Wall St. Calling Traders Back to the Office

on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. One headline, They're just starting to cross and I think, you know, let's remind everybody that there these are the minutes from two FED meetings, both on March three, that emergency meeting that we got and then again that earlier than expected March fifteenth meeting that

happened over the weekend. One headline, I've got extremely large degree of uncertainty on the outlook that is coming from that FED meeting and also that rates at zero until the economy, weather, the virus, So some initial thoughts on all of that. Let's get to our team. Kathleen Hayes is with US Global Economics and Policy editor at Bloomberg New. She's on the phone from the Poconos. Dave Wilson also with US, Stocks editor at Bloomberg News, also with us

from New Jersey. So, Kathleen, initial thoughts here, as you see these minutes, you know this is interesting because um, you know, we have our entire he said, ECO team UM Washington d C based in any lock up that

occurs when the minutes are released. I've been in this lock up, and generally speaking, you go in about an hour forty five minutes before the minutes are released, and you have time to read them and really vet them and make sure whatever headlines you put out, whatever story is, is fully thought over, you know, when you put the most important things first, and the two headlines you read are all we have so far. I have been looking around.

I see that Dow Jones, one of our competitors, who also covers a FED very closely, has a brief story out. Not this this outpouring up. Here's what the FED was thinking. It was obviously unusual because there was the unscheduled emergency meeting on March second. So presumably, as we see more headlines are more of a recounting of what the minutes say, we're going to find out, you know, what the debate was there, how urgently they felt they had to act,

and of course they cut the key rate. Then they made it very clear that, you know, quantitative using bond purchases, whatever it takes, basically is going to be done. Then we got the minutes of the March fifteenth meeting. So it's something I think it's a bit different today in terms of how the information has been given to the press and what we're waiting to see. But um, it's pretty clear from what we have seen rates at zero

until the economy has weathered the virus. So in other words, we have to see and I think that is the question, doesn't it, you guys, that whether what is weathering the virus, is it getting to the point where the virus peaks and comes down, is it having the economy show it's gotten through it? A lot of unanswered questions, Yeah, exactly.

And I'm just looking through some of the notes too, and it's talking about, you know, the pace of economic growth abroad was already subdued before the appric I mean they were also looking at, you know that this wasn't just a u S thing that this was obviously a global thing as well, and just looking at you know, uncertainty in the markets, volatility in the markets, conditions in short term funding markets also deteriorated sharply amid a decline

in market liquidity and challengers and dealer intermediation. They were specifically going into the weeds of how the financial markets are working or not working, and that is why you saw those unprecedented actions and also the expansion of the balance sheet to make sure that there was liquidity in the markets. It was all about making sure also that those markets were operating accurately. Jason, all right, so Dave Wilson, come on in here. It looks like we're seeing equities

take a little bit of a tick up. Not nothing dramatic going on here, but tell us what's underneath. Uh, this trade based on the FED, but also based on everything else that is happening in the world, well back toward its highs of the day, and sort of backed off a bit before the minutes were released. So clearly that's being taken as a positive. Now a whole lot of a positive, but certainly kind of helping things along.

You know, what jumps out today's trading. I mean, we were seeing the travel related shares rally as we have for a couple of days. Now, what's different this time? At least it got my attention, And one is we're seeing the home builders with some pretty substantial gains. Poultigroup notable in that score. It's up ten percent in today's trading, uh Leonora, Dr Horton also in the SMP five hundred also showing some pretty substantial gains as well. But even

more so, what's going on with the hospital chains? And if you think about an area that's being affected by the virus, I mean you figure that's front and center at this point. You know you've got h C A Healthcare, biggest owner of hospitals on a for profit basis, up more than eleven percent in today's training, and smaller companies doing even better. Community health systems up seventeen and a half percent, ten at Healthcare more than twenty six percent.

