Walmart Creates New Approach Toward ESG

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. They are the nation's biggest private employer, well known household corporate name, one known big time to our financial and investment audiences. We're talking about Walmart. It's also a company that is on a mission to become a regenerative company on all levels. So let's get into it with Walmart executive vice president and chief sustainability officer.

She's also president of the Walmart Foundation, Kathleen McLoughlin, and she joins us on the phone from Canada. Kathleen, so nice to have you here on Bloomberg Business Week. How are you I'm great, Thanks Carol, thanks for having me. It's super to be here. Well, it's super to have you here because you guys see so much in our global economy, have to deal with so much in our global economy when it comes to supply chains. First of all, step back if we could, or look back past year.

Tell us about the year on your world, uh, from your perspective at Walmart and the impact on e s G initiatives. Yeah, well, you know, our focus when it comes to e f G really is on shared value meeting. How do we as a business address the issues that are most important to our stakeholders, the societal issues that are relevant to our business important to the stakeholders, or we can make a difference through our business. And boy, what a year it's been. Um Covid obviously climates what

we're hearing about nature, equity, economic opportunity for people. You know, we had it all and so you know, many ways when when COVID really struck, we thought, gosh, this is gonna make it things really challenging. Graphtakes step back. If anything, it's actually strength and their resolved and how us go

faster on just about everything. Well, you know that's a great point, and I do wonder this last year laid bare things that we knew were already existing, existing in our society, but nonetheless kind of hit us bam in the face because we were all at home and kind of taking it in or feeling it. Has it helped in terms of the timelines and aggressiveness that you can apply to E s G goals at your company, Yeah, it has, you know, as you say, it really has been a moment when all of us, um, you know,

I had to sit back and take notice. And I think we realized a few things. One is the power of individual action. You know, everybody acting together can really turn the corner on something that's global in scale. We learned that with COVID, we're seeing the same thing with climate or equity or other things. So it really did help us elevator ambition and in many ways we have

moved faster. So you know, for example, in terms of the response to COVID, our first concern was associate safety and because we even continue to operate in terms of PPE and protective equipment, plexic glass, all those kinds of safeguards, additional emergency paid time off leave policies, hiring an additional five thousand people to put some slack in the system, will make it easier for folks to stay all that they felt they needed to and so on. So all

of those kind of things. But in terms of our omni channel transformation to serve the customer well in a contact less way, we accelerated our expansion of O g P for example online grocery pickup sites, and we now offered that in three thousand, seven hundred to see locations, So we moved faster on that. You know. In terms of climate, we elevated our ambition. We were the first retailer years ago, back in two thousand sixteen to set

a science based target for emissions reduction. Um, this last year we elevated our ambition and said, okay, let's set twenty forty as a date to get to zero emissions in our own operations. Not met zero, but euro and let's go faster. You know. UM, we did set out a broader aspiration to be to become a regenerative company, which for us means needing to go beyond just being

sustainable but actually build back. Whether you're talking about climate, our natural ecosystems are equity and you know that's huge, right, Like, it's not just about reducing your impact, but then kind of bringing back our climate and our environment. Right, that's just one example. You know, we're now at a point we know from the science that we actually need to draw down emissions, you know, not just avoid further emissions.

So it's a it's a higher bar. And similarly on equity, you know, we all felt the impact in a very visible way of what happened with George Floyd, and like many others, caused us to reconsider what could we do, What more could we do with the assets that we have When it's our jobs, our purchase orders around equity, and it's it's not a matter of holding steady on equity. We got a lot of work to do to elevate people, to address some of the wrongs of the past, and

newly addressed your harbors of systemic racism. Hey, I wanted to ask you because you pointed out that you guys are working towards zero missions across your global operations by you know, without relying on all of those carbon offsets that a lot of companies put into effect and use. Why does it take help me out here? So that's

what nineteen years from now. Um, part of me wants to say, and to be fair, I asked this of all the companies when we talk E. S G and all the big companies like yourself, why does it take so long? What is so difficult? Because most scientists are saying we're running out of time. If you look at what's going on the Pacific Northwest, just this like couple of weeks, the flooding in Germany, the flooding in China, we just maybe don't have another twenty years. Yeah, So

let's be clear. Is the date will hit zero in scope one and two. It's not the date that you know we'll start working on stuff, right A. Scope one and two is direct impact and indirect impact like through suppliers and things. Correct. Um, that's go three. So our science based target covers all of it. Here's what we're doing, and here's to answer your question about So for our own operations, that includes the electricity to power our stores and our dcs you know, fulfillment centers and so on.

