Powell Warns of Broad Virus Danger

Week on iTunes, SoundCloud, bl Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio every weekday, or watch us on YouTube by searching Bloomberg Global News. Interesting week where we've heard a lot about basically, we've got to take this slowly in terms of reopening. We do want to get to

our virus update. What I noticed, Jason, is it's back among our most right stories on the Bloomberg because I remember last week it's stocks rallying and a lot of optimism. The update had slipped down the list on the Bloomberg terminal, but it's back up there, and it's on an interesting day and week where all lots going on. Let's get to Dr Ian lust Bader. He's one of our go two voices when it comes to the virus, Clinical Associate Professor of Medicine at n y U Lango Medical Center.

He joins us once again on the phone in New York City. So good to have you back with us, Um, Dr les Bader. You know, it's interesting. And I thought something that really stuck at with me from Dr Anthony Fauci this week when I think he was pushed by senators to say, we'll wait a minute, maybe you don't know everything about the virus, and maybe some other countries are doing it differently, like Sweden, and maybe that makes more sense. And he basically said, we still don't know

about this virus. Now, all of a sudden, we're talking about children being impacted in a different way. It's just a reminder of how much we don't know. So I'm curious here we are in our ninth week of being home. Um, how do you see things when it comes to the virus. Hi, hope you guys are doing well. And uh, I certainly would agree with Dr Faucci on this. This is a unique virus. It does seem to be related to other coronaviruses, but really seems to behave you know, in a different way.

Most coronavirus is like ad no viruses or rhinoviruses. You know, we'll give you more of the common cough cold, that sort of thing. But to have all all your organs involved virus, uh, you know, on on pathology seen in the kidney and the heart, in the liver and the gut, in the brain causing strokes and pulmonary embolion cloths. Uh, that is unique. And we don't know a lot about the virus, and we certainly don't know whether a vaccine

will work or how well it will work. Uh. And that's certainly one of the big areas of interest recently. So definitely a lot of challenges, and exactly as you also say that for a long time, um since January, we thought kids would be relatively spared, and it did seem that that the sickest patients generally, and that's still more or less the case um Man above sixty sixty five. With other issues obesity, diabetes, heart disease, we certainly see

women and now we're certainly seeing children. So the whole sort of understandings as to who are the really who are the risk groups and what to do as a challenge. Um, but we're certainly encouraged by some news of at least starting some trials on vaccines, and many companies are are looking into it. One company that's very interesting is you know, Maderna doing the messenger r n A uh and and we're going to be starting that study at n y

U and at some other sites. So before we dig any more into the vaccine element, uh, Ian, I want to ask you on these new findings and which are as both you and Carol say, somewhat troubling in terms of how the disease presents and manifests and the people who it affects. How does that change the medical approach and how should it change our approach as we do think about reopening and further spikes and infection. Well, you know, in terms of reopening, I think it's hard to pick

a specific date. Uh. Certainly in New York, I think we picked June six, you know, why not June five or June seventh through June one. You know, that's sort of an arbitrary time. And I think no matter when you go back, there will be some risk and certainly some increased risk in spikes. And of course if we had really a treatment, and people are looking at different treatments, sort of this triple cocktail of some anti HIV medications

and riber iron and and interferen and so forth. You know, we may have a cocktail, but that's certainly not for out patients. It's not for the patient who comes in with a cough and diarrhea, sore throat, you know, in your office, and you'd like to give them a pill to prevent them from progressing. Uh, not to mention quickly doing a test, uh, such as the nasal swab. So you're right. I think seeing more children now is very confusing. Is the virus mutating? Have we been missing this? Uh?

We don't really know. Uh. And hopefully again something like a vaccine will give people more confidence. One thing we're doing is certainly is sending a lot more blood tests. So blood tests for antibodies are are much easier to obtain, and I'm certainly seeing a number of patients in my practice who are antibody positive. Uh. And we think that should make it relatively safer to go back, But we really don't know that. It's really the same concept of

the vaccine. Just because you have antibodies doesn't always mean you're not going to get the disease. Think of influenza, right, we get a yearly influenza shot. Does not protect us necessarily, or it may help. HIV people have high antibodies to HIV virus, but unfortunately still have progressive disease. Herpes. People will get herpes outbreaks and they have herpes and a buddies. So this goes all the way back to when vaccines