So whatever is happening, it looks like it's being interpreted as a positive for the hospitals here. Yeah, and I want to talk more about the markets, but I do, and also go back to those FED minutes, and I'm looking at the bond market, because it does look like a slight uptick in yields, if ever so slightly ten years yielding about point seven too before the Fed minutes now up to point seven four. Again minuscule, but nonetheless a little bit of a movement. Five year note was

yielding about point four three. Now we're with the yield of point four five two year note, that shorter end of the yield curve res yielding yielding point zero two. It's now I mean sorry, point to uh, it's now yield point to one. It's now yielding point to four. So a little bit of an uptake to uptake. Um, Kathleen, As you said, you know, all of this stuff is just coming across and we're all trying to make sense of it. Um, So treasury is a little bit lower

after that Fed mission. Fed minutes officials advocated quote forceful monetary response. That is truly what we got, Kathleen. Well, and we certainly did. And apparently according to the minutes. UM. We're looking at our market live blog, a few preferred to um do a fifty basis point. That's interesting meeting. I get some people saying, hey, let's don't wait. You know,

let's let's be as aggressive as we can, etcetera, etcetera. UM. I think for the bond market, UM, what they would fear in something like us is any hint that the FED didn't say what we all we were just talking about, you're going to keep this response in place. You want a forceful monetary response, and you want to keep it in place until the virus has been vanquished. And you know, be FED officials UM have said since then that they know that they can't sure the virus, they can't get

test kits out faster, they can't do that. But what they can do is do everything they can to bolster the economy, both to the financial markets throughout so that we don't get a bad financial crisis. There's been all those tresses and strain, but we've also seen that that just you know, you look every day to see if there's another headline on a new FED program. Right, well, and we're going to hear from Sorry to interrupt, Kathleen,

but we're running a shot in time. We are going to hear from Jpale tomorrow, right, that's right, And a webinar at ten a m. We heard from Charlie Evans from Chicago, FED speaking to Econo Club of Chicago, by the way, um, and he also sees some you know, long drawn out damage to the economy, so it will be very important to hear what he tells us. All right, Well, thank you both so much. Kathleen Hayes, Global Economics and Policy Editor, joining us with her analysis of the FED mins.

We're gonna have more on that coming up in just a few minutes, Carol our. Thanks to Dave Wilson as well. He'll be back a little bit later on with his chart and stock of the day. You're listening to Bloomberg Business Week Karl Masser along with Jason Kelly, and our top story certainly at this hour is the release of those minutes from the latest FED meeting meetings March three and also March fifteenth. Let's gettle bit more analysis. Steeplitz is back with US chief US economist at TS Lombard

on the phone from New York City. So Steve, hopefully you've had a few minutes to digest it. Although it was a live release, so all of us were scrambling to kind of make sense of it, because usually they're released a little bit of ahead of time. We can you know kind of figure out. Certainly are our journalists are in the lock up? The key points? Um, what

stands out for you from what you've read so far? Well, honestly, what's first of all, Hi, everybody, I didn't What stands out to me is it's sort of a time capsule, you know. It's it's like reading the minutes today from something that happened in two thousand and eight. I mean, so much as occurred from the time at which they met in terms of their own actions, as well as, uh, what happened to the economy since then. Uh, it has more of a it's an interesting slice of what they

were thinking at the moment. And Uh, I think one of the things that jumps out at me, which I was saying at the time, was there are a number of FOC members who said, well, with all everything that you're doing, don't cut the rate to zero right now, just cut a fifty basis points in leasing room so later. And and I think that was a valid point that that they were making, because everything that fed is done right. Um. To use a phrase that was popular in two thousand

and eight was to ring fence. In effect, the government mandated contraction. Uh. And that and the and the financial impact that that created, and to ring fence it from basically spilling into the broader economy to the point that something even worse, you know, gets created. But you can't do that with this right right, The broader economy was

impacted from day one pretty much, right right. So what you try and do is by ring fencing, what I mean is make sure all these good businesses that have been are now shuttered or severely impacted, make sure that they have cash that they can open with and that

they don't actually go out of business. Um. And then on the market side, make sure that everybody who is stressed in their positions who needed to raise cash could sell securities, that there could be a market price and securities, which if you remember was part of the problem with Bearer with Lahman um that there's a price for these securities and if they have to be in the bid on the office side of the market, that is the