It's our on site fuels, it's refrigeration equipment, refrigerants, and it's the tractor trailers you see on the road that our labeled Walmart. Right, it's the heavy rigs that are carrying products around. So all of that getting to zero takes time. Some of it goes fast, and by the way, we're working on it every day. So the science based target has us reducing emissions every year. It's not as

if we wait. So you'll see if you look at our reporting, we've reduced our cumulative admission since two thousands, five teams substantially. You started on this, and every year we reduced for what will take the longest and what requires the technical breakthrough in those categories the long haul transportation and Kathleen, you know it is impressive. You go to your website and you look at the different you know, programs and initiatives that you guys are working on specifically

and making progress. Uh. And when it comes to your impact on the environment, I do wonder when you set out goals. We had an interesting Bloomberg story last week that just said governments need to get more proactive, that we almost need a response to climate and e s G. We need the government to kind of create crisis programming just like they did for the pandemic, to get to be able to kind of help the world and companies

get two goals faster. What's the company's take on that? Yeah, you know, absolutely, science based government policy that's consistent about a predictable operating environment and creates the appropriate incentive. You know, again align with the science is needed. Um. We saw it in COVID. I think the same can be said for climate. Um. Having some type of mechanism to encourage

climate action is something we would really welcome. Well, and then are there any specific initiatives that you think that the government could be helpful on? Well, I think what you raised in terms of climate action, um, And you know, I'm not a policy maker. I don't know the specific public policy mechanisms that would be best, but something that would encourage climate action in line with what we need to get to around a one and a half degree

warming scenario. You know, that's what we're shooting for through our own actions. And you know, I'd say we're going to do what we're doing in line with the science regardless. But I think it would help, especially in some of these areas. I mentioned transportation as one where we need technological innovation to actually achieve our goal by driving forty for certainly long haul transportation. Having favorable policy environment for

something like the carbonizing transportation would be just an example. Well, it's interesting too because I've been talking m We had a Bloomberg Global Sustainable Summit here recently and talking with the Cisco CFO and the CFO over at a bm BEV in there chief sustainability officers as well, and you know, there's lots of conversations about, you know, using government policy maybe to impact truckers to some extent because they create the most usage and destruction, if you will, to our

roadways when we're talking about infrastructure, and how by doing so that might help create more innovation right to a

more sustainable way. And so I hear what you're saying when it comes to trucking, because that's a big initiative, and you do wonder whether you know government policy along those lines can make a difference, right right, So, and then you know, coming back something you're asking me before the break in terms of emissions reduction, Um, you asked a really good question, which is, gosh, doesn't twenty four

you seemilate certainly would be late for the action. But the science based targets set out a trajectory that we are following that has us reducing, um, you know, day by days. So for example, our most recent reporting of our calendar year two dozen nineteen emissions, we're down over twelve percent where we started in our two fifteen baseline, and we're about to come out with our latest numbers for which you'll see that, you know, for the decrease.

