Markets Fall Amid New COVID-19 Variant

chief strategist for Quill Intelligence. Danielle, Yesterday, as I was watching football and eating turkey, I was just kind of flipping through my Twitter feed. I started seeing more and more mentions about this South African varying here and then you wake up this morning and boom, Europe trading off three percent equities. Uh, and here we've got the U S market. How are you trying to contextualize the news that we're getting today about this new variant as it

relates to kind of just the overall economic outlook? You know, you know, I keep up this USA Today map of the United States, and two months ago there were only four cases up four states where there were COVID cases growing. I've had to flip the way that I tabulate now there are eleven There are eleven states now with cases falling, and the words the rest of the country has already got COVID cases rising. So I've been watching this pretty

closely for the last month. So this has kind of been an accident waiting to happen if there's a new variant that's going to come on top of this. So we've we've already got the bulk of the country. And trust me when I say, my my seventy five year old mother her birthday's Sunday, God lover um. She and

her friends, they pay attention to these data. And because we know that the savings, in fact, this was a good terminal story, because we know that the savings are concentrated in the hands of the wealthiest and the oldest, that really has implications for US consumption, which is the economy. Because they pay attention to where COVID cases are rising

and where they're not rising. They pay attention to these COVID headlines because they're the ones who who are going to tend to stay home as we head into this critical holiday season. And so Danielle, given that you have been following this closely, and like you said, I mean, this was an accident waiting to happen. If you look at US cases, I'm still curious. I mean, if you do look at the reaction in this stock market right now, I'm looking at the SMP five hundred down almost two percent,

biggest drops in September. Is this justified or at what point does this become maybe an overreaction? Well, you know, it's hard to say. I've been watching the movement decks very closely, and that's what I follow much more closely than UM than the VICS index. I followed treasury volatility much more closely. And you know, we've been seeing it in up very very rapidly, so the highest levels since

we have the pandemic breakout. So the bond market has been screaming that there's risk in the system for weeks now, and we've seen the yield between the two year and the ten year treasury slam down to one basis points despite the increase in the shorter maturity treasuries, because the

markets are concerned. At the FED, my former employer is going to be tightening at a at an increasingly fast pace going into two because even the most devilish as in Mary Daily out of San Francisco have advocated for a quicker tightening to combat the inflation. That I mean, I sent out a tweek that went viral a few days ago. There I've got almost a thousand. Like. All I did was take a photograph of Austin Mayer bacon in Dallas, Texas. It was ian there's something wrong. I

saw that. So there's something wrong with inflations. And it's a regressive tax that hurts the lowest income earners the most at a time when there's been no legislation past. And the little cast that is coming to US families, which is the child tax credit, is set to roll off as of the December payment. Daniel Worth, the markets is certainly reacting to this variant news this morning, and

actually on some decent volume. We were just noting earlier relative to obviously being a holiday, uh kind of day after on holiday. How do you think the FED looks at data points like you know what we're seeing today? Well,

this this is a friendly reminder. Actually it's a very unfriendly reminder to the Fed that they waited too long to tighten and that they're tightening into a slowing economy that was always going to be vulnerable to the next COVID virant, and now that we do have the next code mutation on our hands, that we're that we're staring at again with forties states, with rising cases. It's it's very problematic for the FED to be pressured by politicians

and there are quite a few politicis. Politicians have crawled out of their skins. When was the last time in your career you you heard quite a few politicians saying, gee, I think monetary policy needs to be tighter, and yet we have this chorus. So there's a lot of there's a lot of pressure to to to shift the narrative, especially with a hundred thousand print on jobless claims, there's a lot of pressure to shift shift the narrative away

from maximum inclusive employment back to inflation. Yeah. Absolutely, definitely a tight wire act for high wire act for the FED continues. Danielle de Martino Booth, thank you so much for joining us. We really appreciate getting your perspective here, your learned perspective here on kind of a new kind of a you know, monkey wrench thrown into this market and economic outlook. Daniel DeMartino Booth and chief strategist at Quinn Intelligence. Also, as she mentioned earlier, former advisor at

the Federal Reserve Bank of Dallas. So we always appreciate getting Danielle's view of the markets and of what this Federal Reserve may do big risk off day. Today's Charlie was just reporting let's get a look at what's happening with the small cap stocks. We do that every day at this time with Bloodmark Sucks editor Davilson. How's it going, Dave? Not well? I'm short. I mean the Russell two thousand down almost four and a half percent. That's more than

