Surveillance: U.S. Vaccination Rate With Brady

and of course on the Bloomberg Terminal. Coming to us, Mr Brady of Texas, Kevin Brady, of course a Republican from Texas and farmer that far more than that, I should say, one of the clearest thinkers on the Republican side on what is correct away from the federalism of this nation. Kevin Brady, I want to take you down to your woodlands, down to Houston Methodist Hospital and Kelty Baker,

the head of medicine at that wonderful institution. I want you to explain how you dovetail Dr Baker's aients with the tony or not of anti science, but the tone of doubt that we see nationwide among the unvaccinated. You know, I know this is this is frustrating. I am vaccinated, have been urging my constituents and neighbors to do the same. It is uh, it is a difficult argument to win. Frankly, with those thrown vaccine. I think at the end of the day, it comes down to genuinely for most you know,

they don't know that this is safe yet. I think many of them are telling me, you know, get out of the emergency authorization, make that a permanent safety decision. I think that will help some, if not all. Convis of Brady, you were at great support for Donald Trump. He got vaccinated quietly, without fanfare. What do you need from your guy right now to change the trend of the unvaccinated. Yeah, I think the key thing here obviously

reward people for being vaccinated. We're seeing in places like Houston where actually asking the vaccinated to mask up to protect the unmasked unvaccinated that I think that's probably wrong incentive. Secondly, I think we need a permanent authorization for those vaccines and a lot more consumer education. Uh, certainly in our area, I think that would be key. So we're seeing, you know, more of this delta in some of the land the variant.

We're also unforcedly seeing that coming across the southern border, which is troubling people in a big way as well. So I'm hopeful we can keep making progress but but I will tell you too, I think I think President Biden vice President Harris did the country disservice during the campaign, essencially planning the seeds of doubt on the vaccines developed

under President Trump. And I think that that Okay, please, I'm gonna give you that idea that they planted the seeds of doubt and it was part of the campaign as well. But you didn't answer my question, what does this nation need from the former president right now to explain to the jackson Ian unvaccinated that they need to be vaccinated. Well, I think the president President Trump has been clear about this that he has talked about the need to be vaccines, talked about the remarkable success in

bringing these vaccines to market in record times. So I will tell you I think it is this president and vice president who bear the burden right now. And I'll tell I'm willing to help, an eager to help. I've been preaching this back home in a in a big way,

especially as we see these new variants coming forward. Representative, there is a huge delta, and I'd forgive me for the pun between Republicans and Democrats when it comes to the vaccination rates and actually in more heavily democratic areas, the vaccination rates tend to be much higher and people tend to be more open to getting vaccinated. How is it that you see President Biden playing a big role

in shoring up confidence and vaccines. If it's largely the Republican regions that still show down out well, I'll tell you it was early on. It was the Democratic regions where the problems were at Everyone criticized President Trump for that. I think, frankly, to be fair, the president, this president now in the administration bears the responsibility and certainly, you know, perhaps for the first time, bring both parties together on this mission, because I think it is so important right now.

Again it is. It's frustrating for us of us who think we should find common ground here to have this just go at a loan mentality. I'm a little frustrated with it. But we have to keep making progress and it's not going door to door, not mandating. I think we can do more of that. I think we can do better. All right, Just a forty five seconds left. Congressman, I'm wondering you talk about bipartisanship and bringing people together

in Washington. What's your chance in your opinion based on your Republican colleagues of having a bipartisan agreement in a very near term on this one trillion dollar infrastructure spending package that so many people uh seemed to support whatever side of the aisle that they are on. Yeah, I think I think we're all hopeful that they can find common ground here. We haven't seen munch of details, but I think we're we're encouraging people to find common grounds.

I'm left optimistic about the votes for because clearly the Speaker, Clothy and leaders Humor want this to be the pilot shoot that pulls along that three and a half trillion dollar massive expansion of the welfare state. There won't be Republican and support that if they were truly separate. If one went forward period, I think there'd be song support from structure. We all to get it done. Kevin, Thank you so much. Kevin Ready with US of Texas greatly

appreciated the Congressman from the Woodlands. Right now, off of Dr Bremer's comments, Dr emsh adalgia with JOHNS. Hopkins Center for Health Security, I need to talk to you doctor about the medicine realities within democracy and liberty. Ian Bremer is talking from a political aspect, you represent the medical aspect. Can you succeed that your medicine amid American democracy and our definition of American liberty? Yes, I think we can.

