Rapid COVID-19 Test Kits Producing Contradictory Results

Week on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. Let's talk about what's going on in the markets. Business Week agenda, Let's set it. Gina Martin Adams is chief equity strategist at Bloomberg Intelligence. On the phone in New Jersey. Dave Wilson with US stocks that are a Bloomberg News on the remote access

line from New Jersey as well. Gina, Let's start with you watching the churn here a little bit back and forth, um, guessing investors kind of waiting for that monthly jobs report, even though we kind of know it's going to be pretty bad. But how do you see the market internals right now? Yeah, we actually entered a little bit of a consolidation phase at the very end of April. I say, it's a just a tiny consolidation of a roaring rip, roaring April gain at least so far. I think that's

actually taken quite a few investors by surprise. Many were thinking, Okay, that this can't keep going. We can't keep we can't keep putting in you know, double digit pace of games amidst economic weakness. But the reality is when the Fed is just pummeling the market with a tremendous amount of monetary policy support, quite the opposite is occurring. I do think that investors are getting pulled in and fits and starts two stocks, and that's probably going to characterize much

of the summer months. So Dave Wilson, earnings still a part of this conversation. What do you see as you look at level deeper in the trade, You know, they sure are Jason and maybe one stock that's indicative of how the market's been going today, as Walt Disney, because you know results route late yesterday, uh didn't go over

so well. I mean fiscal second quarter earnings and revenue coming up short of what analysts we're looking for uh, you them, They've got the theme parks closed, they got cruise ships that aren't going anywhere, they've got films that aren't coming out, and yet the stock manages to rebound and then move higher. I mean, you could focus under streaming services. I suppose certainly plenty of growth at Disney Plus and ESPN Plus and Hulu, and now you're looking

at the stock that's little change. So there's definitely a back and forth to the market, and Disney is kind of indicative of that. You know. Beyond that, you see sort of the old favorites kind of leading the way, the biggest technology companies, the thanks stocks in their peers. And on the other hand, with bond yields going up as the government lines up to borrow trillions of dollars in order to pay for its deficit spending, you see

utility stocks down. You see real estates shares down, financial companies as well. So some of the more interest rate sensitive areas of the market taking a bit of a hit here, Dave, you're teeing me up because I do wonder Gina. You guys have been writing some research at Bloomberg Intelligence, and you talk about this unconstrained federal spendinging, and you combine that with trade policies that pushback even

more so on globalization. You've got upset supply chains. All of this could be inflationary um and we could see that start to pick up later on this year, and that could impact asset prices. Talk to us a little bit about that. Yeah, we did put a report on the terminal today just talking about the the actual results of COVID nineteen and this devastating recession could be an

inflationary regime change. We've been over the last decade really in a period of time in which inflation inflation is continuously decelerated, most of that driven by the commodity complex as well as globalization of the technology specific supply chain. And obviously we have severe disruptions and energy which are

likely to constrain the supply of energy going forward. At the same time, you've got a lot of disruptions to globalization in the form of trade policy as well as technology specific policy, and enormous fiscal and monetary policy packages. All of these things combined suggests that when we do get through this recession experience, as we start to recover, you might actually see an inflation outbreak, you might actually

see inflation start to accelerate. I would say that the other the big unknown is what happens with supply chains. You know, obviously, companies are incentivized to produce profit growth, and the fastest mechanism for profit growth is margin growth. So they found lowest cost labor, lowest cost production facilities globally, a lot of those specifically in China in order to

create that margin growth potential. But if we do see a diversification of supply chains, if we do see a deterioration of the relationship between the US and China, on top of all of these other factors, we very melt well maybe in for a much different economic climate over

the next ten years. Then I think asset prices are currently prepared for, because I would argue that asset prices right now are completely captivated by economic weakness and deflationary pressures and certainly aren't thinking forward to a year or two years from now where things might be markedly different. Alright, Gina Martin Adams, thank you so much, chief equity strategist at Bloomberg Intelligence, on the phone from New Jersey, along with Dave Wilson, Stocks editor a Bloomberg News on the

remote access line from New Jersey. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Jason, I'm not sure what this means, and maybe nothing, but our story on the Bloomberg about the latest on the virus was way down the list. It was like number sixteen or so among our most read, when it has been among the top first few on a pretty regular basis, right since all Yeah, I was kind of shocked when

I went looking forward today. Um, let's keep in mind that a bravirus cases globally are past three point six million deaths, topping two fifty eight thousand. So let's get an update on where we are. Dr Ian LUs Bader is black with us, his clinical associate Professor Medicine at n y U Landgoing Medical Center. He's on the phone in New York City. Dr Lusbader, Nice to have you back with us. How are you? Always a pleasure? Thanks for having me as always so interesting developments as always?