started in sevent at least in the West. You know, when Edward Jenner vaccinated a thirteen year old boy with cowpox vaccinia to try and prevent smallpox. That happen to work well, and that's been our model really ever since that. You know, it was to give low doses of the virus are inactivated. And we have vaccines now for bacteria

like pneumonia now maccacus, not all pneumonias, but new Maccack pneumonia. Uh, you know, tetanus, and a variety of different vaccines and most usually work, but typically they reduced the symptoms, they don't always prevent. Let's continue our conversation with Dr Ian les Bader, Clinical Associate Professor, of medicine and why you Landgun's Medical Center. Johnny's on the phone from New York City. So, Ian,

we're talking a little bit about vaccines. Do you have any sort of latest thoughts or what are you reading and hearing about timelines? We heard what Dr Fauci said yesterday. What's the buzz among the doctors? So typically, you know, most vaccines take quite a while there. They go through different phases, a safety phase and then an effectiveness phase,

and then a dose phase. I mean there are different you know, stages to to really get this and in the old days you've been getting back to with Edward Jenner. Typically um, you know, you give a a low dose of an inactivated or weaken you know, virus urbactoria. You get an immune response, and usually it's protective. As we said, not all that doesn't work all the time. For example, HIV or influenza, herpes, others will get a response, but

not always a totally effective one. What seems encouraging, hopefully, uh is the Maderna style vaccine, which is something called messenger RNA, where messenger RNA is innoculate. Add instead of um uh, let's say the COVID virus itself or an

inactivated covid virus. It's a messenger RNA which codes for a small part of the virus, say the spike protein, that should be recognized as farm and generate an immune response that hopefully is protective, similar to what they were talking about at Johns Hompkins, which is you know, convalescent plasma people have high antibodies. It does seem to help people who are very sick with the virus, so hopefully

similar concept will have to see if it works. The messenger RNA is injected, it's incorporated into the human or host cells. That uses the cells your own cells um machinery to make this protein. It's not a complete virus. It's just this say spike protein. The body recognizes that forms antibodies, and then we have to see will that really protect you? Uh, And that it takes time then to have people exposed to the real covid virus to see if f x seene really does protect you. But

it's a unique way. It's a faster way really of getting people immunized. So I think that and other companies are working on different techniques. Fisor and some other companies, But just like with Abbott where uh, you have a test and it turns out that it's not accurate, or you may need to do it several times on a patient to finally get a positive. When you know they're sick with COVID and there and their swab comes back negative. That's frustrating when you know they have it. Hopefully this

messenger or an a vaccine, which is really unique. We're looking at different ways of getting the body to develop an immune response that are safer, for example, than giving someone a live virus like mumps, measles and rebella or attenuated viruses. So the hope is this can also be manufactured, you know, more quickly and administered more quickly. Um But we don't really have the results of that yet. Those

studies are just starting now. I have to say you made me nervous though, when we first kicked off and you said, you know, we don't know ultimately of a vaccine will work, right Carol. I hate making you nervous or but you know what I mean. But yeah, I just you know, because because everyone keeps pointing to that is the way we get back to normal, um Ian, and I do wonder if we're not able to do that.

What does that mean? Do we have to just accept that there's going to be more risk in our society and people will lose their lives as a result of it. You know, I think there's always risk. I think there is actually a risk of people staying home. I see many patients who are very upset, sad, depressed. So I do think we need to edge back to to returning.

I think we all feel safer with a vaccine. This to me seems very encouraging, but again it's uncharted territory, so we really will have to just wait and see if a if antibodies are produced and be if those antibodies really protect you. We certainly know we have convalescent plasma, you know, so the whole virus which does seem to help the sick patients, and we're doing studies on that.

For hospitalized patients. That's an intravenous infusion. You know, We're not going to give that to people in the office who come in with a call for a cold. But hopefully the vaccine, which should be faster, easier to develop and and hopefully than manufacture for a large number of people, even if it provides some immunity or reduces the severity of the illness, where shortens the illness, I think that would still be very encouraging. But we don't know yet.