twice as much as the today's trade. Energy stocks weighing on the Russell is all prices tumble. Uh. The index steepest decline belongs to Calan Patroleum, whose ticker is CPN or CPE. I'm sorry, Uh, that stock down nineteen percent. Laredo Petroleum ticker l p I is down seventy and a half percent. Matt Or Resources ticker mt d R is down thirty and a half percent. Hotel the resort

owners are lower as well. Part of order decline among travel stocks, Ashford Hospitality Trust ticker HT is down sixteen percent, and the Grand Old Operies owner Ryman Hospitality ticker r HP is down about eleven and a half percent. Now two of the Rustle's biggest games belongs to companies that were named to the SMP small Caps six hundred indecks late Wednesday. Uh. They'll join that benchmark before uh next week's open on Thursday, U and one of them is

cars dot Com ticker c a r s UH. The automotive side is up eighteen percent and UH the other is engineering company n V five. Glow will take her envy e e and that stock hired by about all right, Bloomberking stock seditor Dave Wilson, thank you so much. We appreciate it. All right, Black Friday people are shopping, you know. I know I'm gonna drive by the Short Hills mall later today and it will be back. The question is how are shopping malls doing in general? How is the

real estate in the retail space doing. Let's check in with Jim Sullivan. He's a managing director and reet analysts at B T I G. Jim, thanks so much for joining us here. I know you've been covering the reets for a long time here. There was a time when, you know, you everybody just thought the retail brick and mortar business was literally going out of business. Has that happened? No,

absolutely not Uh. And in fact, what we've seen this year is the two major mall red that we cover, Assignment Property Group in mace Rich, they're both up delivered total returns of proximately before today. UM. And they've done so because we've in a strong recovery and retail sales at the stores UM. And it's been consistent really since since going back to March. So UM. You know, the delta variant in August had a little bit of a slight negative impact, but it was short lived UM, and

sales growth in September was robust so UM. The result is companies reported their third quarter beating rays quarter for both may Switch and Simon. So the stocks have done very well. And so we were talking to Bloomberg Intelligences who not' goyle earlier in the show, who is at the mall today? Uh? And it sounds like there's plenty of foot traffic. But I'm curious how you think about the risk of you know, these new variants, and in particular this one from South Africa, which we don't yet

have a name yet. Maybe that's coming, But I mean, how do you how do you factor that in to your analysis because it almost feels like a black Swan event we don't know which is going to be a really big deal. Well, I think you know the comment you just made is obviously the key. How serious this going, this is going to be? UM? How serious the reaction for those who infected will be in the UM uh you know, how long they'll be um they'll be impacted

by that remains to be seen. But if we make the analogy with what happened with the delta variant, which obviously increased infections substantially, UM, and that impacted the third quarter. When we look at the third quarter retail sales numbers, what we see and it will just say, as an example, apparel and accessories, which is kind of the key category for malls and for sales in the malls. You know, back in July UM clothing and clothing accessory stores their

sales grew nine versus UM. In August that sales growth fled to eight percent, but in September it was backed up to just over We saw something similar in the hotel business as well, where we did see some travel numbers decline, and we saw that hotel occupancy rates and room rates slid at the same time in the same way and had a similar recovery. So that was the

impact of the delta variant. Now, whether this variant is going to have a more severe impact or not remains to be seen with waiting for the information to see what impact it will have on sales. But if we make the analogy with the delta variant, it was about a thirty day impact. Jim, there's a you know, school thought out there in a retail that the the US is still overstored. What what what are you three companies that you fall say about that? Will there be a

lot more closures? Um? I don't think so. I mean I've been following this space for a long time, as you noted, and I think as long as I've followed, if two things have always been true. One is this too much retail square footage when you look at square feet per capita in the country versus other major markets. However, there's never been enough of the best space. So you had mentioned um in your prepared comments. The Short Hills Mall,

the short Hills mall cannot be expanded anymore. Um it is um it is capped out in terms of square footage, and yet in the zip code that its services has been a substantial amount of wealth created obviously over the last one to two years, both in terms of real estate prices and equity market prices. So spending power is increased and you have the square footage has it, so the result should be better productivity for the malls that are located in the best zip codes, and particularly big