How how are how are things going? Yeah? Um, you know, I think again our tale of two cities good news and bad news in some ways, and I think for me helping in the intensive care units this weekend. UM, I was really most concerned and struck by this population

of patients with COVID on ventilators who really have not recovered. Uh. Fortunately, as we've talked about, you know, the majority of patients we're gu estimating around you know, we see as out patients cost fever, chills, diarrhea, and they do well, and there's a population that unfortunately need to come into the hospital and uh ju deteriorate from these multiple clots and multiple systems. UH And in this particular ward, it's really

sort of a chronic ventilator ward. UM. What I'm releasing our families that are uh not really prepared to deal with these patients who are uneventilator and with a little chance of coming off that and most have not been considering something called advanced care planning. In other words, they haven't had the conversation with their relatives. And many are older, they're sixty seventy eight and never really had this conversation

with them. And I think it's just very important to you know, tell our listeners about that, uh and really at any age to have that conversation. Many websites are available CMS and a HPMU Embaricade Association of Hospital and Tality of Care Medicine to really UH find out about what are different kinds of life sustaining treatments, What treatments would the patient wants should they be diagnosed with a

life limiting condition. UH to complete a directive and advanced directive which may include a healthcare proxy, so someone knows that patients wishes and they're legally empowered to make decisions when they can't do it. There are things called the most former electronic most form, which is medical orders for life sustaining treatment. So all of these things I think are uncomfortable for many people to talk about, but I think this crisis really is an opportunity for people to

have that conversation. I have to say, having had conversations like that with both of my parents who I have lost, it was very difficult, but it was necessary and it was something they wanted to do as much as you know they wanted to be, you know, have some say in this, so it's really important. I agree with you that this is an important issue of all of this.

It's so awkward when families um have a loved one that has deteriorated requires event a later, you know, with or without COVID, And often these patients have COVID with associated other you know, illnesses and are really unsure about what to do. The patient isn't getting better, They're very stressed, very sad. Prognosis may be very limited, they may have other issues you know, underlying cancer's, lymphoma, other other big strokes, etcetera.

And it would be so much easier for the families had they had an understanding of what the patient would have wanted, had they known they would be in this situation.

And I was just struck by rounds in the ICU where just had had there been a little bit of this advanced care planning, uh, patients could be made more comfortable, families could be more comfortable emotionally with what's happening and with some of the difficult decisions that sometimes has to be made, you know, when patients are in this condition well, and I would imagine it's only exacerbated. I think you alluded to this inn by the fact that oftentimes people

aren't able or really all the time. In the case of COVID cases, family can't be there, and so those those conversations you know, even when you, as a doctor, I would imagine are wanting to have a conversation with with the family, Remember you're doing it over FaceTime or over the phone, and you can't sort of have that more sincere and moment where you're making some judgment calls.

And I do wonder how those decisions have really changed doctors to some extent, because you know, you've been pretty clear about the fact that making some different sorts of decisions along the way, I mean, have changed doctors as human beings and maybe as professionals going forward. You're exactly right. One of the and this has been written about, one of the most sad aspects of COVID is really these

patients UM dying alone or suffering somewhat. Of course you're trying to alleviate any pain or suffering UM, but but they are alone, and patients we know do better with connection and only having a connection with healthcare workers. UM that's helpful, but it is a unique situation where families can't be at the bedside, and to me, it's so we do try and do those UM visits by face

time and so forth. Sometimes the patients are not always alert and so having misunderstanding having these conversations even reading about things now for healthy people, very important to get healthcare proxies early on and have think about what wishes would be helpful and make sure family members and healthcare proxies and paperwork is done so that if God forbid there's a problem, at least there's a game plan. Yeah, exactly.

