Microsoft Buys Activision Blizzard in $69 Billion Game Deal

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. Tim. Uh, you know that one headline for the World Health Organization about a macron won't be the last variant um, but you do you know, you're reminded that this thing is gonna linger, hopefully get easier, but linger hopefully. Look and we've talked to people about this,

and we're gonna talk more about this. But the idea of going from a pandemic to endemic and the idea that amcron could be uh that maybe look here here in New York City, the COVID nineteen waves is slowing. Cases and hospitalizations are dropping. Dramatically from a peak in early January and remaining concentrated among those who are unvaccinated. Carol, Right, but now we're hearing also about animals South Africa, Hong Kong, Like there's some concerns about that. All right, it's never

adult day when it comes to COVID. Hey, let's bring in our guest, Dr Tom McGinn. He's executive vice president of Physician Enterprise of a Common Spirit Health. They've got more than a thousand sights in some twenty ones Uh cities. Excuse me, in twenty one states, I should say. Uh. They are a massive team and they see a lot. And he's back with us on the phone in New York City, Dr McGinn. Nice to have you here with Tim and myself. How are you and what are you seeing?

Great to be back and good to talk to you again. UM. Well, I don't think we're seeing anything different than what you're currently saying. I do think, Um, as you go across the country, you can see the cases, particularly in the East coast, because you've been stating here in New York and Maryland, New Jersey. The number of cases are obviously starting to turn down, which is good news. The tough news is obviously that hostializations are in other areas picking

up as this virus moves across the country. So we have pockets in areas where we're seeing a little downturn, but we have pockets where we're probably at the beginning of this inflection. We think we're gonna beat all our prior records in the original January phase, the dells a way we're gonna We're gonna definitely be in terms of hospitalizations. We're going to probably peek over all the prior quote

unquote records, which is difficult with staffing right now. I think that's that's the combination that we're all struggling with. So yeah, I mean it's it's obviously not just the healthcare industry, but it puts it in sharp relief when you know the doctors who have and and and nurses who've been doing this for close to two years are just under such strain that it's difficult to you know,

find a place in in in certain hospitals. Hey, Dr McGinn, I'm wondering because you have such a unique view of what's happening in different parts of the country in more than twenty states. How would you characterize the people who are hospitalized right now? What can you tell us about who's hospitalized you has been vACC needed and boosted versus who isn't. Yeah, that's a very good question. I mean

it's pretty well delineated. Um, I mean the number is a little bit very but I would say anywhere from six of those admitted are unvaccinated, probably closer and in some places, and we do have, um, you know some of this. We don't know the number. I think it's an interesting question of the incidental COVID, which is kind of a misleading term. So example of you know, Mr Smith, a young man comes in with an ankle fracture and

needs to be seeing. They swap and he's positive, so he's not very cost of COVID, so he's incidentally diagnosed. We don't know what that number looks like. Uh, and that could be anywhere from a couple of percentage points, you know, maybe it's a ten percent. Now you still have to isolate them, you still have to have protection. It's still very complicated to manage those patients. But in some ways they're not a traditional COVID case. So predominantly

unvaccinated people are getting admitted to the hospitals. The remainder are going to be those with comorbidities that you know, obesity, diabetes, hypertension,

and cortivascular disease, et cetera. Dr Wicked, I do wonder too, are you saying cases where you guys and your teams and your emergency room staff are having to make decisions because there's just the systems are overloaded and you maybe can't have someone come in because maybe it's not because of COVID, but for some other reason, you just can't let them in because you just don't have the capacity. You know, we haven't reached that point. Thank Thankfully, that

is not something that's happening. The choices that were currently facing, and again this is very particular to you different cities and different prevalences of the disease that's occurring, is whether we can we have to shut down other procedures that we do, some of them, you know, are potentially life life saving. Maybe we have to have patients go to another site for certain things. Some some of our hospitals have had to you know, shift out of their elective procedures.

