Transcripts For BLOOMBERG Bloomberg Surveillance 20240711

Nation, and Bloomberg Television as well. I love how we end our opening withistopher Christopher Verrone of strategas. A lot of people rationalizing where we are and beginning to rationalize outcome a way utes come on down 30,000 where we are and beginning to rationalize out, wait a minute 30,000. Jonathan lets be clear about something, they have been bullish and right through most of the last eight months. Most hatedlked about bull market, but this recovery has been underappreciated. I have sat here many times waiting for it to fade. It hasnt. But i think now things have changed. Restrictions are back. It is our closing indoor dining. The letdowns wont be the same as early spring, but the restrictions are there for all to see. The question is how much of this do you tolerate. ,om what is just as important moments ago at Deutsche Bank on the fact of a weaker dollar. How weak is weak . What do you see was in the literature . Jonathan if you are ecb president Christine Lagarde, too weak is 1. 20. In that note from Deutsche Bank that just came out in the last hour or so, this is what he had to say on asia and china specifically. If asia cant generate inflation, it is hard to see can. Region think about that when you look at this bond market, and treasury yields struggling to break out. Lisa Christopher Smart tom Christopher Smart at bearings talking about the darker tunnel, aback by theen narrowness of the pandemic news today. I happened to focus on sweden, where they are doing complete capitulation from what they were doing before, but there is other news that is just outright grim. Theres no other way to put it. Lisa the trajectory is more than 150 thousand cases being diagnosed every single day, and again, that number is climbing exponentially, which weighs his questions about deaths, about capacities and hospitals. The issue as we look forward is you the tunnel ahead, as referenced, looks darker than it did earlier this year, darker than a lot of people expected. But the exit looks brighter than people expected with the efficacy of the vaccine. How do you pair those two at a time of such uncertainty . That is what people are struggling with. Of we will get to mr. Loh state street in two seconds. Down 0. 2 . Dollar weaker. I really want to feature renminbi, 6. 55 you want 6. 55 6. 55 yuan. Is at state street global macro, a strategist there. We are thrilled he could join us this morning. How has your view changed in the last few weeks . Arvin certainly the world is bit more optimistic. I think we might move the timing when we canto reengage with society, but not all that much. A vaccine had been expected, and certainly some of the election risk was less than the worstcase, but not really a holland. Not really a whole lot. Jonathan what do you make of the risk over the next couple of months in the United States, given what you are seeing from policy makers in the last 24 hours alone . Washington fact that is stalled with regard to stimulus, and all of these this is six all of the statistics you provided on the next wave of the virus appearing to have outofcontrol aspects to it is certainly a double concern weve got going, even though, like you mentioned, the light at the end of the tunnel is bright. The tunnel itself is still pretty long. Lisa how do you trade this . Do you just reserve an extra pile of cash while staying in risk assets and waiting for an entry point . Marvin i think so. We are going to have volatility, so there are going to be entry points. I dont think Monetary Policy is going to be able to let up at all, so the fed theoretically still has your back. I know it is kind of an uncomfortable investment thesis, but that liquidity is important, and we will see the next stages of that over the course of the next month and going into the first quarter. So you will have that, but certainly just be wary of the choppiness that is going to exist. I also dont necessarily think that rates are going to jump anytime soon because of the inflation profile, plus the fed still being in the game. Tom what does a carefully balanced portfolio look like . I think youve got equity exposure. I certainly think em is a bigger part of that. For the hedge, it is more of a challenge. Productsly, corporate as an income substitute for these lower treasury yields starts to come into the discussion. Worldwidefor audience come on bloomberg tv and radio, we are with marvin loh of state street. Prime minister Narendra Modi giving an address at todays key session of the Bloomberg New Economy Forum, where the focus today is cities. You can watch that on the bloomberg. Also streaming on bloomberg. Com. Tom the overlay here with the virus and the pandemic, this is really profound, is the stunning i and so muchdelh of industrial india. , noted russia today as well maybe on a warmer moscow, but this is a really important moment for india. They do have better pandemic statistics, but the overlay with pollution is challenging, to say the least. Jonathan that was the president s position over the past years, that he wants to see more done from emerging economies. Lets bring it back to marvin loh of state street. I want to turn to the United States and china. In the new Economy Forum