FED they will be to allow that. So if you allow that to occur and you push credit where where firms are shuttered, then you the presumption is you have something that's still viable so that when they mandated shut down ends or as it ends, because it's not going to just end to one fell swoop. We know that. But as it ends, then these businesses can come back

to life again. Whereas if you don't do that, and this is what I mean by by the uh rein fencing, if you don't do that, then this thing just cascades through. And then when everyone goes back to work, that's great, but so many business will just just be permanently closed. And so what do you want to hear? So we're gonna hear at least from a speech perspective from j Pale tomorrow, we're continuing to hear from FED speakers. What

more do you want to hear that? Maybe more up to date and relevant that the FED is thinking about or doing, Given as you say, Steve, that you know this. This feels a little bit outdated these minutes at this moment in time, given how fast the world is moving. Yeah. I think there's two things here, and I think one is, um,

what's the simulus plan? Right? So everything they've done is to keep everything together, and I guess the stimulus plan is through the SPVs, and I like to hear more about that and more about we keep getting bits of pieces of information about this lending to main street business and I'd like to hear a little bit more specifically about what that is and how that's gonna work. Um. And but then I guess the stimulus is just for them to support whatever the fiscal side is because there's

no more stimulus that they can really offer. And then while it's early to think about this, and I admit that, but triage is not policy. And what is your policy? That that is the FED? What is the FENS policy as we reopened? Because death Comb is on the scales of capital market prices everywhere, they're the both sides of the market almost everywhere. Um, what is their plan? What

is their thought to unwind where they are? And are they going to go back to what they were over the last expansion, which is being the leverage for the system, their balance. It was a level of a system to allow um borrowing and and and and an equity issue was to occur at the same time, washing financial sector leverage to be fair, and Steve, we've just got about forty five seconds left here. I mean, the Fed's going to have to watch how this evolves on the other side,

just like the rest of us. We don't know what the longer term impact will be. What kind of behavior will we see, you know, in individuals and companies. We just don't know yet. I mean, we were talking to John Worth, I'm well known to the sports industry and saying that is kind of a loss when it comes to sports at this point. So, UM, just got about

thirty seconds left here. I I agree with you completely, and I don't expect him to answer that, but I think, um, I think it's something though that we should be thinking about as the economy solely does recover. And remember, our view is that the lows aren't into the equity market. We're looking eighteen dreds thousand. I still see a negative

GDP for the third quarter. Um, the overhang of what's occur ard is going to extend basically into the third quarter, very slow return and GDP doesn't get back to where it was in the fourth quarter twenty nineteen until late all Right, we really appreciate that instant analysis. Fast moving this afternoons ficial without that lockout. Steve litz c us economist for T s Lambard joining us on the phone

from New York City. Stay safe. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Let's turn to the doc our guy. Dr Ian LUs Bader, clinical Associate Professor of Medicine at n y U s Lango Medical Center, joining us on the phone from New York City. We love checking in with him because he gets it to a straight Dr leus Bader, how you doing, Hi, Thanks,

thanks for having me. Definitely challenging times out there today, having done twenty telemedicine visits many patients with you know, really classic COVID symptoms so loss of smell and see or clough. I personally know about twenty friends and colleagues with diagnosed COVID, A number of physicians who have acquired it, some fortunately, most doing fairly well. Some has unfortunately been hospitalized. So very challenging. Times are really it's all hands on deck.

Are friends who are in dermatology, urology are being called into the hospital to really help manage the huge volume of patients. So it's it's a challenge. So when you read are you know here Anthony Faucci as we know at the National Institute of Allergy and Infectious Diseases, you know very well known now because of the virus updates and SEANTA daily basis. When he says, um Dr les Bader that the start of a turnaround in the fight against the virus could come after this week, how do

you see that? How do you interpret it? Because I think it is important that we not run into fast But how do you interpret that? Thinking? Well, Dr Faucci is is a legend. I remember him from the HIV days back in the eighties, and so he is. He is a very credible expert for a long time. And uh, and and hopefully the models are correct, and hopefully the numbers are correct. I can tell you the system, certainly, the hospital system is that max capacity and certainly very strained.

UM it's always challenging when when some of your colleagues are succumbing to the same disease that that you're treating. And I think we have frustrations. I think a lot of the numbers we have are inaccurate because we really don't have testing. Getting um Miley symptomatic patients tested, UH is very difficult. You know, what's advertised as sort of the fifteen minute turnaround is very very limited. People are asking intelligently, I must say, patients asking about antibody testing

they think they had it. Is it safe to go out those i GM early antibodies and i G G antibodies. So many people, including physicians, would like to be tested, and I think when we do test all those people were going to see the case number much much higher than what's officially reported. So hopefully he's right. Hopefully the the peak is sort of cresting at this time because

the system certainly is is strained. I myself will be on call on the hospital next weekend, so certainly I would it would be great if the numbers begin to come down. And we also really need better, better treatment. A lot of patients are in studies for that plaquinal hydroxy chloroquine and zpac io sex inhibitors, but we really also are lacking data on what's the right approach to

treat people. So that's a lot of supportive care. My senses, when all this data is in and all the ventilators have arrived, the storm will have passed and in June or July will have ten thousand extra ventilators and lots of studies and uh, you know, most of the storm will have passed. Unfortunately, so only got about a minute left. Dr les Bader, I gotta ask you just from a very practical perspective, because we're talking about it in our house. When do we are a mask? You know, in general,

