Disney’s New Streaming Star vs. Netflix

dot com. If you can also listen to our radio show at two pm Eastern on Bloomberg Radio and be sure to watch us too on YouTube by searching Bloomberg Global News, Top Business, and definitely top stock story today is the Walt Disney Company, because man, it is a fifteen percent in today sessions. It's amazing given that the

business model has been completely upended by the pandemic. To right, Its parks are closed, movie theaters are closed, right exactly, so many parts of their business and they're like, you know what, We're going to wrap it up when it comes to streaming, and investors like it. So let's get into it. Um. We do get a bunch of headlines late yesterday and that's why we're seeing such strong stock reaction. Let's do a deep dive into the company. Chris mary

is l a bureau chief for Bloomberg News. He's on the phone in Los Angeles. Also Bloomberg opinion columnist Tarala Chapelle. She covers the business of entertainment, telecommunications, and the deal's world. She's on the phone in New Jersey. Chris, I want to kick it off with you. WHOA why is I

mean the stock is that it's all about streaming. Yeah, I mean you know it's like to your point, Uh, if you know you said at the beginning of the year there was going to be a global pandemic that would shut you know, theme parks and cruise lines at movie theaters and live sports, and you know, should you sell Disney? Of course you would say yes. And yet here it is continuing to hit new highs for a couple of weeks. Now, um, it's yeah, it's all about streaming.

You know that they happen to launch this product Disney Plus, uh, a year ago in November, right before the pandemic, and everybody's now focused on home entertainment and what can I do with a family at home? And uh, schools out and so subscription surge all around the world. Uh. And why Wall Street loves This is because it's a recurring subscription business. Everybody is paying their monthly Disney Plus bill and so they can project those subscribers out at infinitem.

So it's a you know, it's it's a lot more reassuring than trying to get a movie sold this weekend. Great visibility, right, Yeah, yeah, it really is. And I want to bring Tarry in here because she got She has a new column out today called Disney's new streaming Star is a Netflix? Is Netflix? You guys talked earlier on We talked earlier on Quick Take, and it's all about Star and what Star is doing and how Disney

is positioning Star internationally. Tara, take us through this because it didn't get a lot of attention when Disney first acquired Star, but now it's kind of becomes center stage, right, especially when Bob Tapek is sitting up in front of a big screen and you see the Disney Plus and then you see Star behind at the logos. Tara, Right,

that's what was so telling. You know, Hulu was moved to the side and right behind shapec or whoever was speaking last night, you saw Disney Plus and Star and that was definitely new and What I love about it is, you know, covering mergers and acquisitions, when you see deals the size of the when Disney did for Fox eight five billion dollars, what often happens is there are businesses that are bought part of those deals that the acquirer doesn't really want, some smaller units or brands that they

get because they kind of have to because they're buying the company. But with Star, I think it was a little overlooked at the time when the deal closed, people said, well, it's an Indian TV brand. Yeah, there's growth there, but it's going to stay kind of a smaller piece of Disney. And instead, Disney is putting it front and center and

building this brand into an international streaming powerhouse. It's going to be there global version of Netflix, the brand with all the sort of adult programming beyond the stuff that's on Disney Plus. And it just makes a whole lot of sense. It's kind of filling a hole that Disney Plus had, and I think people are gonna like it. It's gonna make it a really compelling offering. Vias of the Netflix, Sarah, we won't see it are in the

US though, right, We'll see Hulu instead. Right, So they're only doing it outside the US with Star in the US. It seems like, at least for now, they're sticking with this bundle for thirteen dollars a month where you can get Disney plus Hulu if you want some more, um you know, adult programming and ESPN Class if you're sports fan. I think the the US offering is a little bit messy. They need to figure it out a little bit more.

But the global offerings are really compelling. Well, and you know, Chris, come on back in on this conversation. Global, right, there's US growth and growing in the US market, but global and the opportunities there for Disney, Um, they've always thought about beyond the US. Well, if you look at the projections they made yesterday, three fifty million worldwide subscribers by four that's bigger than you know, Netflix right now is a million. But even our our consensus forecast on Bloomberg

is for Netflix around three d and twelve million. So they're basically saying we're going to be big than Netflix. They have an advantage, which is they have these four uh streaming services, so you can you know, if you're a Netflix customer, you're only getting one they have different plans even with ads without but you're but you're not subscribing to both. With Disney, you can easily have three different services so than one customer three uh you know plans.