that we have been covering, many people talk about a reset of u. S. China relations. How important do you think that will be in the coming year with a biden presidency . Marvin i think it will be important. In particular, certainly have commanded this virus, i wont say stronger, but certainly with a bit more clarity. Additional clarity with regard going to betrade is approached. It will certainly make looking into the region a bit easier than it has been over the last several years. Lisa meanwhile, the strength we have seen in china, we talk about chineseu. S. Relations, we have to also talk about the response to the virus and how china is having a preferable response when it comes to how quickly they can exit. How much is the strengthening of the yuan, the weakness of the dollar will add to an inflationary environment, even if we dont get growth in the u. S. Marvin most certainly it is a concern within various emerging markets. I certainly dont see it in the developed markets as a lot of the structural issues that we had going into the pandemic. Is, from an emerging market perspective, a casebycase basis that different economies need to evaluate individually. Jonathan i think increasingly, we are thinking about tolerance levels, pain thresholds for the fx market in various countries. In europe, the last time we breached 1. 20, we got some pushback from the ecb. One thing we are trying to understand right now is when the chinese start pushing back and stop tolerating that move. Do you have a level in mind . Do we know whether they like where the currency is right now . Marvin i think they are fine where the currency is right now because of the economic backdrop driving it here. Inflation seeing that response yet. I think they are happy allowing it to consolidate because of the of thist their ramp out virus is the clearest amongst the larger economies. To catch up,at sir. Arvin low of state street, thank you. Dollaryen at 6. 5548 on that currency pair. Tom not a small matter. I think this has been yuanreported, but to see breaking through seven, and then suddenly 6. 55, i dont have any knowledge on this. I really wonder where that Tipping Point is where for beijing, it becomes an issue. Jonathan i think theres been a lot more comfort pushing into the asia story off the back of the chinese strength, and increasingly more recently around the commodity story as we start to get that faxing news comfort. Speaking of commodities come the move we have had in crude and the move weve had in energy equities, wow. Tom there it is, 41 on west texas. The response you had this morning was like nothing we do matters except the International Argument on bloomberg surveillance over pesto. You have let up a fire of debate over pesto. Francinesy from genoa, or from the south of italy . Thinkan i would like to the south of italy does everything better, but that is in theven my roots northwest. Tom towards france. Jonathan it is very you. You would do well there. Tom a viewer emailed in and said come next time we are getting the sea salt from trip on a from trip any from trip on a. Where is that . Jonathan italy. You should know this. We will continue this. Coming up, Greg Valliere, chief at agflicy analyst investments. This is bloomberg. Ritika with the first word news, im ritika gupta. Joe biden has called for congress to pass a larger scale stimulus package, running into swift opposition. The president elect wants Something Like the 2. 4 trillion bill the house passed before the election, but senator Richard Shelby says it probably wont happen soon or anytime later. Saysense of his will troops would be cut to 2500 in each country by january 15. The Senate Top Republican Mitch Mcconnell isnt happy. He says there is little support in congress for simply walking away from the conflict. Spacexs dragon capsule has safely delivered four astronauts to the International Space station. Elon musks company and boeing both won contracts from the space agency. Turning now to another elon musk company, shares of tesla are soaring today. It will join the s p 500 month is its biggest share to date. Americas efforts to revive its thrownconomy has been into reverse. Across much of the country, new infections are soaring at the fastest pace since the early stage of the pandemic. Michigan has ordered a partial three week shutdown. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Gupta. Ika this is bloomberg. We shouldnt accept or assume that it is all going to be bad without working to make it better. Weve got to get the new administration to articulated an approach, and cooperate with the international bodies. Jonathan bill clinton there, the 42nd u. S. President , on the religion should between the United States and china. Right now with some of the issues weve got, weve got to stop making his works making it worse, particularly with the pandemic. Alongside tom keene and Lisa Abramowicz, im jonathan ferro. Defensive. T more futures down 0. 