So um, please don't take me as to just wait till we're moving as quickly as we and day by day that's the that's the day we get to zero on our scope one and two. Well, I have to say, what really caught my attention, and we were talking about this in our planning, is you guys are committed to protecting, restoring fifty million acres of land, one million square miles of ocean. Uh, you know you're doing these things aggressively. You're thinking about our community at large? What really moves

the needle? Do you think when it comes to reducing our world, our corporate world are everyone's impact on the environment And just got about forty seconds left here? Okay, well sorry, environmental goals we're now we're now learning that natural ecosystems are as challenge a climate. So that's why we set that goal and it is about rewiring food production, production of other products so that the way we do

that is regenerative to nature. We enhance for our health, we can improve water quality, we can improve our diversity. That's what's needed in our secret sauce as Walmart, and we invite other companies to do this too. Is to connect the big goals that we have to achieve a society to the practical action we can take through you know, in our case, business to retail business. And it's true

for any company. And that's really what he has He is about and recognizing that those things create value, financial value for the company as well as health society address these tough challenges absolutely. It's why you see, you know increasingly, right, the CFO and the chief Sustainability Officer like yourself working

hand in hand, because they do go hand in hand. Um, Kathleen, I know it's a big world and a big conversation, but thank you so much, and I hope we can continue it in the future because it's certainly something I know our audience increasingly cares about. She is Kathleen McLoughlin. She's Walmart Executive vice president, chief Sustainability Officer. On the phone in Canada. You're listening to Bloomberg Business Week with Carol Measure and Bloomberg Quick Takes Tim Stenovic on Bloomberg

Radio the World the financial markets. You know, we've been obsessed this week a bit with the COVID delta variant, and rightfully so. One story in the Bloomberg Today warning us that more variants are coming and the US is not ready to track them. This story also a Bloomberg Big Take and in the upcoming new issue of Bloomberg Business Week magazine on newsstands, online and on the Bloomberg

All Happening Tomorrow. Let's get to it with Bloomberg Business Week editor Jill Webber and Bloomberg News US Healthcare reporter Cynthia Kons, both of them in our Interactive Broker studio. Um, it's a mustry. There's a lot of information here. Is it a feel good story? It's well no, I don't think so. There's a little bit of Colonel of Hope

in here. But you know, the thing down we actually started talking about this story, um a while ago, and the thing that just made me um my ears perk cup was because at that time, variants, I don't they were not part of the bigger conversation, And in Cynthia was like, you know, there's this a threat that variants are going to come at us. We're gonna have more than one of them. But the bigger thing is we

don't actually know how to track them the US. Other people actually do do a better job of this, But that sort of the takeaway from the story is genetic sequencing is not something that has really been prioritized in the US. So the little kernel of hope is that there is this little patchwork quilt that I think we're going to talk about a little bit. But but Cynthia, why is the US not doing genetic sequencing at scale and and why are we effectively flying blind without it? Yeah, well,

it's a money issue. Um, there's no real center. Now. The CDC has some money from the Biden administration, but they're giving it out. It's not moving very quickly from what I hear from scientists in the field. But when it came down to it, we had these genomic labs at academic universities and they would seek, you know, grants, or they would apply for money and they would get rejected.

And this happened to so many scientists. I know one turn to crowdfunding, but he didn't get much money from that, and their one actually was very dejected and about to run out of money, and someone who turned her down five months prior because they didn't realize the importance of variant tracking came back and said, wait, wait, we want to give you money. So she reapplied. So it was a lot of really slap dash getting money where and how you could. And it wasn't Hey, here's a substantial

amount of money. It's going to be invested through academic centers and different parts of the healthcare system to get this done to well. First of all, I feel like you went through went out a rabbit hole when it came to labs that are trying to do this and put it together. Why is it so important that we

do this sequencing? So this is how we find mutations, and so virus like COVID's changing all the time and you have to do a lot of sequencing to figure out what's important, and that there are tons of changes within the virus that don't matter, and to matter, it has to be, you know, significant in terms of its infectiousness or how it harms a person. Potentially they get sicker things of that nature, artifacts, younger patients worse, or

something like that. There are distinct things that make mutations concerning, but the very virus is changing all the time, so you need to be keeping an eye on it in such a huge way in order to get enough data to say that this specific mutation is doing X, y or z to patients. And once you have that data, then you have a better handle on how to enact measures. This is how they decide, say the mask mandate may come back, or there may be longer quarantine time, versus