So so they have that advantage. You know, they're tailoring these for different markets, as Tara said, you know, sports for Latin American customers and streaming uh in Europe, you know, the sort of f X content, and they have more adult Fox films are going to be bundled in with Disney plugs for a higher fee. So they're trying all these different strategies. So Terry, if if if your Netflix

right now, what are you what are you thinking? Because you know, Netflix was the company that invented direct consumer streaming. Is it threatened by Disney's power now? Yeah? But Netflix will say that they welcome the competition. That kind of there. They always they always say that, but I think it's it's what it means is that, you know, Netflix isn't standing still like they are growing. They're constantly creating new content,

so they're going to have more competition. But I think what it means is they kind of try to step that up a little bit, maybe the quality of the stuff they're putting on their service, maybe more kids stuff so that they can try to compete head on with Disney the way Disney is trying to do with Netflix. But you know, as a consumer, this is a good time. Everyone's always trying to figure out who's going to be the Netflix killer, who's going to be left standing at

the end of the streaming wars. But for consumers, it's important to remember competition is a good thing. It keeps prices low, it keeps the value proposition up, so more companies that are fighting for our dollars the better. How much of this in terms of the emphasis on streaming was, you know, the brainchild of Bob Iger, longtime CEO UM now I think he's executive chairman. Uh. And also how much of it is Bob J Peck Well, uh, you know, there was this narrative earlier this year that you know,

Bob Iger was still running the show. He's a powerful force, no doubt, Um certainly listens to him. But you know, there were certainly hallmarks in yesterday of of J Pick running the things. In fact, there was almost this disconnect where Bob Iger gets up to speak and he said, you know, we're going to emphasize, uh, quality over quantity, and they announced a hundred movies and TV shows. Uh, every retread you could possibly imagine Sister Act three, the

Dog from Up gets his own series. I mean we need Chris the Board, Bob J. Peck, you know, sitting like at a you know, portable table in the lot parking lot of Disney, just saying yes to a long line of people pitching him ideas. Uh, it was. It was very much, uh, let's throw everything at the wall, and and really just pretty different from Disney Films strategy

under Eiger when he took over. You know, they deliberately paired back all of those movies that were you know, the sports films, the you know adult ori need comedies, and they really focus deliberately on these big blockbuster Superhero and Star Wars and Pixar movies that they can get more bang for the buck out of. And so totally different strategy. Now, this stuff is expensive to do though, it's expensive to shoot, it's expensive to get the talent.

Why do investors seem to be ignoring how much cash this is actually going to cost Disney. It gets back to our earlier point about it's all about the subscriber numbers. And so if you can get to three million subscribers paying you ten bucks a month, you know, it's it's just a huge surge and dependable revenue. So what Wall Street, It's not about the earnings right now, and the Disney's is losing money. Uh, you know, given the pandemic and everything,

it is all about the future subscriber. I mean, this is Netflix's playbook. Netflix just burns cash, and they've been burning cash for years buying content. It's it's almost any tech company, right, h And is the Amazon story right with that? When exactly how how many you know, long term subscribers can you get? Because subscribers stick around and and and you know, it's it's predictable revenue. So so yeah, so the fact that they're spending more money losing more

money Wall Street applause. So so, Chris, listen, you've been following this company for a long time. I mean, where does I don't know, things like Hulu fit into this. Where do those you know, big releases to the big screen. You know, certainly after Warner Brothers kind of shocked the industry by saying, you know, we're gonna go straight to you know, streaming or offer them in streaming and theater

at the same time. Where does all of that fit into Disney's world, Because the big screen it's important to Disney. It is and and I think one of the takeaways from YESTERD is they they indicated that they were not going the Warner Brothers route, and in fact, some of the theater chain stocks are up quite a bit today as a result. Um, you know, so they're gonna save the new Indiana Jones with Harriton for the next Star Wars directed by Wonder Woman director Patty Jenkins. Those are

going in theaters. Um, you know. They announced one movie, you know, a new animated film which was entirely new, uh contacts there and The Last Dragon is going to go up in theaters and on Disney Plus for a premium thirty dollar purchase on the same day. So they're testing that model. You know. They they're putting a Tom Hanks Pinocchio movie direct to Disney Plus. So you know,

