Omicron Variant Grips Markets

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. So back. Among our most read stories is what's going on with COVID again? And this new variant will give you a few headlines. The doctor who alerted the government scientists to the possibility of a new variant said people infected with omikroner showing milder symptoms and those suffering that delta strain government across the globes.

There they're stepping up restrictions on travel. As the World Health Organization warned that this new variant of the virus Carol could fuel a fresh surge in infections. Right, so we saw so much concern on Friday, so the market sell off. You see the bounce back today, so uster seemed to be calming down as we seem to be feeling like maybe this is manageable, this latest variant. But again,

as we've mentioned earlier, still a lot to be known. Well, let's get into it with Dr Rhonda Meadows, president of Population Health Providence Health System, joining us on the phone from Rent in Washington. We should remind everyone that if we think back to about two years ago, the first case of COVID nineteen, it was confirmed in Washington State at Providence Regional Medical Center that was an Everett, Washington back in January of Dr Meadows, it's great to have

you on the program. Thanks for joining us. Well, thank you for inviting me back. So it's so interesting because if we're doing this on on Friday, I think the market would be telling us that it's very concerned about this new variant. But the market telling us today that it's not concerned about the new variant. That's what investors are showing us. As a doctor, what are you thinking, I'm going to have to agree with them. I like what you were saying earlier on your show. We actually

have seen this this movie before. We actually have some best practices and things that we can do. Um So panic is not the strategy, right Being in warmed is how you make your plan. I would agree with them. I think once we realize what we were seeing and what we don't know yet, then people said, okay, wait about it, let's just cool their jets for a second

and see this thing through. It is a reminder, right though, um dr meadows though that we are constantly kind of racing against time and if we don't get any kind of full immunity in terms of our society on a global level, we are ultimately going to be at risk of a variant coming out that's going to be more problematic. I think you are correct, and so this is what viruses do. This is what they lived to do. They mutate to try to find some way to propagate themselves.

As long as there are pockets of people who are unvaccinated, and we can now see it's not just in your local neighborhood, it's globally. So you are right. As long as there are people locally, regionally, nash Sly and globally who are unvaccinated, that is a prime place for more mutations to occur, and at some point um those mutations may actually result in the more severe disease. Right now, we don't know that that's the case. We definitely know this is a variant with lots of mutation that is

spreading faster. Is it excuse me for cutting you off? We only have about three minutes left and we have so much to get to I is is there a chance Dr Meadows that we perhaps could see this variant overtake all the other variants and it be a less mild form of the infection. So essentially the winning the winning variant in terms of nature is one that isn't

as dangerous to the population. Yes. And the reason I say that is a more virulent or more severe variant basically would kill off the coast um, die out right and ultimately die out right. So what we want to do is actually, if we're going to have something that's going to be downb that let it be the milder version, and let it be a milder version that we can use the vaccine against. Yeah, that actually help in creating a much broader immunity across the globe. Potentially, this is

what having more mutation. No no, no, no, no, having having this latest variant that is uh not as severe, but perhaps maybe you know, spreads more easily. I don't know if that's a that's a way to kind of think about it. I think it's probably more important that the vaccines themselves actually be modified in any way that they need to be to make sure that we're doing the best immunity, and then the vaccines actually get into the arms of people who are unvaccinated or who are

under vaccinated. That's probably more the way we should think about it, rather than counting or trying to figure out what a virus is going to do. How should we think about yeah, no, no, no, I get I get it. I totally get it. I just I look at society where getting a vaccine has become so political and people pushing back. So I'm thinking, Okay, in the face of maybe people not stepping up and getting the vaccine, how

do we get to a better place? And I think, all right, is it just that we get a less severe case of COVID that goes around a variant that just infects more people and that they just develop immunity that way? I think that there are too many mutations variations that are going with this virus. Anyway, we can't count on that. You have to take care of the thing that we can control, which is those vaccines and um and you know as well as idea that the

virus does not care about our politics, that is so true. Yeah. Well, Carol brings up a really good point because I tweeted about getting a booster last week and I got some pushback on Twitter from somebody who listens to this show a lot, and he said, he asked if I got tested for antibodies before I did the booster. No, I didn't.