malls and suburban markets cannot be expanded. Jim, thank you so much for joining us. Really appreciate it. Jim Sullivan, Managing director and read analyst at b T I e G. Talking about the mall business again, Folks aren't flocking to the malls. It appears here as we do Black Friday protests. Yeah, we're gona stick here for another two hours with you. We've got these markets just moving pretty dramatically. I want to bring a guy Johnson Bloomberg News from London joining

us for the next couple of hours. Guy, you as heady ripping day, very tough day in the footsie of three points six percent today. We were expecting to David to be a day that we would spend our day talking about shopping. Yes, it was meant to be Black Friday. It turns out it's Red Friday. And and we have

been yeah, looking at some really brutal numbers. Um this as we try and figure out whether or not actually we are done with COVID, not done with COVID and we got COVID under control, or as COVID got us under control. Certainly today it feels like it is the latter, because this new variant to certainly spook markets. I think it's just a lack of information Paul, that we that we have at the moment that I think it's really

spooky people. Everybody thought that they got their arms around understanding what delta and the variant was gonna mean, whether or not we would be able to control it with vaccine. Certainly, the evidence thus far has been that we were doing a fairly good job of that. Yes, we're seeing a pick up in Europe, but in areas where we have seen high vaccination levels, it does seem that we have our arms around it. Today that's been completely thrown out

of the window. The real question is does the health care sector had the health care sector seen this one coming. Let's find out. Dr April Capoo, acute nurse practitioner and president of the Association of Nurse Practitioners, joining us. Now, Dr, let's just talk about what we've seen today and what

we've learned today. A lot of people in financial markets have been caught by surprise by the emergence of a new variant that is much mutated and as a result, has the potential maybe to evade vaccines, to be more transmissible,

to be potentially more deadly. As you, as a health care professional, had you expected like something like something like this would happen, Well, thank you, I agree with you, and I think what we know is that until we have more of our population fully vaccinated, we're going to continue to see the emergence of the variants, and the variants will continue to get more severe, the transmission rate will get higher. We know this because we know this is what happens with viruses, and so we need to

get more of the population vaccinated. That's our number one defense. As far as what we're seeing today, still, the patients that are coming into the hospital, um, those the severe disease, those continue to remain the unvaccinated for the most parts or those that are very compromised, and it still remains to be the DELFA variant. Now what we're seeing in

South Africa today. Yes, this has been um big breaking news for everyone and we are following it very closely and we have to see what happens with this variant. But in the meantime, it is continue to urge to answer questions, to get the word out, to make the vaccine available because it has been shown to be effective in reducing severity of disease, severity of illnesses and hospitalization and deaths. And so let's get people vaccinated as our

number one tool. And then in the meantime, for those that cannot be vaccinated, they're not in eligible for whatever reason, wear the mask, get tested often. Um, but I completely agree we're going to continue to see these variants until we have more of our population vaccinated. So, Dr you're a professor at Vanderbilt University, one of the leading healthcare universities in the United States. It's also in a region of the country down to Nashville, Tennessee, that has had

some challenges with vaccination rates. With mask wearing, You're on the front lines here. Do you have any confidence that we in the US, and more importantly in other parts of the world, can get vaccination rates materially higher. Well, what we're saying, according to the CDC, now we've had about six of our population across the US is fully vaccinated, so that means they've had two doses, and then we've had over thirty seven million that have gotten boosters, and

now all adults are eligible for boosters. So we are seeing movement in that direction. But Tennessee, we remain lower UM or more around fifty of our population is fully vaccinated, and so that still means we have lots of work to do. I'm a nurse practitioner. I spend a lot of time out in the community talking to communities about the importance of vaccinating and answering questions. These are great questions that they bring up every day as to why

they're not getting vaccinated. Until answering those questions, UM is very important. Are you expecting that as we head into into winter that we are going to be seeing higher case counts? I appreciate that we're Novembre about to go into the say, but but I imagine it's still pretty warm where you are, are we going to see high case counts? You just give me a number that's in the fifties of the population vaccinated. Eastern Europe, which is in the mid sixties has seen an absolute explosion of

cases over the last few weeks. And that's what we're seeing in the US. We're saying seeing in case counts. We're seeing that as well. UM. However, we are not seeing the dramatic increase in hospitalizations and deaths. So that's that's the number that's very important to follow. UM. But we are seeing an increase in case counts, and so what is to come after that is very important to follow. UM. We need to make sure testing is available to everyone everywhere so that they can get tested as soon as