they're trying a lot of different things. But they're very clearly not saying everything is going to the streaming service day and day with the movie release theater release. So it's a it's a different approach, and it's more nuanced than it gives the theater some hope. Yeah, exactly, good stuff. Good stuff. Ten Star Wars series spinoffs and ten Marvel series that will debut you on Disney Plus. I know, family members, that's what we want. I have a baby brother, man,

he's just gonna be like all into that. Look, as long as they continue to have the Mandalorian, I'm going to keep paying for Disney Plus. You're gonna be paying for it for a long time. With your son two years old, You'll be paying for it for a long time. Chris Paul Mary, thank you so much. L a bureau chief at Bloomberg News on the phone from l A. Check him out at Chris Paul Mary on Twitter. I mean,

listen the Disney story. I'm just fascinated by the company and the strategy those acquisitions of Lucasfilm and Pixar and Marvel. I mean, we're brilliant then and even looking more brilliant now. Yep. And they just kind of, you know, the strategy, they just move it around the platforms. This is Bloomberg Business Week with Carol Messer from Bloomberg Radio. You're listening to Bloomberg business Week Carl Masser along with Tim Stenovik a

Bloomberg Quicktake and Tim this story. I noticed it's been among the most read on the Bloomberg. It's about a group of guys trade ors who rode the crash in oil prices and as a result, they made hundreds of millions of dollars not too shabby. It's all about what

happened in April. I remember that day where I was because this was just mind bending what happened, right because the oil prices, neil prices crashing going to negative, essentially requiring that people pay you to take oil off your hands. You paid people rather to take off your hands, right, Like, it just didn't make sense for anybody who's been following the financial markets. This story is reported for Bloomberg Business Week, and here to tell us about the guys and the

ride is Bloomberg business Week. Get it to Joe Webber on the access line in Brooklyn. It's written by Liam Vaughan, senior reporter at Bloomberg News and Joe, let's kick it off with you. Uh. This is like one of those stories that I feel like again, you can make a movie out of it. Yeah, well, it's what we try to do and this was one that you know, Liam

has been close to for a while. Um. And you know we reported in Business Week back over the summer actually when we found out the details of of the trade and that it was more than five million and now it turns out it's even more than that. It's

it's six and sixty million dollar profit. And what we've also learned in that time is is what makes this story so special, um, And it becomes almost a character portrait of the group of of guys who were behind the trade, and um, we know very little about them, but what we do know is all in the story and it's this little group of guys in Essex, England. Paul Cummins, I mean, I feel like it's just like, as I said, you could just kind of you know, you just want to pull out his story, um, because

it's his name. Which is part of the joy of the story is that the case of characters, it's so it's almost like a guy Ritchie film and they have it's a really tight knit crew. And and the character that you mentioned it goes by Cuddles or that's how he's affectionately known within the group. I feel well. And then there's another guy named Dog, right, ye Dog. And you know that was part of the charm of the story was that you know, we we uh, as we found out a little bit about their details, we tried

to kind of bring them all uh to light. And the fact that, um, you know, the other element of the story that I just find totally fascinating is his Cuddles actually really does know oil. He's been in the trenches for for decades now, but some of these other people, um don't in their in their twenties. Uh. And basically it's this ring of of of characters, characters who sort of know each other and that's all they all they know, and they they've kind of grown up with each other

and have learned the oil trade. And that's kind of I mean, they're almost like novices in that they're they probably don't have that much experience, and yet they at a heck of a day on April. Well, and this is one of those stories like as Tim was talking about joll like when it happened, we're all thinking, Okay, first of all, this makes no sense negative you know,

we're all getting used to negative rates. But this whole idea of negative oil prices and what it what it meant and the thing is it happened and then it it went away. Um. But as as people wanted to kind of understand the trade that day and how it happened, that's where investigators on in the US and I guess elsewhere really started looking into to try and understand how did this happen, and that's what really led them to

this gang of nine. Yeah, we we don't really have visibility into into where any sort of investigation or where that stuff could go. But what we do know is that the trade is um. You know, some of these details were ones that we are able to report on earlier but then even learn a little bit more of. For this story, UM, it comes down to Tad's T A. S. And the it's also known as quote unquote banging the