Sometimes we've had to pull physicians or nurses or advanced care providers out of ambilatory sites to come in and help cover. So there is an impact, but it's sort of an indirect impact. But no one is ever getting turned away in the sense that it could not get care. But we are pulling things away from other you know, you know, resources, the elective procedures for example. Not everyone, I'm saying, in small pockets that's happened. What are you

telling the world at large? I mean, Tim and I have had guests on who basically have said, you're all going to get this. I'm home because I've had a positive rapid and my PCR came back negative. I don't have any symptoms. I'm pretty sure it was, you know, just a false positive. But nonetheless we're being careful, um, which is the right thing to do. But it reminded me that if it's not now, it's it's probably just a matter of time. Is that the way we need

to look at it? Well, I would say, well, first and foremost, I would say, we all just need to just just really focus on doing all the smart things because of our hospitals and our health care workers and everyone involved in this, we need to do what we can. Just just stem this tide. I'm a little nervous with all the messaging. Oh this is the waves are coming down, and all to that effect. We need to continue to get vaccinated boosted. We need to get the influenza shot,

which is picking up across the United States. We're now seeing young children get admitted for influenza and what we predicted the over a year ago, the twin demic is happening now. And if we all don't get the flu shot, we're going to have some struggles there. Will we all end up getting it? You know? I don't. I don't think so, but you know, certainly a large percentage of us will will will have eventually gotten this. But to me, that's not the important question. The question is, right now,

what can we all do? Don't wear a cloth mask, by the way, no one should wear a cloth Please stop the madness. All right, We're gonna leave it on that note, And that's a good piece of advice. Dr Tom McGain over Common Spirit Health E V of Physician Enterprise. We appreciate his input. Turning us on the phone in New York City, this is Bloomberg Business Week with Carol

Masser and Bloomberg Quick Takes Tim Stinovic on Boomberg Radio. So, Tim, I think about you know, we worry about inflation, we worry about central banker policy missteps, we worry about slowing anconemic growth and earnings. And then you've got m and a record year last year, and those big blockbuster transactions they continue. I thought you were gonna say you worry about, you know, large technology companies going out of alone. Apparently

not where you're worried. We are, of course, talking about the huge news today Microsoft buying Activision Blizzard, the game publisher, and a sixty billion dollar game deal, if approved by regulators A key key phrase here, would create the third largest game publisher in the world. So let's bring in Anara Grana. He is senior analyst of software and I T Services at Bloomberg Intelligence. He's on the phone from Chicago Onoraga. Heard you on surveillance this morning breaking this

down as it was, you know, being or crossing. Um, are you surprised? Does this make sense? Oh? It does make a lot of sense. But I was surprised at the same time, only because you know, as you said, this is not the season for large, large deals, just because the regulators are taking a look at this very closely, which is why the surprise is more so the size of it and the timing. But you know, the content

side of it makes a lot of sense. And as I think I mentioned that in a couple of places before, we expected the gaming content wars to have begun many many years ago, and it's just taken a long time for them to pan out. So why does the content side make sense? Is it specifically for the Xbox platform and the newest version of the cloud service that Xbox offers, the subscription service that it offers to two people for

fifteen bucks a month. Or is this about mobile? Is it about getting getting onto mobile devices and Microsoft finally being able to do that. I think it's all of the above. Think about it the same thing. What's happening on the Netflix and the Disney arena. The company, the distribution channel or how you get the content is going to be you know, irrelevant later on whether you see the you know, the movie on on the phone or through any other leads. But having the content is the

most important parts. So if you have the biggest screaming franchise, then whether you sell that through virtual reality device or through excuse me, question, so it doesn't matter. Hey, un a RUG, do do regulators have have an issue with this? Is that something that investors should be concerned about. I think that's the biggest season because you know, that's possibly the reason I think with the stocks on date about if you two points something, um, I think that remains

the biggest concern, un RUG. One thing I'm curious about Bobby Cootech of Activision Microsoft in Activision, I think it's safe to say they're different kinds of companies, and I just do wonder, you know, how much of what Activision is in terms of its culture, it's types of management, it's crucial to keep it to some extent, or do you think it just doesn't matter independent, you know, in

terms of how much it gets integrated into Microsoft. You know, that was a big question we had this morning as well, and although he was on the call this morning, we have since then read that once the dealers closed, he will not be part of the company. So I think that's a very good thing because one of the things we had also said before was when this news broke up, the Activation is issues. Um Phil Spencer, Microsoft Gaming CEO

was very vocal and against it, so we were. You know, initially when the first deal break broke out, we were surprised that he still remains with the company, but you know, in subsequent releases we have heard that he will leave. All right, So the question that that I have is what other gaming companies are in play now? That if regulators approved this and we see the stock reacting for competitors like e A and UH, you know among others, you be soft, who's in play now? I think all