610 . The bid comes back into the bond market. On the tenure, down three basis points. A bit of pushback from the south being much followed. Fund manager surveys from bank of america, down from four point 4 . The expectations for growth and. Rofit optimism, a 20 year high it tells you something about sentiment right now. Tom weve got to mention the Economic Data in 12 minutes. This is not a small deal. This data is going to be important. Jonathan i would agree. Tom right now on politics, Kevin Cirilli with us. Let me get this out of the way. We can do this with Greg Valliere of agf investments. We rely heavily on his wisdom of a morning note. I want to talk georgia right now, and what the democrats need to do to respond in a clearly , two majorstate republican senators. Greg it is going to be tough. Assumption, is the that the democrats could win both seats, is not valid. I think they will be lucky to win one of the two. Tom what are the ramifications if they win one of the two . Greg huge. That means mcconnell controls the senate, the biden agenda of higher taxes will fail. It means we will pretty much get gridlock, so the stakes could not be bigger in this january 5 race in georgia. Jonathan once we get past january 5, weve got about two weeks with an outgoing president. How do you think relations between Senate Republicans look with the president at a time when georgia is out of the way with . Are still so many republicans terrified to alienate the base who thinks the election was stolen. The base still loves trump. I think most republicans in congress are scared to say very much. I think trump in the next couple of months will have quite an opportunity to do a lot, changing regulations, may be getting involved in geopolitical events. It is going to be a really interesting two months. Lisa lets talk first about international issues, people talking about that in particular with some of the changes in the defense department. What do you think you will do on this front . Greg i think he will withdraw troops from afghanistan, maybe iraq. Republicannfuriate hardliners come up behind that is this deep antipathy donald trump has for iran. I think he wants to do something to stop irans buildup of nuclear weapons. There may be targeted assassinations. As you saw in the New York Times this morning, i think trump would be doing even more, but he has been con sold he suled that it is not the right move. Lisa who are the key members of trumps cabinet who are, i dont want to say pulling the strings, but pulling the strings here . Greg there arent many left, are there. Barr could beal vulnerable in the purge that we see over the next few weeks. Pompeo is the key guy. The relationship he has with trump is first rate. I think mnuchin will become less visible. He had a chance to get a deal with nancy pelosi and wasnt able to. Jonathan this conversation assumes the president understands he is an outgoing president. Do you believe he believes that . Greg i think he knows it. He has to know these states can be overturned. Youve got a 50,000 vote margin in pennsylvania. You are not going to overturn that. I think he wants to influence things for 2024, either him being on the ticket, or ivanka or don jr. I think trump really thinks that is possible. Tom lets go first lets go fullcircle to where we were two hours ago, on a diminished House Speaker Nancy Pelosis agenda. How does she manage middle of the road democrats with a left that is more than vocal . Greg great question. Tom my only good one. Thats it until 2021. [laughter] greg her own troops are not happy with her. Policeel that defund the heard them defund the police hurt them. Getink she had a chance to one point 8 trillion out of Steve Mnuchin in october, and she could not take yes for an answer. I think that is going to haunt her. Jonathan blew it. Greg, great to catch up. That is a story i think on shows like this hasnt been covered enough, the conservative pushback down the ballot is really clear. Of we talked to mr. Boyle the second Congressional District of pennsylvania, philadelphia and up north, and he didnt mince words about it. It is front and center, they got to defend that middle area where he is versus the republicans, and also the left as well. Jonathan dont you find that fascinating as we go into georgia . The band is so wide, youve got a difference of a fiscal plan that could be a couple of hundred billion or a couple trillion. That is the story going into georgia. Jonathan it also highlights lisa it also highlights how fractured both parties are to me. We talk about how hard lined they are, but they are splintered. There could be republicans that get on board with a bigger plan. There could be democrats that pushback. These are sort of the aspects people are looking at. Jonathan you might just have a situation where the issue is pushed again. That is what we saw and spring. I dont think the appetite was there at the time for a bill of a couple of trillion dollars, march thatonly in people woke up. I remember speaking to the administration in early march, and there was not no opera tied at that point to push a bill of was not we and there an appetite at that point to push a bill of the size we saw. Are we going to supplement or replace income . Tom i think you got to the catalyst it will become a which is the job economy. If the job economy flatlined orchid works, our unemployment or whatever, it will get worse. It always does. Jonathan restrictions will get worse. Really important data points around the corner, u. S. Retail sales. The momentum in america and the american economy. This recovery has been impressive, perhaps underappreciated. Will it continue . That is up next with michael fore and William Dudley, merly of the new york fed. This is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Jonathan the data. 10 seconds away. From london and new york the data point 10 seconds away. Great futures at session lows. With Economic Data in america, we bring in bloombergs Michael Mckee. Michael it is just slowly crossing the terminal with import prices out and prices down. 1 on the month. Without petroleum it is flat. Here come the numbers on the retail sales. We are slowly getting these. 