clothes and settlement exactly. And there is um a little bit of um understanding within the community that this is not, you know, anything nefarious or illegal. It's been practiced for years, especially back in the commodities glory days, and that's kind of where UM cuddles as he goes. But UH perfected this and so we think that they basically were able to do that during the close really take advantages of

the price going negative. There is some some speculation or interest in it whether or not they actually pushed it negative just through their own trading activity, but that's not

for us to say. But yeah, you know, when you look back on the course of this year, we've seen so many incredible things, so many weird circumstances that you know, even even that that day and negative oil remains one of the weird are just things, and and yet you know, uh, this this crew is responsible for for perhaps maybe the

trade of the year. I think, yeah, And I guess my question would be, you know, even though it was such an anomaly to see oil do this and crash like this in a day, is this trade still possible in the future, or by shining a light on it like this as a sort of decrease the opportunity that people can can do this, you know, it's it's hard

to know. Um. I think in many ways this was a perfect alignment where we had a coronavirus and supply and demand things, so we had oil already come down and then you know, all of this coincided basically with this one day that happens every month with oil where the contracts roll over. So you know, we we even thought maybe the following month there could be a repeat because we were still on lockdown right then and demand

had evaporated. So who knows. I do think, you know, one thing we know about about finances that weird things happened. There are glitches. Um, no one thought the prices could ever go negative until they were starting to be warnings like days before that it was it was possible. So I think it took a special alignment. And when you kind of actually, um, you know, read the story closely, it it seems like they knew what they were doing, and everything happened to align just right well and to

be fair and to be fully transparent. No authorities have accused Vega Capital or any of the traders referenced in this story on doing anything illegal. And I love the law firm. I guess that represents eight of the nine traders in this group toll each the quote is, each of our clients regularly puts his own money at risk to try to make a profit. Sometimes it works, sometimes

it doesn't. And and and Liam even includes in his story that you know, if they've made maybe seven million dollars that day, nobody would have maybe really you know, like yeah, okay, whatever, But it was just they made almost seven hundred millions, and so authorities, yeah they had to take a law and maybe they don't. Yeah, yeah, exactly. Yeah,

I think you know that. That last note of the story is another trader who says, look, if it was BP or Goldman Sacks, nobody would be saying anything but the fact that these are, you know, working class lads in the neighborhood like Essex, which is is basically the equivalent of New Jersey for thank hey, so there you go. But yeah, it was just a correct trade. Maybe it was just a great trade. So that that's what got people talking about it, the fact that these aren't it's

not a firm that everybody knows. It's just some guys who had a great day kind of like jefter then Joel Webber, have a good weekend. You told it, well, everybody should check it out. Joe Webber, editor of Bloomberg Business Week, on the remote Access from Brooklyn, given some shade. Yeah, you're not going to forget about that comment come monday. Are you liked him really up to that point? All right? For those of you listening to New York DC in

San Francisco watching a YouTube Bloomberg Business Week. We're going to continue if listening on Bloomberg one or six one in Boston based day Business is coming up next. Check out the magazine Incredible Stories. You can find it on newsstands, on the Bloomberg and online at Bloomberg dot com. You're listening to Bloomberg Business Week with Carol Messer on Bloomberg Radio. All right, so yeah, tough story once again of our day, of our week, of our year, no doubt about it.

Is everything and anything to do with the coronavirus and vaccine. Charlie Pellett just talking about the story that we've seen came out of the Washington Post that the White House Chief of Staff Mark Meadows telling Stephen han In, the Commissioner of the FDA, to submit his recognition but Hans saying no, that's not likely, right or not happy? That's what That's what han is responding. And and look, I think it raised if this story indeed turns out to

be true. I mean it's a Washington Post story. Um, it doesn't help confidence in the vaccine at a time when Americans are concerned that it's been rushed through exactly. And let's get into that with our next guest, Dr Ian lous Bader with us as he is always every Friday, his clinical associate Professor of Medicine at n y U Landgown Medical Center, on the phone in New York, on a day when global cases exceed sixty nine point seven

million deaths, surpassing one point fifty nine million UM. Dr Lesbad, are nice to have you back with Tim and myself. Um, how are you okay? Doing doing well? Thank you, Carol and Tim. Happy Friday. Yeah, you sound a little tired. Well, it's been a long week. It's been a busy week. And uh, but I think we have good news coming. I think where we within the next few days, I