of them are in play. I mean it's going to be a question of but the question is who's going to buy them. I mean, it is going to be easier for Amazon or Apple, on Facebook or Google to go out and buy so movise companies. I think it's going to be tougher for them. I think Microsoft has so far evaded the scrutiny of the regulators just because you know, they don't have that level of I guess a lens on them as some of the other companies too. All right, well, we'll be certainly watching out for that

aspect of this deal. Um Anna rog, thank you so much. Good to catch up. Annaa Grana. He's senior analyst of Software and I T Services at Bloomberg Intelligence on the phone from Chicago. But it's going to be a group that's on our radar this year, Tim, Yeah, it certainly is. And Microsoft devating regulators right at least for the last couple of decades. They have some history there. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes.

Tim Stinovic on Bloomberg Radio. Well. Bloomberg business Week continuing to report on the real estate world and its lack of diversity and inclusion, and in the upcoming issue of the magazine it's out later this week, a story about the progressive real estate firm Redfinn that's facing accusations of discrimination. Tim. You can also find the story online the stories by Peter Robeson and Noah bou Hire. Peter robe us In

as Projects and Investigations reporter for Bloomberg News. He joins us on the phone from Seattle, as does Joel Webber, editor at Bloomberg Business Week. He joins us on the access line from Brooklyn. Joel. I think a lot of people in New York City they know, you know, they know about the New York City serves street Street Easy and the New York City specific services. And we've talked

a lot about Zillo. For the uninitiated, redfin what is it huge huge provider UM And basically, if you're anywhere else uh in the country and or concluded UM, you know, the chances are when you when you go UH to list your home, like Redfinn could be a place that UM you consider UM. And one of the things that that they've done is really had a Mid American offering.

But as Peter and uh No, his reporting goes into UM, there's still these vestiges that the real estate industry industry specifically kind of runs up against, and racial elements are are continue to just be a really problematic one and that that is basically the subject the lawsuit that Redfin has been involved with. So so Peter break it down for us, what are the what are the two sides

fighting over sure. So so redfin um it appears to to most people browsing on on the web to be much like Zillo, that it's a place where you can get homeless things and valuations. But Redfin is also a

huge broker. It's the fifth largest real estate broker in the country, and Redfinn has a very very organized way of collecting leads of of people who want to either list or their home or buy a home through redfin and they categorize these leads based on the value UH that UH is that that that sale or purchase is going to provide in each market, which they've used as a way to manage their workforce. They have a certain number of agents in each city, and they're in certain

parts of the of each city. Um so, so they argue that this is simply a way of organizing their business. UH. The lawsuit brought by fair housing groups towards the end of UH pointed out that, according to their studies, redfin is is much more likely to not provide its best service to homes that are in predominantly non white neighborhoods.

So that's what the fight is about. And and no, and I also talked to many current former red Fan employees and some of those people said that they had had concerns over the years about how much service Redfan

is providing to minority neighborhoods. So at issues you do wonder, you know, Peter, in terms of is it just a case of a company maximizing profit and they're you know, organizing their organization to to maximize the most out of their resources, or are they discriminating based on what you guys found out And there's so much detail in the story.

What's going on or what are you seeing? Redfin argues that that this is with within their their right, so this is legally permitted, that that they're applying a neutral basis That price is a neutral basis um to decide you. But what the fair housing groups are arguing is that that's also a gating practice, that instead of taking each lead as they come in, they're they're assigning each lead based on value. And UH, it is not resolved yet. The two sides say they have a framework for resolving

the suit. It's partly going to come down to the data, and there's not agreement on the data between the two sides. The fair housing groups contend that the data shows uh that people in minority neighborhoods are less likely to get good service. Redfin claims that more recently, which is after the period of the suit, UH, that their data is showing that, uh, they're not discriminating against people by race.

So Peter, let's talk a little bit more about REDFINN because UH, if if you know anything about the company, some of these developments might come as something of the surprise, right, Yes, that that's um part of what really drew us to the story because Redfinn and its CEO Glenn Kelman have an extremely progressive reputation in the industry, and and Dave cultivated that. Glenn Kellman well before George Floyd's murder was he hosted a symposium on race and real estate, and

he's spoken out against unconscious bias. He's uh, he's increased the training for unconscious bias after the Black Lives Matter protests. Um he uh created new rules to reward managers based on diversity and hiring. Um so so uh. That's partly what's so interesting about this suit is that even a company that beliefs and everything right uh can run into issues.

