Testing and Data Addresses Omicron Concerns

Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern Time on the Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Some of the key COVID headlines that are out there about South Africa, they're surgeon cases, um, not overwhelming hospitals so far. In New York City, Mayored Bill de Blasio saying the city will become the nation's first impose a vaccine mandate on private sector workers starting

on December twice seven. But as you so rightfully pointed out to him, good luck with that, because you're not gonna be mayor anymore. Yeah, Eric Adams has his work cut off him if he even ends up going through with us, right, and we know how much difficulties President Biden has in terms of imposing any kind of vaccine mandates. One thing we're also watching is what's going on around the world, Carol, France, for example, closing its nightclubs for

four weeks and we'll open vaccinations to children. So different stories playing out in different parts of the country, in different parts of the world to absolutely. So let's see what our next guest has to say. Dr Michael Blas is a chief medical officer at Annivasi Blavis excuse me, Dr Michael Blavis, chief medical officer at Annivasi Diagnostics. It's uh.

He's also a practicing emergency department physician, and he joins us on the phone in Atlanta, and I just wanted to point out global COVID cases are topping two hundred sixty eight million deaths, surpassing uh five point two million. Just we've stopped doing those numbers, and when I see them, it always kind of stops my heart a little bit. Um. Dr Blavi's nice to have you here with us. How are you, thank you, Carol? Very good pleasure to be

there with you. Well, tell us a little bit about what you guys are seeing in terms of the impact of the amicron variant and just generally in society when it comes to battling COVID. So I think there's a lot of kind of panic and concern. Rightfully, So, the last time we had a new variant that there was a lot of excitement about that was Delta. On the kind of the diagnostic side, there's a lot of I wouldn't say excitement, but some concern as well because there

are so many mutations with the omicron variants. So everyone is scrambling to make sure their tests will accurately detect it. They're doing all sorts of simulations, and obviously on the diagnostic side or on the therapeutic side, everyone is worried will our treatments work just as well? And do we need to come up with new things? When do we know? When will we know? Because so far over the last six days, all we've been talking about is we do we need more data? We need more data? When do

we get that data? So unfortunately it just takes time. We're really talking about three weeks now that we've been aware of it. So the genetic sequencing is almost completely done. We have some good data on that, so a lot of simulation can occur. For instance, we've looked at it and will detect the cases um like things like how well, uh, will the virus respond to current treatments. That takes people actually being studied, studies being approved and run, so something

like that can take several months. Obviously, in the next few weeks we'll get more of a general idea of how severe the diseases or macron is, how quickly it spreads, and we'll get uh some news about our any tests failing to catch it, so that people will know do they have to choose a certain type of test? Are they okay? Just getting whatever they're used to getting? All right, So we've just got to be patient here in the meantime, just be prudent. It sounds like, UM, tell us a

bit about the work that you guys are doing. You have a COVID nineteen test and detector. From what I understand, at least on your website, it's not yet cleared nor submitted been submitted to the FDA for authorization under the Emergency Use Act. Is that correct? That's correct. We're just starting our final study with patient enrollment now and hope to submit to the FDA in early January. So maybe be out on the market in late February or at

least early March. And it's basically like a massive lab PCR that you would find in a hospital, but in in a tiny little box and one that gives you results in about thirty minutes or less. As well. How much does it cost or how might it cost? So the device itself, and we can only give ranges per FDA regulations. Uh, it might be kind of in the

two range plus or minus. We haven't made any final decisions, and then the device can run up to about three thousand to five thousand tests in its lifetime, and how much each task costs is something we're still trying to determine. We want to bring down the price as much as possible to increase access, but obviously there are costs of

manufacturing involved. So we're thinking probably in the fifty dollar range, but that hasn't been decided, and again we can't really give out any uh definitive numbers according to the FDA. What were your thoughts last week when you heard tries and in Biden said that he wants insurance companies to our cover at home testing starting in January, So you know, obviously as a company, Uh, you get excited about that.

As an emergency physician who saw hundreds of patients and many very sick, I think this is a great idea because if we can really interrupt the spread of COVID vaccination, we all hope that everybody will get vaccinated, or at least you know that over seventy five mark and COVID will just go away and you know we'll be saved from it. That's not been the case. So the way we're going to stop COVID from spreading with each wave is to identify as quickly and easily as possible when

somebody has an infection. So, for instance, I want to go to a party with people, I test quickly, easily, accurately, and um, then you know I find out on positive. Oops, I'm going to stay home. We're not going to infect anybody else. So if we can get to that point, I think it's really going to make an impact. But costs and access are both significant barriers. So people need to be able to test at home ideally and be

able to afford to test. Yeah, I know, so many of the conversations that we have certainly have to do with the ability to affordable UH and accessible testing certainly going forward. Dr Michael blab Us, he's chief medical officer Anavasi Diagnostics. He's with us on the phone in Atlanta. We think about this. You talked about this a lot test. Well, we do weekly tests for our son who's in nursery school as part of the you know, the tuition there,

and we forgot his salive example last week. Well we just have to give him an instant test at home. But you know the PCRs they're with bottle tests. Yeah, you know, it's a good point. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. All right, so, um, love this story, so kind of them.