We're going to continue the conversation with Dr Ian lust Bada, clinical Associate Professor of Medicine at n y U Land Going Medical Center. And I do want to get his take on a headline California reports two thousand, six hundred three new virus cases largest one day jump. I do want to see what he has to say about, you know,

all our many states easing the lockdown restrictions. Let's continue our conversation with Dr Ian LUs Bader, clinical Associate Professor of Medicine at the n y U Lang Going Medical Center. As I said, our go to doc when we want to really understand what's going on. He's been on the front lines, as he mentioned earlier in the conversation, working in the i c U. So Ian, I have to ask you, we are seeing continually some troubling numbers as

these cases rise a record day in California. On the other side of the country, we continue to see, even though they are declining, pretty big numbers here in New York State, and yet a lot of reopening going on, a lot of reopening talk happening. How do you square that. What's the medical side of this? Well, I think we're in uncharted territory. Uh, we have not had a pandemic like this exactly. How to do this delicately and balanced the economy and people's psychology? Who are getting a little

store crazy? You see them out on the street. You know there's a higher volume most people. I don't want to say people are disobeying home isolation, but people are finding excuses to go out, go to the drudge store, get a breath of fresh air. So I think the weather and time at home is uh is working against

being very restrictive, which is a challenge. Governor Cuomo has commented about, uh seemingly this increased incidence of coronavirus hospitalizations with people who seemingly have stayed at home and I've had no exposure. Very hard to explain that. Uh. So there's really a push and pull with trying to be a d percent safe and reopening the economy by definition when people return without knowing their antibody status. Uh, And

we're sending a lot of patients for blood testing. It's going to be impossible to send everybody to the lab for blood testing. And then what do you do if people don't have antibodies? Uh? Are they not supposed to go back to work? So I think this is a work in progress. Uh. It is disturbing because the virus

is clearly not going away. There's some evidence of people with antibodies or people who seem to get better with COVID nineteen and then within a few days or a week feel sick again, and when they do nasal swabs find the virus there again. So we don't fully understand the virus. We don't understand why seemingly if you have antiboddies you you can relapse. Uh. So this is going

to be a challenge. But it seems to me at least that the wave of people who want to get back, who need to get back, are going to win the tug of war, and we may have to be prepared

for for more cases. Unfortunately. Well, and I well, that's what because you know, we've had certainly statements from President Trump about this in terms of you know, reopening, and I just do wonder if this is unfortunately going to have to be part of the process because we don't know, as you said, UM, and we don't know a ton about this virus, and so you know, we don't totally understand full immunity and how to get there. So I do wonder if these reopenings and unfortunately spikes are going

to have to be part of the process. But do you you know, as a result of these spikes, does that mean we should then also shut down again? You know, I would defer to UH DR Fauci and and UH leadership on this. I think it's going to be very hard to send people back, and I think that would

really throw the economy into a serious tail spin. UH. To me, it seems that we will have to put our toe in the water, have people wear masks, have critical services, start back and UH and then observe what the numbers are because her immunity, as we've said before, is not going to be achieved by a vaccine, which is months or longer than that away. The vaccines haven't been developed, they haven't been tested, UH, and we don't really know on a widespread scale will they even work effectively.

Things like the flu shot you know, we know are not a hundred percent effective. So I think no matter what we do, a life will resume, probably with masks and social distancing, and I think the number of cases

will not drop to zero. Hopefully though we will have better medications to modify the disease to give people more hope, and certainly for those patients as we said earlier in the show that um you know, are chronically on ventilators, we need to have some conversations that advance care planning that we talked about. So if people jugitary rate, or if they're older and a high risk, at least there's some sense with a family about what their wishes are. Yeah, alright, well,

great stuff. As always, we really appreciated Dr Ian less Vader, Clinical Associate Professor of Medicine at n Y use Link on Medical Center. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. This is a story that both Carol and I read, and I know a lot of people have read over the last couple of days because we're all looking for answers, and those