3 for the month for the month over month numbers. Leave out autos and we were up. 2 . Both of those were lower than the forecast. The forecast was for half a. Ercent gain the control group, which is what economists like to follow because it is what goes into gdp. 1 control group is up just. The forecast was for. 5 . Last month it was 1. 4 . Really seeing weakness in retail sales which is interesting in a negative way because what we have seen over the last couple of months is people buying a lot of stuff and not spending much on services. Service businesses are the ones that will be impacted by the additional shutdowns we are seeing. Let me take a quick look at where we saw gains and losses. Electronics and Appliance Stores down 3. 9 in october. Building materials up 20 . We know housing has been strong. A big drop in clothing stores, 12. 6 on the month and also a drop in department stores, 11. 9 . We like to look at gasoline stations because that is affected by price. This is interesting. The price of gasoline went down october, butnth of sales fell 14 . It shows you the economy slowing. Tom and the old days we got all of these numbers, now Michael Mckee has to wrestle with how they come out. The revisions just came out in the revisions are weaker than what we saw prior. How is this fold not so much in the fed policy, but into the framework of inflation . Michael it suggests we are not seeing significant inflation because these are dollar figure reports. The decline we are seeing a lot of these categories suggest there is no additional pricing that is pushing these higher. It is a concern. What will be interesting is if there is any reaction in washington. The stimulus talks at this point seem completely dead in the water. We have to keep an eye on that. Check,ng i did want to and i do not know if i have it in front of me, we have seen, and i thought this was the most interesting number ive seen recently, shoe sales had been down. I do not have the number in front of me. They were down double digits over the last three months, and you, youisa would tell talk to people and they say i do not know i would never wear dress shoes again. Lisa i am wearing heels. Tom i am looking at the market revisions. It is substantial. Jonathan this is the worry. It is one data point, but this is the worry, this economy loses momentum just as we have more restrictions. The bid is clear come into the bond market, the long end of the bond market. Down five basis points on 30s. Last week the vaccine news cannot get a 31 , we rollover. Not get us through 1 . Russell futures rollover. The downside surprise in the Economic Data and this is where the test begins. How committed are you to the news that will come in the back half of 2021 as we start normalized . You of the bade news that could come, particularly at the back end of this year as the Economic Data starts to look worse. Lisa the issue is why is this a surprise . We saw the virus numbers going up and we saw the highfrequency data should activity was coming down. To wrap things together, i would love to get your sense of the coverage period of this survey and how much worse things have gotten since then when it comes to lockdowns and restrictions in response to those spiraling pandemic numbers . Michael you make a good point. These advance retail Sales Numbers cover the first half of october and that is why we get significant revisions and we saw a revisions down for the month of september you include the later half of the month. It does not portend well. One other number to throw out, Food Services and tricking places were down 14. 2 . That is the definition of the Discretionary Spending we are seeing pullback as people decide not to go out. Thank you so much. Greatly appreciate it with important data. William dudley is a former new york fed president , now princeton as a Senior Research scholar. More than that he developed Goldman Sachs economics and new it was about theory, it was about estimates, but also the granularity of the data. Bill dudley joins us this morning. Deadlyto talk about the beige book about the dudley beige book, about how you use data like Michael Mckee just reported. William we have to look at the data in the context of what is going on elsewhere. The fact that retail sales were weaker in october reinforces the idea that the pandemic is worse. The november data will be even softer. We have a valley we have to go through over the next six to nine months before the vaccine arrives and we can get people vaccinated. I think it will be a difficult valley to go through because the pandemic is getting worse and there is no stimulus