I think it's good to be safe. Most people in their household, if they've had it, they've probably exposed to other people. So unless someone for sure in the house knows you're in quarantine, you haven't no one else did, that's reasonable. It is reasonable to wear outside, although I must say there are so few people on the street you haven't more you know you've got. But I think if you're going into a closer space, that's reasonable if you're sure you haven't had it to where it play

it safe. You know, Gloves, if you wash your hands regularly, are probably unnecessary. So I think it more is better when it comes comes to masks, I think that's reasonable to do. I'm going to replay that from my teenage daughter who keeps fighting me on it, like I can't breathe through it. I'm like, just put it on or

just wear it. Figure it out. Figure it out. You do get used to it, and I think this is also a time to think about I hate to say it advanced directives many patients who are older who are sick. We know they get in the I c U. It's a mortality to the I see you think about it doesn't hurt to sort of say, what do I want to important to think about that? All Right, We're gonna put We're gonna talk with you more about that the

next time we catch up. And we've been very fortunate that you're able to spend some time with us just about every week. We really appreciate Dr Ian Lesibator, stay safe out there, Clinical Associate Professor of Medicine over at Lango Medical Center. This is Bloomberg Business Week with Carol

Masser and Jason Kelly on Bloomberg Radio. I also think it's notable, and I just want to take a moment to point out that Newsom also has been doing some fairly remarkable things in terms of not just allocating his states resources within the state, but also reallocating them when

they're not needed, sending ventilators to New Yorks. Yeah. I mean, it's really just amazing to think about how important New York, California and all of this is, especially as we move on, as you say, to this next phase, it's really um it's an important thing to to keep track of. And as you say, it's it's ventilators, but you know the PPE and everything else. Yeah, exactly. I mean they said their initial goals were five hundred million PPE, you know,

and it's all its various forms. And then of course as the you know, the trendline and how the virus um, you know, the models, how they played out has given them an opportunity to kind of take a second look at that, and then that's how they've been able to certainly spread out the equipment not just to their state, but to other states. So I think I don't listen to you. I listened to you, listen to feel free to tweet me. Does he always listen to me? And

don't think I mostly listen to you? You know who I always listen to and read? Though? Is Michelle what a rock star during all of this? Because we're always interested in what's going on in Wall Street, maybe now more than ever because at the crux of this geographically but also in terms of the recovery, really important to understand what's going on there. She joins us on the phone from Vermont. Michelle Davis does Financial Reporter her story yesterday.

I feel like set the tone for everything that's happening. Greed and fear collide. Wall Street calls traders back to the office. So Michelle, help us understand what's going on when it comes to Wall Street people going to work,

not going to work. What do you find? So we have been hearing from traders across Wall Streets that they are getting pressure from managers to go back into the office even as you know, infections rise around them, you know, not only around New York City, but in some cases on the trading floors that they had been working on UM.

And I think this is a really important story because when we talk about Wall Street and traders, you know, these are white collar workers that you know, they're not a group of people that tends to realizeit much empathy from the public, but there are people who are facing serious pressure here to choose between you know, keeping their jobs in some cases that they're if people senior to them are pressuring them to come in UM and putting

themselves and their families at risk, or training are straining the health system. I gotta tell you, greed and fear collide. That has been our theme since we saw it on the Bloomberg terminal because it does feel like as there are more Michelle, you know, optimistic trend lines when it comes to the virus, hardly are we out of it? But um, you can see that folks are saying, I saw it in my neighborhood. My daughter and I were walking your dog and there were more people out yesterday

and we were like, what's going on here? Because we still you know, we've still got to be in this shutdown mode in order to make sure that the models you know, work for us here. So, um, you know, what are you so what are you hearing from individuals? Are they they're feeling pressured? Um? What are you hearing from the firms who say, wait, we're not pressuring them.