think we are going to get FDA approval. The Vaccine Advisory Committee uh seventeen to four voted uh, you know, to to approve this authorization, and I think, uh, literally within the next few days we'll get the full f d A committee to approve it. I think by the hanging I want to I want to get to that, but I do want to get to that headline that it looks like the Washington Post was was or they were reporting that the White House was threatening the FDA

chief um to basically prove it or else. Yeah, So yeah, what does that do? And Tim brought up a really good point, what does that do to confidence in the process, especially for the American public when there are still many out there it's safe to say that are a little nervous about taking the vaccine there are and even some physicians I know, or or a little hesitant. You know. I don't think politically or scientifically that was good. I mean, you have to let the the FDA evaluate it, which

they did. The vaccine data is very good in terms of efficacy and hopefully lives to be saved, and and side effects are are low, not zero. So to me, it's certainly unnecessary to um, you know, to threaten or cajole the f d A and you know, we really should sort of stay out of that scientific realm. So I think that was an error in judgment and I think unnecessary because the FDA is going to do no matter what, the right thing. I don't think you're really

subject to a political pressure anyway. Because these are committees and they're composed of infectious disease specialists and heads of departments and people who know what they're doing. Well, what would dr what would you say to someone who is seeing the news from the UK this week and understanding that people in the UK are already getting shots of Visor bion Tech Vaccine American company Visor at least, and

not getting shots here in the US. I mean, what, what like can you shed on the FDA approval process as to why it is taking a few more days to get it approved here? Well, Uh, it is really just the difference of a few days. And I think this is not like the space race where you have to be the first one on the moon. Uh. You know, I think we've had an amazing under a year to get a vaccine is really unheard of. I think Worpspeed

did did an amazing job, you know. And I think the FDA, or at least the way we work here is that it's goes through several committees. And it was eight hours plus of discussion on the back seen Um Advisory Committee. They had lots of different opinions. You can listen to it if you want on YouTube. I think it's a long, a long series and they really waited out the pros and concepts just how we do it here.

And I think people should feel confident about that because really experts, leading experts reviewed the data, they went over it. This was not a rush judgment in anyway. I'm not saying the UK was a rush judgment. Maybe their committees work faster, or maybe they started a few days earlier. But I think we're going to start giving out the first vaccines. My bet it's later next week. Wow, And that's when are you anticipate coming to n y U landgoing that you guys start to get it? I do.

I think the FDA sometime in the next two three days, four days will formally approve it. I think based on all the data, and I think it will be ready to shift by midweek. Uh if all goes well, And I think the first vaccines probably will be later next week or early the week after. Is my my guests, I have no insight information and but that's my guess

is to the timeline. Do you think the rollout from the recommendations from the CDC about making sure frontline workers, healthcare workers and those who are most at risk, this is the right way to distribute the vaccine? I do you know? Unfortunately, we literally see multiple COVID patients every day. Fortunately, the volume in the hospital at leash in our area is taking up, but not massively. Um. And I think

the frontline healthcare workers are the most at risk. Elderly at the most at risk and uh, and then the rest of the population. And I think once some people see that we chuck it and that we're doing fine, there'll be more encouraged to take it as well. That's a really good point. Yeah, when when they see the doctors taking it totally right. And what I do wonder too is Santa Fie and Glaxo Smith Klein Um they delayed some advanced trials of their experimental COVID nineteen shot.

I guess it didn't produce the strong enough response in some older people, so that they're drugs are being pushed out maybe in terms of availability to the end of next year. I mean, ian, this is what we're going to see. But that does complicate potentially getting vaccines to the entire world. Correct. We need all of these companies to have success we do. Manufacturing vaccines is not easy. Uh, there are a lot of limiting steps and I think

we need multiple vaccines. Again, the data that I've seen parliamentarily at least with Feisser and Maderna Astra Zeneca. Is that, you know, again playing with a dose a little bit. You know that we're getting into the um efficacy, which is great. You know again, flu shots not even that strong in their mandatory in many medical institutions. You know, they may be effective. So, uh, we do need a

lot of companies. And then when you start getting out into Africa or other countries where they don't have infrastructure, you really need vaccines that that need to be transported without such critical conditions of you know, minus subzero temperatures. So in a way, it's good that that perhaps more Western countries who have the technology are getting at first.