I'm talking about Wall Street It, Tim, it just wants to sell a special index just for you. This story in the upcoming issue of Bloomberg Business Week magazine. It's also Today's Bloomberg Big Take. Pat Rickners, markets and finance reporter for Bloomberg Business Week. He's with us in the Bloomberg Interactive Broker's studio in New York. Justina Lee wrote the story. She's markets reporter at Bloomberg News. She joins

us on the phone from London. So, the idea of investing in passive indexes and you know, those from perhaps Vanguard and others that track the SMP five hundred, it's been a really good thing for investors pat but not

necessarily such a great thing for stock pickers. Yeah. You know, if I think of the two most tectonic changes in investing in my career, it's been m the adoption of index funds and then the shift of that to e t f s. And one of the things I found so fascinating about Justina's story was that, like, this is what people on Wall Street really hope will be the next step. Uh. In some ways it has all of the logic of indexing and ets, but they think it's a way that they can preserve an ability to charge

higher fees. I'm just saying it, where where do you see this in its evolution? Right? It's it's kind of interesting, like you said, because it has some passive elements, but it really has some kind of an active ingredient. Um kind of smuggled into it because they kind of start what's the clients start with is an index, and then they can add and subtract from that list to end

up with a personalized portfolio. And we're really seeing kind of the intersection of like technology as well as UM kind of this big personalization trend across a lot of other products. You know, if you think about Spotify or Netflix every where, I hurry you here. And and the question is, I mean, does the same concept also apply to investing. Yeah, it is kind of interesting in terms of so you basically take it index and you can

kind of tweak it um. I know it's kind of earlier in the game, or is it like talk to us about kind of the establishment embracing this form of investor ding. So for now, direct indexing runs about three fifty billion dollars of assets, so it's so tiny if you compare that to the mutual fund or et s industry. But we're definitely seeing a lot of big moves all

around to make this the next big thing. You know, we have had acquisitions from Franklin, Templeton, black Rock, Morgan, Stanley, Vanguard, even all the biggest names kind of wanting to get ahold of this, And I think the question is whether this will kind of end up being quite a niche product that maybe you can get a bit more fees on, and whether or whether it really will end up being

a threat to E T F the mutual funds. Well, you know, in our tis at the top of the show, I said, well, is this altruistic like giving the client what they want? Or is it capitalistic or a little bit of both. Yeah, I think there really is a philosophical question here, because you know, the supporters of this day, even if the clients are not making the best position,

you need to enable people to make them. You know, for instance, if you you have a client to hate s fossil fuel companies, I mean, maybe it's okay for them even if they lose a few basis points each year in performance. But of course we've also had a lot of research over the years showing that it's not that great when you let individuals you know, with busy lives, um if you worry about their own portfolios. So in that sense, I mean, are you actually just empowering uh?

Investors might have something to say about that. I mean, I think there's also been you know, quite influential papers in the history of markets that show that even the best stock pickers can't repeatedly even after fees, especially after fees beat the markets just you know. So, I wonder in a in a where it comes when it comes down to fees, how much directing indexing will cost, especially compared to some passive vehicles. I mean hundred for example,

more than this year. You could throw that into an et F with what like five basis points of a fee, yeah, or even lessen that at this point, Um, there isn't a lot of transparency in direct indexing fees, but Bloomberg Intelligence Estimate did that it's around thirty basis points, which is still higher than E T S where you can

get almost zero at this point. So it is cheaper than your old school mutual fund, but it is more expensive than you know, the cheapest E T S, which I think really is to pitch here you know, somewhere have been more expensive but not you know, the cheapest of the products. No, that's okay, you know, it's interesting. Um, I guess I do wonder it's hard not for Wall Street who has been just watching so much of the money fly out because of index funds. And I agree

with Pat. I mean, one of the first things I did in my financial journalistic career was producing mutual fund show. It was all about playing the strategies and you had you know, people were just piling money, uh into mutual funds. So it's fascinating how quickly it is evolved to the index world. Although John Bogel, you know, bless his soul, um and may rest in peace. You know what I said years ago, Well, this is the way to go. It makes sense. Um, it's a it's a smart strategy.