waiting to see the impact on the population. We need to see it's too late because then the disease just continues to exactly exactly. That's kind of how you would think of it in terms of the best key scenario of public health officials had the information fast enough, they could lock it down really fast. Granted, it feels like we're in a post lockdown world, but not necessarily just

in the US, it doesn't. It seems like that might not be the next That might be a strategy that's readily employed at this stage, but still it could be. If we know we have a highly infectious or highly deadly version things could be done to stop it from spreading too quickly. So the some of this sequencing is actually happening in New York in in Queens right. Talk to us about the Pandemic Response Lab and the work that they do. It's Pearl for those of us who

are cool Jill so Pearl, as it's called. This was an effort by a company called opent Trons. They do they create robots that help automate labs, and they basically applied to be a COVID testing center and they became this pandemic Response Lab and they were a COVID testing center for New York City and they augmented the city health efforts and that started in the fall. And what happened was early on they thought, okay, but let's figure

out what's going on mutations. So they tried to, you know, convene with health officials and figure out if they could get some money to start sequencing. And there was just no money for it. Again coming back to the initial issue of money. So because there's no money for it, but they were actually in a good position. They had

a lot of the technology. They decided to set this up and do the sequencing on their own dime to start out, and so they're doing the sequencing, and they're giving New York all their data, and now they're participating in trying to get funding from other sources. But they did it basically on their own dime, which is pretty remarkable when you consider that's not how businesses typically operate. Right Who else is doing a good job of this

in the US? There's states that are doing better than others, but they're still not There's still a lot of limitations within state based systems. But Michigan has a really strong system, but it still takes up to two weeks to identify and communicate a variant through the system that Michigan set up. But they are one of the bigger systems. There are some big labs around the country doing a lot of it, like Scripts in California. UM, there's different UM, the Chance

Zuckerberg Group was doing it for a while. Now they're trying to move into helping educate labs around the country and get up and going. But there are definitely a lot of places that are doing it. The problem is there there's a lack of cohesion to create something that we would consider really a system through which these books

are all participating in the same way. Well, if anything we've learned through the pandemic is that we need like a coordinated response, right, and somebody in charge of But where's the CDC or the U. S. Government on this saying well, wait a minute, we do not want this to happen again, So let's create a coordinated effort, maybe led by the CDC, and coordinate all these labs. Yeah. See, this is a piece of the CDC. And they did get this money and they are going to spend it.

But they told me, for example, are supposed to set up centers Centers of Excellence as part of the Biden proposal, which would help bridge the gap between some academic research where this is going on, and commercial labs and so on and so forth state labs. But they're not going to fund that until next year, the next fiscal years. So that's a problem. It's there's there's money, but it's

taking a long time to flow through the system. And so basically, you know, someone proposed something to be At one point in my reporting, I thought it was really quite an interesting idea, like should pandemic preparedness sit inside of these big government groups or should it be its

own segment of the government. Should there be an agency around pandemic preparedness because if you look at it, and I've covered this through vaccines as well, it's pieces of pandemic preparedness are kind of scattered throughout different parts of the government. And we do have a lot of pieces of pandemic comparedness, but we don't have a lot of cohesion,

not yet, even after all we've been through. Okay, so there's a little Like I said, there was a little bit of hope, it's not all bad, but you know, stuff we could fix now, um abroad, does anybody else do this better? You know, are effectively I feel like we're flying blind. We don't know what variants are out there, how bad they are, what the what their capacity spread is.

But has anybody else figured out how to do this yet or just just about the UK has done a remarkable job that came out of the gate really early March April. They were doing a remarkable amount of sequencing. When we say there's a UK variant, that's just because they've done the work to discover something that easily could have come from somewhere else. Um, when you think about it, possibly that's the same story with South Africa. So there are some countries and places doing it. We definitely need

more of this around the world. We need some flexibility. But technology is also moving quickly, and as we're developing smaller and smaller and more handheld or easily use sequencing devices, perhaps we can get this technology out into the field faster. But it's going to take you know, money and sinkers crossed and money. Money is what makes it all happen, all right, Jil Webber Cynthia Coon's check out that story in a new issue of the magazine. This is Blue Bark.