And I think if you're talking about vaccine mandates, I think it's one thing for the government to mandate, and I think that's very difficult and doesn't usually happen. But we've got so many private organizations, employers, schools, or things that are transportation companies where I do think it's justified for mandates, including in my own industry where we're struggling

to get nurses, for example vaccine. And so I do think that when we institute mandates, you see vaccination rates go up, and I think it illustrates confidence in the vaccines because they are safe and effective. This you should be a non controversial vaccine. Why are selected nurses afraid

to be vaccinated. It's unclear to me, because plus of doctors are vaccinated, But when you go to nurses, it's maybe in some hospitals fift and it's likely because they've swall of misinformation, At least from my personal experience talking to some of these nurses, they've seen something on Facebook

specifically things about fertility, things about this being experimental. Uh. And there are some people who believe these ideas about microchips and five G as well, which is kind of surprising, but it's taken hold, and I think the nursing unions have kind of given them cover and have blocked administrators from or at least scared off administrators from mandating the vaccines, but more and more of them are going to do it, and I think once we get full left approval, I

think it's really going to be universal. I think the VA steps yesterday as well as other organizations, are going to make it the norm that health care workers should be vaccinated. And I think that's what it should be because it's it's a professional obligation and I was one of the first people to get vaccinated the minute I

could before Christmas amish. Some people might say this is an overly narrow or complicated issue at this time of the day, but I feel like this goes to the heart of the issue, and that is the Department of Justice and the memo that they put out yesterday basically saying that even though this vaccine only has emergency authorization, that doesn't necessarily mean that employers and that universities cannot

mandate that people get vaccinated. This sort of goes to the heart of the issue of legal immunity for entities that decide to create some sort of vaccination mandates. How important is it for the government to lead on this issue. It's important that the government give these companies assurance because they were kind of brought into this by the government's

request through Operation Warp Speed. And often during pandemics, when there's a public health emergency, there are indemnifications done for those companies in order to get them to make this vaccine because they have to do it quickly, they have to do it uh in an expeditious manner, and there is some uncertainty, and this is what happened during the seventy six wine fluid, happened during two thousand and one pandemic.

So I think it is important that the government say that these companies are going to be um indemnified because we're in a we're in it. Basically, this is a government run program in order to curtail this pandemic. I don't think that there's going to be that many losses. So because when you look at the safety and efficacy of these vaccines. They're really off the charts when it

comes to any vaccines that humans have ever created. So then why haven't they Why haven't these vaccines gotten full authorization? Why do we still have an asterisk around them at a time when there is such efficacy rates? And why is it that kids under the age of twelve cannot get vaccinated? So the emergency use authorization was necessary because in order for the f DAY to approve a vaccine, they need six months of data. That's just sort of

what they do. So I fiser recently crossed that threshold.

They've applied now for priority review. It's likely to happen faster than than the six months that they have during a priority review, but it is something that I think we should do faster and quicker because we know that this is holding up many places for mandating the vaccines, and it's giving anti vaccine activists a talking point calling an experimental even though emergency use authorizations have been around for a long time, when we use them during H

one N one and doing PICA, I think that we're gonna see children approved below the age of twelve. But it's in iportant that we do the studies because we're trying to make sure that this is safe and effective at the risk benefit ratio favors the vaccine in that age group because remember, as you get to those younger age groups, the risk of severe disease falls to very low levels, lower than influenza for a child less than twelve years of age. So we want to get it right,

want to get the dosing right. Hopefully this will be something that we see probably in late fall early winter. Dr Deult join a game theory basis, It seems to be that the medical community is drowning in success. It's a miracle that we got the mRNA vaccines done so quickly. Is most of the angst right now, because this is all happening so fast, unlike a slower process of previous pandemics.

It may be part of it because m RNA vaccines do give you that great advantage to make a vaccine candidate within hours or weeks and then move into clinical trials quickly. And I think that the lightning speed of this, which was one of the advantages of m r and A vaccines, has been something that people have exploited to say this happened too quickly, But you imagine if we were still waiting the old way for a new vaccine, how many more hundreds of thousands of people would have

died United, how many illnesses would have happened. So I think that the speed of the MR and A vaccines is what makes them the most attractive thing about them, and it's probably going to change the way we face infectious disease outbreaks in the future forever. It's it's a huge advantage and we now have as humans against the viral kingdom. Doctor. We appreciate your time and thank you very much for your heart works joining us at the

end of a very long shift. I'm sure doctor amish it down to the John's Hopkins Center for how Security, senior scholar. Most people in this building would call me a humble guy, extremely humble and always willing to listen to really smart people. And here's the first line in the note that I got from Jude to Immanuel his guests. No, it's just the first line, Tom, Johnny is right, So let's start there. Judemanuel bt I g chief for a derivative strategist. J Let's stop that. Why is John Wright?