package about to arrive. This is so important and why it is so good to have William Dudley with us. The only what i can think of is Lawrence Meyer in terms of looking at the granularity of the data. What data are you looking for forward to frame out the next two quarters . William i will be focused mostly on the course of the pandemic itself and the reaction from state and local governments in terms of restrictions they put in place and how much people actually social distance. To the extent the pandemic worsens and we have more restrictions, that puts downward pressure on the Economic Data. It is important to recognize when we get data like we got today, we are looking in the rearview mirror. We are in a much worse place today and we were in the first half. Jonathan is about momentum, momentum is fading. The data is set to worsen from here because of restrictions. Lets talk about where this leads policymakers, particular Monetary Policymakers. He wrote an oped piece that says you think, and many share the view, that the you have run out of ammunition. Where does it lead them right now . William they can do more. They have not completely run out of ammunition. They can increase their asset purchases or extend the duration of the asset purchase they make but this would not have much consequence because the ventas succeeded in terms of what it wants to accomplish, it has made Interest Rates low and Financial Systems very accommodative. If the vet did more, would it help . A little bit, but at the end of the day it is about fiscal stimulus to help people get through the valley we face in the months ahead. Jonathan on balance, as a former policymaker, when you look at things right now, we have Market Participants on the program all day every day, five days a week, talking about risk or lack thereof in the credit market because of the fed presence in it. Is that a good thing in a time like this . William i think the fed backstops are important because it reassures people there is a buyer of last resort and that encourages other people to be engaging in Financial Markets. The liquidity the fed has provided has not had that great amount of takedown. What has happened is they have served as effective backstops and it is very appropriate. The other issue that gets attention is whether the fed will extend the data when facilities lapse. Right now they are scheduled to end at the end of september and is likely they will extend them at least until the end of march maybe through the first half of 2021. Tom lisa a lot of people agree the fed stepped in and provided a backstop in a good way. There is some concern the fed is exacerbating any qualities, not just in households but among companies, because right now we are seeing the pain being felt among companies that do not register bankruptcies because they simply close up shop and do not have access to borrowing money and credit markets the same way. Do you think the fed has whitewashed some of the pain with their policies looking at broader markets that have this enthusiasm, and if this is potentially harmful . William i do not think it is harmful. It is much better to have Financial Markets operating the nonoperating. The problem for the feds Monetary Policy is a blunt instrument which cannot do much about the fact that the pandemic falls unequally on households. The fed has introduced the main Street Lending program to try to get to a set of businesses that cannot Access Capital markets easily and it has not worked well because there a lot of terms and conditions. It is much better for the fed to generate a Strong Economy as the can and recognizing rights will have unequal burdens. That is for congress to come forward with taxes that support those most disadvantaged. Fed isext month the expected by some to extend the duration of their asset purchases. Do you think based on where we are and what markets are doing, they should go through with that and make that decision next month, even if Market Conditions are similar to where they are today . Do not think there is a trend is rush. Tremendous rush. It certainly makes sense. If your buying treasuries and Mortgage Backed securities, not to support market function but to support market function but keep longterm rates low, and why not concentrate your purchases in the long end of the market . About must ask you governor to be judy shelton. I want you to explain to our ,udience what her theory is grounded in traditional economics. If it is not classical or neoclassical, if it is not keynesian, what is shelton theory . William i do not think i understand her theory, to be very blunt. It is unfortunate that a Republican Congress is pushing to confirm shelton. It would make more sense to leave those positions open so joe biden can put his imprint on the fed. At the end of the day, if shelton were to get confirmed, i do not think it would make a huge difference in policy. Tom this is so important. If you do not understand her theory, do you perceive she is coming from some convolution of austrian economics and a historical german economics from another time and place . William she has been inconsistent. On one hand she has some sort of Gold Standard or hard money, on the other hand she wants Interest Rates low before we enter the