This is Bloomberg Business Week. I'm Karl Masser and I'm Bloomberg Quick Takes Tim Stanovk. We're here every day bringing you the latest news from the world to business and finance, plus technology, politics, economics, all purtnising the power of Business Week reporters and editors, not to mention our journalists and analysts in more than one twenty countries. You can download
Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Clovel News. We did get the latest minutes from the last policy setting meeting of the Federal Resort
that was earlier this month. At meeting, we did see uh in terms of the SMP five hundred equities rolling over SMP five hundred e racing some of those earlier gains and just turning lower after the Fed minutes, So we are seeing some market reaction on a day where we're seeing little volume. We also got a big batch of economic news, so here filtering through it all for us and great to have back with us is Steven
Skanky he's chief economic advisor over at keel Point. Former US Treasury and White House National Security Council staff member Steve based in Washington. We find him on the phone from Washington, d C. On this Wednesday, UH, Steve, good to have you here with Creedy and myself. UM. First of all, happy Thanksgiving, UH five minutes. What stands out
for you? Well, I think what what stands out most is that is that the governors were really sangment about their decision to UH to begin to taper without making a decision on interest rates. And it's not that there's not turbile. I mean, if you if you look at the big picture, even coming into that meeting, it was before they that they knew the good jobs report for
October and the increase for August and September UM. But you know, it would have been very easy to conclude that their job was done when when you look at the trend increase in employment and then the fact that we've seen the level of price increases even with the PC personal Consumption Expenditure and Index Act today at five percent headline core A three and a half roughly UM, the fense easily could have declared victory and gotten on
with their plans. And yet that wasn't That wasn't the tenor of the meeting, Steve, I want to ask you what the variables are here? Because we know that the market is waiting for this rate liftoff. We know they're waiting for this accelerated tapering. What could change between now and say January or stay December when we really get a new kind of tapering amount for January? What are we watching here? The labor market, the commandities market. What
are the variables involved in this decision making? Well, there's there are several carol uh, and first, happy Thanksgiving to you. It's always great to be with you, and I'm so glad to be on with you a creety today. Um, it's always a pleasure. The variables the FET has in front of I mean that the personal uh, the consumption expenditures uh coming in still strong. It looks like fourth quarter g d P is on track to be up
six and a half percent on an annualized basis. That's significantly above the sort of the four four and a half that have been in the consensus forecast. The FETE is not unaware of that, and as they come into December when they have to decide what's going to happen, uh with well, they've already announced what they're gonna do with the paper beginning December fifteen. So November fifteen to December fifteen, that's said, December fifteen to January fifteen, that's
set also. But but but they're seeing in real time a better than expected GDP growth number. They have in front of them, better than expected October jobs number and the upward revision. So they have a chance out to see what happens to November jobs and uh, you know, which is measured mid mom and we just saw the the the unemployment claims number coming out today weekly. Uh, way better than expected. Uh, it's it's a long time
since it's it's been this low. Right, So here go ahead, Well, Steve, you know, and and Crey brought up some good, you know, a good question in terms of the variables that we can expect the Fed to be focusing on to kind of figure out as they find tune their policy and really fine tune their message. I think they've been many would argue they've been very clear and very careful about messaging to the markets and um really to all of
us who watch the economy. Uh, what is it? I mean, if we get that strong jobs report next Friday, is that it in your view? Or all bets are off because they're waiting for the latest and greatest, and we know with COVID still out there, anything can happen. I don't think all bets are off there. There's certainly being
very careful. One of the things that this current FED share learned as did this process, remember the taper tent from going back under Chair Bernaki, It's it's important for the markets to to have a clear and clean understanding of what the Fed is planning to do. Uh and uh. With the information that we have in front of us just today, you're very easy for them to change course,
accelerate paper, say something about raising interest rates. You know, coming into the meeting a couple of weeks ago, the markets were the market bet the that was three rate increases, three fund rate increases in one in June at the end of taper, one in September, and then one in December. Very aggressive and defenses shut that down, and the market
accepted that easily and readily. Remarkably so in my opinion, still with us is Steve skanky chief Economic advisor at keel Point, as well as the former U. S. Treasury and White House National Security Council staff member joining us on the phone from Washington, d C. It's so handy to have you here, Steve, because we are still talking about those FOMC miths that we just got things looking kind of good from the FEDS perspective, but they are saying there is room for them to really accelerate some
of that tapering. How fast does is fast? How fast can this actually happen? How quickly can it happen? A quick reminder to our audience is that the last time they actually announced the tapering, they only really gave an amount till December. From January on, we don't know what's happened things. So Steve to you, how fast is fast? Well, right now, they're they're scheduled to to have phased out