It's great that Fiser is coming out. I want to get to this news that we learned earlier today from Governor Cuomo saying that indoor dining here in New York City is set to close on Monday. Is this, in your opinion, the right move? Well, uh, that's a good question. You know, I think everyone is trying to make their best judgments all the way around. We do expect a bit of a bump a surge in cases after Thanksgiving and probably um, you know, around the holidays in December

as well. UM, certainly we know outdoor dining is fine. I think it's a tough call to really restrict indoor dining. I think what happened is that it was hard to sort of that is a reasonable number. But I think there's been a number of infections people have had from dining out. So I can understand it. The poor restaurants have been understrain. The whole industries or understrained. But I think I have to agree, at least temporarily for for a short window to perhaps let case volume drop a

bit um. I think it should be reevaluated, probably on a weekly basis, because if if positivity rates come down, they should be reopened. I can tell you it's a tough time. By next summer, we are not going to be wearing masks. Most Americans will have a vaccine and we will look back on this, but it is going to be a rough few weeks. I wish we could take a time machine and get there, yeah and move ahead. Yeah. There's a headline out from ABC that Dr Anthony Fauci

says he will get vaccinated publicly. Um, so Charlie Pellett is sharing that with me. So yeah. I mean, listen, I think he understands. So many people understand and we were talking, you know, Ian that you know, by you and other members of the medical community getting the vaccine, I think that is going to really provide incredible reassurances

to the mass public. I'm hoping by next Friday, when we do another medical segment, that I will have had it by then, so I will let you know if I did, and how I feel well, and look forward to go ahead. Yeah, I mean, one thing I want to know is what it feels like to get a shot of something that's stored at negative seventy degrees into your arm, right, I mean, that's got it. You can

feel that, right for sure. It's a deep I am injection. Uh, it's got these lipid particles that protect the messenger R and A. Yeah, it's a it's a unique vaccine, it's a new vaccine. I'll let you know how it feels if I If I get it before Friday, well, we look forward to that. Hey, Ian, I do want to ask you to, um, what are you seeing when it comes to COVID cases in New York City. We're definitely seeing a slight increase the hospitals are also seeing uh

an increase nowhere near March. I suspect part of what we're seeing is the positivity. In other words, we're estimating at twenty or over at least of the New York City population has antibodies, so I think that may be moderating it a bit. And when the vaccine starts rolling out, there is some protection after the first shot. We don't really know how much, and we certainly know many vaccines, like the shingles vaccine, the moni vaccine, you really need

two shots for optimal antibodies. But I think there's some data that there will be protection after one shot. So I really think in the next few weeks we will at least have some good news coming along. But cases are up a little bit, and I think that probably factored into Governor Cuomo's decision about restaurants. But we've got to hang in there a few more weeks, and I think we'll begin to see a little more daylight. Yeah,

figures crossed here. The other thing, though, that is still tricky, right that you can get the vaccine and so you are essentially protected, but you still don't know you can You can still though potentially spread the virus. Is that correct? Help me understand that? Well, yeah, you're a good, very good point. You're you're you're on the cutting edge with with nuances. So there's some rational abt people who've had

it wearing a mask. In other words, you've had antibodies, you had COVID, you survived, should you wear a mask? And you know, we feel that it does make sense for a while, and that's probably true to the vaccine. There may be some carriage of the virus in nasal passages. I think that's a relatively low risk um and I

don't I think it's not going to be meaningful. I think most physicians planned to wear masks even after they get the vaccine as they're seeing patients really for a few months until we really see a drop in cases. And I think part of that is cosmetic. I think it looks good and probably there's some protection. But once you have antibodies, generally they will go everywhere, and alluding to the nose where there's the virus, there's some thought that there will be fewer antibodies in the nose and

you could harbor it or potentially infect other people. I think it's a theoretical risk, but a relatively low risk. A doctor. We don't have much time left. But what message do you have for people who may be putting off going to the doctor because they're worried about being exposed to the virus of our medical office is doing a safe are protecting people? At great point, Kim, thank you, A great point. People need to come in for their screening, testing, colonoscopy, mammograms, vaccines,

flu shots. The offices are safe, there's social distancing. Everyone wears masks. Many offices have air purifiers. I went to my dentist and they have ultra violet air purifiers. So we need to be less afraid. Get out there and get your baseline healthcare done and uh and avoid crowds inside. You may need to take a little break from restaurants, but I think the doctor's offices are relatively safe and it's important to get your you're screening healthcare than I got.