pandemic. She seems to bend with the political wind. You want the fed to not bend with the political wind. Jonathan lets talk about process and wrap things up there. Ive lost count on how many beatings he mustve been too with the Federal Reserve. If there was someone with a more unorthodox approach to Monetary Policy, how loud could that voice possibly be if she was confirmed . William not very loud. The way the Federal Reserve works is it up his sentences, is it is a consensus, committee, the chairman since the agenda. If you have used not shared by the committee, you can dissent. If shelton is confirmed, the main implication is that joe biden would not have a chance to appoint governors to the fed, and that might slow down his ability to put people in place he thinks are more consistent , not so muchcies on Monetary Policy, but in terms of Financial Regulation and bank regulation. Jonathan bill dudley, former new york fed president now at princeton and a Bloomberg Opinion columnist. Whatever you think about judy shelton, when you work through the process of the fomc, and Michael Mckee much more familiar with it then you and i, that voice will not be that loud at those meetings. It might make a lot of noise in the media, but when it comes to the decisionmaking, it will not be as loud. Tom to your point, she represents the thinking of a not narrow part of america. There is a lot of people that have sympathy for the theory she has expanded for years. I think that is more important than anything we can talk about. Jonathan alongside tom keene and Lisa Abramowicz im jonathan ferro. Coming up on the program, Barry Ritholtz. From london and new york, good morning. We do plan on equity futures after a downside surprise on retail sales. It is a test of the faith in the year ahead with the number set to get worse from here in the u. S. Economy. Down 27 on the s p. This is bloomberg. Ritika with the first word news, i am ritika gupta. Mark zuckerberg and jack dorsey will be defending themselves before congress. The ceos of facebook and twitter will testify before the Senate Judiciary committee. The second time in a month will have to answer critics who say their social networks silenced conservatives. Senate republicans are trying to push through the president controversial nominee for the Federal Reserve board of governors. Judy shelton. Now a third republican has said he opposes the nomination, lamar of tennessee. That means approval could depend on whether all republican senators who support shelton show up for a possible vote. The strongest storm of the Hurricane Season has landed to central america, threatening to cripple a region already hurting from a deadly storm two weeks ago. Sure e iota game of came on shore on nicaraguas coast as a category four hurricane. It is likely to trigger deadly mudslides. Making its biggest push into selling prescription drugs. It is launching a digital pharmacy. Shoppers can pay using their health care insurance. Shoppers are eligible for discounts on the amazon site from 50,000 pharmacies. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. The notion that the fed can do all that is required at this point to support the economy is just wrong. The fed is pleading for fiscal relief. I believe it is essential. Tom the former chair of the fed, widely referred to be considered for secretary of treasury by president elect was myjanet yellen, that Favorite Panel at the new Economy Forum, Stephanie Flanders holding court. Francine lacqua with Christine Lagarde later in the u. S. Morning today. Right now, Barry Ritholtz is with us. News, something foundational to read pauls to Barry Grifols to Barry Ritholtzs theory. All i want to do is make 27 per year. It is simple. Do not doepot and anything else. Why is that so hard to do . Barry first you need a time machine to go back in time and buy these things when they are cheap. Everything is obvious after the fact. Do not tell me what were the big winners of the past year. Tell me what the big winners are going to be next year. Tom what are they right now . Lisa the harder issue is tom the harder issue barry the harder issue is being able to see the future. Lisa if you want to not predict the future, which you cannot do unless youre are someone very special, typically people go towards a 60 40 allocation. If people do go towards that, can they just expect to get 2 , 3 , based on where treasury yields are . Is that the new reality of today . Barry clearly not. I do not do predictions, but i think it is a fairly safe, probabilistic exercise to say the returns garnered in the past decade in fixed income are not going to be the same returns we are looking at over the next 10 years. The reason for that is obvious. A decade ago the 10 year was yielding 4 . Today we are under 1 . ,ot only do you get that yield you get the benefit of the capital gains. Unless the u. S. Goes deep into negative territory, and that is oddsy iffy situation, the are against the same sort of returns for fixed income the next decade as they were the last decade. We are talking longterm allocations. Markets are skipping over the near term and attention on the show for the past weeks has been the dissidents between the near term outlook, which is negative, and the data we