their bond buying program by June. And UH, from you know, from from the discussion after the meeting and from reading to the minutes, as I said, they seem to be sanguine about where prices are UH and where the economy is generally. Now, obviously we've got some some great news on the employment side with the August, Attember, October jobs numbers, and if we get similarly good news for November, they could at their December meeting decided to accelerate. What would
what would acceleration look like? Probably not more than doubling up at the most. Recall that they get into the most trouble and think about December of uh two years ago, um when three years ago, when when there are comments just caused the financial markets into turmoil. So it's not going to be a big change, and any change is going to be well telegraphed, and the market is is
going to feel good about it about it coming. What the market is seems to be most concerned about is waking up and finding FED is is behind the curve and then is rushing or struggling to to catch up. At that point, confidence is lost as to whether the FED really has rain on inflation and its policy actions. And Steve I asked, sorry, I asked, how fast is fast? But this is already a much faster pace than what
we saw in the wake of drop. Yes, yes, uh, But but they've been preparing us for it for a good bit and many would argue that they've waited way beyond when they logically could have started this UM and uh so, so to go at this pace, to to have it done over over eight months is Yeah, it's faster than before. But markets seems to be very comfortable with it, and it also seems to be consistent with
the data that they have in front of them. Well, that's what I was thinking about, because we were just talking so much about this on Monday as deals were moving up. UM Steve is that whether or not the data points we knew we'd get a big data dump this week, whether or not they would confirm that move up in race, and it certainly seems like it's playing out that way. If the FED decides to UM reduce, you know, they're they're the tapering moving along much faster.
Should we assume that as soon as that done, they're going to start raising rates or that's a bad assumption. I think that's a bad assumption. At this point, they want to give themselves as much latitude as they can. And you recall schure Apol at the press conference on November three, when asked about rates, he just shut it down. He said, we're not even talking about that. We're going to finish the taper of the bomb buying program, and
then we'll look at what we're gonna do with rates. Uh, there'd have to be some dramatic change, uh in the data, and in particular that that all of a sudden employment just blossoms. G d P growth is running hot into January February. And and they can come to his inclusion, you know, at the at the end of at the end of their March meeting, for example, and just say, as we complete our taper and if it were accelerated,
it could end in March. We we will we will be looking at what what what the environment suggests as far as an adjustment in the interstate policy. Well, and I feel like even if there are questions out there right, we know for certain that the Fed, Steve and creating that the VET has been very good about telegraphing and spoon feeding us um what's to come, so that to avoid any kind of big surprises. Steve Skanky have a safe and happy and healthy Thanksgiving. So great to check
in with you. Steve Skankey over at kill Point, former U. S. Treasury and White House National Security Council staff member. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stenovich from Bloomberg Radio. So we have often talked on air about mounting student debt. We've talked about the levels of credit card debt. Another mounting pile of debt on our radar is a hundred forty billion dollars
in medical debt. It's all in a story that you will find online at Bloomberg dot com slash business Week. So let's get to it with Bloomberg News healthcare reporter John Tazzi with us on the phone in New York City, along with Bloomberg business Week editor Joel on the access line in Brooklyn. So I have to say Krety and I were talking about this story, it's it's really upsetting to see the levels of debt that we're talking about
and who's in particular targeted with all of this. Yeah, and it was I think timely because you know, as we kind of enter whatever phase of the pandemic um we're in now, we're you know, left with the consequences and the legacies of some of this stuff, and and the the amount of debt that um medical debt that is crewing for all Americans is obviously really troubling, but then to know that there's this racial element on top of it, that um is clearly clearly affecting people of
color more than white people, uh, just shows how um, how pervasive some of this stuff can be. So so John walk us into the data and and how the story came about. Sure, Yeah, I mean the kind of poor thing we were trying to understand is, um, you know, it's been well known for a long time that medical debt is uh sort of disproportionate or you distributed that black Americans in particular are more likely to have medical debt than white Sitspanics are more likely to have medical
debt than whites. And so we were really kind of just trying to understand, you know, why that's the case, and UM, you know what it's like to um, you know, to experience that. You know. One of the things that UM you know turned up in our reporting is that there's sort of a lot of variability. If the hospital or healthcare provider has an unpaid bill, UM, then they have sort of a set of choices of kind of
what they can do. UM. You know, they can sort of try to pursue that uh payment maximally and take patients to cord or put leans on their houses or garnish their wages, um you know, or they can um you know, sort of uh check whether the patient is eligible from finance unel it and in fact, non nonprofit hospital they're supposed to do that. But there's a lot of variability in the industry about sort of how those um you know, how those practices are put into into place.