This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Stop yourself in, everyone, because, as he writes, a sloppy summer for stocks is going to test investor's stomachs. Here with more on his thinking, Bloomberg Market Senior Editor Mike Reagan, he joins us on

the phone in New Jersey. You know, this is one of those things, you know, Mike, where it's like Monday was one day in the markets, and then Tuesday was a completely different day in the markets, and it's kind of a continuation of what we're seeing today. I don't know when someone gives you a mission, especially like on Monday, what are they saying to Mike, Mike, are we coming undone?

What's going on? Yeah, that's that's kind of it. I mean, obviously, you know, we wanted to make some sense of that told me on Monday. Only not just Monday, but it started I don't know a little bit more more than a week ago, last Monday. And but even if you go further back and look under the hood of the market as you full full, No, I'm sure, it's just

been odd to see the shift and leadership. You know, I've seen there was a lot of optimism about the vaccine early in the year, and kind of the sense that you know, the vaccine would sort of be a switch that would end the buyers. We'd all get back to life is normal. These reopening stocks, you your cruise lines, your hotels, your airlines, anything else that you know involves just getting out of the house would really be in

the leadership um. And you know, the bond market given a sick similar signal that you know, good times we're on the horizon. Yields for rising, so for months are all that is un land. It's it's just made a big U turn UM. So it's kind of a fascinating sort of thing because you know, the vaccines are progressing UM. But I think the big thing is that the reopening UM, rather than being full steam ahead, sort of flick a

switch and everyone's back to normal. UM. It's kind of about two steps forward and step back thing, especially with this delta variant and and all the other variants UH that are cropping up and may crop up in the future, and that it's really kind of taking the life out of that reopening trade. So so the stories trying to trying to make sense of that. At the same time,

you know, people are still buying stocks regardless. Right. The experience be tied over the last year and a half is the market keeps going up, but it's that sort of back and forth and volatili among the leadership that I think for a professional investors it's very frustrating and very hard to navigate true UM. And this week is

a pretty prime example of that. I mean again we're seeing now we're seeing those sort of cyclical energy and financial stocks taking the lead once again, with bond yields coming back up a little bit, oil coming back up, but you know it's a it's another case where like you said, you wake up tomorrow and and and and see if it's take a step back day rather than take a step forward day in that reopening trade. Well, the bond market also fascinating right to juxtapose against the

equity market, and they obviously go hand in hand. You've got to look at both of them in this environment. But it's interesting, Mike, in terms of how equity investors read the bond market. I mean, we've got the tenure went what close to her hit one thirty maybe earlier today we're now at um. But what's interesting is higher rates usually indicate some inflation, the economy getting back to normal, but that can free so there's some you know, left brain,

right brain. Some equity investors say, that's good, we're getting back to normal and growth. That's what we want to see. But then there's the other side. Oh wait, now the Fed's going to back off. But we should want to see the fedback off, right, because the only reason Fed's been so low and doing all these you know, quantitative measures, is because we needed it because of the pandemic. So how do you look at the two sides of this financial market. I think it's a matter of Carol of

and you're absolutely right. You know, Uh, interest rates spodules are rising very fastly. That's that's scary. That's the states are gonna rise and then we're gonna go the other way when everyone's buying. But it's like, oh, well, that's bad. Someone in the bond market knows that, you know, the growth is gonna slow and and you know this is all you know coming to an end. But to me, I think and I think, oh, there's a lot of

research that sort of backs this up. Is what really um scares people in the equity market is when the bond market behaves in an unexpected way, uh, and in a fast way. If if rates are rising and everyone's comfortable that, okay, we've got a rising rate environment. Um, they're not going up too fast. But we know what kind of stocks will benefit in that. So so we'll load on into banks and other sort of reflationary trades

and that will be our leader. Kip and the On the other side, you know, the traders in the bond market are taken similar in they're saying, well, let's short the treasury. Let's let's all load into shorts on the treasury market and bet that they'll go down. So then you know when that positioning turns out to be off size. When okay, all of a sudden, everybody is betting on on a drop in bond prices and a rising yields,