just had with october retail sales confirming the negativity, versus the positive future without face masks, without social distancing. How do you work around that in trade with that backdrop . Barry let me challenge a little bit of your question. I would not say it was the past few weeks. Go back to the end of march. From the beginning of the second quarter, markets were looking over the valley of the pandemic, of the lockdown, of poor earnings, and looking towards a better future. Change overhe big this year has been the attenuation of the trillions of dollars of the cares act that has worked its way through the economy and is now fading. When we see one of the big things we watched over the past two quarters was the rising savings rate. That is not only ended comet started to reverse. We have seen fairly robust sales in retail, at least robust from what people do from home or going to places like lowes and home depot. That is starting to fade. The big question is are the adult going to step up and will there be fiscal policy to match the Monetary Policy . Tom we have been in a trading zone since september or october. It has been a broad zone with volatility even though we are lifting up with new highs. What you do when you are a trading range in the equity markets . Do go to florida, do you read your last book, do you write a book, what you do in a range . Barry less is more. You are hinting at the right situation. My favorite historical example is to think about 1966 to 1982. Remember the new bull market kicked off in 1982 . In nifty 50 hit their peak 1966 and did not surpass that for the next 16 years. Certainly not on any sustainable basis. The dow just barely kissed 1000 and not get up and overlap until 1982. If you look at people making regular contributions to their savings account. Back then there was no such thing as a 401 k there were sparsely used for o3 b 403 b but if you are making regular contributions to your retirement account you went nowhere. Suddenly 1982 to 1987 comes along, and even after the 1987 crash, the next decade, all of that accumulation of assets during a period of sideways nongrowth suddenly exploded in value because you are teeing yourself up. If the next decade presents us with that, that is what longterm investors will have to think about, not this cycle, but the next pure tom Barry Ritholtz doing so much for bloomberg. His podcast. Longer discussions with smart people. Within the blur of the morning yield has shifted. Within the 10 year,. 8701. We are in four basis points. Lisa a complete reversal of the reflation trade and it is interesting to see the date and the nasdaq futures. People going back to the stayathome stocks. What is interesting about this move as it comes after the much weaker than expected october retail sales. Why is this a surprise . We saw the numbers climbing. We saw the restrictions. We saw the fact that in the highfrequency data people were not going out to eat. That has consequences. The question is how longlasting will the reversal of inflation b. Tom what did you learn on the show today . Lisa i learned about your soft preferences. Tom exactly. This is very emotional. I learn something every day. Jon ferro is looking at me like im supposed to know where they make salt in italy. I have no clue. Olo on twitter put out maps of where they make the pesto. Down south is where they make the salt. Lisa you cannot pivot on jon. You are the one who started talking about chestnuts from a town in france you cannot pronounce. The other thing ive learned from today show is there is a growing feeling, perhaps fade the vaccine optimism. Jonathan was talking about that. Are we getting the Tipping Point today with his retail sales data that is not even show the heart of the slowdown we could see . Tom i could take the point i will take the point it is challenging retail data. I am looking more the labor economy than anything else. Red and green still on the screen. You can say what you want about a movement lower in equities, but still red and green. Nasdaq positive. Down 255. Forfutures 25, near lows the day. The 10 year yield in a solid three basis points. Oil not giving much. The dollar is weaker. Quiet. I has been we advance forward. The conversation on economics, alan blinder of princeton coming up on bloomberg. On Bloomberg Radio and Bloomberg Television, stay with us. Good morning. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. From new york and london for our audience worldwide, good morning. The countdown to the open starts right now. But he futures down 24 on the s p, we begin with the big issue. Joe biden warning of a dark winter ahead. President elect biden things will get tougher before they get easier. That requires bearing no effort to fight covid so we can open businesses safely, resume our lives, and put this pandemic behind us. Itll be difficult but it can be done. Jonathan the United States adding one million new cases in ,he first 10 days of november reverting back to partial lockdown spirit philadelphia introducing some of the countries tightest measures. Closing museums and schools. Iowa implementing a limiting mast mandate. New jersey, oregon, washington state. California putting more than 94 of its population and its most restrictive tier