So actually, let's just stick with this hospital element um for a moment, because I found that to be a particularly interesting part of the article. And as you're reporting, revealed even executives at hospitals weren't exactly in in the know about how some of their their facilities were actually enforcing this and actually you know, going after people's credit, right, Yeah, I mean, I think that's one of the most revealing
things that came up in this recording. As you know, there were at least one large hospital system in New York City, the public hospital system, your Health and hospitals corporations UM you know. Uh. When advocates brought to their attention that they were shooting patients in court over unpaid
bill um, the CEO stopped it. He said, I didn't know that was happening, um, and they put a stop to it, and that actually kind of led to some change in their practices and they said they've added more financial counselors, they're doing more to proactively reach out to patients, uh,
you know, who may not be able to pay. And I think, you know, it just goes to show that there is, you know, there's a whole sort of like set of discretionary choices for healthcare uh providers here about like how they respond in one of these situations, which are you know, all too common that this is not a rare thing that happens if somebody has trouble paying their bill, um, But there's a lot of variability and
how how they respond. John, first off, fantastic story. Like, like Carol said, we were talking about that, it's really just unbelievable when you're reading it. Highly recommend our listeners to go out go and check it out. You mentioned in the story. Are you write in the story that there are some ways that hospitals are trying to make things a little bit easier on the folks that can't afford it, But some patients say they didn't apply to those benefits, They didn't even know how to do it.
Can you speak to more of that element? Where where is the disconnect here? Yeah, I mean I think it's a it's a conversation that the whole healthcare industry is happening. I mean, first of all, we could just start by saying that this is a you know, this is a complex transaction, right access in healthcare often you know, sometimes in emergency circumstances, people have different insurance plans that pay for different things. Some people may be eligible for certain
assistance or certain programs. Like this is all super complicated. Anybody who's had healthcare in the US knows that. And I think in that complexity is where a lot of
these sort of problems arise. UM. So you know, I think there is a conversation going on within the health care industry about like how do we you know, UM, how do we respond in situations and what should we be doing as you know, hospitals or healthcare providers, UM, you know, to make sure that patients who who deserve charity care, who deserve finding out to help UM know about it first of all and and can get it.
And I mean one of the things, you know, we spoke to a patient who had you know, twenty eight thousand dollars of medical data creed over years, and we're struggling to pay our bills. And she said she had never been offered financial assistance. Well, John, this is like you know, as I read through your story, I was curious and like, is this because minorities and lower socioeconomic individuals are on the lower socio economic scale don't have great medical coverage? Or is it that it's a system
that repeatedly takes advantage of the vulnerable both. To be honest, I think we fully we don't fully know the explanation of why thisety exists. Right, there are some underlying inequities and income, wealth, healthcare, health insurance coverage that I think
I'll contribute to it. But you know, one thing that you know, people told me as I was reporting the story is that you know, and I'm white, UM, black people who I of you, We're saying, you know, we are spoken to you differently in UM when we get medical care. We are there's already a kind of underlying UM fear of being treated differently. I don't think that, you know, could surprise anyone UM in the United States today.
And so I think the question and again this hasn't fully been answered this, you know, to what extent do some you know, biases or implicit biases or differential practices have a disproportionate impact on people of color. Well, I gotta say it's one of those remarkable numbers. And as you said, creating the details in it. Um, you know, it just is a really serious situation and problem. Um, John, thank you so much, really appreciate you bringing it to light.