they experience signs their symptoms. UM, even if they if they are unvaccinated and they're going somewhere, get tested where MASK. We have to do whatever we can to reduce the transmission rate UM so that we can keep our numbers of hospitalizations and deaths down. That you mentioned fully vaccinated, that's tennessee, but in the United States we're around fully vaccinated. All right, Dr April Capo, thank you so much. We

really appreciate. Dr April Capo, acute nurse practitioner and president of the American Association Nurse Practitioners, also professor at Vanderbilt University. And again, guy, it's just challenging. It just seems like once you get a handle on one wave delta, here comes another one potentially. Well, yeah, that is what we're dealing with here. We The problem is we just don't know enough about it at the moment to form informed,

uh sort of decision making. We're cutting flights. But the but the suggestion of all the people I've been talking to today is that basically this is probably already spread, we should expect it to pick up. Well, I'll admit something to you all, um, A lot of the smart kids are talking about distributed finance. I don't really know what it means, but fortunately our next guest does, Cam Harvey. He's a professor finance at Duke University's Fuqua School of Business,

my former professor when I was a student at Fuqua. Camp. Thanks so much for joining us here. I know you've got a new book out, which is really why this is great to chat with you, entitled Defy in the Future of Finance. What is what is defying. So decentralized finance is a way to transact where you kind of

avoid a lot of middle people. So, for example, if you want to buy or sell stock, you need to deal with a broker, you need to go to a stock exchange and things like that, Whereas in decentralized finance, you're training with an algorithm, so the algorithm doesn't care if you're a buyer or seller. You sell or you buy with algorithm. So it takes a lot of the middle layer out, and decentralized finance does a lot more

because it's not just trading of securities. It could be UH, savings and lending, UH, it could be tokenization, UH, it could be insurance. That. There's many different things that are possible in this space, but the key thing is that

you take a lot of that middle layer out. And when you do that, it's very interesting because today, if you buy a stock, for example, you can buy it pretty instantly, but the settlement of the stock it actually takes two days, whereas in this space the settlement is immediate.

So there's no difference between execution of a trade and the settlement of a trade that regulates feel about that Professor, Um, we spend a lot of time over the last few years, uh, making sure that that a lot of price action on financial markets is centrally cleared. It allows visibility, it allows safety. Does this allow for that? So on the visibility, everything is transparent in these markets. So the current markets are

the markets that are actually opaque. And it's also the case that the same asset could be traded on multiple decentralized exchanges. And and let me be clear here, um, popular exchanges like finance and coin base, they're not decentralized finance. They're just centralized broker exchanges that people actually deal with.

And decentralized finance, you're just dealing with an algorithm. And look, to me, it's not too hard to imagine in the future we're gonna be dealing with algorithms, not just in finance, but in finance. It's kind of low hanging fruit to actually do this as sort of the regulators, um, And there's multiple layers here. Uh, this is a new space, and they've got a tough job because obviously cryptocurrency wasn't detailed in the nine three Securities Act, so they need

to improvise. But they need the balance and what I mean by that is nobody wants people taking the advantage of by people in the crypto space, and we've seen some of that already. But if the regulations are too harsh and they reduced that risk to zero, then these new ideas will simply move off shore and uh and and no country wants their best ideas to move off shore. So we'll see in the next few years some sort

of regulatory guidance. You know, I do think that that's important given that most of the trading today is just purely speculative trading in the too complex. So when I say decentralized finance, that's a small part today of what's actually happening. And indeed, today's market action verifies that most of the trading going on in the crypto space is

purely speculative in a risk risk off day. Um, you talk about the market going down two percent, to take a look at what's happening to bitcoin and ethereum bitcoin down seven point professor. You know, when I think about the centralized finance, and when I think that even you know, just just crypto, which we have some more experience with, I don't see it being led by JP Morgan or Bank of America who was going to innovate and develop

this new area of finance. Yeah, it's really interesting because you ask the traditional banks like JP Morgan and Bank of America to innovate, they essentially look at this as a cannibalization of their business. US. So decentralized finance is an existential threat to our current commercial banks. So so for them, uh, to be a leader in this space is fraught with risk because they're basically if they jump into this, uh, it means that their role will be