Absolutely a lot we don't know. Uh. And you are right to bring all of that to our attention. Dr Ian lest Vade are always good to catch up with you. Really appreciate you taking some time. We know it's a very very busy time for any doctor, especially one on the front lines like you are, Clinical Associo Professor of Medicine. It and y use Lango Medical Center on the phone

from New York City, Carol. And the thing is, I guess it's just we keep pointing to here's how we get back to normal, writer normal, right, And and I just do wonder it's going to be probably a variety of things that are going to have to be done two for people who get sick. But maybe there's a way to mitigate the worst effects of it, you know, I mean, it's not binary. No, gonna have to live with this in some form of fashion. I think that's what we're learning every day. Yeah, I think so too.

And just have to learn to isolate the most vulnerable populations if we can, and take care of those that are really hurt. You are listening to Bloomberg Business Week, Jason Kelly and Carol Master here with you on a Wednesday afternoon. Well, many of us are working from home. We know a lot of traders are working from home. And there's quite a callback in this week's edition of Bloomberg Business Week. It's the excerpt an excerpt from a

really terrific new book. It is called Flash Crash, A trading Savant, a global manhunt, and the most mysterious market crash in history. Liam Vaughan wrote it. Joel Weber put it in his magazine, and Joel joins us from Brooklyn. This is an amazing read. I feel like this is a little bit and I've said this before, Joel, a little bit of your fealing your past as the editor of Bloomberg Markets here. I love this. Well, first of all,

it's UM not my magazine. It's our magazine. And the only way we can, you know, make it make it work is by having some pretty incredible writers and reporters. And you know this this UM, the article UM, which is an excerpt of Liam's book, is really kind of a case in point um and it's an incredible story and one that is actually I think kind of relevant for the moment because obviously, um, the flash Crass was the biggest event and so um basically March. That's what's amazing.

Like I forgot, first of all, it's ten years ago, and that's like to get my head around it. I mean, I know time, we're all living in this very weird bizarro world right now when it comes to time. But I was like, wow, that was ten years ago, um that this happened. And I remember it was kind of NonStop reporting because it was a really big deal in trying to figure out how did it happen in and then as the stories the details. I was going to say, this is like Netflix and Amazon, you know, wanting to

already turn this into a movie. But apparently they're already going to do that. You know. The book is, um,

it's basically just out Flash Crash. I feel like the book reading material next to my bedside table just keeps getting higher and keep getting Actually with colleagues who are writing books, like they're Sarah Fryer who's written this great Instagram book and Susan Susan Burfield who just came out with her book which we talked about on on last week's show, and this one I think is right up there,

um and I think you know the same. It's also kind of amazing about this was like, here's this guy who's basically a work from home trader, right, and like if there's a role model that you probably don't want to emulate. But also he did make a lot of money while he did it, Like you know, here here's some inspiration. And you know, the thing that I kind of think bears um some some discussion here is that he was basically, uh give putting put under house arrest.

That is, his sentence was basically waived. He today said you have to spend a year at home, and he basically went into you know, house arrest right at the beginning of the pandimice. We're all living you, We're all living through through nap. Honestly, we're all the we're all the trader now. All right, Lea Van, come on in here. You wrote it. We've been talking about you behind your back. Congratulations on the book. Uh, first of all, incredibly timely in a lot of ways, for all the reasons that

that Joel just laid out. Remind us who this guy is, so Novenda sinks Arow was a very ordinary guy who grew up in a working class area of West London called Hounslow, about a mile away from how the Hatrow airport, so literally his house. Um, you can count the windows on the planes as they kind of land. Um. And he was a gifted kid, a bit of an odd kid, but very good at maths. And one I saw an advert in a newspaper that said wanted traders. Um, you know,

must work well under pressure. And he applied for this advert and it was for a trading arcade um, and it was about us far away from kind of Wall Street and the whole you know world of high finances as you can really imagine. Um. But Nev had this amazing gift and he got you know, he sort of arrived in the markets at this really crucial time when the pits are just closed. But there wasn't such a

thing as really algorithmic trading yet. So if you were really gifted kind of m gamer type, or if you had you know, very good mathematical skills, you could really profit. But you know, very quickly from short term trading. So now you know, became very very quickly incredibly good and incredibly wealthy, and was was a millionaire in a fairly short shrift. But the reason he became famous is not