Because John, You've been saying this for quite some time now that you know, just asking the question, why can't you just be a passive S and P index investor in a world where, if you look at one, active management, as we heard from guests earlier in the show, has been giving you headaches for the most part, at least

the last several months. The answer is to us, because if you're just simply a passive investor, you sort of are open to this range of emotions that frankly, if you look at the course of investing over the last twelve or thirteen years, certainly since the bottom of the financial crisis, you have to be in the psychological mode to where you're buying the dips. It's very difficult to say I'm going to commit cash in March of last year.

Very difficult to say I'm going to commit cash in March of two thousand and nine, the times when you really wanted to do it. So either having something that causes you to outperform to the upside or outperformed of the downside gives you that psychological edge to do what we think you're gonna need to do and want to do for a number of years to come. I should be very careful here I'm not making a trade recommendation, want to be clear about that, Julian. You're the man

who's got to do that for me. Work through it now then with me. I got all these issues on the horizon at the moment. How COVID cases play out. Do they translate into higher depths, increased hospitalizations, maybe more restrictions on the economy that just turned down the dial on mobility. Then you've got the China factor as well. It's just worry after worry, Julian, just parting up as always, and this market keeps climbing that wall of worry to

all time highs. How do you navigate those issues? So again, look, the price action tells all right now. And the price action, even though it is telling all, is telling us somewhat contradictory message that at the headline, the S and P five continues to rise, very much propelled by the NAZAC within the NASDA, very much propelled by a number of stocks, all of whom we're gonna hear about earnings over the

next two to three days. Um, but you, there is starting to be a diminution amongst the rest of the troops. Breath has turned a little bit soft that can continue. But frankly, from our point of view, when you look at the bigger picture, when you've seen the kind of economic strength that we have seen build over the course of the year, whether this is the peak growth or not, the implication is stocks are likely moving higher over a multi year period. From Julie, you look at the dynamics

that are out there, the derivatives and all that. Let's look at the one derivative, which is cash on the balance sheet today this afternoon. The three big ones Microsoft, Apple, the other one Google hundred thirty five plus plus two hundred and four kazillion dollars. These guys could top trick half a trillion dollars cash in their report worth this afternoon. What's the social good of all that money? Should they return it to shareholders? Well, look, they are for the

most part slowly through buy backs. Um, you know, the signaling of sort of a special dividend or something like that from companies like that that are poised for continuous growth. Secular growers has tended over time not to be good. You can argue about the social good, but I think frankly, what you're going to hear from them is, you know, ways of getting stakeholders more included in the debate rather

than just shareholders. So talking about wages, talking about employment programs in an economy that frankly confounds people because of the lack of the return of the participation rate in a in a market where there are jobs incredibly plentiful. Julian, what's signaling power does the bond market have for equities at this point? Lisa, that is the I don't know, twenty trillion dollar question the size of the U S economy.

From our point of view, Uh, it's really rather limited. Look. Obviously, we know that the Fed has, as you said earlier, put their thumb on the bond market. Um. But also when you think about it, all the extraordinary monetary and fiscal stimulus has come together to chase asset prices higher across the entire range, whether it's commodities earlier in the year, obviously, stocks, goods prices i e. Inflation, or the bond market. To us, it's all the wall of money. And the question is

is policy or perceptional likely to change? And our view is that you could get to a point where if the labor market does sort of uh, remove the logjam that we have come the fall, which is the Fed's expectation. UH in an environment where the FED is not likely to advance the taper conversation materially, this week you could see yields start to rise in the long end, Julian, just quickly, you still at full pans and dr end

on SMP. We are, and and here's here's the reasoning. John. Again, as I said earlier, this kind of economic strength, while it bodes very very well on a multi year period,

doesn't necessarily mean that corrections don't happen. We've gone quite some time without a correction, and frankly, we're concerned about some of those internals, the lack of breath um and we think, actually, if you look at it, this be a week where there's a potential for a surprise in terms of reaction from the large cap tex stocks, which