So it's of course, uh, very mixed. There are some firms like Goldmen Stocks that have said publicly that you know, very high percentage more than nine of their employees are working from home and have been able to successfully do that. At JP Morgan for for the trading workforce, that it's closer to eight percent working from on the trading floor. And you know, the banks say that this is all

a balancing act. They are trying to juggle keeping markets functioning like traders are an essential part of market stability and and people say that if we were to just close markets everyone could stay home, it would lead to way deeper issues in terms of stability and and you

know of the market structure and liquidity. But the people I'm talking to sday at least at JP Morgan, we got our hands on this email that showed that UM senior credit head had told his employees that even though overall at the firm, you know that the directive has been please work from home if you can. UM this manager had said, you are you have to be on the trading floor. You have to be in the office unless you have a condition and you have a doctor's note.

So the banks are saying, you know, they would never force anyone to come in who doesn't feel comfortable coming in. But yeah, but you know how that is. Jason and I talked about that's the thing. So that is the thing that I keeps your in on Carol and I both Michelle, which is this notion of there is a

very big difference. I think we're all learning it between someone saying, listen, if you don't feel comfortable, you don't have to come in and basically saying, look, we are doing this for your own good and for the good of the firm, and for the good of society. Candidly, I do feel like that's a vast difference that you guys really zeroed in on this story. And we know about ambition, we know about you know, people wanting to do a good job and provide for their families and

all those different things. But at what cost. And this isn't just about you know, someone saying well, I'm a tough guy. This is about like the number of people who are out in social distance and and the spread of this virus. Right yeah, And and I talked to people who who pushed back on this idea that you know, they needed to be at the office to be able

to to you know, appropriately do their jobs. Some of the people I talked to you had been working from home already, and and things had been going smoothly, and then they got calls from manager or pressure from other people to come back and just I guess, to differentiate themselves from other terms that that maybe had a larger

workforce at home. I think this is going to be so fascinating to watch, you know, especially again, like this is our sandbox that we plan Wall Street and you cover it as we said so well, Michelle, but you know, as a lot of New York, especially when it goes comes to finance, as New York finance goes, so goes a lot of the rest of the world, And you do just wonder what this looks like on the other side, and whether you do have a meaningful number of people, Carol,

who stand up and say, you know what, No, I'm not going to do that. That's not it's not good for me, it's not good for my family, and I can't I can't do this anymore. Yeah, exactly. And we've seen this in organizations right where this has gone on, where you know, it's not until we feel like a number of people or our managers are doing it that we feel comfortable about doing it. Setting the tone absolutely all right, Michelle Davis, Thank you so much. Always good

to catch up with you. Michelle Davis, finance reporter, rock star for Bloomberg. Been all over this story joining us on the phone from Vermont, Carol, Yeah, I think it's really important, and I just think this is going to be key in terms of when we get on the other side of this and how we all go back to it, and I think there's going to have to be some coordination between companies and organizations and certainly within governments, even though states are going to probably do it at

different times. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Well, I feel like we've just been been having the show of like our favorites in in many ways home coming it really is and virus COVID nineteen version. I know, we go from Michelle Davis to to now one of our one of my long term friends, a friend of the show, uh Dan Morgan, down with Senovis in Atlanta. Known him for a long time and looking at the markets and he's

really done some thoughtful analysis. So Dan, great to have you with us. And first of all, how are you doing. How's it going down in Atlanta? Oh? Thanks are good? Hi Jason and Carol. It's a little quiet down here when you're driving around on the streets. I don't know if it's like that in New York, but uh, uh yeah, it's like that everywhere. I guess, yeah, I do wonder, you know, just to dwell for a minute on this,

Uh Dan, you know, Atlanta. Obviously it's been different in our listeners and and poor Carroll have had me listening to had to listen to me, you know, talk about maybe, uh, the governor of Georgia being a little bit but behind the curve in terms of closing things down and sheltering in place. But it sounds like Atlanta is taking a little more seriously these days in Georgia. Yeah, you're right, Jason.