I gotta say, I got a root canal. I've been in and out of doctor's offices done. I gotta go to the down screening. They have been incredible. So yes, you do need to go to then. I mean not not for anything, but you just got to take care of your deep What are you telling me? All right? Dr Ian les Bader, stay safe, be well, Clink Associate Professor of Medicine, and y you land goom bro my turn on. Yeah, but you let me drive? No no, no, he's home. Please, I'll do the right vel. Lets me.

I want to drive all Just drive baby, it's the question trying. This is the drive to the Globe community. Thanks, we'll dry us to Dawn on Bloomberg Radio. All right, folks, we've just got about eleven minutes left in today's trading session. It is time for of the drive to the clothes. Getting ready to wrap up this trading week. We're off our lows big time. We need to take a look at the trading day. Tim It's been kind of a funny day, like we kind of sold off a little bit,

but not dramatically. But we've definitely bounced back here. But we're kind of overall a little changed. Yeah, and I think investors taking a step back and thinking about stimulus or lack thereof, and when is that going to happen? If ever, like a little bit of a breather and we'll see what happens. Except for those Disney investors, except for those Disney investors, or if you happen to hit one of the I P O s this week. So let's get right. So let's get into it with Ryan Dietrich.

He's chief markets strategist over at LPL Financial. They've got eight hundred ten billion dollars in assets under management. He joins us once again on the phone from Charlotte, North Carolina. Here, Ryan, Nice to have you back with us here on Bloomberg. Um, So, Tim and I are watching the markets. It's kind of a little bit of a mellow day, but it's been an interesting week. But I think we are on track

for some losses for the week overall. When it comes to the broader market in the SNP five hundred, how do you see the market environment right now? Are there any technicals kind of you know, jumping out at you at this point? Yeah, Carol, thanks for having me back. What's You're right? And I guess markets they don't go up forever, right, We're having a little poll back now.

It looks not forgot we had over a ten percent rally and equities just in November, and if you look into the market technical seasonality, the first half of December historically is actually kind of flat for stocks. Most people think, you know, Santa Claus comes to town. December is always strong. The majority of the strength in the month of December tends to take place the second half of the month. And that's, you know, kind of where obviously we're heading here,

uh fairly soon. But technicals are strong. I mean, coming off the guys for a while saying there's a lot of participations, technicals are strong. The one thing that gets me, I consider a kind of market sentiments part of market technicals. Cinema is awfully frosty. I know you guys have talked about all the big I p o s, the excitement that comes with those. Put the call ratios, and here's the lowest level they've been in decades. If you look like the five days CBO, we put the call ratio,

UM investor Cinema polls. We can go on and on margat to keep going up when Cinnamon is optimistic, but that does that a much higher bar, but maybe a little bit of disappointment UM and markets finally can pull backcause people are a little too optimistic. We think that makes sense. We head into early sometime early next year, what is the political risk here? I mean, what are

you watching for in terms of from Washington? It it does seem like that there will be some sort of bill pass, but it's going to be smaller than I think the Democrats want. I mean that's pretty much guaranteed. But what does it mean for what you're watching right? Well, first OFFTI not nice to talk with you, but but you're right, I mean, that's that's pretty priced in at this point, right, some type of fis stimulus bill is

extremely priced in. I mean, we think it's going to happen, right, I mean, honestly, guys, we were talking about on August six, the summer resets, right, that's what we thought we were gonna have this stimulus bill. Now Here we are in the middle of December, still talking about it. So it's it's going to happen. I mean, I at the same time and his politics are waiting on the runoff in Georgia.