have been doing all the heavy lifting. Interesting they started reporting in earnest a little bit later after the close, Julian, thank you, sir, Jenny Emanuel Ba, chief equity and derivative strategist Judian love catching up these sur and so White we're gonna start stop now and look at Apple will power with us with Bear the senior research analysts with a terrific note, and what's so great about will power? At the bottom of his note he shows you his

belief and his track record from another time. This is a guy who just before COVID, just before the pandemic, was outperformed on ninety and will power sustain that outperform through thick and thin? Will power you sustain your outperformed today? Simply? Can Beijing upset the Apple Apple cart? Can Beijing all this upset in China derail your outperform? Well, Tom, that's a great question. Good morning. Thanks, there's always for having me. Great great to be on on the on the show. Here.

Look at China is always a big wild card, and you know, at least at this point has still been a big driver of Apples and results, and we're still expecting that to change near term. But it's certainly something we keep an eye on with all the tumult that's that's underway in that country with respect to you know, other other tech companies, But at this point Apples be able to navigate that market fairless successfully. Of course, that's

just one piece of the puzzle for Apple. As you think about the broad based drink we expect again you know this quarter. Well, as you know, the cheap guide to Apple over the last decade is just to buy it, to keep buying it, and then to keep buying it. It's complex on one front, though, and I've always struggled with it, and I'd love you to guide me through it. What multiple do you put on a name like Apple given the evolution of this company over the last ten years. Well,

it's a great question. It's been one of the central questions, and I think you know, lunch panel probably if there's a bare thesis is probably on the valuation, decreation and

multiple expansion. You know that that's occurred here over time. Look, we played a long game with Apple, right, and our view over a long pretty time has been it will continue to grow into valuation and you're betting on their ability to continue to add new value added you know, services and solution you know, for in customers, and that in turn continues to drive you know more, you know,

shareholder value. Our view is that increasingly you know, falls into the consumer staples camp, right, so that it's not a name that you can like cop against traditional big cap tech you know, per se. If you start to look at consumer stables names it's you know, we think you can justify multiple and get your closer to thirty times, which ultimately is what we're currently using to get to our hundred sixty dollar target price. Well, this is an

important point, the idea that you emphasize services. Does that mean that at this point people are basically not looking for Apple to necessarily innovate with the Apple Watch or some other product that really it has to do with ongoing revenues from either iPhone sales or from the services that you can get on the iPhone that will determine

the future revenues. Well, I think that's a great point, and look at me services now is of revenue, it's growing north of has a much higher than average who's margin and close to se and that's that's a big part of the story in terms of driving higher higher multiple than what it traded at historically. And our expectation is that can tanna look at me they I think just last quarter reported of course, the six D sixty

million paid subscriptions you know on the platform. That's the number that continues to rise by forty million, you know, every quarter, and that's why it's critical that that services like Apple TV Plus and things down the road continue um to take off because that helps that helps strive

that line of business for them. Of course, that's just one piece of it, right The key to the story has been the consistent diversification beyond iPhone, which is now a little underfif of revenue, but still of course the lynchpin to the story and a big driver near a medium term. Still, would you like to see Apple become a media company? I mean, there's been so much speculation about their buying let's say, a Netflix or some other big service provider that way to enhance their Apple TV.

Is that still on the table? Well, I think Apple TV Plus is very much on the table as you know right, Ted Lasso of course has been a great show, but they need a few more hits like that. I think at this point it doesn't appear they plan to buy a major media company. I'm kind of jump start that effort. I mean, what kinds that's always twenty Perhaps they should have done that, Perhaps they should have looked

at something in the Tontom Hiss viah Gole market. I think these are all things of intense interests as you go forward. Look at the end of the day. Part of the bet on this and the bet on the valuation is that this is a true platform that they can build off right and services and media are key elements that. And now for William Power. For those of you on radio, we get out the HP twelve c Okay, you don't do with some of the parts on Apple, but you do extrapolate out to some form of estimate

off of five dollars ten cents. If I'm the gloomiest Lisa Bramo, it's gloomy on Apple that I could gloomily possibly be, I would do a fifteen percent gross up on this. If I do that twenty four months out, will Power, I'm at two hundred and two dollars a share with a three point four trillion dollar market cap? Is that feasible? Look? I I think that's possible. I mean the day, I think part of what's gonna happen

here on Thomas. As I said earlier, they're gonna continue to grow into the multiple and that my expectation is what we While we may not have the level of beat we had this Passporter, I think there's still nice upside the current estimates, both this quarter and as you move into the fiscal queue four and look, one of the key things to keep in mind, we haven't really touched on this five G cycle is still super early, and it may not be the passive super cycle in

year one. But if they just sold over, you know, a hundred million iPhones that are five G a capable against a mobile base as close to a billion iPhones, that's a big upgrade opportunities still for multiple years. John, that pause that will Power gave you when I asked him that question is known as the General Council pause. That's because he's really not supposed to interpot extrapolate out twenty four months in the night? Is my badge? And Baard gonna work to respond him? What to respond to him?