Healthcare reporter at Bloomberg News. You can find this story online at Bloomberg dot com Slash business Week. Have a good Thanksgiving. Joe Webber, same to you, editor of Bloomberg Business Week, on the access line from Brooklyn. I should point out it's a special double issue of Bloomberg Business we deep dive into inflation, which is so relevant, especially considering some of the data points that we got today
from various government agencies and private institutions. So um, but it's just again another sign of I feel like those who are most vulnerable just kind of getting another another a tough situation. Yeah. And the disparities, whether it's regional, by whether it's by race, I mean, there's so many ways to dissect and splice this but at the end of the day, it really is just sad. Carol, There's probably no other way to say it, right, and there's
assistance out there to help these individuals. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stenovit on Bloomberg Radio. Indeed, this is Bloomberg Business Week on this Wednesday before Thanksgiving. Tim's off and Krita Gupta in his place joining me here in our Interactive Broker studio. Well, the U s economy's main growth engine.
We're talking about American consumers continuing to power ahead, and as we heard from Bloomberg Intelligence Pudham Goyle yesterday, that's expected to bode pretty well for the nation's retailers. So let's get to it and let's see what we're hearing from the nation's retailers ahead of the all important holiday shopping season. Tom McGhee is back with us. He's president of the i C s C. That's the global trade Association for the marketplaces industry, and Tom is with us
once again, joining us right now from Los Angeles. Tom, good to have you here with Creating Myself. How are you good? How are you Happy Thanksgiving. Happy Thanksgiving. I'm getting ready planning to do probably a lot of my shopping online, to be quite honest, Um, tell me, we've got some really strong economic data on consumers spending. What are you hearing from members of the marketplaces community, whether it's storefronts, online, what are they saying about the upcoming
holiday shopping season? Yeah, it's going to be a super strong holiday shopping season. We're forecasting eight growth in all the conditions for a strong a season or their good um, you know, strong economy, jobs, etcetera. So you know, although you know there has been strong retail demand to date, and obviously a lot of holiday sales have already taken place, given some of the supply chain concerns, etcetera, you know, all systems to go for the balance of the holiday
season as well. I don't see anything that would deter me from many point nine percent of protection and quite frankly, potentially beating it. Well, Tom, you mentioned it's going to be a pretty good season. You mentioned some of it's already front run as well. How much of this preparation are our stores really doing? How much are like talk inventories to us? Yeah? I think the retailers have done a lot to try to prepare, you know, to manage
to disapply chain issues. I mean, the first and most important thing they've done is trying to encourage shoppers to come out early, you know, to to you know, straight line demand over a longer period of time. You know, the larger retailers have done a lot to try to manage inventory in advance, um, you know, everything from looking at alternative sources to uh, you know, even getting different
logistical operations in place to assist. So I think all of those things have really played a part in helping managing you know, some legitimate supply chain concerns that exists. But despite those supply chain concerns and and clar frankly, you know, obviously trained on consumer sentiment that has just not translated itself into any change. And consider demand or behavior right now, I mean it is it is very strong.
Foot traffic, online traffic, all of all of the above is really at very robust levels right now, and I've see no indications that's going to change. Pretty remarkable, And I know you guys share some data with my team and my producer. On average, shoppers are projected to spend an average of four over the course of the weekend. Um is the bulk of it still brick and mortar. I mean we are still a brick and mortar world,
aren't we. Yeah. No, I think the majority of those sales will be within physical stores and and you know, but there will be strong oath on e commerce as well. I mean, it really is a is a perfect situation where you're going to find strong demands throwing demand about channels, and as we talked about before, Carroll, I mean, those lines are really started to blur, and you know, there's a lot of trones acceleratoring the pandemic, and quite frankly
because of the supply chain issues as well. You know, retailers have done a really good job of managing inventory and they're using their stores not only as a place where people can go and browse ails and shop, but they're also using their stories as a way to fulfill online orders as well. So it's a way of managing inventory um and fulfilling orders. And of course you have you know firchite pick up and pick and collect and all those types of things um that are really speaking
to convergence. But as you get closer to the holiday too. You will see traffic and stories pick up also because people are going to be more concerned about the ability to get that product in their office if they buy it online because of the concerns around I change is just shipping straight on the shipping system right there, Tom, you mentioned was a pretty good deal for the consumer. This holiday season is looking pretty good already with Black Friday,
Cyber Monday. How high is the bar set for two when it comes to this holiday season? Um, I think that two is going to be Personally, I think the signs are there for a very strong Um. You know, the only thing that would concern me in regards to demand going into twenty two are broader economic issues around the supply chain and obviously inflation and if the if inflation was wasn't transitory and it continued to have an
impact of time. Um, consumer consumer sentiment that at some point it's going to translate into into retail sales and consumer behavior. Absent that, I think all the conditions are in place where a very robust retail environment in twenty twenty two and quite frankly potentially in the twenty twenty three and beyond. Uh, you know, there's a lot of
the times that you saw during the pandemic. You know, the acceleration that people moving back to the suburbs, millennials, you know, buying homes, beginning to have families, et cetera. Those are all very good for demands because as you buy homes and have kids, you tend to buy a lot of stuff. And those things, coupled with a strong economy and emergence from the pandemic, I think created pretty
good environment for retail s over before. As long as this supply chain issues are you know, our temporary and inflation doesn't become something that's sticking. Hey, um, Tom, just got about fifty seconds left here. I mean, how many shopping places are you going to be checking in over the holiday weekend? You're gonna be walking the malls and
all that good stuff. Yeah, sure I will be. And I you know, I'm obviously in constant contact with our members, both our both our retailers and property developer members, and and and you know, get get reports in the am on how things are going. So and again, you know, as we said here today, Um, you know, the day before Thanksgiving, a lot of optimism about the weekend and about the balance of holiday season in general. I mean it's I think this could be a record breaking. It's palpable.