The makeup of Congress. Um. You know, at the end of the day, the truth doesn't matter is the Fed is still a major backs of fiscal stimulus is coming. The economy obviously, the vaccine news is great, right, economy is opening up, so all these things are playing in there. UM, and just the fact that earnings are likely going to

increase more than the US and emerging markets next year. UM. You know, fiscal stimulus matters in your term, but bigger picture, there's just a lot of stee wins that do say, hey, things are still looking pretty good next year. Hey, Ron, I want to go back to Tave Wilson a chart of the day, because he talked about UM earnings estimates for the next couple of years making us do more costly in historical terms than just one year's worth of projections or even past results. And he said, SMP five

hundred closing yesterday at twenty six times earnings. Uh, and it goes it's close to the September second ratio of twenty seven point two that was the highest since we saw some data being compiled by US. UH here at Bloomberg, which goes back in when you look at the valuation of the market, are you concerned, Uh, when you look at next year's earning estimates, We're not super concerned. Is is it a one something that we think, oh, this

is like n markets extremely overvalued? I think so here, Carol, but I'll tell you what look at emerging markets. I mentioned them a second ago. They're extremely cheap ralt to the US, and you know, a lot the emerging markets are not above where they were in two thousand eighteen. Emergy markets aren't even above where they were in two

thousand seven. You're gonna talk about a long base and a long time to kind of consolidate that we like the US still don't get me wrong, But in the models that we run for our more than seventeen thousand advisors, emerging markets are an area that we really think next year from a globally diversifying portfolio point of view, that could be an area that you really start to see some strength and out performance, honestly led by China. Nobody

trust Chinese data. I get that, but I'll tell you there's a lot of positives South three of Taiwan, China. There are some really good things happening in next places we're looking for investments next year are chief to be honest, what does the recovery here look like? Does it? Does it? It doesn't look like this v shape. We're we're not going to have that. We know that, Um, what do

you look at? Yeah? I mean everyone wants to the shape. Right, we've been saying a swoosh shaped recovery where it's easy off the initial surge. We saw that the last couple of months. Now it's getting tough. We're looking at initial planes just yesterday. Um, you know, there's there's gonna be some sticky points here. But but the truth of the

matter is, we just released our one outlook. We called it powering Through Here at LKI Research, we think the US can grow about four percent next year globally probably five percent or again. Earnings in the SMP can game maybe about twenty percent, which you get it to a one sixty five multiple. And we've got a fair value

target on the SMP of thirty. And I know that's a little lower than what a lot of people have been laying out there, But honestly, I've become all with you guys where we've been bullish pretty much this whole time, and and we think maybe now that everyone's starting to get optimistic, here that inner contrarian and it says, well, maybe let's pull it back a little bit. Seing globally,

my goodness, grations. The emerging markets are an area that, like I said earlier, is a lot of opportunity for investors. All right, we're gonna leave it on that note. Ryan, thank you so much. Have a good weekend. Ryan Detrich, chief market Strategies at p L Financial on the phone from Charlotte, North Carolina, so kind of laying out his

metrics and what he's watching. But I think it is a week and I think you said it well that it just feels like a day where we're going to just take a break a little bit, and maybe the week because it does look like we're gonna end lower for the week. Overall, I think investors are just kind of waiting to see if we pull something out of DC potentially that gives us some optimism that kind of helps shore up the economy. Is Yeah, and I think, like Ryan was saying that it's kind of priced in

right now. I think the big surprise would be if we continue not to get something as the end of the year gets closer and closer. Yeah, exactly. I think that would certainly create some disappointment. I'm just going over to Airbnb and door dash because I wanted to see how these docks are trading. So Airbnb, which was up finishing up about a hundred and thirteen percent yesterday, it's down about two and a half percent, So not a

big deal. Uh. Door Dash, which was up almost eighty six percent and it's first day of trading on Wednesday, lost about two percent yesterday and it's down about six percent today, which is to be expected considering the But it'll be fun too and interesting to watch what the trend line will be. Yeah, the hard work is ahead for these companies. They have to live up to the expectations.

And these expectations got lofty this week. Yeah, and listen, both of them are pandemic plays, and I think some think that maybe we'll see who has the longer term play post pandemic. Ultimately, I don't think it's gonna be Yeah, I don't know. People could say I think door Dash because they're so in terms of market share and cemented in food delivery, but who knows. Yeah, I mean maybe people are gonna be traveling in living in different places.

Airbnb could benefit exactly, exactly. Thanks so much for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or at Bloomberg dot com, and be sure to check out our daily radio show at two pm Eastern on Bloomberg Radio and be sure to watch us too on YouTube by searching Bloomberg Global News