What Swignalas gonna got in the house? Bats Well, great to catch up, appreciate time, said William pat of Bad Looking for one sixty. That's the price target from Bad on Apple right now. For Global Wall Street, Ian Lincoln joins with Female Capital Markets. How do the US rate strategy is a hyperdense morning note always read worldwide and I'm gonna go right to a single sentence you have which suggests the demand for bills notes and bonds and that is the backstop of demand you see out there.

Define that backstop well, Tom, I certainly think that if we look at the primary takedown of treasury supply via the auctions, we continue to see a willingness to underwrite treasuries, whether it's from domestic accounts primarily banks and investment firms, or overseas central banks in particular. These auctions continue to see strong sponsorship, and that at a minimum suggests that they will continue to be a backstop of demand that

is a really going away anytime soon. It's less about whether or not there's a willingness to absorb supply and more a function of what levels will we see these takedowns, And with ten year yields at it's very difficult to argue it's not a strong market for us dead and one needs to go right oh wrong for that matter to get ten years to one eighty from eighty by year end. That was a code from Morgan Stanley. What

would need to happen for that to happen? And you'll mind, at least well, in my mind, I don't think that it is as simple as passing, for example, the infrastructure build, because that will be staged in over time and not actually lead to the type of wage inflation that the market would need to see for inflation in and of itself to become self fulfilling. The one key aspect of this recovery that has been missing thus far has been

wage inflation. If we see the labor market participation rate continue to be low and our pockets of labor scarcity over the course of the next few months, we might see spikes in wages, which would then get the market excited about the idea that inflation could be self fulfilling, but argue even that would fall into the FEDS characterization

as transitory. We really are coming out of a massive shift in the real economy, and there's a lot of different moving pieces yet to be resettled where they will be going forward. And this is really important Tom and Lace, who were discussing it a little bit earlier. The failure to see real continued improvement in things like the employment

to population ratio, the participation rate in America. If we don't get that improvement, if we don't get back to where we were saying, how much would that complicate the outlook for this federal reserve, which, to be fair is pinning its forecasts on the idea that we do fully recover on those aspects. Well, I think it will very much complicate the FEDS path for rates going forward, because on the one hand, they've acknowledged that in relation has

come in stronger than even they were expecting. But on the other hand, under their new framework, the FED needs to remain accommodative for frankly the foreseeable future, until the unemployment rate gets to the lows that we've already seen, and within that we are assuming, and so is the FED, that the labor market participation rates slowly starts to increase.

If you don't see labor market participation increase, then you'll continue to have this surplus supply of workers that if they if there isn't enough incentive for them to slowly come back into market, will really leave the FED at a loss in their new framework. At this point, given the Fed's intervention, is the bond market accurately reflecting the fundamentals?

I think that this moment, the bond market is reflecting the realities of the delta variant, not so much that it's going to lead to increased lockdowns or revival restrictions in the US, but rather it's a reminder that these variances, the potential for these variants are going to be with

the real economy for a while. And so while we might have brought into the beginning of this year the assumption that after Labor Day we'd be in the new normal, the reality is we're going to continue as an economy and globally and domestically UH to to deal with the pandemics. That it's extended the timeline out of the pandemic. I think that's why rates are where they are at this moment.

Just real quick, do you expect negative real yields to go even more negative as inflation expectations continue to pick up? As long as nominals are contained, inflation is drifting its direction, and the Fed doesn't hasten the departure from que, there's no reason to expect that we couldn't see real yields

continue continue to drift. Flower. I think tenure breaking or tin tips yields at negative one, which would be another fifteen plus basis points from year, is something that the market needs to have on the radar as a risk. And thank you, I'm gonna get you a view on this market that's for sure, handling in the female capitol market's head. If us right strategy. This is the Bloomberg

Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course on the terminal. I'm Tom Keene, and this is Bloomberg