answers are increasingly hard to find. This story is just one of these great first person pieces written by one of the best writers I think across the Bloomberg Empire, Stephanie Baker. She's based in London. She joins us on the phone from They're great to catch up with you, Stephanie. Thank you all right, So tell us about this piece, because you really just outlined and documented your trials and tribulations in trying to figure out whether you had COVID

nineteen right. And you know, I did this because, um, I realized that I, like many other people had, was wondering whether or not I might have had it. UM, And I think those are a lot of other people were in a similar situation. And I had written about antibody testing, as you know, being trumpeted by politicians as a way out of lockdown, but had talked to scientists

who had beside these anybody's tests is being unreliable. So I thought, well, if I throw myself into this world, um and really do some research and test it on myself, I'll get to the bottom of of you know, how reliably reliable these tests are. UM. And you know, I thought well, maybe it will be really boring and I'll just get you know, a bunch of negative results a story and then um. And then so when when I started out, I got a negative test and I thought, oh, this,

what's going to happen. I'm just going to get a bunch of negatives and I won't have a story or much to say. Um. And then the next test was positive, and I was really confounded. The third test was also positive, so I figured, well, two out of three, you know, the first test must be an outlier. By the time I took the fourth test, which was negative, I thought, well too positives, too negatives. I have no clue whether or not I've had it. And then I started and

you have a story. You definitely have a story. There a story. I started. I could clothes or look at these tests. Why would I be getting, you know, differing results. You know, there's obviously a lot of these companies are claiming incredibly high almost perfect specificity, very high sensitivity rates. But what I realized is that some of them are testing different UH antibodies to different parts of the virus.

Some tests just for antibodies against the so called spike protein, which is a sort of calling card of this novel coronavirus. Others test for antibodies against UH something called the nuclear capsid protein, which are far more abundant and easier to detect. Some tests for both, and I think that's one of the reasons why they're I got so many varying results.

Oh my god, so many questions. Because what's key about this, right, Stephanie, is that so many world leaders, and you write this in your story, have said that we need these antibody tests to determine who has had the virus, who has immunity, so we can reopen up the economies and so everybody

can feel safe. But what I got from your story is that there are tons of different stories, different types of tests, excuse me, out there, and there are some differences between what's done in the lab versus what you can do kind of a rapid test. And the problem is there's a lot of variation, right, So I feel like there's not a lot of certainty that comes out

of these antibody tests. Yeah. Absolutely, And and look, you know, one of the things I should say at this at the start here is that UM scientists don't know if you have antibodies, how much protection they actually provide. You know, many people, many scientists, think that it will give you at least a few months of protection, perhaps several years. But the virus has only been around, um, you know that we're aware of since January. Still still so much

to learn. UM. And it's hard to see to study how long immunity laughs and and what level of antibodies really provides you any protection. But my takeaway from this very unscientific little experiment I did was that these tests by and large are not ready for prime time. And UM, I'm surprised at the overwhelming number of messages I got from friends and contacts and Bloomberg users saying, UM, I got a test, is it correct or I'm going to

get a test and what do you think? Um? And you know other people who like who said well, I took two tests and I had a similar experience to you. I got conflicting results. So UM, I've surprised at how much this story is kind of captured what is on

so many people's minds right now. UM, And I think there needs to be a lot more research into antibodies and how to detect them before we can think about rolling this out on a wider scale, and I feel like the conversations have increasingly moved from oh my gosh, we figured it out, you know, on one level pre vaccine, to wait a minute, it's not so clear cut, um,

you know. So I don't know when you see the headlines when it comes to reopening economies and you know how long it's going to take for a vaccine, I don't know what conclusions do you come to. I think everyone is going to have to be really cautious, uh, you know, for the foreseeable future, until there is a vaccine, even if they've had COVID nineteen and they've recovered and they've got perhaps a test that shows they have some level of antibodies, because we just don't know how long

that will last and how much protection it will provide. Um, And you know, I would agree. I think the only real comfort is when a vaccine, uh you know, is found and is rolled out worldwide, which will take a

long time. So, Sephie, I do have to ask you, since since we have you here and you talk with you know, high level sources across the world and especially there in London, like, what's your take on the return to work, especially among the financial community that we care so much about like, what are your folks telling you? What's the view on the ground there. Well, again, I think you know, there there is a lot of stock and hope put into antibody testing is one way to