a much smaller role in the future. So this just to be clear, Um, decentralized finances, where you're dealing with peers, everybody's appear, there's no client, there's no customer, there's no banker. Everybody's appear and and that's a totally different model. So we don't rely upon JP Morgan or Bank of America and to innovate in this space. There's like a whole

new ecosystem out there. Uh. That is it's driven by economists and computer scientists to essentially rebuild our financial system, not to renovate, but to rebuild to reduce those current sactions costs and reducing those transaction costs is a good

idea that leads to economic growth. Can when you see a market like this, um, you know, it's just I'm just gonna talk since the pandemic where we had that dramatic sell off at the beginning of the pandemic, then an extraordinary rally, uh, and then you get days like today. Is today an efficient market from your perspective or how do you think about it? So no market is perfectly efficient.

So there's information that came to the market today, um, and it's negative information and we go into risk off. So it reminds me somewhat of March if you recollect that that was the month where we realized how serious the COVID nineteen actually was. Equity markets plunge, UM and other kind of risk on assets the same thing. So gold drop, UM, Bitcoin drop, and people piled into safe haven, which is US treasury bones in cash. And it's very

similar in terms of what is happening today. Um, we're scared that we're going to replicate or could be even worse in terms of COVID UH nineteen. And it's a risk off day. And again do you see that in the market. Uh, it's interesting to me that the so called safe haven asset gold is essentially unchanged today, whereas stocks are substantially down and as you mentioned, bitcoin is down nearly eight percent and the other speculative cryptos like

doge coin down even more. Like does that, in your mind draw a line between growth stock um, the mean stocks, the retail stocks, and crypto. Has crypto become very correlated with equity markets? Yes? So, and I've mentioned this for a very long time. So given the speculative interest in cryptocurrencies, they actually have data. So that means that when the market, the equity market plunges, they tend to do the same thing.

And again March is a good example of that. And then what happened afterwards, the stock market realized that we're going to have a vaccine eventually, UH it turned to a risk on situation. People piled into UH, into equity markets, drove them to all time highs. Gold went to its third highest level ever and Bitcoin went through the roof.

So so this is very consistent with the narrative that the crypto complex UH is very influenced by speculative investors theoretically, so theoretically the cryptocurrencies are decoupled from the economy in general. So bitcoin has got an algorithmic money supply that caps out at twenty one million. It has nothing to do with FED policy or FED money supply or any other

central bank. Yet given the speculative interest in the cryptos, they tend to move with the other risk assets, and they tend to move more than the other risk assets, especially in a period of a draw down like today. All right, Cam, thank you so much. We really appreciate your time here. Cam Harry, Professor Finance at Duke University's uh Fuqual School of Business. He has a new book app Defy and the Future of Finance, so as we all try to get a little bit smarter about decentralized finance.

I read that book. It's a quick way to kind of get up the speed. So I wreck commend that, and we appreciate some moment we became hurry. We focused on coming into today. What was happening with inflation. We've seen obviously the supply chain crunches. We've seen the impact that they've been happening having there's been labor shortages. We've been watching that carefully. We've obviously seen a high price

of fuel as well. That started to certainly abate today with a massive move down in the price of fuel. The question is is this just a brief blip and we bounce back, or are we going to start to see actually a new normal starting to assert itself as we realize that maybe actually we're going to be dealing with this, with this COVID crisis for a lot longer. Supply chains absolutely front and center, particularly on a day like today Black Friday, So let's get some some insight

into what is happening. Page Van Fossen joins us now vice president of e Commerce Operations for DHR, working on the supply chain side of the business. Page. Welcome to the program. Thank you very much, indeed for your time.