because of that. It's because once high frequency traders do start to kind of enter the marketplace, human scalpers as they're called, like, he found that they were increasingly getting beat into the punch and you know, it was hard to make a living anymore. And rather than sort of bowing out at that point now have made this faithful

decision that he was going to fight back. Instead, he built an algorithm of his own, which he called nav trader um, and what it did is essentially fire all orders into the market in order to deceive the algorithms about whether the market was about to go up or down um. And this machine, even though he kind of came up with it off the top of his head, didn't know anyone in the kind of industry, proved to

be incredibly successful. And by the time the FBI knocked under his door in two thousand fifteen, he was worth seventy million dollars. And I feel like we all learned about spoofing too, right, we all, if we didn't know about it, we learned about it because that was certainly

something he was in on big time. But it's the interesting thing about spoofing is that it it only became illegal into Wasn't an eleven with the introduction of Dodd Frank and before that it was kind of understood that in financial markets, if you place an order um the you know, it's no indication really of whether you intend to take a long position or a short position. It's no statement about your true intentions. It's just an order UM.

And you know, a lot of people believe that sort of deception in the markets is part and parting of the cut and trust of financial markets. But in two thousand and eleven, after a lot of lobbying by some high frequency trading firms UM, they introduced a new rule

which outlawed spooping for the first time. UM. So basically, you know, if you imagine high frequency trading firms are just looking at all the orders in the order book coming in and using that to statistically analyze whether the market is about to go up or down, and then using very fast computers to jump ahead of that UM. And so if you spoof the market by placing orders that you don't intend to actually execute, that you're going to cancel. Um, you deceived the robots really about the

sort of true state of supply and demand. Um, and they react to it even though they're you know, hugely sophisticated firms run by all these kind of PhD s. They were actually in this instance quite easy to fall. Well. I gotta say, it's just a fascinating excerpt, and I can only imagine how great the rest of the book is. So um, something is certainly to put on your reading. Lauarrantine read Quarantine read Liam vomb Thank you so much.

Bloomberg New senior reporter joining us on the phone, and of course a Bloomberg Business Week editor Joel Webber joining us on the phone as well. And it's been into it's already been picked up for development for in a movie starring Deptel. So get ready, everybody's coming to the big screen. Tell there's some Doug millionaire, right, yeah, yeah, I can already see it if you. Oh, I can

totally see it. I can just reading this piece. There's a little snippet right about talking about how you as when he was treating into so FO guest, and so you can totally see it up on the big, big screen. You're listening to Bloomberg Business Week with Carol Mazer and Jason Kelly on Bloomberg Radio. Well, it's the top story of the day by far, certainly Chairman J. Powell's comments having a negative effect on the markets and certainly the sentiment out there. You heard a little bit of what

he had to say there in Charlie Pellett's newscast. Let's hear a little bit more if we can from the Fed Chairman pal He spoke earlier today, as Charlie mentioned, at a virtual event with the Peterson Institute for International Economics in Washington. While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and

subject is significant downside risks. Economic forecasts are uncertain in the best of times, and today the virus raises a new set of questions. Alright, So if you weren't sobered by Dr Anthony Fauci yesterday, you definitely were today by FED Chief J Powell, of course, speaking today earlier in a video conference, a virtual conference with the Peterson Institute for International Economics. So let's get into this with our

economics team. Kathleen Hayes is with US Global Economics and Policy editor at Bloomberg News, on the phone from the Poconos. Jelena Shiltieva, our senior US economist at Bloomberg Economics, on

the phone from Long Island. I mean, clearly, our top story today is what we heard from FED Chief J. Powell, and we've been calling it the one to punch Elene and Kathleen, coming after Dr Fauci what he said yesterday, which was very sobering, and then to hear from J. Powell again today, also very sobering when it comes to the outlook. Um, Kathleen, let me start with you, Um, what was your feeling when you heard that from J. Powell? Well,