I mean, I agree with you. All of a sudden, it feels like everybody's a beat. The big concern, as you said that supply chains and certainly the inflation outlooks definitely on everybody's mind. Hey, Tom, have a great Thanksgiving. Always good to hear your voice, Tomygee. He's president and chief executive officer, and I c SC represents the marketplaces industry, so we're talking a big time view when it comes to retalk. You're gonna be at shop in this weekend.
I will be online shopping this weekend from the comfort of my bed, very excited about it. Do you get does is it like when you see Black Friday deals? Is it a catalyst for you to like check it out, maybe do something? It is? And you know, I hate that because I heard that they are baked in the discounts, are are baked into the prices. I don't know if that's true. We should say you feel managed. I feel a little managed, but that doesn't stop me from spending.
I'm a shopoholic. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick takes Tim stint of it on Bloomberg Radio. A little bit about Amazon today, if we may. There's a great story about Bloomberg's Matt Day and Spencer soaper and creates about how far Amazon is willing to go to make sure you get all the things you want on time. And that doesn't make you feel good. Carol, tell me the truth. How many Amazon packages have you bought in the last year? You know what,
I bought a lot during It was NonStop. Yeah, it was kind of crazy. We we paired back a little bit for me. It wasn't a habit I ever ever shook still still doing it all right, Well, let's see what Spencer has to say. Is Bloomberg News Technology and e commerce reporter. He is on the phone in Seattle. So Spencer, what is Amazon up to? Well, they're up to anything and everything to get packages to customers this holiday. So they're really trying to, you know, sidestep the shipping
log jams. We have one anecdote in particular that kind of portrays this where it was, you know, shiploaded with rolled steel heading into a port, sleepy port and Everett, Um, Amazon had nothing to do at that, But what had managed to do is get space on the on the top of the ship to just load it up to containers that it needs inventory for the holiday, and even
empty containers that it needs to shuffle inventory around. UM. The company plans to spend about four billion dollars this year extra just just to deal with the inefficiencies of all the log jams. But the message is sending is that it's going to pay whatever it takes to uh, you know, have the inventory available and get the inventory two people over the holiday. I actually love that. It is very reassuring, Carol. It's good to know I'm gonna get my packages no matter what. Spencer. I want to ask,
what is this doing to their bottom line? How much is this digging into at the end of the day, their profits, because it wasn't too long ago that they reported pretty I think this want to say, correct me if I'm wrong, but they reported not so great earnings because they said shipping was costing so much that it
ended up cutting into their profits. Yeah, and they and they forecast UM for the fourth quarter that they might just break even UM, which is a pretty big step back for them because they have been moving profit margins pretty regularly, so they waived a big red flag that the profits could be pretty marginal uh this quarter. But again, the Amazon calculation is we'd rather disappoint investors than disappoint customers.
So the ultimate loss for them would be to have people go on Amazon, not find what they need, not be able to get it in time, and end up going to Walmart or Target or Best Buy. So Amazon wants to avoid that at all costs, even if even if that includes profits. Well, you know, Spencer right there, something to be said. Funny. My husband John and I were just talking about this at home. It's like, we don't we go to order something, we go straight to Amazon.