get back to work. Um. But you know, I think the financial community has uh, you know, done incredibly well

in terms of working remotely. Um And I think some of them are looking at how to get back to work, but perhaps continuing to work two to three days at home because they've figured it out and they've found a system uh that works that and that perhaps getting back to work is not going to be the same in any shape or form that you know, do we still need these huge offices if I can you know, effectively

work from home, you know, full time. Um. So I think a lot of thought is going into what does that actually look like and how do we go about doing it in the safest way and long term, what have we learned from this period of working remotely? Yeah, it's so interest I mean we're talking about it all of time in New York too, And I do feel like you know, London in New York or in many

ways going to lead the way. They set the tone for for so many things, whether it is on Wall Street or the city the equivalent there in London, or when it comes to big restaurants and retail and all these different things. All right, Stephanie Baker, so good to catch up with you. Thanks for spending some of your evening with us there in London. Financial investigation see your

writer for Bloomberg. Check out her story because it is a terrific synthesis, startling and a little bit worrisome, but worth reading just because she does such a nice job sort of walking you through what she experienced and as she pointed out, and unfortunately this isn't surprising a huge amount of feedback coming to her, Carol about other folks saying, yeah, that happened to me too. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Let's

shift gears because I love me some Liz McCormick. Yeah, it's one of the most read stories. I think it was the most red story all day have in Bloomberg Today. How Ken Griffins shut down playbook has kept him on top of the markets. He spoke in a rare interview about how he did it so let's bring in Liz Kapa, McCormick, Bond and FX reporter U Bloombergnew she's on the phone in New Jersey. Um, so nice to have you here with us again, Liz, so tell us about this and

getting access to someone who doesn't often talk to the press. Hi. Hi to you guys. I hope you're both well. And yeah, I mean Ken was kind enough to talk to me.

And you know they are a huge player. You know, treasuries are my thing, and you know their firm is very active in many markets equities as well, but Treasuries and Ken, you know, it's kind enough to speak to me because I know they were among other firms that did a lot of work to Like you guys have been talking about be able to function and make things happen with everyone at home, and like we laid out in this story, so did all securities creating you know,

on a fly very you know, high chech remote offices and you know, to try to serve their clients and make market But wait, am a perspective this company, as you say in your story, li is they trade what three point three billion US shares a day? Right there? Even even though I kind of love bonds. That their main huge thing they do is equities. Like you said, they're a very big player in the equity market. And uh,

and they were higher. They did like a daily average in March, which was the Mayhem months months, right, that that was higher than their highest level of So all this kind of herculean steps they took seemed to pay off for them. So Liz, you know, I have to say, I look at this as I think many do, with something of a gimlet eye, and just think, man, these guys always figure it out, and it's not necessarily a bad thing, but it really is kind of amazing that

if you have the resources to do it. And look, he moved fast, to Carol's point, he moved very fast to get this done. But it it almost just feels like a different playbook for a different set of folks. Well, right, I mean, we have to be fair. You have to have the cash and capital to pull this off, because you know it's and I don't have a figure, but of course it's costly too. You know, they had to get the local cable companies with a fiber optics and do everything they do. Um, but it takes a lot.

But I mean to be fair, many, I mean, you know, Ken Griffin is a special person as far as you know finances, but many on Wall Street we've all talked to them, even the dealer firms, what they're doing to try to set up at home. And you know, I think that's costing all these firms some money. But yeah, I mean Citadel Securities kind of has the heft and

ability to do what what some firms just couldn't. Right, and think about I mean, right, we always talk about even in times of crisis, right or or what have you, is that those who can move very fast, uh, and definitely you know they stand to benefit, specially when it comes to the financial markets. List right, exactly exactly, and we've seen that through the years in different asset classes.