I'll tell you, Um. When I was waiting for it to start, I was tweeting out a couple of different things, and one of the first things I tweeted was, you know, countdown to Powell. Let's see how adamantly he rejects negative rates. He did. And then when Adam pose and started Peters at Institute for Nationally not Economics asking question and he had kind of broad, interesting questions. I was thinking, come on, Adam,

you gotta get to negative rates. I tweeted, please Adam, and just as soon as I finished, he was he was on his list. We know it was. Anyway, he asked the question, and as expected J Powell you know, said, the punchline was, no, we haven't changed our mind. We're not going to go move towards negative rates. We've got tools are tools are working. And remember it's a little technical, but there are money market funds in this country. We've

got a different kind of financial system. It's another reason why they don't even want to think about this um But I think it was also the fact that he said, basically, you know, there is potentially more to do monetary and fiscal. The longer you stay at with these these bad unemployment levels, people might lose their jobs permanently. Their careers might be

getting sticky. But that, you know. The thing is, though, I think what's interesting to me, you guys, is that a couple of others, notably Jim Bollard St. Louis fed has said, look, if we don't reopen soon now as we can, you know, safely, but still we gotta go, you guys, we could have a grand scale of bankruptcies. That's what he said yesterday, and even a depression. J

Powell hasn't taken it quite that far. But I think that's something that's a little bit different when Anthony Fauci saying the EPIDO became geologists are saying, don't open, don't risk any more deaths, etcetera. But I think there's another way of looking at that says, you know, you're gonna we're gonna kill some part of your economy or even

our people if we don't move. But I will say, though, Kathleen, is that Fauci did say yesterday, and he was very clear that I'm a medical expert, but he said if if we come back too soon, we have a second wave, that will impact the economy even harder. So he did make the connection there. Well, I think it's it's some people would say, uh, ultimately, we are going to have deaths that you're you flatten the curve. You just move the desks out into the future, but thank god, you

don't overwhelm the hospitals. A lot of people Sweden, for example, arguing for you, you've got to get hurt immunity because the vaccine is going to take a while to get here, right, all right, So Elena, come on in here, what does cherre Powell tell us in light of the data that you're seeing, What is he looking at that makes the sort of give him this perspective? And how does it affect your outlook? Hearing what he had to say, everything he said today was actually quite in line with what

we are expecting in terms of economic outlook. Uh. So they're looking at the same data. And uh, the recovery depends on unknowable and un quoting check how questions related to the coronavirus. So, Uh, there's a lot of uncertainty about how this reopening h of stags after the crisis will occur. So, will we have another outbreak? Will it goes slowly? So it seems like the consensus here is that it will go slowly. There will no be V

shaped recovery. And the FAT is adjusting to that. And not only they are adjusting to that, but they send ready to provide even more wants support to the economy

than they have already done. So despite the unprecedented response that we have seen from them so far, they're ready to go further in terms of expending the balance sheets, terms of the forward guidance and so one thing and Kathleen mentioned that earlier, and I would like to read the read not only the power from the stance on negative interest rates, but he emphasized the unonymous agreement on their firm see that they're not ready to go there.

So Kathleen, yes, there may be more that the that the FED can do, But it also seems like he said a pretty clear message to Capitol Hill that lawmakers need to step back in and do something. Did you did you hear and read that the same? Absolutely? And I think he's He's kind of said that before. And of course i'd imposed and asked him this kind of broad question again about you know, giving fiscal advice, you're taking a stance, but he hasn't been afraid to do that.

I think even one of his last public speeches, people were much more impressive by that. But I think he too can see that that that you need to do something and you can't just let if it's not working. The terre policy we've done fisically so far. You gotta do whatever it takes right and the Congress has to come along. Of course, now we get into a much more political territory that FED doesn't have to face in the same way Republicans Democrats having a somewhat different view.

Republicans saying, let's see how this all affects the economy. Democrats say, no, we've got to go now. But definitely the Fed Chair, I think is making it pretty clear if we don't we have to do something, no matter how questionable it might be. I just want to jump in just very quickly. Yelena, are you getting more nervous that we're going to be in a pretty severe recession?