We don't even we don't even shop around anymore, which is so Amazon wants to make sure that we don't get ticked off, right, that we don't get our stuff and that we start looking elsewhere. Yeah, exactly. They That's an extremely enviable position, right to be kind of the destination of choice for so many people, and the last thing you want to do is a road that by disappointing people. Another event is is this marketplace, uh, that they have the online marketplace, so it's not just buying
from uh, inventory that Amazon owns directly. It's also this huge mix of online merchants who put their wears on Amazon for precisely the reason you mentioned, because so many people shop there and so that gives them this deep, deep inventory. And even if you don't find precisely the product you're looking for. Uh. You know, if you do that in a store, you go into a store looking for some specific thing and don't find it, there's an
empty shelf, you walk out disappointed. On Amazon, there's this deep secondary inventory that could service and emerge and maybe you don't find exactly what you're looking for, you you find a pretty good alternative, and in this shopping environment, you're gonna be pretty happy about that. Spencer, tell us a little bit more about Amazon Air and their their efforts to take to the skies and transport cargo that way. Yeah. Well,
a big thing that we saw this year. We've we've known about Amazon Air for a while now and they're up to like, I think eighty five planes this season that that really just get inventory around country. So that just helps them react quickly to any inventory shortages in
any critical markets within the country. Another thing that they're doing this year that we highlighted, um, is that they're actually chartering planes, uh, internationally, so they'll they'll secure space on aircraft, you know, flying from China into the US. It costs a little more to do that than by sea. But right now, uh, you know a lot of merchants would rather have inventory in the US available for sale than sitting on a factory floor in China where it's
where it's doing doing no good. So they're they're leaning on planes as well this year. Al Right, so Spencer, they figured out how to charter freighters, They've got Amazon Air, etcetera. Um, what about having enough people in the warehouse is to ultimately get it kind of the last mile or last few miles. Yeah, that's the big challenge and something they've acknowledge that this is unique for Amazon this year. It's it's usually capacity constrains, you know, doesn't have enough space
in its facilities world of goods. This year, the big strain is going to do they have enough people they have enough people in the warehouses to get the inventory in, to pack it up, get it out the door. And also do they have enough drivers? You know they have these uh these Amazon Delivery service partners which are kind of small businesses around the country that operate these Amazon vans,
and those companies have had trouble hiring as well. So yeah, it's going to be a big The ultimate test for Amazon now is going to be that that last smile, well they have the people that they need to deliver, and to do that, they've been offering pretty big hiring bonuses, you know, like up to three thousand dollars in some cases of requires you to stay a certain period of time. They've boosted wages, so once again they're they're trying to you know, outspend others in in competing for the labor
pool as well. All right, well, another great, great piece of reporting when it comes to Amazon. Spencer, thank you so much, have a great Thanksgiving. Spencer Soaper, he's technology and e commerce reporter at Bloomberg News on the phone in Seattle. Took him out on Twitter at Spencer's Soaper. It's smart, right, Amazon just about to keep us in their network. It's kind of brilliant actually, right, Like it just stays get blown away and it is truly like
our destination trade for everything. Imaginely going on Amazon and not finding something you would be like what you can't even imagine it. I'm yeah, but you let me drive. Oh no, no, no, no, this is not a toy. Please, I want to dry. Good question. This is the drive to the clothes on Bluebird Radio. All right, everybody, we are driving to the clothes, getting ready to wrap up the trading day before Thanksgiving. We do have a short and trading day on Friday, so we're not quite ready
to wrap up the week. But let's get to it because we do have equities pretty much at their best levels of the session. After bouncing around a bit um. We did see some reaction in terms of those fed minutes yields off their highs of the session, but we definitely have seen a bump up in yield equation over the week overall. So let's get to it. Back with us as Tom Plumb, He's president chief investment officer at Plumb Funds based in Madison, Wisconsin, joining us on the
phone from there. By the way, that Plumb balance fund in the ENTI for the past five years based on Bloomberg data, meaning a beach just about all other funds in its category, returning on average annually nearly fourteen percent. Hey Tom, nice to have you here with Crety Gupta and myself. Interesting week here. How do you see in terms of some of the broad macro trends that we've seen, yields moving up a little bit. Uh, and we certainly are seeing a strong patch of economic news. Does that
bode well for the equity markets? For you? For you in your view? Alright, Carol Creedy? Ye, the question is are we going to continue the move that we've had for this multiple year period of time since the pandemic started? And and we think that we will. Um, it bodes well. I think on your guests just on a few minutes ago talked about how the consumers in such good shape. Purchases that we expect to be over the holiday season, uh set a record again. Uh. The consumer is so
liquid they have been saving. Um, they're now more confident of the economy than they were a year ago. And we think that that liquidity that the Federal Reserve has provided has basically translated into asset prices going up. Certainly we see some of that in the inflation, but a lot of times we forget about that. One of the assets that's gone up tremendously in last year has been the stock market. I want to ask what your thoughts are on the next what do we have left month?