I got the booster because the CDC recommended it. Uh. And he made the point that if we get boosters in this country, when not every not the entire world is vaccinated, we're pulling vaccine away from people who haven't gotten it yet. And that's a criticism that I've heard leveled a lot in developed countries. What do you make of that, doctor Meadows? So I'm going to tell you that I don't know that it's neither or I think we can still actually get vaccine and give it to

people in other countries that don't have it. Now. I think we can do that and I think we can also provide boosters for people, particularly people fifty enough or people eighteen enough, who have underlying conditions that would make them more at risk. I don't think this an either on old decision. I think what there has to be is the will to actually get vaccine doses to poorer nations, right. I think that's the question, not whether that we can produce a book. Can we will we give it to

them so they can go ahead and use it. Right. We're getting some pushback already from some nations are saying stop sending them. We we have so many at this point, Dr Meadows, just very quickly twenty seconds. Are you guys expecting some kind of surge in your system through the colder months? Just quickly. We we are preparing as if it's coming, no matter what, whether it's felter or whether it's omicron, or whether it's something new, We are prepared

to address any search. Okay, well, we wish you well, uh in a safe and healthy holiday season. Be well. Doctor ROHNDE. Meadow is President of Population Health over Providence Health System. On the phone from Washington. This is Bloomberg, so among our most read on the terminal has to do with Twitter. This headline crossing were like, all right, we gotta find out what's going on. In fact, Twitter shares they were up eleven percent early on in the trade on this news of Jack Dorsey no longer CEO.

Ten there down about two. Let's bring in Mandy Saying, senior tech industry analyst for Bloomberg Intelligence. He joins us on the phone from New York City. Mandy helped us understand what's going on here. Jack Dorsey had been at the helm since June one of twenty fifteen, at least in this iteration is CEO. First he was interim CEO and then he became full time CEO again. Um, and since then the stock is just underperformed it's peers and

the benchmarks in a in a massive way. Help us make sense of Twitter's moves today though with this announcement, yeah so again. I think Twitter has been a story of continued under performance when it comes to execution on the ad side, and part of that has to do with, you know, them not being able to add more advertisers to develop a robust at platform. And I think what happened today was initially investors thought that they would bring

in somebody from outside. The CEO search was more comprehensive in the sense, uh you know, they went about it objectively and they found the best candidate. Well, after two hours, we learned they picked up the CTO to be the next CEO, which I think, I mean, the way investors are looking at it is it will more or less be a continuation of the existing strategy. Granted, this guy has you know, credentials in terms of being a product guy. He can definitely improve on that ad platform that I

mentioned before. But at the end of the day, when you look at these companies targets which they gave at the banning of the year, you know, user growth, it will be hard because they're not bringing in somebody new, and you know, I think investors are interpreting it as that those targets won't be met targets and that's why you're seeing this kind of historic reaction. But what does it mean when they bring in um Manti the CTO. Is it does it say something about changes to come

On a tech level. I was trying to think, you know, is there another tech company out there that brought in their CTO and it was a game changer? Maybe in a good way or was disastrous. You can think of You can think about Microsoft, you know, bringing in such a leading the cloud division to be the CEO of the company. He was an internal candidate and guess what, he did a phenomenal job in terms of the vision and execution that the company showed after he took over.

So I think there is merit to bringing a product guy, and you know, a tech focused guy to fix all the product issues that Twitter has faced over the years. But in terms of the neretrum kind of targets and execution, again, it doesn't give you the impression that you know there will be a drastic change in the company because of this announcement. And I think investors aren't even sure they went about the CEO search in the most comprehensive way.

I mean, we don't know anything about how long were they're looking for CEO and how many candidates that they have shortlisted. So I think the objectivity of this search isn't very obvious to investors at this point of time. So help us make sense of this for our audience here, because, as I mentioned, shares of Twitter massively underperforming pure Facebook, for example, since the time the Dorsey came on as CEO, underperforming the NASTACK one hundred, the SMP five hundred, the

list continues to go on. Is it is a continuation of what has been happening, a continuation of its strategy. Is that a good thing for investors? Well? So, uh, look, when you look at the social media space that has evolved quite a bit in the last you know, five years, we were mostly focused on text based content. Then you know, videos, short term videos really became a craze. You saw the rise of TikTok. Well, Twitter didn't really participate in any

of those trends. When you look at a company like Snap, which is growing fifty percent, which continues to think they can grow fifty even with their core audience being you know, the younger demographic, they're doing something right in terms of monetization using ads. In start contrast, Twitter is growing and that is in line with the digital ad market growth. So it makes you wonder Twitter with its kind of engagement and really it's one of the uh, you know,

the most under monet highs platform on the Internet. It's got a very high level of engagement. It's right for user base that uses it, but they're still not able to monetize it. So the core problem does lie in execution, and you know how they show their targeted whether the ads are actually targeted or not. And that is why you you see those kind of numbers, you know, trilling the lights of snap Man deep just real quickly twenty five seconds. Can they monetize Twitter in a more effective way?

