretty strong growth outlook for the next few quarters. And the lagguerage I think are continental Europe and some

of the emerging markets. But basically, when you have over half of the GDP looking very strong, that says that I think that will really drive earnings and drive investor expectations. What about inflation concerns? We heard J Powell on sixty Minutes every weekend. A lot of FETE officials have been out there with Kathleen Hay's talking with Mr Bullard and Bullard Mary daily, Uh, just hearing from them and weighing in on the economic outlooking what they see with inflation.

Does inflation become problematic on the equity side of things anytime soon? Margie, I think we have to see all that unfolds. I think clearly we're going to see inflation in certain sectors, some of the commodity sectors, some of the goods that have been in short supply. I think we'll see that some some of the chip in fact, computer chips have gone up a lot in price. So I think we'll see here and there lot of spotty things.

It's much more important to me is what happens to labor costs overall, because that's really the biggest driver of inflation. But I think we should expect to see from materials and shortages, we should see some higher prices. And I don't know if that will spook the market. It's only if we start to see sustained labor increases, I think that the market will get quite concerned. Can we can we drop on history? If I think about pre pandemic,

the labor market was getting very tight. We know that we did start to see some strains and some push up in terms of wages, especially along the lower rung uh jobs, if you will, and that showed how tight the labor market was. Is it a long time before we get to that point. Well, I think we should expect to see some of those the bottom fifth or two fifths in the employment market show the biggest percentage rebounds um. But I think what's more important is what

happens to that top top two fifths of labor. We're not expecting to see much increase there, but optically we may see. Uh for for the average rage for the entry level worker, big increases they are just because they've gone from such a low level, and we'll need a big bounce back in order to draw those people back in the labor force. Hey, market, where don't you want to be in the market right now? Uh? Well, I think the best place to be is in the strongest economy.

So of course I would still think the US. As opposed to say, emerging markets, I think there's still a lot of uncertainty about the ability of those countries to rebound and also their ability to get over the COVID crisis. We were pretty much past that, England's pretty much past that. China looks like it's handling that been. Some of the emerging markets they look much earlier on the COVID curve than we are. So I think we may see disappointing

growth from from those countries. But did you like the economically sensitive sectors correct? Yes, Because we're seeing a not only a short term cyclical rebound, but also continuation of the secular growth, especially in the U ask for a lot of materials demands. A lot of those companies have restructured, a lot of industrial companies have restructured. So we think that as economy progresses, we'll see good demand for those those uh, those companies. Just real quickly, just got about

twenty seconds here. What keeps you up at night when you look at the financial markets? I would say, will we see inflation actually pick up for the first time in several decades? Right now, it doesn't look like it, but it's something to be carefully watched. All right, Gonna leave it there, Markie, thank you so much, really appreciate it. Market Patao. She's senior portfolio manager at Wells Fargo Asset Management, six hundred three billion dollars in assets under management, on

the phone from Boston. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern Bloomberg Radio or watch us on YouTube. Sarah to Bloomberg Global News