We we the the opening example in the story was about a house on the South side of Chicago that's worth eight seven thousand, which at the time we looked at Redmond was not offering its best service. However, at the same time of a house in a phenominantly white suburb of Glencoe, it was actually a condo, which is value for twenty less was being offered Redfin's best service. Uh So, so that that's that's the type of discrepancies and disparities that uh we looked at and which are

so alarming to these fair housing groups. So if if we step back from even that one, you know, Peter, the ultimate theme here and you guys touched on this in in some prior reporting as well, is basically, uh, minorities have been locked out of a lot of the wealth creation that real estate has afford. So so what when you just step back and think about what all of your reporting on this topic is means, like, how, how are we getting anywhere better? Have there been any improvements?

There may be some improvements to come out of this suit. I Uh we had looked in the past that the Realtors Association which apologized for made a formal public apology for for decades of past racist behavior. Uh there is more awareness in the industry and that seems to be helping um and perhaps out of this. You know, one person that we talked to said that, uh, you know, redlining is a has been a part of the real estate industry, and we don't want to have redlining in

the age of algorithms. So this is the moment to not let history repeat itself. But it's a great point about here You've got a CEO who you feel like has been on it and doing the right thing, and then to see that you know there are problems there too. So it is just a reminder of how deep, um the problems are embedded in our system. Um. Great story

and appreciate you spending some time with us. Bloomberg News p and I reporter Peter rubuson with us on the phone, and Seattle of course along with Bloomberg Business we get it or Jill Weber on the access line in Brooklyn. Catch that story. It will be in the upcoming issue of Bloomberg Business Week on news stands later this week. Find it online at Bloomberg dot com and also on

the Bloomberg terminal. The the opening anecdote here is really powerful, the idea that a more expensive apartment in in in a non white area you can't get the services that you get for a less expensive home in a predominantly white suburb. I love though this series to Tim that, and I think Joel tapped into this. It's like, so much of wealth creation is about property for Americans, and so if there's any kind of holding back on that that's going to impact a family's ability, of minority family's

ability and abilities to maybe creates some wealth. You're listening to Bloomberg Radio. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. We've talked about one of the biggest stories of the day. That is, of course Microsoft buying Activision Blizzard and nearly sixty billion dollar all cash deal. The other big one

has of course to do with Goldman Sacks. We're in the midst of bank earnings right now, and we did hear from Goldman Sacks early in the day equity traders posting a decline in the fourth quarter. Revenue from the trading operation slits seven percent and equities business declined eleven But compensation and benefits, that is what we've all got our eyes on. Does feel like Tim and a big way. We're getting a reset from the reset from the big banks.

You heard it from the Morgan and the others last week, and I feel like we're getting more from Goldman. Well, let's get well, let's get a little bit of insight from Shanelli bassk Wall Street reporter for Bloomberg News. I checked when I was reading this morning what time Shanali got in, because I was like, Okay, it's bank earnings week. It means she's getting in at five am. She's still here to hang out with us, and we're very grateful for that. Shinali. What do we need to know from

from Goldman Sacks? We've had a few hours to digest it. Yeah, there's some sticker shock when it comes to how much compensation is rising on Wall Street. And when I spoke to the co founder of Carlisle today, you know, what he really says is that this is defying gravity. But at the same time you have this thirty jumping compensation expenses. That's the rise you saw in Goldman's revenue, and you saw that jump the bigger in percentage terms, more than

double what you saw JP Morgan. But JP Morgan's overall cost of compensation benefits is much higher because they just have such a large work for us across the United States. So the thing I have to say to you guys that a lot of people are missing is it's not just compensation costs that are rising for the banks. There's technology costs and marketing costs. Pay is variable. In a bad year, you don't get a big bonus, so that can change in a heartbeat. Okay here, okay, I totally

get it. But we heard the same similar things from Jamie Diamond last week when it came to pay right. And the other part of the Shanali that I'm wondering is doesn't this also in the long run when you when you pay to actually keep and retain employees, doesn't that actually I don't want to say even out, but it ends up being a good thing in the long run because it's really expensive to lose people. It's expensive to lose people, and and actually that was part of

the cost. If you talk to GP Morgan, their CFO actually said that attrition was part of that compensation cost. So yes, it's absolutely expensive to lose people. At the end of the day, it's going to come down to market share. If they are winning on the top line, then it's okay to pay people as as long as they are winning on the top line, rewarding and masters