Six weeks? Ish? We have volume already dropping this week. We know that for Thanksgiving holiday, we can kind of expect on the last maybe Christmas, New Year's kind of holidays. Well, but between that, is there really any room for any near term volatility? What do you think? Uh, Well, volatility is always and certainly most of the companies reported the third quarter, we've had a sprinkling of companies reporting, and sometimes that's caused an incredible amount of volatility with their stocks.
But we we think that there's a number of companies that are great companies that really haven't participated in this year's advance, and those might be the stocks for next year, especially since we think that the economy is still going to be pretty strong next year and we're going to
work through a lot of international things. You're going to work through a lot of supply chain issues, and a lot of companies are going to deal with this rising prices by figuring out how to become more lean and more efficient to One of the things we love talking about you is you've got a top performing fund consistently over the past five years and you talk names with us, and I love kind of digging into your holdings. One of the names that you like is Amazon, and that
is a top holding within your fun. We just talked with our spencer Soaper about how Amazon is going to do basically whatever they need to do to make sure that if you place an order, they can get a product to you, even if it costs them more money to do so. Uh, you like Amazon? The stocks up about ten percent so far this year. What's the thinking
or continue thinking when it comes to Amazon, Carol. When you think about it, there are very very few years that we've seen in the last ten years where Amazon has lagged the market advance, and this is one of them where it's about behind the rest of the side market. We think that this was a consolidation year that the sales are going to go and as they have shown before, they can pick their margins. Right now, they're picking growth over margins, and so this year is not our big
earnings for here for the retail side. But you know, the retail side is becoming less and less important, even though it's growing, you know, in the double digits, it's still peals by the growth of other services and by aws. So there's this year the online retail will probably be less than fifty of their total sales, which is such a good point, right in terms of where the growth
is going forward. Uh and Amazon, you know, we look at that, right, Creedy, We look at I love going to the d e S page and looking at revenue growth and you look at a w S over the past three years. You're talking about average are over the last three years growth here, and that is much more
than what we're seeing in online. Yeah. But you know what's scary about that is Tom we were just talking with our very on Spencer Soaper about our own Amazon story dealing with essentially the supply chain issues where Amazon is kind of cutting into their own profits. He said, this holiday season they might just be breaking even That's a story you're hearing across a lot of big tack, a lot of these major companies. How does that affect the index as a whole, which, of course probably the
majority of America is invested in some way. Well, well, that's a good point that this year is going to be here where they're basically are defending the position, maintaining their dominance in the online retail and they have shown us in the past. They're they're very willing to skip a profit here to contain to build this enterprise value, and so we expect that that will be what we
see here. That earnest growth has been non existence, and but the revenue growth is going to continue to be so strong that they're going to continue to put all their co editors in an adverse position. Hey, I want to make sure Tom that we get in another name. Microsoft is another one that you continue to like at top holding. It's up fifty this year. Um, why is it that you think investors should continue to commit new
money to it? Well, I think Microsoft is a neat company that has put together everything they need in this digital world. They moved the old services that we've all seen into a subscription service, high recurring revenue. None of us is going to stop paying our monthly or annual feasts to have Outlook and have Excel and all the different services that are in Microsoft Office. But the other side is that their their cloud based business has just exploded.
And again we'll see when the Defense Department decides who's going to be responsible for that multi jointy billion dollar project. But they one at once, and they have a chance to win it again and talk about the other thing. I Carrol the other stock, and I know you don't have much time, but I think this is the incredible opportunity to buy Autodesk AFT that they reported yesterday. Everything that they said in their or matches what we think is in there for the long term. Well, we never
have enough time, Tom, so come back soon. Tom Plumb, He's president, chief investment officer of at Plumb Funds, joining us on the phone from Madison, Wisconsin. 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 on Bloomberg Radio, or watch us on YouTube. Search to Bloomberg Global News.