Maybe treasury is the slowest, but where it's become more about speed and you know, the ability to trade and electronically and you know, kind of this became, you know, such a huge issue more than we ever even thought during this pandemic, because who realized you know, you might be at home and you'd normally be sitting next to your five year trader and you could just yell out to them and you know, you know, it's just to

a new dimension. Yeah, how much it was important have the technology to do all this in the bandwidth and all that which is expert you know, so, Liz, So let's play that out, I mean look ahead, because we're all trying to understand what this business looks like on the other side of this. Obviously, Ken Griffin was able to, as they say, sort of stand up an entirely new operation, uh in many ways and and be pretty seamless. But on a broader level, we're all trying to figure out

what does the workplace look like? What are trading for is look like? To your exact point that that you just made. What are folks telling you about what getting back to work really looks like? Especially when you think about the New York's and the Chicago's of the world, where proximity has been the name of the game for so long, right right, Yeah, I think, first of all,

people are still trying to figure that out. But I think, and you know it's talking to some of our smart folks over in Business Week about this that you know, for the trading world, in the market makers, I think there's gonna be even more of a new normal than we saw a post like nine eleven that were a

lot of firms created backup sites. I'm not saying Ken Griffin's team is eventually going to come back from Florida and stuff, but I think even the dealer firms, I think the equipment people who who got up to speed in a way they never had before of having ex percent of their employees who could work like to full

capacity even at home. I don't think they're going to dial that back, you know, even if you know some of them are saying they're in the office more more often, right, But I think that investment, from what I'm hearing, is not going to go away, right um whatever they had

to do to set that up. So I think there there's gonna be, like you just not that God willing we never have another pandemic corner for another thousands of years or something, but that if something does this, it's going to be easier for firms to kind of quickly on a dime, have you know, half their staff not

in the office. But I do wonder to Liz the ability by Ken Griffith and Ken Griffin and his team that sit it out, you know, being able to kind of move so quickly get up be involved certainly in the trading activity of the market and helping to keep it liquid. How it helps maybe cement their place either within the Federal Reserve, whether within the government in terms of being able to help out in a future financial crisis. Well,

I think so. I mean, that's something I asked Ken about because you know, and I've kind of off to them through the years. They've done a lot to lay the groundwork too, you know, you know, I mean, that's not a goal of theirs, but it's ultimate may happen that you know, the primary dealers I think you're talking about that has their primary dealers that you know, you know, work with them when they're doing open market operations. They're

the counterparties. And these dealers have to bid at the Treasury auctions and you know, Citadel Securities, it seems that they they are among what I see on my radar as like the likely next players and that would help, you know, like you know, kind of talks to that in the story that you know, it would be a win all around, Like especially if you have one of the biggest dealers and Treasuries that isn't the primary dealer.

It seems like inevitably it will happen. And I know even um, you know, the Treasury has a baring committee and through the years they've really change. They used to be always just the banks on there, and they've learned in recent years to add more of these electronic market makers even to the people that advise them, because they realize, like you guys are talking about that the let's call it the micro structure of these debt markets have changed.

So you have to have all the relevant players, even advising the Treasury, who just announced lots of new debt because we you know, funding this pandemic, you know, economic hit another nine Yeah, yeah, I mean, you know, lots and lots a new twenty year at the size of no one expected how big it is. So I mean

there's a lot of death coming. Yeah. It's so fascinating to look at this because you know, we're we're talking about you know, literally market structure here that that has been changed, you know, the way that we do business, but also the way that that trades get done and and the different players as you guys were just talking about that, you know, have really emerged from this, and you do wonder I feel like the question that we're going to be facing so much over the next few weeks, months,

you know, maybe even years. Is what sticks from this pandemic. What is fundamentally uh changed. So great to catch up both Carol and I were so excited to talk to you about this story. Yeah, it's really it's really just terrific. Uh. I must read and that is demonstrated by how many people are reading it on the terminal roam a journal. Yeah, but you let me drive. Oh no, no, no, no home honey, please, I'll do the riding drivels me. I want to drive, Just drive, baby, the questions trying the

drive to the globe commune. Thanks well, run on Bluebird Radio. It is time for the drive to the closed. John Padreds is with US, portfolio manager at Tookville Asset Management, joining us on the phone in New Jersey. So, John, nice to have you here with us. Uh. Interesting week, right, We're all kind of focused on that job's report. We know it's going to be staggering, and yet when you see the numbers, it's still definitely throws us off. Course,