But I do wonder about the fees that financial firms have been losing because everybody's been throwing money into index funds, and how much of that is a big part of it. And I guess well, time will tell, right in terms of performance. Yeah, and you mentioned fees. But another part is, of course, this is going to a few more single stock trading flow so even kind of if you look beneath that, this will also be better business for brokers

and market makers to just like higher volumes. Actually, that's one of the fascinating things here is that a lot of this is built on the fact that trading costs have been driven so well so that one of the reasons you can do this is that, um, you know, at both the institutional level and the retail level. Um, all of these fees have like just fallen, fall and fallen. And that's one of the reasons that this is this

is even possible. Um, where do you see that kind of playing into the evolution of this, the fact that like, I mean I could go on robin Hood and I could build an index that's not a pitch by and you're not gonna do it, absolutely not my my In fact, my two my two robin Hood holdings are a total stock market et F and a bond market index. Kind has a ring to it. Well just yeah, because like

go ahead, yeah, because I guess. Um. The other thing is everic indexing has been around for a while, but it's kind of becoming a big thing because you know, as Pat mentioned, um, with trading getting so cheap and fractional shares, you can now offer this to people with much less assets. And I mean there's still a threshold of maybe a hundred thousand dollars. And of course, um, there's a tax benefits and makes more sense if this is an a taxable account. But this is going a

lot more mainstream than it used to be. Can anybody do it? Just quickly, got about twenty seconds left here, Justina. Can anybody create their own index? Yeah? I mean if you have kind of quite a bit of money and talk to your financial advisor. I'm sure a lot of them want to sell this studio. Okay, so not anybody can do it. You have to have quite a lot of money. Okay, That's what we wanted to know, Justina.

Thanks so much, Justina Lee. She's markets reporter. She's also Quantz reporter here at Bloomberg News on the phone from London along with our Patigney or Markets and Finance editor Bloomberg business Week. This story. Read it in its entirety at Bloomberg dot com, business Week dot com on the Bloomberg terminal end, in the new issue of the Business Week magazine that will be out later this week. It's also Today's Big Take, one big piece of journalism from

around the world. You can read it at Bloomberg dot com. I love how the markets evolve and how you invest evolves. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stenovian on Bloomberg Radio. Alright, folks, tennis, it's a really big deal in China, some fourteen million people play regularly, almost one quarter of the global total. According to some reporting by Andy Brown, it's been in a work in a lucrative market for the Women's Tennis Association.

So why why did they walk away? What does it mean for other international businesses that operate in China? I mentioned Andy Brown, He wrote about it in his Saturday New Economy column. He joins us on the phone in New York City. He's the Bloomberg New Economy editorial director. Andy. Good to have you here again on Bloomberg Radio with Tim and myself. You write about how a tennis star may really hurt China. First of all, remind us by a story that I think it's safe to say that

a lot of us have been riveted by it. Yeah, it um. The story is that the w t A and Steve Simon the Commission to have stood up for principle in China, and UM present a rare case of a business that you know, has put principal first over profits. We've had numerous examples of businesses that have come under attack,

uh in China. I mean, marry at Hotel, Mercedes Bands, Versacchi, Valentino coach um for crossing China's red lines, and all of them have reflexively groveled and come up with these sort of trembling apologies because in the end they don't want to sacrifice their business in China. What happened obviously in the case of the w g d A, you

had a theme Chinese female tennis punk fly. She comes out, she's making allegations of sexual abuse assault against a senior retired leader, and the w t A back her up. How is this different or? Actually, Andy, what I want to ask you is if this represents some sort of sea change in the way that American organizations doing business in China will act. I mean, and you write about the difference between this and what the NBA did just

a couple of years ago. Yeah, you'd have to wonder whether the n B a um you know, at himself or would have responded in quite the same way. Um. You know, first of all, they came out and and it was a pretty bad response. When Darryl Morey, was then running the Houston Rockets, came out and tweeted his support for Hong Kong. But then they came out when they sort of they sort of folded, they came up with another statement in Chinese that said these comments have

been irresponsible. Um. Look, I think I think the w t A in a sense of set a new standard for corporate behavior in China against which other companies and other sports leagues are now going to be judged. I don't think it means that, you know, companies from Nike to Starbucks who were all making a bundle in China are going to start start getting themselves all anguished about human rights and Gina and and thinking about pulling out.