and all of a sudden they start going the other way. Well, that really just catches everyone on the wrong side of the playing field, right, and so they have to cover those shorts, and I think that sort of then bounces back into the equity market to some degree. If you if you have to buy bonds to cover your shorts, well maybe if you're a multi asset hedge fund, you're

selling stocks to do that. Pay just quickly seconds here, I mean, there's also so much cash slashing around still, right, that's got to be given some support to the equity markets just quickly. Yeah. To me, that's a big sort of undertold story. I looked at the amount of money on deposit at commercial banks, the US seventeen trillion dollars, a third above where it was at this time in two thousand and nineteen before the pandemic. So to me, that's you know, that's a lot of money burning a

hole in people's pockets. That's going to get spent somewhere. All right, good, good, good, good reporting as always, and this is in uh Business Week magazine. Mike, thank you so much for that. Really appreciate it. Bloomberg Markets Editor Mike Reagan on the phone in New Jersey. I'm groom Macro journal now, but you let me drive. No, no, no home, honey please, I'll do the riding drivel. I want to drive, Just drive baby, good question trying. This

is the drive to the Globe Commune. Thanks. We'll drying us down on Bloomberg Radio. Just about ten and a half minutes left in today's trading session. It's been an interesting week already. But again here we are two days in a row. We see stocks trading higher after a Monday sell off. Let's get to it. Drive to the close with David Dietz back with us, managing Principal and senior portfolio strategist at Peapack Private Wealth. Manage it once again on the phone from SEMIT, New Jersey. Nine point

four billion dollars in assets under management. David, So, it's been an interesting week. Uh, there's been some concerns about the delta variant. There's concerns about economic growth here in the US peaking. How do you see it, especially as we are just kind of smack in the middle of

corporate earnings. Yeah. Absolutely. I mean, you know, if you had taken Monday and Tuesday off, you come in today after Friday, you would have thought nothing had happened when we had a uh, you know, a terrible day in the markets on Monday. But now we've got two back to back days with up volume and risk assets in favor. Again see for me, Carol. I mean, basically, if that was the extreme focus on the spike in the COVID cases due to the delta variant got people very worried.

We heard about more mass mandates, potential lockdowns and so forth. Plus the plummeting ten year treasury yield really spooked investors. But what we've seen here is with earnings overall expected to be up seventy percent year over year, the best we've seen in terms of you over year for well over a decade. Getting some good reports. People are saying, hey, look at these earnings. These companies are powering through. Um. Uh, you know, the concerns we have over the COVID virus,

and uh, the bond market woke up to that. We went from close to one point one to well into our one point to eight area. Um, suggesting that you know, risk austs that there are back in favor earnings backward looking outlooks are not h In terms of what you're hearing on outlook commentary, does it say to you that the growth momentum continues? We expected second quarter numbers to be pretty impressive, correct, I mean, if if they didn't

come in impressive, we'd really have some problems here. Um. But so in terms of what you're hearing from the corporate community about whether or not the growth continues the second half, does it give you enough confidence to say that the an ups that we continue to see inequities make sense? So, you know, that really is a great question, because yeah, the problem with now turning says they are in the rear view mirror and investors really care about what,

uh it's gonna happen going forward here. But you know, unbalanced. Um. One of the things we're looking at is the amount of cast is on corporate balance sheets. Now it's huge because since about two thousand and eighteen, and we also like the fact that a lot of buy backs are being announced. So for example, you know, Prudential just sold the division, they're gonna buy back about eleven percent of it's company in the next thirty months. Stuff like that

gives premendous support. And what we'd like about that is that shows confidence that they're not going to need that cash for a crisis going forward. It shows confidence in the current valuations of the stocks, and I think it gives investors confidence that there's some served floor under the market, right But it's not like they're putting it to building new facilities, hiring more workers, giving workers pay raises that