I think initially it was kind of a thought that there were these kind of epicenters like New York City in San Francisco, and it wasn't quite as a big deal here in Georgia. But you know, the number of cases picked up and it's become more of an issue, and I think they have taken on pretty much the same precautions now they're just pretty much everywhere. Eld Hey, you know, Dan, is there an understanding like, you know, it's hard for us certainly here in New York. You know,

we see it firsthand. We understand how serious it is, and we're all in lockdown. But I do wonder how other states are feeling when they're like, you know, it's not so bad here, but do we all understand kind of we're all in this together, do you think. Yeah?

I think so, Carol. I mean, you know, like initially, I think it was thought that it was kind of a separatist type of thing, but I think now, um, you know, we have the Disease Center here in downtown Atlanta, so you know President Trump is down here very often doing conferences. So I think, you know, I think at this point, like you said, Carol, I think we all feel like it's something that everyone has to fight together.

All right. So you're an investor. At the end of the day, you look at the markets, you look at individual stocks. Dan, what do you make of this? And as I alluded to, you've been doing this for some time. You've seen some downturns, you've seen some crises. How do you approach this one maybe a little bit differently? Well, you are right, Jason, I mean you think about it.

I hate to admit this on the air in front of everyone, but I've been in the business since nineteen and when I started, the Dow was at two thousand, and I went to Black Monday, and the Dow is now with twenty two thousand. So I have a little different perspective than maybe somebody who just got in the market maybe the last five or ten years ago. But you know, this is obviously a huge pullback. It's you know, in terms of you know, from top to bottom. You know,

it's about a third. It wasn't quite as bad as the housing bubble. You know, that was what fifty six percent from the top to the bottom. So you know, it's it's not as bad. But you know, I don't know about you guys, but I'm kind of taking and stride um. You know, it's it is a huge negative.

There's sectors that have been absolutely obliterated, but there's also you know, there's also some interesting opportunities out there in terms of various stocks and sectors that UH investors could kind of think about, you know, going forward in this kind of new COVID nineteen environment. So tell us about some of those What are you thinking about? Yeah, well,

you know, technology, you know, that's my eerie of focus. Um, you know, and again it's you know a lot of the core themes that we kind of started off the year talking about Jason McCarroll I think are still in place. I mean, you think about you know, the big build out in terms of the data center space in terms of infra structure as a service, in terms of cloud. I mean that's still I don't expect to really change um,

so that should be a good area going forward. You also think about the roll out of five G. Everybody's saying now that Apple is going to probably push that into the first quarter of calendar twenty one, but I

still expect that to continue to roll forward. So even though we know about all the bad stuff that's going to happen, right you know, and some of these sectors that you can just keep reporting about it all day long, it's so depressing, it's nice to kind of take a step back and say, wait a minute, you know, it's not all that bad. There are some certain things that are good out there, and there are some certain sectors

and companies that are actually going to benefit from this. Dan, I gotta ask you because one of the stories that Jason I talked about specifically for our New York audience was about the creation of a w f H e t F Work from Home e t F, about the expectations that more people will ultimately be working from home after we get through this virus, and that's going to benefit cloud companies and a few others do you buy

into that? Well, Carol, can I be a part of this so that I can be like saying and get a code name and get some sort of copyright off you know, that would be awesome? Yeah, I think so. I mean if you think about the names in that group, right, we all know them, right, Zoom Video Technology, which did an I p O you know recently and it's just done fabulous, right, That's been one of the plays in that space. Um, you know you think of Microsoft with

their team's app. That's another area, Slack, which isn't quite profitable, and then like you said, Carol, you start to kind of take that out and say, well what does that mean for the cloud? Right? And then you think of like Amazon and a w S and Aser with Microsoft, and then you look down at the grandeur level in terms of who's producing the data center chips like Nivada

and a m D and so forth. So I think you could put something together like that that would be really cool and uh, you know, trade market or code name it and uh then everyone will refer it to that, and then you can have the trademark, you know, revenue that comes off of it. And so how much do you worry. I guess Dan that some of these gains when it comes to some of the tech names and are are short lived only because the world sort of reverts back. How do you sort of make the call

between what is? And you and I used to talk about this, and we talked about something conductors, like what cyclical and what secular in terms of you know, these changes. How wary are you of the of the world snapping back? Are you so convinced like many are, that the world has just fundamentally changed? Well, I think it has to some degree, Jason. And like the names that we just talked about in some of these themes, they were in place before and now we're kind of saying, Wow, it's

even bigger than we thought. So I would expect that to continue going forward. And you know, I would agree with you. I think it's gonna be a little bit slower coming out of the second quarter than people would have originally expected. I think most of research I was seeing initially was going to be like a V shape recovery. But now we go back and we see what's happening over in China and we see how kind of slow

they are to get back on board. You start to wonder if this thing is going to really linger throughout

the remainder of the year. So I would agree with your first point, Jason, and that is that, you know, this is kind of a post COVID nineteen environment, and I don't know if we're ever going to go back to the way it was before and our thinking and you know, these are still fundamentally sound themes that I think will play out even if we see that reversion, like you met, going back to the more traditional legacy sectors.