Not at all. But I think it could well be the case that businesses that don't actually have to be in China, they are not making a lot of money in China, they're in a sensitive area, sensitive from a political perspective, human rights perspective. For instance, in the media industry, we could well see exits, and in fact we are seeing exit LinkedIn packed Up, Gone Going, um Yahoo another example. Right, So it is going to have an impact, I think, in some way on just about every business that is

in China, foreign business in the country. And you talk with so many CEOs and leaders global leaders. UM about the relationship between US and China. When does walk the talk really matter? Um? You know, I feel like we've had so many conversations, whether it was with George Floyd or U S China relations and inequities and people saying we've got to do bet our company is saying we

have to do better. And yet I think about US China, you don't see a lot of companies, especially when you're talking about the amount of money that they can make in the Chinese market. Still you don't see a lot, you know, pulling out, even though there's some really egregious things that happened in China. So when does it matter

on a corporate level? Yeah, Look, before we elevate the w t A to the saint hood, it's it's probably worth saying that the w t A would have taken a cold hard look at the business consequences of of pulling out of China. Um. You know, it's not automatic that the financial future of women's tennis is in China.

Ask the p g A. It wasn't that long ago that China was building golf courses all over the place and the biggest names in golf from Um, you know, Jack Nicholas to Gary Player, we're all coming into design courses. Dent Thing comes into power into a thousand and twelve and closes a whole bunch of them down. He doesn't like golf. It's bourgeois, and you know, and and and and the game takes a big, big dive and by the way, revives spectacularly in the United States. Just reasons.

So so you know, they would have looked at that. Nobody's playing Golden nobod playing professional tennis in China anyway. The country is in lockdown, and it's entirely possible that the tennis could go the same way as golf in China. It too is kind of elitist. Hey, Andy, I want to bring in what we learned about Ray Dalio's comments over the weekend, because last year he found himself the last week excuse me, after an interview on CNBC, he

found himself the target of criticism. He said over the weekend that his comments on China human rights were misunderstood. So we do see UH portfolio managers founder of water Bridgewater for example, UH in hot water as well. As a result of this, Yeah, he came in for a norm of criticism essentially growing an equivalence between you know, dodgy human rights in the United States and human rights

abuses inside. And Andrew rosso And sort of challenges him, and he says, yeah, but you know, there's all kinds of things wrong with with us, with with the United States, but nobody is getting disappeared, And and then he goes off on a long riff about how this is just

sort of strict, China's being a strict parent. And if the storm of criticism not least by the way, from his number two, David McCormick, who evidently is weighing a run for Senate from from Virginia, you cannot run the public office in China now without being a kind of hawk. And you know, a lot of this comes down to public opinion that Ray Dalio just doesn't have the public on your side. You know, seventy six percent of Americans take a very negative view on China, according to the

latest Pew survey. Interesting developments, Um a great column as always, Andy, Thank you so much, really appreciate. Bloomberg New Economy editorial director Andy Brown on the phone in New York City. Can check out his column. Just head to Bloomberg Dot com or. Also you can search on the Bloomberg You can also sign up for the New Economy daily newsletter at Bloomberg dot com slash New Economy. Um. I read

him every day. It's a great raid and definitely check it out of the global issues they're always dealing with. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Yeah, but you let me drive. Oh no, no, no no, this is not a toy home. All right, please, I'll do good riding revels. I want to drive. It's a good question. This is the drive to the Globe. Mun on Bloomberg Radio.

Just about ten and a half minutes left in today's trading session, getting ready to wrap up this Monday day of trading, and you've got you just heard from Doud Prisoner Equity Averages. We've got a rally underway and we're hovering just off actually our best levels of the session, but broad based with industrials, energy, at materials and consumer staples. You're out performers. So let's get to it. Bradwick Bill and his chief investment officer at Commonwealth Financial Network he

joins us on the phone from Waltham, Massachusetts. Commonwealth does approximately two point two point five at billion dollars in assets under management. Brad, how are you great to talk to you, Tim, Yeah, it's good to have you back with us. Hey, help us make sense of what to think on a day like today where we see you know, as as as we said, as we talked to Vincignarella earlier in the day, he said, we can't quite call it dip buyers coming back in and buying the dip,

but we're seeing quite a rally after last week's sell off. Well, that's the thing. I mean, there was a lot of fear out there. There was a lot of worry about O Maicron, there was a lot of worry about the bed So I think a lot of the people who ran away are coming back again. It's not really dip buying, it's just kind of adjusting to the news as it comes in, which is a good thing. What do you make of I know we like to talk equities, and I get it, but I also like to talk about

the fixed income market. Brad, Um, what do you make of the tenure seeming to right itself. We've got a yield at one point forty two. For it looks like that one thirty four that we saw on Friday was perhaps a miss, take a false move. It wasn't a lot of conviction behind it. But do you agree? And then what does that tell us? I do agree because

I think it's a play in future growth. I mean there's a real sense out there with with with the ten year staying low, that the bond market is telling us that some of this growth we're seeing isn't going to last, that the bed is in fact making going to make a mistake and that's going to kill the recovering.