On the other side a little bit more protracted? Wait, we will be, and that's not a need for This is about how long it will take us to get out of it. Well, that's what I mean. Do you Are you getting more nervous that it's going to go out much longer than everybody anticipated. It will take years to get back to where we were. It will take at least three years to get to the same level we were before the christ It's not even talking about

growth from there. Yeah, alright, well we're gonna leave it there. Thank you for your insights, both of you. Elena Shute, senior US economists for Bloomberg Economics, join us on the phone, and Kathleen Hayes, Global Economics and Policy editor joining us from Pennsylvania. It's just a three years right to get back to normal. Yeah. I think that tracks with a lot of what totally we've been hearing. Yeah, for sure. You're listening to Bloomberg Business Week with Carol Masser and

Jason Kelly on Bloomberg Radio. Bloomberg Green. It is brought to you by Pijum Outless Today's uncertainty with the long term perspective of PIGAM, the investment management business of Prudential. Find out more at pg i am dot com. Carol, Well, Jason, you know so much in our world as we know is not going as planned, and that applies to electrification. Writing about that in our Bloomberg Green segment. We're doing this every week, bringing you some of the coverage from

our Bloomberg Green team. It's about how investors are really starting to think about this revolution and how it's going to look a little different post COVID nineteen. Emily Chason is Sustainability editor at Bloomberg new She joins us on the phone from New York City. Emily, so glad to have you here with us. Jason. I both love this vertical here at Bloomberg and glad that we can bring it out to our listeners. Tell us a little bit about electrification, right, because we have been I feel like

the last couple of years. And thank you Elon Musk and others all in on electrification in many different ways. Um, tell us about where we are and what happens because of the virus. Yeah. So this is really interesting because before the virus um people thought the way to get more renewable power is to actually demand more power, right, So we need more things that demand electricity than demand. Yeah. So that means you want an electric stove and a

electric grill and not a natural gasters. And you want electric cars and not internal symbusting engines. You want electric keeth bumps and energy start, not diesel generates and fossil fields. Right. So we've been looking at this for a long time and saying we have to electrify everything if we're going to get to where we want to go on renewable energy goals to meet the Paris Climate Agreement. And UM, what's happened with COVID is that suddenly the economics that

we're supporting a lot of that electrification are not really there. Um. For some of the things. So people are not that bullish right now on the ability of consumers to go out and buy an electric car. There are long waiting lists right now that have supported some electric car sales. But um, like they think people working from home, you might not have a reason to buy a car. You might not need, you might not have the money to go behind a new car, um if you've lost your job.

So there's a lot of um changes there. And then some of the development stuff that have been planned has been shelved um and so there's there's it's just gonna look a little bit different, but it's still gonna happen, right, and so happened. It may be a slower pace, So take a sort of a step down if you can. Emily like, where where are you seeing the most dramatic

either pullbacks? And maybe where are you seeing some progress? Well, I guess progress up front is the biggest issue is going to be the fleets where you can electrify a fleet of cars rather than um individuals buying the car, which is actually much more efficient. Right if you can run your whole business on electric cars or electric buses

or electric work vehicles. UM. Electric factory giggles, you'll save a lot of money on inputs, And honestly, it's that would probably still happen because the input there is like zero and you still have to pay a little bit for Fosters fuels, but the imputus for some companies won't be as much as it was because they're not going

to be saving as much money given the oil price crash. Right. Hey, I'm like, you know one thing I wonder, Jason, I have talked a lot on air, you know, and we've all you know, tweeted out or sent out on social media. You know how the earth is looking with the you know, world shut down. People aren't driving cars, you know, skies are clearer, uh less pollution. Uh. We hear about it

on the West Coast. And I do wonder that awareness raised awareness, does it stay with us on the other side and maybe conversely help in the electrification of the world, or is it going to be even tougher if the economy is we just talked with our economics team. We're talking about an economy that's going to take maybe three years to get back to where it was pre COVID nineteen. I just wonder, what are the conversations you guys are having about that and what you're hearing. Yeah, well, people

all overseem really invested in resiliency. That resiliency is sort of becoming the theme of the decade, and people are saying, you know, if we spend three years recovering from COVID nineteen, we can't go back to where we were. Everyone's talking about this build back better idea. And so electrification is a huge part of that UM And what's interesting is that things have just sort of moved around the world. You know, like when you look at at overall power demand,

it's only down about like ten in most places. So we're still using very similar amounts of electricity and power UM to run the economy, even though we're doing it not in centralized UM ways anymore. Still that streaming, we're all at home and exactly exactly UM so, I mean, our investors sort of backing off of this, Emily mean. Ultimately this comes down to, in part, whether the money