Is it just bad management or is it just like we've been We've been to having this conversation about Twitter for a long time. Can they really effectively monetize it in a better way just quickly? They can? And they have to think about the next version of social media and it has to tractor in meta wors. That's why Facebook and snap everyone is going after metal wors. So they have to think long term here and not just you know, fixing the holes. Mm hmm. Like I said,

i've seen this movie before happens. This product just hasn't evolved the way that other platforms have. And like Mandeep said, social media has changed so much in the last five years, and yet it's such a part of certainly our world, the media world. But I think a lot of people use it um fairly effectively to communicate all right, mind deep saying of Bloomberg Intelligence. Thank you so much. Tim

and I were just talking about this. The most important abortion case in a generation will be argued Wednesday before the nation's top court. Nine justices will decide that outcome. And Tim, the veteran litigator that we arguing the case, is betting on a precedent to save abortion rights. It's Julie Rickelman and David Yaffi. Bellenie writes all about her in the most recent issue of Bloomberg business Week magazine. You can read it on the Bloomberg and at Bloomberg

dot com. Joining us now is David Yaffi, Bellanie and Joel Weber, editor of Bloomberg business Week. The precedent when it comes to Roe v. Wade, Am I going to get this Rightel storry diosis? But I mean it's it's maybe. Yeah. You know. The thing that we often try and do with the magazine with stories like this is like, we know that there's this news event coming that is basically

could be one for the ages. You know, I have generational consequences in terms of what this outcome looks like, and if we do our jobs well, there's often a character sort of at the center of that of that storm. And and that's what just immediately caught my attention when David started talking to us about the attorney who's actually going to be defending um uh in front of the court. So, so David tell us more about Julie, right, Coleman. Sure. So she's one of the kind of pre eminent abortion

law litigators in the United States. UM. The last time there was a major abortion case at the U. S. Supreme Court, which is about a year and a half ago, she was arguing on the on the side of the abortion clinics. UM. So she's she's very seasoned and has been doing these sorts of cases for for decades and decades. UM. But but this is uh, you know, as important as

it gets, UM. And one of the reasons I was interested in her was to kind of on understand how it feels like to be somebody with the kind of you know, way of the world on your shoulders going into this sort of argument, and how she doing with the weight of the world on her shoulders. I think she's holding up fine. I mean, you know, like I was saying, she's very experienced, and she's argued at the

Supreme Court before. So I think that that helps, but she says it's definitely stressful, and you know, she's working long days to get ready, doing kind of trial arguments and in front of experience litigators at law firms in DC and other places. Um. So she's, you know, working really hard to make sure that that she's ready for for arguments on the Cember first. Well, what do we know about her approach for arguments come this week? And in the context of how she argued the Louisiana case,

what is her strategy center on? Sure? So, I mean, at the at the heart of this case is a decades old precedent in Roe v. Wade. It's it's very rare than not unheard of for the Supreme Court to overturn its own precedent. And one of the things that she's going to be stressing is the principle of story decisives and and the importance of kind of maintaining settled law um and not creating chaos unnecessarily by sort of

changing changing tracks, um, kind of on a whim. So, so that's going to be the heart of our argument. I mean, that's it's similar to how she defended the um or how she opposed this law in Louisiana a couple a year and a half ago. UM. The difference now is that the court has changed Um Amy Coney Barrett's on the court now, it's a much less sympathetic set of justices to abortion rights UM and so the

challenge is greater than it's ever been. So you laid that out really well, David, and and I am kind of curious that like what we know going into this case about how the court feels, um as you've established about abortion and abortion rights, but but also in terms of how they view the President, which she will probably argue the case. Sure. So I mean we know that there are you know, three liberal justices on the Court who are basically you know, you know, Shore Shore vote

UM for for up polding ruviy Wade. Then you've got John Roberts, who we all understand, you know, really kind of values the institutional legitimacy of the Court, doesn't want to do everything anything to undermine that. He sided with Julie Rickleman in in UM striking down the Louisiana law a year and a half ago. And so you know, the hope is that he'll be on board too. So

that's four of the five votes that you need. UM. And then you've got the five most conservative justices on the court, and the question is is there one of them that she can that she can win over um and Amy Coney Barrett looks like it looks like a tough one to win. She's been written critically about abortion in her kind of career as a law professor before

she became a justice. UM. And so I think that the hope in in the in the pro choice community is that somebody like Brett Kavanaugh can be can be swung like a lot. Less is known about where he stands on abortion. He hasn't written or talked about it that much, and so the hope is that he's he's persuadable. But I think everybody understands that it's a long shot.

And that's right, like kind of an amazing circumstance to find that Brett Kavanaugh, who had such a tumultuous hearing, would be the person who could be something of a swing vote here. Um, So what what do we know about the little that he's spoken about the issue, What

what do we know? Well, one kind of quirk of history is that that in in the early nineteen nineties when um the Court reaffirmed Roe v. Wade in the case called Planned Parenthood v. Casey, basically kind of striking a compromise that kind of chipped away at Row a

little bit but kept its essential holding intact. At that time, Brett Kavanaugh was clerking for a lower court judge who kind of heard the case before it reached the Supreme Court, and you know, while he was clerking, that judge issued an opinion that basically laid out the compromise of the

Supreme Court later adopted. So Kavanaugh was sort of tangentially involved in the kind of most comparable historical precedent for what's happening now in case like really challenging the heart of Roe v. Wade, And he was clerking for a judge that basically helped lay out the compromise that kept Row intact. So you know, it's it's a quirk of history. And obviously a lot has happened in Brett Kavanov's career since then. He's become you know, more kind of closely

witted to the conservative legal movement. But the hope is that you know, his his role and that kind of historical event, you know, maybe indicates that there's some flexibility. I mean, ultimately, is this about um a lawyer with a great argument before the Supreme Court justices, or is this just about the technicalities of law before those Supreme Court justices? What what will it come down to? Ultimately? Well, I don't think those things are fully extricable. No, clearly.

But there's definitely a school of thought that there's really not a lot that Julie Rickleman can do herself. That you know, you've got nine justices who have thought about this issue plenty, who read the briefing and it probably already made up their mind, and there's like a limit

to what she can accomplish um. And there's even there's a defeatist version of that argument that you hear from some people in the in the pro choice community, including the woman who argued that planned parenthood be casey case, which is that there's nothing that Rickleman can do and that you know, the numbers are the numbers, and you've got six conservative justices and it's just too much to

hope that you know, two of them could be swayed. David, just in the last thirty seconds that we have with you what happens if Rickeleman ends up losing, Well, it sort of depends on how she loses. You know, there are different ways that that row could be either overturned or significantly watered down. But the most immediate effect, there are a bunch of states that have what are called

trigger laws that ban abortion. The moment ree view weight is overturned, and so those would go into effect, and you'd see women in large swabs of the country lose lose access to abortion. Amazing. Um, A great story, and it's also telling it through an individual who's going to be smack in the middle of it all before the Supreme Court justices. David Yaffie Bellini, Thank you so much. Legal reporter at Bloomberg News on the phone from New Jersey,

Joel Webber, Editor Bloomberg Business Week. He's in our Interactive Broker Studio. Find this story in the current issue of Bloomberg Business Week magazine. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right, you are listening to Bloomberg Business Week Carol Master along with Tim Stanovic and our interactive Broker's studio.

So too is Bloomberg New Economy editorial director Andy Brown here in studio with us and the interesting story on the terminal that says China would face a colossal outbreak on a scale beyond anything any other country has yet seen if it were to reopen in a similar manner to the U S. We're talking about COVID, We're talking

about closing borders, not closing borders. How do you see this? Yes, So this really confirms the general view that China has no intention of acting away from its COVID zero policies and if anything, is going to double down with this new omicron variant. So what happened was a bunch of statisticians at Peaking University asked the question, what would happen if China opened up just like the United States, in other words, adopted a pretty lay safe, fair attitude to

COVID restrictions. And the answer is it would be an absolute catastrophe for China that within one or two days you'd get infections going from where they are now, which is about a hundred a day, give or take to six hundred and thirty thousands, of which of which twenty thousand would be serious cases and it would completely swamp the Chinese healthcare system. Is it just an numbers thing. I mean here in the US we have more than a hundred cases a day. Roughly, it is partly a number,

partly a numbers thing. I mean, China's population is one point four billions. But it also reflects the fact that China has a relatively low vaccination rate of about fifty The vaccines they use are not the messenger RNA vaccines Madonna visa. These are vaccines made in the traditional way using inactive form of the virus or a attenuated water down form of the virus, so the the efficacy isn't

quite as good. And the fact that because China has been in COVID zero, we've been pursuing COVID ze over so long, there is almost no natural immunity in the entire population, so you let it in and it just it almost go through the That's interesting because I was in Singapore with the New Economy Forum recently and they had just they have just started moving away from zero

COVID towards COVID endemic. Basically, the the understanding that you're not going to defeat code and certainly not these more transmissible variants, including the delta variants. So you just got to live with it. Their experience was you went from I think it was about twenty a day two thousands a day, I mean almost overnight. I mean it went

up to five thousand, and even in Singapore. Of those five thousand, there were enough serious cases to make the government very worried that their I c U units could be overwhelmed. And don't forget the Singapore healthcare system is about as good as any system in the world. And the Chinese system outside of the major cities where it is world class, medical system is world class in most of the country, and the countryside it's still medical is

still pretty rudimentary. This is so important. I think about when we talk about the markets, and what's a top of the list of things that we need to be worried about. If China, you know, continues to be shut down or closed off from the rest of the world, what does that mean in terms of global economic growth or the global economic repercussions. But you think what that means right now for their efforts to maintain COVID zero in the face of delta, right, So it means extensive lockdowns.

I mean they shut down the port of Ningbore, the port of dai in Uh. It's gonna mean travel restrictions. Um, it's going to mean that you know you're gonna get more snarls in your supply chains, factories closed down. I mean, look at the latest data. Factory output is slumping. Consumer demand in China is down because people are worried about going out and being exposed to COVID. So it's going

to mean a good deal more economic disruption. And that's before omicron, which is apparent by all accounts, a good deal more transmissible than delta, So expect more of the same. What is life like for people who are under lockdown in China? So, I mean it it all it's all quite sudden and random, right that you know they'll lock down whole cities because they found one or two cases.

I mean literally, they have the they have the confidence that they are able to track and trace and chase down every single case in a country of one point for billion people, which is about the same size as the United States. So Andy, why can't they forgive me? And I'm just kind of playing devil's advocates and things.

So if they can track all of this down, will they ultimately track everyone down and just put a shot in everybody's arm and basically do it because because is that their only savior in terms of kind of reopening Well, the the the exit for them is going to be a more is going to be a better vaccine, and they're working on m R and A vaccines. We don't know when they're going to deliver one, maybe next year. UM and therapies. That's really the only exit now that

they can hope for. Well, and it's interesting you do one or if the relationship right between China and maybe the U. S Or the rest of the world in terms of sharing vaccines, whether that could be a better situation. Well, Madonna would like to manufacture and has a license to manufacture in China, but they haven't actually started manufacturing yet. I mean, partly this is this is a question of you know, we're not going to rely on foreign vaccines

to to save our population. They've got to be made. They've got to be made in China. There's another question, now, what happens to the Olympics? Um you know, now with with the omicron, what does happen to the Olympics. How do they do that? Well, you know, the reactions so far, Tom Crown in China has been pretty much taken in stride. Okay, we've you know, we've beaten We've beaten Delta Um. This is another challenge, but we're going to rise to the occasion. Essentially,

we're going to double down. All right, Well, we will certainly see. But I do know that you talk to market watchers and they're definitely keeping an eye on what's going on in terms of Chinese growth. Andy, thank you. I really appreciate Andy Brown. He's editorial director at bloomber New Economy here in our Interactive Brokers studio, and that's something we'll probably talk about with our market clothes a

little bit later on. Among the things that are top the list of market strategist market watchers, right, it comes down to COVID China being a huge economic engine for the global economy, and you do wonder if there's problems there, what happens. We should know. Biden meeting earlier in the day with CEOs of companies to talk supply chain and you have to wonder what a continued town in China means for those companies. Yeah, exactly. I try to order some things for Christmas and like no luck at a

stock Well, Happy Valentine's Day everyone, exactly. Tim and I talked about some of the retail data points. Retail foot traffic up last week from a year earlier, shoppers UH driving US retail sales during Thanksgiving weekend up about fourteen point one percent year over year, and up almost six percent compared to twenty nineteen. That's according to MasterCards Spending Pulse. There's a lot going on in the retail sector. Well, fortunately we have joining us Gregg Portel, partner and head

of Consumer Industries and Retail Practice at Carney. He joins us on the phone from St. Louis. Greg, help us understand where we are sort of halfway through Cyber Monday, or at least in New York wrapping up Cyber Monday. Um, what are the metrics telling you about where we are compared to nine because that is the benchmark that all of these companies are using. Well, I think the the

overall messages that the consumer remains very strong. They've been the backbone as we've gone through this rocky period of time. They've been there throughout it, and they're there now that the challenge becomes how to interpret them because the traditional retail observers are looking for is it online or is it in store? And reality consumer shop all over the place, so it's a little bit misleading to evaluate them on one channel versus another because we just don't live that

way anymore. No, but that's a good point. But we do try to figure it out, right, especially as we do try to figure it out. Yes, um, well, so like what are we doing? Are we? I mean? I don't know? Is it early in the season? Did the um omni crum variant? Do I say it right? I knew I said it incorrectly? Oh Crown Varry? Did that freak people out at all? Like what was going on

this weekend? It's a little too early to tell what the new variant we'll do the consumers, but if it's like any of the other variants, consumers will blow through the news fairly quickly. One of the things we already have. The markets bounced back to me quickly, Yeah we're back, because consumers love to shop at their outlets. Retailers were really smart this year and they started to extend the holiday season so it didn't really start on Black Friday.

It started in the middle of October, and that allowed the consumer to really lengthen their demand cycles, which allowed the retailers two in term, handle the pressure of the supply chains a little bit better than they have. Hey, what do we know right now about what consumers are finding out of stock versus what consumers are actually able to leave a store with him? Look, I'll speak any totally here. I went and bought a new phone while I was away last week, a very exciting, you know, staycation.

And I went into another retail locations for the provider that we have and they didn't actually have any of the phones in stock, but they said we can fed X one to you and they will be there in two or three days, which is fine, right, But when I did this three or four years ago for the iPhone tend in the store, that is the The prediction of demand and the flexibility of the consumer are really

two components of that story. We did a survey of consumers and asked them, hey, how loyal are you to particular brands in particular items, and shockingly said that they would go to a different store to find an item that they wanted. So it really isn't the out of stock that's going to trigger the problem. It's the how much disruption is there from going to one store to another. With the online options, it's pretty easy to to shop and find the item that you want, even if it's

not in stock of your first choice, you know. And I did pop into a Target over the weekend to pick up something and it is a little bit of a madhouse. Did you did you order it online then go pick it off or do Actually I did order something online. They said they had it, and then like on route, they're like, sorry, out of stock, and I walked into the store founded on the shelf like randomly.

So I do think it was either misplaced and they you know it was it was low so um, but yeah, I did think about I'm gonna do it online and just make sure I have it, and then ultimately had to go to the store anyway and play around. You point out a real problem for retailers. One of their I T backbones are not as robust as they need to be to track all of those moving parts, and consumers have really lost patience with the companies that can't

figure it out. I mean, there was a certain amount of tolerance for that kind of inconvenience at the first part of the pandemic. But now consumers are expecting retailers to fulfill their consumer promise and if they if they're if you're people like you were going to the store expecting to be able to pick up the product and it's not there, that's going to have repercussions for retailer

down the road. I was ticked off. I'm going to be quite honest with you because I was like, you sent me a confirmation that I had it, and then I was kind of like, what because I might have raced to the store quicker or I don't know what I would have done differently. It's happened to me, don't anymore? Yeah, So, so what's the what's the best practices for consumers right now? If they're looking to get their holiday shopping done, how should they be thinking about the supply chain snarls and

navigating this. Well, if you're a shopper like me that depends on Christmas Eve to do your shopping, that's probably a bad idea. This time of year. Consumers should think about getting to the store early, having flexibility and what they want. I mean, the single Meamo doll that you had, you had your heart set on probably even going to be there this year. Yeah, it's the shop early and

you know, as a retail observer, shop offer. Yeah. But it is interesting to see the equity trade today because we see a lot of the online retailers put Amazon as side. You see a lot of them like Etsy and a few others that are having are struggling a little bit because of some of the early numbers. You. I wonder how much of it was a is a reflection of what happened late last week. Was that's he's sort of seen as a stay at home booon. I

don't know, that's like complicated. It is complicated. That's the word of the day. Omnic Amen what all? Okay? So the translation is return return return, right? Yeah? How many your susp did you take study abroad? Actually? Actually yes, there there, you've identified the title of a song that's not bad. So we're talking about returns for Latin. Yeah,

that's what we're talking about. That particular version of the song was done by loss Low Books and it actually came out on a single they released themselves before they got signed and you know, made a name for themselves as recording artists. And you know that particular song is one of my wife's favorites. So I mean she learned it, you know, from her father. He was a fit goes out to Dave's wife. There you go, Sandy, you can say it if you want. In any case, I don't know,

we'll find out. We'll find out. I'll find out tonight when you go home from Yeah. Absolutely might be a little lecture dessert for you. Yeah, maybe because she made her day. Yeah, I try to do it. I can, especially, you know, because I'm going to be spending more time with her very soon. In any case, Yeah, Latin America, that's what it's all about. I mean, this is uh something that Michael harten It over at the Bank of America, who's their chief global equity strategis highlighted in a report

last week. A comparison between the MSCI Latin American Index, which we should point out as doward denominated, that's sort of a key issue, and the S and P five. And you look at where the ratio has been this month.

It reached its lowest level since January nine, which is particularly important because the index is based is the end of nine, So in other words, you're practically back to its very beginning at this point, and the ratio has come down eighty nine percent from a record setback on October. You look at what's going on with Latin markets this year, Mexico's up a bit. The thing is, though, when you figure in the dollar, those games sort of a road.

And then you look across South America you see markets like Brazil uh down in part because of lower share prices, but again weakness in the currency relative to the dollar. Similar story elsewhere like Chile for example. So it's really a continuation of something that's been going on for more than a deck and it's not like Hart and it came out in his research and said, you know, you should do something about this. He was pointing it out just to show kind of distortion arguably that's gone on

in the market over time. Well, and there's a lot of markets, I feel like throughout South America's central market they've been struggling, like generally speaking, but then you factor in rite the stronger dollar and it just is really rough. Yeah,

absolutely and mean. And you think about Brazil and you know what they've been going through with their president jen Your bills narrow when the issues they've had with COVID and everything else, and you can sort of understand why Latin America more broadly is in the situation it's in. You know, in Brazil, you figure is the biggest country in the region. If they're having issues, you know you're gonna see weakness. Selt square. Uh, Dave, do you have

your charts picked out for the next two days? Um? Yes, there's more to come. I also have my stock of the day picked out for today. That would be very global. It's a maker of plastic packaging and other products. And they've got this activist investor and core group, and they don't have the biggest steak, only about one percent by their calculations at least. Uh. They came out though, sent a letter of the board said you should take a look at your options, including either doing a buy out

or selling yourself to somebody else. And whenever you see that sort of thing come up, you know, people pay attention. And very global. The ticker is b E r Y. That's one R or even though the company name has to um as you'd expect. Well, the shares set a record today in response to this letter, and at the moment they're up about eight. Yeah, it's start that. I'm just like instance about mid October has been like bouncing off their lows and has been had quite a trajectory.

But the market cap is something that you could see a lot of investors being interested in maybe doing something right. Yeah, I mean into that kind of just below ten billion dollars, all right, t Wilson, I don't go. You can also check our Dave stand all three time. It's on Facebook, LinkedIn and on Twitter at the one day. Yeah, but you let me drive. Oh no, no, no no, this is not a toy. All right, please, I'll do the riding revels. I want to drive. It's a good question.

This is the drive to the clothes down on Bluebird Radio. TikTok everyone. Just about ten minutes left in today's trading session. Quite a reversal from what we saw on Friday. Remember the Friday was lighter trade in terms of market participants.

But nonetheless we are seeing a bounce back in today's trade, not necessarily gaining back all the ground that we lost, certainly with those major market averages, but nonetheless definitely seeing a pop. Let's get to it with our market guest, Dave don Obede and his chief investment officer at CIBC Wealth Management. He joins us on the phone from Baltimore, Dave, how are you doing well? Are you doing well? Thanks?

Help us make sense of what exactly is going on with the sell off that we saw on Friday and what the market is telling us now about the way that it's feeling about only Kron. Yeah. Well, I think if you you know, before Friday, we had a market that was uh, you know, either soaring or complacent about risk, depending on your your point of view. And then uh, you know, Friday, on a holiday shortened trading session, a new issue was injected on the CRON, and um, you know,

complacency turned to fear. Although it was it was orderly, perhaps a little bit of volatili on Friday, a little bit exacerbated by lack of trading volume. But then I think we have all learned in the last twenty months in a coronavirus environment is that investors are adaptable, economies are adaptable, and so I think a little bit of time to think about it investors today. So you know, the delta variant was very important, um and significant health concern.

It did slow the economy a little bit, but markets looked right through it, and uh, you know, let's not jump to conclusions here. Um, I think that's really important. We know very little about a macron. In fact, the experts are sort of sending different messages that the who referred to the risk of a macron is being very high, and hours later, the head of the South African Medical Association said that from what they could see the patients

with symptoms, those symptoms were extremely mild. So is the risk very high or is there something was extremely mild symptoms. I think we're gonna, uh, you know, go through another couple of weeks of uh, fact finding, but probably with market volatility associated with it, until there's more clarity, luckilarly about what are the vaccines will be effective. David Wise person said to me just recently, we don't even know

how to say this. We are still kind of early in the stagious when it comes to that person's initials are ts. Look happens to be my co host, But I mean, I'm not making light because people are getting sick still, and we know there's nothing funny about COVID and where we are and the impact it's had on society.

But you make a good point, right. I mean, Tim, we're early in on We're still trying to figure this out, this variant, you know, And to some extent, David kind of felt like on Friday a repeat of what happened in March of twenty when the world was quickly learning

about something new that it hadn't experienced. And then, you know, we speak earlier in the show with Dr Rhonda Meadows from the Population Health Management Providence in Washington State, and she says, what did She said, Carol, We've seen this play out before, We've seen this movie before. Don't panic exactly, and we have to take some time with him. She said, the market was right, exactly. And it is interesting the resiliency, right, we see when investors are like get some clarity and

they bounced back. Having said that, we've talked about and I think a lot of market watchers, certainly earlier this year day we're talking about this being a much more volatile market and we've seen the VIC swing around certainly Friday, certainly again today. Um, how do you anticipate market action or what are you expecting in terms of market direction? Maybe it's a better question as we turn into a

new year it's just around the corner. Yeah, So we think that the market direction for for equities is still higher, but our messages, uh, you know, it's sort of cautiously optimistic. Probably you take a six or twelve month time frame, it's probably more of a single digit market return and to your point, with higher levels of volatility. And that was our view even before this latest piece of news on on the coronavirus, because you have, you know, valuations

that are certainly fowl. Uh, we're at you know, past peak policy support both monitoring fiscal policy, so not not quite as much of a catalyst there um and a year in which you know, we expect earnings in to be positive but but of course not up nearly as much as as so a more muted environment with higher volatility, which really what I'm saying is a more historically normal environment compared to what we've seen in the last three years.

So we're also on the watch for a lot of economic data this week that we're set to get pending home sales for October this morning, hitting a new high for the year. We're expecting i M. Manufacturing on Wednesday, and of course that jobs report on Friday morning. We're at least now according to economists survey by Bloomberg, we're looking at just around fifty thousand jobs at it for

the month of November. Apart from the job's report, what's the most recent what's the most important piece of economic data for us to keep an eye on? Dave? Yeah, I I think the other thing I have my eye on is, uh, you know, any piece of inflation data. Obviously, UM, we're very bullish on the economic outlook, the growth outlook right right through next year. UM. And you mentioned a lot of the data. We think it's going to continue to get stronger. But we're also in the sort of

higher for longer camp on inflation. I think that you know, some of these supply chain shortages will lease over the next six or twelve months. But we're seeing stronger wage growth and we think we've not even seen the peak of that yet. We have rising shelter costs and just this incredible amount of liquidity flashing around UM. And so the notion that you even see in the Fed Zone forecast of inflation settling back down around two by the end of next year, we don't think that's going to happen.

We think that the new normal for inflation is going to be you know, it's going to start with a free three points something instead of one or two percent. That's exact, and that's not the end of the world for equities. But the transition relative to that change in expectations is going to mean probably a more aggressive tightening path for the FED over the next couple of years than investors currently anticipate. But I do think about the

spending power of individuals. We know consumers have been so crucial to this this UH economic recovery, and then you do wonder if they're purchasing power is reduced because of inflation or there's definitely we're seeing wages in some sectors but not necessarily everywhere, And you do wonder with the inability of wages to maybe keep up, whether or not that starts to dampen some of the earnings outlook going forward. Hey, Dave,

we gotta run. Thank you so much. Dave don Obedie and his chief investment officer over at CIBC Private Wealth Management on the phone from Baltimore. What wage growth important number to keep an eye on on Friday when we've got those jobs jobs numbers for the current month that we're in and how much is it spread out. We've seen certainly um wages go up in some of the lower end or lower paying jobs, which is a good thing because they've lagged for so long. Labor force participation

as well, exactly. 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 p m. Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News