all of the above. So what really kind of spooked people today is that some of these booming businesses the last couple of years are going to start to moderate equity trading revenue. It came in eleven percent lower. And that's that's for a firm that is actually it had done better than it's a bitter than JP Morgan, but

in more revenue in stock trading the JP Morgan. So tomorrow for Morgan Stanley, which is also experiencing a severe stock declined today, the bar is very high for that stock trading business because if that revenue also starts to come down, and more importantly, they don't beat Golden Sacks. Morgan Stilling has been the number one stock trading firm for years. It's a problem because then you're paying people and you're not necessarily getting a market share as well,

so shid only. What's happening is it increased competition from fintech, Like I'm trying to understand the businesses where there may be seeing some numbers not as uppeat as that they've been. What's going on. Is it just greater com petition alternatives out there for the big banks or what's going on. There's a few things going on. One is that competition.

If you think about it, if you're a trader, what is the calculus you're making yes, looking for a tech from a crypto from whatever, but really or working for a hedge fund. And if you work for a hedge fund or private equity firm, they're typically smaller than a big bank that has capital requirements, it has regulatory things to deal with, it has many more people to pay. But if you work for a smaller firm, you're not giving all that money back to a big bank. You're

keeping more of it for yourself. So you know if if in a couple of weeks the boutique banks are going to report earnings, and we already know from early indications that some of those compensation jumps are well above what we see at Goldman's Acts. Interesting. So, okay, so

we've had a handful of the bank's report. Um, what are we learning about not just the state of banks, which we've talked about, but the state of the economy because they give us an insight into how the consumer is and how healthy they can see ris how's the American consumer? What have we learned? It's a really interesting question because we don't see credit rising as quickly as

we would expect. Then you throw in some other questions about interest rates that nobody seems to want to answer, are you going to take out a mortgage at a higher interest rate? And so it's a complicated question, but we haven't gotten clear answers from bankers about that. They say that the economy is healthy, but then investors equally say, you know, and we're talking about David Rubinstein today, the

Carlisle co founder, that a correction is also possible. You look at Muhammad Alarian too, and he also asked a question on Bloomberg opinion column today, at what point do the Fed policies start to catch up with financial conditions and financial conditions start tightening? We you're hearing there from investors, is anywhere between tighter conditions and negative conditions? Yeah, that and that is certainly going to be something that the big banks we'll be watching and so only watching for

some kind of impaction. Only thank you so much. We know it's been a long day, but we really appreciate your input. I always appreciate her notes that she sends out in the morning. That gives me instant analysis about all of these financial firms and their reporting. Hey, we're not done by the way Bank of America on Yana Morgan Stanley as well. Yeah, some big ones right, uh, and we'll look for what they have to say with the mirrors what we've been hearing. Or you're listening to

Blueboard Business Week and this is Bombard Radio. Yeah, but you let me drive? Oh no, no, no no, no, oh please, I'll do the riding gravels. I want to drive. It's good question. D This is the drive to the clothes well up on Bluebird Radio, and everybody, let's get to it. We've got just about ten minutes left in today's trading session, once again seeing selling pressure on Wall Street, in particular among those names. As we heard from Charlie, you've got

the NASA down about two point four percent. So to let's get to our market, guests, there's kind of nowhere to hide even you know, the major industry groups. Right now. Energy is higher, but but barely, with financials leading the decliners down more than two point three percent. Marcy McGregor is senior investment strategist at Bank America Private Bank. She joined us on the phone from New York City. Marcy,

how are you. I'm great, Thanks for having me. Hey, help us understand just how we should and how our audience should think of a day like today, Abigail do Little from Bloomberg Markets earlier in the day shared with us this pretty mind boggling staff in the NAZDAC right now is on pace for its worst month since March of and right now as a month, it's down about seven point one percent. In March finished the month down ten point one percent, so we're not even off of it.

It's not looking like a good month so far. Yeah, and we've been paying I think for two it's a year where we're gonna have volatility, especially around the bed right all anyone wants to talk about as the FED and in play Asian and it's going to feel like a bit of a grind, even though we think ultly equities move higher from here. But the pain we're seeing I think even those big growth non earners, and that's

likely to continue. But the big story, of course is FED rate heights, and believe it or not, energy and tech. We prefer kind of mega tech, big, more defensive text, but that's that's Those are the two sectors that actually lead three months into right hyps and then in the three to six months after, so I think it's a market searching for leadership. Ultimately, I think energy and financials

win that battle. But that's not quite what we're seeing today. Well, and let's not forget I mean, we still have at this point economic growth. We will still have earnings growth, just not the blockbuster numbers that we've seen. Marcy right in the past. Here, I totally agree. I think what the market cares about is peak earnings, not peak earnings growth.