tell us a bit about your clients. You deal in wealth management, and I'm just curious about some of the phone calls you're getting and maybe any of the kind of tweaks you're doing to portfolios in this environment. Sure, well, I think the initial phone calls has really calmed down. Um, you know, we spent a lot of time and well, we spent a lot of time talking with our clients during the course of any market, but specifically in more to early April April, uh, and we had a lot

of client communications. You know, PIO rallying a bit here, and I think everyone not only setting setting into their new bomble of of their own socialize and also the financial world. I think people are trying to adjust to see what the future holds. So by and large, clients

has been there educated. You know, we've been through a lot over the past fifteen years with it for Great Financial Crisis, and at this point of course with other markets up and ups and downs, but buying large clients or or holding firm and and remaining calm and not panicking. Of of course, we've been through this with balanced portfolio. So the sixth income portion of our allocation is held

up pretty well. And so how long do you sort of sustain that strategy, especially given what we saw in April. I know, may at least so far, it's been a little bit of a different story, and earnings obviously come into it as well. But how long do you stay relatively conservative here? Yeah, it's a great question, and I think you know, we know, buying a large you know, it goes without saying. You start day one with the client learning their UH financial objectives, goal and income needs

and build the portfolio accordingly. But when you look across different asset classes, you know, I think we think yield is on sale, and we think the highest portion of the bond market has rallied or has held from where yield is not overly attractive. And if investors are overly scared about the volatility in the stock market, what do you do? And we think that there's an allocation where you take some off of the bond allocation and and and add to income oriented assets. You know, we think

we like stuff in the preferred stock market. We think, and you do your due diligence, high quality, high divoten yielding stocks where they have the balance sheet to support their divot in yield. We think there's value to be had in some of the stations of the reef market. So you know, we do think there's yield portion income portion of the market that are on sale right now

that are very attractive. Wait, so you're saying at this juncture to maybe take some off the fixed income side of this balanced portfolio and shift into higher dividend yielding stocks, not only just stock. But so the answer is yes,

but it's not just stocks. We think with the the programs that the Federal Reserve is put in place where they're out there buying almost ever anything not nailed to the ground at this point outside of the preferred start working outside of the store market, we think that yield oriented securities are gonna outperform because you're going to have

a search of hunt for yield. I mean, you know, if you want to tend year US treasure right now, you're getting seventy one basis points after emflorce F and after pass at the negative rate of return. So you start going down the credit quality stack. And with the exception really of the high yield energy portion bond market. You know, we think with with the investor grade bond market is actually open. They're having a record month in

terms of issuance. On the investor grade side. There's yield to be had, and so what I guess one of the questions John I have, especially at this point, and especially as we hear political leaders talk about moving to this next phase of reopening and not just the sort of lockdown mitigation UH element. How closely do you, as an investor and someone who's advising clients, how closely do you look at the sort of tick and talk of the medical side, the development of a vaccine. How much

does that ultimately drive your UH strategy. Well, the assumption is that a vaccine will be found, right, the question is the time of it. And if you figure that China went on lockdown the beginning of January, the world started the clock in my view, then to find a vaccine, or at we start the process of finding a vaccine to understand too, to solve coronavirus COVID nineteen. So you figure we're about four months into the process. You know, if it takes let's say, you know, we've accelerated the

process of it. Normally takes eighteen months for a vaccine to hit the market. Let's say it comes between twelve and fifteen months. Now there's two elements to look like. There's the element of how will the stock market react? And then how the economy react and the stock market will look through the bad data if we see that the vaccine is on the time on the horizon, even though the economic data that comes in it is going

to be poor. So every in our opinion, every day that moves forward is one step closer to finding a vaccine, and then the closer that we find that, the closer that we'll all be able to move on. Because once we all get the vaccine, then we're going to feel significantly more comfortable to go out to restaurants and movie right, and we know the timeline on that can be anywhere from nine months to two years depending on who you

talk to. So uh tied everybody, jomp and Treats. Thank you so much, portfolio manager Toakvale Asset Management joining us on the phone in New Jersey. We appreciate all our listeners. We know cell phones can be a little tricky in this environment, so we appreciate your patients with that, thanks for listening to Bloomberg Business Week. You can subscribe to

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