I don't think that's necessarily the case, and I think again it's a question that the fear of that grove rates down and now that rates are coming back up, it's a recognition that, yeah, there's some more durability to growth here. And I think, you know, we're not going

to see inflation collapse. It's going to go down, but growth is going to keep it, you know, higher than it's bet we're gonna We're gonna get some data this week when it when it comes to inflation, I'm wondering, what can what numbers are going to concern you know it. We're gonna hang on for a second. We forgive us everybody and our listeners are a little connection problem there. We're gonna try and clean it up with brand and

then come back to them. Let's more about the markets and what exactly is happening in today's trade, Carol, I was talking about inflation and the read that we're going to get later this week when we get cp I six headline read on CPI, that's what's expected. That could be the high if if that happens, Hyacinth. Two things. First of all, it's not the Fed's preferred measure of inflation, right,

we know core PC is. And the second thing I would say, and this is thanks to Mike McKee, who is my go to when it comes to all things global economy. But it's going to be premicon data, so you know what I mean. So the impact and the worries are not going to be reflected in those data points. So I think it makes me think, well, I don't

know if the markets will pay as much attention. It probably will because it'll be like whoa, you know what, staggering, But do you know what I'm saying, like you need to put it in in a little perspective. Okay, fair, But here's how I'll push back a little bit. Um. What is the best way to understand if our behavior has changed because of macron? Meaning? What? Meaning that this is the third time we've heard about a variant and we are we are resilient. We have been resilient as far

as spending money goes. And what we know now about the virus is a lot different than what we knew eighteen months ago. So are we changing the way we're doing things? Perhaps? Perhaps? Right? But look at what travel stocks are doing today, look at what reopening stocks are doing today? Right? Right? No? Uh, fair enough? I guess I just think that those data points that come out, you know, I don't know if it will be telling us that much, but I know what you're saying. That's

a good point. Your point is like, we figured it out, we know how to do this. It's not it's not March and everything shutting down and we don't know what to do exactly. So it's a fair point. Okay, Let's bring in Brad McMillan, chief investment officer at Commonwealth Financial Network. We were working on a line apologies to our listeners and to our viewers as well. Brad, what do How should we watch inflation? Carol and I were just talking about it. How should we watch these numbers we got

on Friday? I think the real question is is it going to spike up further or is it going to roll over and start to come down. That's what I'm watching for a lot of the factors that were driving inflation. We saw the excess demand from the federal stimulus programs. We saw the constraints and supply chains. Those aren't going away, But are they getting worse or better? And I'm looking to see if there's science it's getting better. Where is

all the spending coming from. I'm a little confused. And people just sock away so much money, knows, you know what I mean. I don't quite get it because we know the government programs right have largely stopped. And I just wonder, Brad, like, is it just people saved up so much and they're continuing to just draw upon that because the job market getting better, but we still see a lot of people that aren't working. I just don't

understand it. I think part of it, Carol is absolutely we're still spending off some of the savings from the stimulus programs, but beyond that, because that's going to go away. But what people aren't realizing is we're seeing average weekly income go up at a rate of about eight percent a year. And that's something that is people are making more money. Those wage increases are getting spent, and that growth is likely to even accelerate, you know, as wage

increases go up and hiring goes up. That's not going away. So what does what does concern you? What concerns me most is the supply chain. At this point, we've seen spending comeback, We've seen confidence. It's still low, but people are spending. Can the supply chain Hell, I think it can. I think it is, But that's what could break the recovery. Yeah, I think. Do you think it's likely? I'm not sure. It depends a lot on omicron. You know, it's the

U S will handle it. I mean, you guys were talking about that and I agree with that, But can other countries handle it? And that's where the supply chain is going to break or not right, and we don't see everybody handling it the same way. And I do also wonder. Yeah, a lot is still yet to be known, and I think I do I think it's safe to say that the next two to four weeks are going to be key. Hey, Brad, gotta run. Glad we fixed it,

figured out that tech problem. Brian mcmill and his chief investment officer Combe Financial Network on the phone from Walten roughly two thirty two point five billion in assets under management. Alright, folks, just a few minutes left in today's trading session, and I thought Tim and I were to go to the mat over inflation. Just kidding, um. Maybe by the end of the week, if that's what happens Friday. Thanks for

listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News