We've been talking to a number of people already about how the shopping season is going today, that there does seem to be a sense that we have fully stacked shells that actually not only in bricks and mortar, but also any commerce that actually inventories are reasonably good and as a result of which consumers are going to get what they want. You've also been working very hard just give us your sense kind of where we are, how how well stacked are we with inventories. Do you expect

the consumers are going to see any shortages? I would say right now, our facilities are looking really stacked with inventory. As you say, I think it was a little bit later coming that than we would usually have experienced in previous years. So we have been UH had a glut of labor needs as we're both bringing in inventory that's been expedited as well as trying to get the orders out the door. I was out on the floor this

morning and some of our operations. UM, so it's been a good start to the Blacks Friday, and I would say, um, right now, if consumers are placing orders, they should be able to get what they are looking for. Page. You know, as we think about this UH supply chain, it's it's it's a global issue. It's it's probably an area the economy that most folks didn't even really think about. They just assume that it just happens. The box shows up when they say it is. One of the backdrops seems

to be labor, you know what. That seems to be a real challenge, whether it's having folks on the doctor onload the ships, having truckers to actually get the goods Inland. How are you thinking about labor and how is it impacting your business? Yes, definitely, labor is a challenge across the board. You know. I think as anyone who's driving through their hometown, they can see all of the help wanted signs out in the front of businesses and it's

no different and supply chain. You know, at dhl UM, we are very excited to report that we have really had a very successful season and UM recruiting and obtaining labor. Uh. You know, in past years, especially the last few, we have seen a tightening of the labor market and the competition was really forgetting the best talent. UM. Today there

just isn't enough talent to go around. There's not enough people for all of the jobs that there are, and so really there are gonna be winners and losers when it comes to labor and d h l UM, you know, leveraging our strong brand recognition along as our with our reputation as UH employer of choice, UM have really seen good success this year. Despite that, as you say, there is a there is a kind of ongoing issue with labor. While you may have been successful recently, you're obviously looking

to the future and wondering whether that will continue. As a result, are we going to see increasingly fulfillment centers being automated? How much automation are you seeing now? How much aultomation did it? We'll see in five years time, Oh for sure, I think. UM, I guess I would call this and I've been I've been an e commerce since uh when, since it was mail order, So I've

been in the business for a very long time. And I would say from an operation's perspective, this is going to be one of the most transformative periods that we have seen UM specifically because of the labor shortage. You know how over the last few years we have seen innovation began two UH appear though UM it wasn't quite mature enough and the return on the investment wasn't quite there, And that has really shifted in the last twelve months. Being from a DHL perspective, UM, we've been a little

bit ahead of the curves. We've been focused on integrating relevant UM innovation into our solutions for quite a while now, UM and and we UH specifically around driver lists, forklifts and picking assisted robotics. UM and we've doubled the number of collaborative robots that we had um to last year and expect to double that number again next year. So technology is definitely coming automation. You're going to see e commerce operations specifically because they are so labor intensive, really

start to implement some of that emerging technology. Page DHL is a global company. Give us a sense of where you're seeing, maybe some the most challenging area of the globe from a supply chain and maybe some of the maybe some regions that are doing better. Oh. Um, I would say it is across the board challenging. I don't

know that there is a place where it is particularly easy. UM. I'd say in North America because I think have had UM not as necessarily as much impact from COVID restrictions, We've probably seen a little bit of easier time than we have in some other parts of the globe. UM. Just to find a quick question from me, we've got

a couple of minutes left. When I talk to people in the logistics industry, one of the biggest challenges they're facing right now is is how to deal with returns at a period when inventory is quite tight because of what has been happening with the global supply chain story. Managing your inventry when you get it is absolutely critical. A lot of people buy stuff, they try it on, they figure out what they want, they send some of

it back. How how much faster is that process now and how critical is that part of the process in terms of maintaining retailer's margins. Yeah, it is actually a very important part of the project. You know, when merchants are placing their orders, they are factoring in returns as part of the inventory that would be available to sell,

and so we have seen increased focus on that. UM. The interesting thing is through the COVID years, UM, people were ordering much more comfortable clothing, and so we actually saw return rates go down because the sizing which was much more forgiving. UM. We are I mean, yeah, I know, a lot of sweat pants and leggings. UM. We are starting to see that turn around a little bit as people are, you know, starting to order I think Denham is having a new resurgence UM, starting to order more

typical types of clothing. Uh. And there is definitely a focus on that UM as well as returns. As you know, capacities continue to increase. Returns is one of those places where you can be a little more innovative, maybe move that off site, um, so that you can create more capacity for your picking and shipping orders. Um. But you still have to be able to then get those returns back into inventory very quickly. All right, Page, thank you

so much for joining us. Really appreciate getting your perspective on this busy day. Gotta be one of the busiest days of the year for folks of the likes of d h L, So Page van Foston, we appreciate the time. She's a vice president of e commerce Operations at d h L. Supply lots of red on the screen here, And as Charlie was just discussing, is this a fair response to an additional unknown in this marketplaces? And uh

too much or is it not enough? Here? As this market tries to dissect and discount some new information in the marketplace, let's check in with a professional who does this for a living. David Deed's managing principle and senior portfolio strategist at Gloodstone Bank. David, thanks so much for joining us. You've got lots of perspective in this market.