trickle down into the economy. David On, you know that, well, you know that's true, um But I've got my investor had On here and and sometimes you like it when companies, um are are not pie in the sky in terms of what they can do with the money in terms expand their business. They're taking a very measured approach, which actually may be the best from an investing point of view. You know, it's great to expand if you know that demand is going to be there. But if you have

some expansion, some return of capital. Historically that's been best for stock prices. What does it mean for easing some of the supply chain problems if companies are not willing to maybe step up and boost what's needed to meet those supply demands, or if they don't get those workers back, how much of a kind of draw down or pullback will that create on the system That might then pull

in some of the economic growth expectations and realities. Well, that you just touched on a key worry going forward, But I think you have to analyze what are all these bottlenecks due to. And it's a myriad of factors, but I would submit that one of them is the fact that a lot of employees, potential employees are hesitant to go back to work. All sorts of small businesses in our community are having trouble finding employees. We know with the high unemployment rates that they're out there. But

what's going to make them go back. Well, I think the opening up of schools. I think perhaps when a supplemental payments from the government start to wane. I think also when we can finally get COVID better under control. Knock on wood, please everyone get their vaccines done. I think that's going to help the bottle change right there. And of course some of it is is global um supply chains and easing of COVID. There was gonna help just when I mention a headline crossing the Bloomberg term

and all we were expecting. The Senate Republicans blocking the start of a debate on infrastructure. The Republicans want to finalize the bill before starting that debate, check Schumer. Of course, Senate Majority leader can call another vote to debate the bill next week. They were currently voting on the motion to vote closure culture, on the motion to proceed with that massive infrastructure wide ranging infrastructure building and HR three

six eight four. We're talking about aid for highways, safety programs on highways, transit programs and others. But again Senate Republicans blocking that start of a debate on infrastructure. Hey David, you know that has been I think one of the

other macro trends that we've been watching. If we're looking for things to provide some stimulus to the economy and even the financial market trade is infrastructure, which I'm kind of tired of talking about because how many administrations do we have to talk about before whether or not we get something done. Ultimately, do we get something done? In

your view? Yeah, I do. Um, I think there's a general consensus that you're basic traditional infrastructure, road bridges and things for the bring the internet to everyone will get done. I think what the market kind of life here is to talk about how to pay for it? Seems to be keep being put off. Um, people like my daughters say, you know why worry about a bundget deficits. It doesn't seem to matter here. And so I think tax hikes

are not going to be anytime soon. And so basically, again does the positive tie win to the market, more government spending in the risk higher taxes spoiling the party seems to be receiving a little bit Carol, all right, So where would you commit new money right now? Hey, you know we still like tilting two stocks. I mean, here's the number one thing to know that David and

yield the sp F one point three five. It's rare that it's above the tenier treasure, which means over the next ten years are gonna get a lot more incoming stocks and then abunk stocks. We would tilt towards value. Now, why would we do that is because valuations are so

much favor value versus growth. Now always since growth stocks generate earnings faster, there they have higher p s. But in this case they're about twelve percentage points higher than growth in in in terms of price to earnings ratio, that's three times what we normally see. Yet actually um growth in terms of earnings and growth stocks isn't projected to beat that much more than value stocks for the

next five years. So I think that value offers you better opportunities that don't forget that sector of the market and Viacom CBS, uh slumberg A, Wells Fargo. Yes, so Schlumberg A, Wells Fargo traditional reopening stocks. I think as the world reopens you have more energy. Man slumber j A is your blue chip in that area. Wells Fargo of course, as you're one of your best bank franchises trading not too far above book value coast to coast.

They're cleaning up some mishaps over the past couple of years, so that's going to take advantage of ultimately higher interest rates. Viacom CBS, they're in talked to perhaps partner up with Comcast streaming overseas now Carols at a first day or something that is going to go a little further Uporizon just reported today great growth and subscribers. Um. If you want a five G play, which is your right, with a good dividend, you can't go wrong there. I gotta run. David.

Thanks David, d It's managing principal, senior portfolio strategy at Pepack Private Wealth Management, on the phone in Summit, New Jersey. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News