And I don't think peak earnings two story may not even be a twenty three story because I think strong nominal GDP growth, which we certainly have, is can to continue to be a tailin for corporate profits this year.

Is there concern though that? And this is something Tim and I have talked a lot about the magazine Business Withek magazine has covered it a lot about a policy misstep by the U S Central Bank other central banks that have an impact on global economic growth and maybe redirect our thinking when it comes to the opportunities this year. It's absolutely a risk. And if you think about two months ago, I would have shared that I thought the

FED was getting further and further behind the curve. Now I see that risk is being more balanced in terms of devilish and the hawkish risk. The FED seems to be getting more serious about taking a bite out of inflation, but now you have global monetary policy diverging. So I do think we have to acknowledge that inflation is certainly sticky. It raises the pressure on the FED. We're seeing it

flow down and growth. I think because the omicron right now, that seems to move in two month waves around the world. But you have a FED with persistent price pressure, Um, they need to address it. I think the risk is they could kind of overcorrect, but I think that's not where we are today, but we have to acknowledge it's the risk for sure corection look like, you know, I think that what the market is anticipating right now is the first rate hike in March, and we get four

this year. But we have to remember there's six meetings, six f O MC meetings after March, so every month the market is going to be parsing every single word and looking for a policy adjustment. I think the risk is that the FED doesn't communicate well. UM so far, I have to say Pal and Sied leadership has done a really good job. You know, while the market is volatile, we're not seeing an overreaction to what is a pretty

stunning pivot from the FED. So I think the biggest risk right now with miscommunication, But so far I have to give the FED good grades on that. Having said that, you know, Marcy, there's a lot of talk at this point about the FED is maybe way behind the curve um Doctor Henry Kaufman, the original Dr Doom sitting down

with our Eric Shatzker. We talked about it on Friday, and the concern is, you know that maybe this FED doesn't have the nerve or the comfort to do something like a Paul Volker did that was very unpopular or seemingly to raise rates in a high inflationary environment, but it was the right thing to do. Is there are there conversations that you guys are having at your firm

about that. So I think what we all have to get afflimated to is lets the pain of a FED policy error and maybe the idea that the correct policy to really take a bite out of inflation in itself could be painful. And I think with a market expecting a rate hike in March, I do think the FED will move ahead with that. It seems to be shortsighted if they didn't, since the markets already acclimated to that view.

So I think they're going to move ahead. I mean, we saw in the most recent FOM minutes they're already talking about quantitative tightening to two years last time from the first FED rate hike, and we think you get the first step towards QT later this year. So the Feds moving in the right direction. But the correct policy may be painful itself and could potentially cause a mid cycle flow down. We don't see the recession risk and we don't see it in the curve either. Curve kind

of treading water right now. If it stays that way, I think it's telling us that they're not overly the market's not overly concerned about a policy error, but the correct dose of policy may itself be painful. Okay, So a handful of earnings coming up this week, Marcy, just in the last minute that we have with you includes Alcoha, United Airlines, Intuitive Surgical, Netflix, Bank of America, United Health Group, just to name a few. What should we be looking for?

I mean, I'm thinking pricing pressure, right, I'm thinking wage pressure. Um, what are you going to be looking for? It's all about wage pressure this week and real wages have not kept up with inflation, and real wages haven't kept up with corporate profits. That's why we've seen companies protector margins so effectively. I think if we look out to next week, you're going to see more cyclical industries joined the earnings party.

I think the cyclicals dis quarter are likely to report revenue above the AVERAGEES and P level, So I think that's gonna be a positive story. But it's all about wage pressure. That's going to be a story all year, I think, and looking at companies that can pass through those higher prices to a strong consumer. Right, higher wages, but then right, you got to put that against inflation and how much does that eat into those wage increases. Hey, Marcy,

thank you so much. Marcy McGregor. She's senior investment strategist I think of America Private banked him on the phone in New York City. Thanks for listening to Bloomberg Business Week. Download the podcast on i Tunes, 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 Bloomberg Global News