When we saw the trading today, what did you take away? Well, certainly it was a very panicky response, and I think the key thing is, first of all, you know, people who trade stocks for a living are not epidemiologists. So the concern, of course, is this new mutation. Who is now calling it a micron coming out of South Africa. You know, it could be terrible, it might not be, but Wall Street professionals are not trained to immediately assess what the risk is, and therefore the default is perhaps

moved some tips to the sidelines. It is not helped by the fact that a lot of people are at home in this holiday shortened trading week, and particularly some of the senior executives, and so there's probably a lot of stop losses. They were triggered, and people just want to take a deep breath and enjoy the weekend and figure it out on Monday. What happens on Monday is now the key question. We have seen volatility spoke really quite considerably. That sort of the reason maybe to manage

risk a little bit more carefully. Risk offices will be tapping people on the shoulder just looking at the value at risk, and so well, volatility is up here. You need to rethink exactly what your positioning looks like. But the instinct time and time again is to buy the dip.

Do you think that instinct will prove correct again? Well, certainly, all eyes are gonna be on the people, the scientists at Fiser and Maderna and indeed J and J. They're gonna be working feverously this weekend to try and get an early assessment. Is this something that the existing vaccines can handle or will take tweaking and this? So how long is that going to take the other thing, I think people are gonna be watching for what are the

government's responses. So for example, um UH Israel and um Belgium, and I think Hong Kong now have prohibited people coming in from South Africa neighboring countries. Do we do the same thing on Monday morning and say people from Africa are no longer welcome no matter what their vaccination status is. So that's gonna be another key bit of information. Having said all this, you did see some knee jerk selling in so forth. I think people are going to be

doing a little bit of bargain hunting. You know, it's just a few days ago. Everyone's worried about how high is going to be high in terms of what the Federal Reserve ultimately hikes rates two and when, um, how bad will inflation be? Is that all off the table? Uh? If so? Our interest rates seemed to be very very low now below one point five and some for example, financial institutions for sold because the strates that too low

for them to make money. How long can that last? So, David, it's a lot of folks from the medical community and elsewhere saying, you know, this might just be kind of the new normal for the foreseeable future. That is, new variants come along, and that's the nature of a virus. You just kind of got to learn to live with it.

If that's in fact the case, where do you think investors should be, you know, kind of intermediate to long term given that level of given that backdrop, Well, I mean, you know, we've had pandemics from time immorial um, We've had variants and so forth. We just perhaps have gotten finished with the delta one, so you know, and Marcus

has moved to new highs uh this month. So certainly I think that with the vaccines on the market, with the anti viral pills, um with um, you know, the tools social distancing mass and so forth, this country and certainly other countries around the world have learned how to live with it, and so I think economic activity continues to expand and get better. Just because we can't say there will never be another variant or pandemic doesn't mean you stop. So what does that mean in terms of

what the FED does next? The talk over the last few days has been that we will see an accelerated taper. Goldman Sachs was talking about that yesterday in the notes with Jan Hatsias, talking about the fact that we could see a doubling of the FED tape to around thirty billion a month. Do you think that's still on I don't, because the Fed is cautious. They lowered the interest rates

because in certainly of the pandemic. Now that uncertainty has opened up again, there were there was noise in the recent release Federal uh FM O see minutes about increasing the taper UM. I think, and that might be announcement de Scember. I think that's off the table. If you also look at FED fund futures and so forth. A possible first rate hike UM in June at one point today was pushed off into two thousand twenty three. So certainly this is going to cause a pause and a

rethinking by the Federal Reserve again. They're gonna be looking at the listening to what the epidemiologists and the scientists say as well. Right, all right, David Deeds, thank you so much once again for joining us. David Deet's managing principle and senior portfolio a strategist at Gladstone Bank, giving us his thoughts on these markets after a crazy trading day. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever

podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three on Fall Sweeney, I'm on Twitter at pt Sweeney before where the podcast. You can always catch us worldwide at Bloomberg Radio. M