So Dan, when you sit back and just take a break and you think about like you know, you, like Jason, like myself, like a lot of others. You know, we have seen different crises, whether it was not eleven, whether it was certainly the financial crisis, you know, other economic and market meltdowns. This one, though, like folks are saying, you're gonna be telling your grandkids about this one, you know, provided that your grandkids, you know, aren't giving you the

next version of COVID. You know, that was the Michael Lewis line, right, Yeah, thank you for giving him credit because it was like classic, Like I read it this morning and I'm thinking, yeah, like I don't know how do you see this when you when your brain is a moment to breathe and you just think about kind of what we're going through and the impact it's having and will have maybe longer term. I don't know what

comes to mind. Well, you're right, Carol, because you know, you go back and you look at all these other so called pandemics, right, that have occurred recently, right that we can remember, right, the stars, you know, you think of the bowla, you think of all these different things are out there yet bird flu Zeka. So this is kind of you know, I think initially that's how we looked at it. Right when the news started coming out

of China. We're kind of like, okay, well, yeah I get that, and yeah we may get a little bit of a pull back, and but I don't you know, like you said, Carol, I don't think we could ever have anticipated, you know, kind of the complete shutdown of the economy for the next couple of months, and you

know what would be the impact of that. So, you know, if you go back and you think in terms of you know, these previous huge corrections, and of course the one that always comes to mind because you know, basically the fact that it's the most recent that most people can you know, rem member is obviously the big housing bubble. And yeah, you know, the only thing I can say, and again it's it's kind of strange because everybody's so negative.

But I'm I'm trying to stay positive. And that is that, you know, if we look at where the economy was back then, let's say, you know, in two thousand seven, around this in twenty seconds, my friend, Okay, I'm sorry, the economy is in much better shape than it was back then if we look at unemployment and other things such as household debt and all these other variables that we look at. So I'm I'm still optimistic, guys, and I hope you guys can stay on the show. Right, well,

we can talk. You're optimistic having talked to you, absolutely all right, Happy Easter, Dan worried. Hope you get to at least virtually celebrated down there at Christ the King brother Journal. But you let me drive? Oh no, no, no no, no, please, I'll do the ridings. I want to drive. Just drive, baby, good question, trying. This is the drive to the globe.

Thanks well, drying us on Bloomberg Radio. Yes, and do need time for the drive to the close on this Wednesday or twice is with US chief investment Officer Multi Assets Strategies at American Century Investments, some four billion in assets under management. He joins us on the phone in Los Angeles. Rich, nice to have you here with the here with us. How are you doing. Oh, we're hanging in out here. You know. The wave hasn't come out yet.

We're obviously watching you guys very closely, but we're doing Okay, you're doing it. Yeah, it's it's been interesting. I feel like to watch from across the country what's going on out there, and probably vice versa. There, Rich, you know, we've got and Carol and I've talked a lot about this.

You've got Andrew Cuomo here, Gavin Newsom there. Um, you know, two guys who've really seemingly stepped to the fore and and obviously for similar reasons, because heavily populated states very critical to the economy and critical for for the economies of both states to to get back on their feet. Clearly that is on their minds as well, I would imagine. Oh yeah, no question, we're very appreciative of the actions of both governors of both states. But you know, we're

not taking it for granted out here. I can't speak for everyone, but we're definitely preparing for the world and hoping for the best like everyone else. Well, I'm curious then, you know how your clients are feeling at this point too. I mean, this has been you know, we have seen crises.