is flowing to the right sorts of projects. Right. Well, I guess a huge issue there is UM stimulus, right, because that's going to direct a lot of the the money UM investors who focus on this area are usually very long term oriented, and they see coronavirus is kind of a blip in their ten year plan, right, I mean a very good blip, but a blip, And so they'll say, you know, we still have to reach those clinic goals like if if coronavirus did this to our economy,

just imagine what some of these climate catastrophes could do. Um. So they're still going to push for a lot of these projects to happen. The issue is really whether there's going to be a fair playing field, um, given the stimulus. And it's interesting, like there's countries like Canada in Germany that are going to require some green efficiency thinking, right, that's stimulus. Well it's not necessarily happening at it everywhere? Well,

it's interesting. I still think about was it over the last week that big story about you know, um, that big the largest use solar installation installation the US history, Warren buffets behind it, I mean that one US approval so things, some major projects are still going ahead. So um, that will certainly help in that fight. All right. If you want to know more from Bloomberg Green and you should check it out. You can find it at Bloomberg

dot com backslash Green. Emily Chason, sustainability editor at Bloomberg News, on the phone from New York City. I always love just kind of browsing that part of also some great infographics as well, like you really can learn how the world is working or maybe should work a little bit better. Mr Bloomberg, I'm brom journal. Yeah, but you let me drive. No, no, no no, ann leave, I'll do the run rivel. I want to drive, Just drive, baby, it's the questions, get drying.

This is the drive to the globe that community. Thanks, we'll drive us to dawn. On Bluebird Radio, it is time for the drive to the close. Back with us is Ryan Dietrich, senior market strategist at LPL Financial six d seventy billion dollars in assets under management, drawing back with us on the phone from Charlotte, North Carolina. Ryan, how's it going in North Carolina? Hey, Carol? First off, thanks for having me back. It's doing better, you know

what I mean. It's slowly opening up. The weather is nice, which I guess there is always a plus. But you know, driving I go to the office every couple of days, and there are more and more people on the road than there were, you know, a couple of weeks ago. So I'm at home right now, but when I get to the officers step with more people out there, and some restaurants are opening up, so maybe a little. And it's even talk that our spring sports which were canceled

might start up in June down here. So it's very late for spring season, but maybe really, I mean here soon, that's the that's the rumor. It's all to the governor, but we're getting emails already that spring sports could be crammed into one month. My son's play soccer and baseball, so we have a lot of those in June, potentially a lot of potentially, but we'll see. How do you

feel about that? Mixed? My wife is much more cautious about it, and I guess I'm kind of like, it's soccer, you know, they're not really touching anybody and not a ball, let's go out and play. But I'm with you, it is there are we weigh all of them. They interviewed like nine people, and not two thirds of them did say they supported the idea of, um, you know, moving forward with this, so we'll um, we'll see it. Definitely mixed.

I think on the day, right, Yeah, I mean it's it's we're talking about it a lot up here as well as you can imagine, especially as we get into um, you know, I have a son who plays lacrosse during the summer, and you know, the summer tournament season sort of similar to what you're talking about. I'm guessing you're involved like travel soccer and travel baseball, you know, and you've got a lot of different people coming together and people traveling, and they're just a lot of big questions

around the sort of safety element. Yeah. One thing they said is only one parent can even go to the games. That's the one way to get letting people there, right, only one parent can go watch? But what you gotta do? So yeah, interesting. So speaking of mixed and people not quite being able to make up their minds, it feels like the market over the last couple of weeks has been a little tricky to to predict. I mean it feels like it's a fairly clear message this last couple

of days. And we started off the show talking about the the Fauci Powell one two punch of kind of a reality check of where we are and where we go from here. How do you read it, especially from a technical perspective. Ryan, Well, yeah, Jason, you're right. Let's not forget you know, Temper came out and said the second most overvalued parcety scenes to ninety nine, and Druck and Miller said the risk rewards one of the horses are seen in Buffet already said he doesn't see any

good value. Do you see some of the smartest investors ever. And now we've got potentially two days in a row of down two percent stocks for the first time since March March. We'll see where we close. But our take is this, I come on you guys for a while saying for the the last month and a half saying stocks likely will go higher, the oversoul bounce was likely, and

sure enough, at that's the case. But just in the last week and a half or so, we've become much more cautious with some of the assets that we run for our clients. And you know, we look at things like mentioned technicals just simply market breath and to keep this very simple, SMT kept going up but less unless stocks were participating in the rally. Somebody think bang stocks and large ones that says, hey, something could crack here.

You don't know when it's going to happen, but it was likely and sure enough, boom, we've had some negative headlines and all of a sudden we're looking at it could be in our opinion, maybe as much as as in percent correction, which would get the sm T back TOFT. And last thing I'll say, when we looked at all the major bear Arkansas back in history after that initial bounced, guys, the average correction was about ten So do you think that makes sense? We're not in the camp of new lows.

I did think camp we're going to retest March lows. But it could be time, and the calendar says it could be time for a little more out correction here, and that's what we're seeing in the last few days. Well, you hit it, Ryan time. I think that's the thing right now. We all expect the economy to get back to some sort of normal. Um. The problem is how

fast and or how long. And we talked to our economics teams saying it's gonna be three years until we see the economic momentum that we had pre virus um. You know, we see that kind of level again. And I think that's that's the thing. We all kind of need to be patient. You talked about, you know, I think getting more cautious. You said with some of your clients, what does that mean? Are you going straight to cash or cash like investments or what are you doing? Yeah,

great question. There's really the easiest way as we are removing a little bit of equity exposure, going to some bond, some cash. Honestly, be warmed to gold. We'd like old for a while. We've added some gold and some of our our portfolios, and also just a little more defensive something like Staples. Right, do you look at Staples really solid earnings. I mean people are still buying them, good valuations, a good momentum. So those are some of the areas.

But I want to be very clear here. This is more for a tactical and trade the next couple of months of a pullback. I mean, we still think when you see the fact that twenty four percent of GDP, when you look at the combination of what the FETE is doing and what the fiscal policy is doing, that's a lot of backstop, that's a lot of momentum. Again, that still says six months from now, a year from now, we do believe stocks will be up and I mean

one other thing for you. So April is up twelve right, SMP game tecent one of the best months ever When you take a look six months after months game ten percent when the best months ever SMPS hiring nine out of eleven times up eleven percent on average. So we

had a massive rally. It makes sense though they have some pullback the month or two after, and sure enough we're seeing that, but it tends to resolve higher when we saw that blast of power in April, and we're not going to ignore that the tactically here short term think a little of maybe better pitch makes some stuff here, so selling may go away. Is that one of the things that's been thrown out in this pandemic environment? Ryan, Yeah, it's almost two too too simple and too easy to

point out, but it's the truth. You think about last year, I mean S ANDP games thirty last year one plus the biggest correction we had all year it was May and June. And I know it's the US trying of trade dispeace. But for whatever reason, the summer months and to be when we get some of these directions, and

it is what it is. The next six months are the worst on the calendar, and when you lay over the fact that we just had the best six months right and those were down, so the best six months weren't even higher, so you're selling may go away period actually gets worse. When stocks are down for the year heading into the worst six months, the returns get worse those next six months. So the calendar is really doing people no favor. And I get it. The headlines are

what matter. If we get some vaccine, let's pray we do, we get a vaccine sooner than expected, or some breakthrough and drugs, you can throw up selling me throw that out the window, but the reality of the fact is still very near some technical levels. Without participation with the calendar, it all makes sense to us. Some sup of downside risk,

it is more than likely well. And the problem is we keep talking about reality checks and also just how everything that our expectations have been turned upside down and we really don't know we we don't know the playbook on this. We know other crises, but we just don't exactly know how it all comes together. On the other side,

Ryan Dietrich, good to hear that you're safe. Nice to check in with you once again, Senior Market strategists at LPL Financial six hundred seventy billion dollars in assets under management. Jason on the phone from Charlotte, North Caroline. I love hearing kind of what the reality is in different cities, in different states. Um kind of helps tell them. I hope that I hope the kids are out playing soccer and baseball this summer. I mean seriously that that will

be that will be a good sign. And I do think that those are the sorts of things, you know, And obviously it's gonna be a little bit different, as he said, one parent on the sidelines, and uh, you know, we'll see how this plays out. But those are the sorts of things, that is, as they come into uh reality, that are going to make people feel a lot better. Thanks so much for listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud, Bloomberg dot com, or wherever

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