We've all lived through the financial crisis, but the volatility, the swings that we saw certainly in the market, and then to see our economy, not just a sector of the economy, but the economy in the United States really come to a standstill that is unprecedented, certainly in our lifetime. Oh, no question. And investor reactions as you'd expect, or running the gamut or spanning the full spectrum from fear to

greed and back again. Um. And it's it's following a number of things, not the least of which is the trajectory of the coronavirus. Right that this is an unusual situation where the cause and the remedies are from outside the realm of the economic and financial world. Right, it's if you want a good forecast of stock earnings, you really need to ask a medical doctor at this point. Well, that's exactly right. I mean, and and that fear versus greed.

You know, we were trying to we were taping Caroline, I were our weekend show Are we Can Radio show this morning, sort of piecing together some of the good interviews that we've had this week. And you know, the two things that we identified were fear versus greed and markets versus medical. You know, those seem to be the things that everyone's wrestling with. So as an investor, and now we've had the FED you know, sort of retroactively in with these minutes today, what do you make of it?

What do you do at this moment in terms of helping folks manage a portfolio? Sure, well, a number of things, you know, if you if you look out at the environment. Um, there's some good news more recently, the easing of the credit crunch, the hoped for oil deal being imminent, the likelihood that this is a V shape as opposed to

a U shape recovery. Uh, there's good news coming out from uh, you know, a number of countries and states on the trajectory of the virus, the medical front regarding treatment, massive monetary and fiscal stimulus, and and likely another phase phase four to come. But a lot of that good news is not so much good news as it is an attenuation of the bad news. You know, it's not as bad as we thought, kind of like red meat or my high school friends. You know, it's not as

bad as we thought, but it's still pretty bad. And there's a big difference between um turning the corner and just seeing the light at the end of the tunnel. It is likely, we believe that we haven't hit the true bottom yet. It's still pretty murky down. Their credit downgrades keep coming. Uh, there's rising defaults and bankruptcies, supply chain disruptions economically around the world are really not fully fleshed out. There's many secondary and tertiary effects to come.

So we are we are not jumping back into this market um full bore. Now. If if there are speculative moneys and you have clients that have a very high tolerance for risk by all means, and they have some powder that they kept dry, there's a lot of bottom feeding going on. But for many of our clients, especially in our one choice target eight funds, these are retirement assets. As we've said many times, you want to treat your four oh one K like you treat your face and

not touch it. That's good. That's really good. I'm going to use that. That's really really working on that one. Uh. Actually, to be honest, they barred it, but it's a good one. Interview. No, but I do wonder, you know every time we you know, so many folks though, do come on and say, well, it's a long term you're you know, your folks for the long term, you know, not a time to sell. Well,

certainly not time to sell at the bottom. But you know, people lost a lot of money even though we've bounced back. I mean, this whole idea of preservation of capital that needs to be you know, part of your investment thesis, no question. Now, you know, hoping or assuming your portfolio is well set up from the get go. Uh. You know that is in terms of its asset allocation. You it's not that you want to stick your head in

the sand and not do anything. Um. Certainly we would not advise knee jerk reacting or selling in a panic, but managing your asset allocation through a steady or methodical rebalancing algorithm is a tried and true way to navigate times like these. In other words, as the market moves and your portfolio drifts away from your strategic or normal or targeted asset allocation, you want to rebalance back to that target periodically so that you stay true to your

appropriate asset allocation and risk tolerance. You now, if you if you do it ad hoc or knee jerk, it's not gonna work. If if you do it too often, you're too frequently, then incur a lot of transaction costs and just you don't be subject to whip sign But a steady, methodical program of rebalancing your asset allocation is always a smart move, especially in volatile times. All right, well,

we really appreciate the time you've given us. Uh some nice, nice little quotable quotes, some sound bites were definitely gonna be stealing from you going forward. Shirts and bumper stickers and exactly, I really, I really like it. All right. Rich Wise is chief investment officer of multi assets Strategies for American Century Investments. They look after about a hundred fifty four billion dollars. He joined us on the phone from California. So a big money manager, and you've gotta listen.

They're managing so much money for so many different people. You've got to have some pretty coaching advice I would mage, but this is another reminder and lesson that. Right, you know, when the markets are constantly hitting record high after record high, it doesn't mean it's going to always go that way, and you never know when something can come out you know that nobody was predicting, like the virus and really

bring down your investments a lot. So if you're closer to retirement, you have to make sure that you're protecting yourself against these unforeseen stresses on the market. Thanks for listening to Bloomberg Business Week. You can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio