00:00POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. I AM MARK CONDRON -- COMPTON -- I AM MARK CRUMPTON AND THIS IS BLOOMBERG. > > THIS IS BLOOMBERG MARKETS, THE CLOSE. WITH CAROLINE HYDE, ROMAINE BOSTICK'S, AND TAYLOR RIGGS. THAT'S ROMAINE BOSTICK, AND TAYLOR RIGGS -- WITH CAROLINE HYDE, ROMAINE BOSTICK, AND TAYLOR RIGGS. CAROLINE: THIS IS BLOOMBERG MARKETS, THE CLOSE. IT IS RISK OFF, STOCKS DOWNS, BONDS HIGH. WE WILL BRING YOU OTHER FED REGULATED ECONOMIC OUTLOOKS. THE HOT ECO-DATA. THUS, THE EXPANDED MONTHLY TAX CREDIT FOR UP TO $300 A CHILD HITTING AMERICAN BANK ACCOUNTS TODAY. AND, THE RACE TO SPACE. WE LOOK AHEAD TO JEFF BEZOS'S FLIGHT. CA ROBIN: -- ROMAINE: TECH STOCKS TODAY ARE LOWER. YOU ARE ALSO SEEING FINANCIALS LOWER, MATERIALS, A LOT OF STOCK THAT YOU WOULD THINK WOULD BE PUNCHING A LITTLE HIGHER, THEY ARE REALLY NOT HOLDING APPEAR. YOU ARE ALSO SEEING SELLOFF PERSIST WITH CYCLICAL NAMES IN THE RUSSELL 2000. RIGHT NOW AT SESSION LOWS ARE TREASURING THE -- OUR TREASURY YIELDS. YOU ARE LOOKING AT 130 NOW. ROMAINE: DUBLIN CAPITAL IS SAYING THAT THE FED KEEPS CHANGING THE DEFINITION OF TRANSITORY TO FIT THEIR NEEDS. CPI AND PPI ARE A LITTLE BIT WORRISOME FOR THE MARKET, AND YET, BOND YIELDS KEEP FALLING. THE 192 MARK ON THE THIRD YEAR IT'S PRETTY INCREDIBLE. CAROLINE, TAKE A LOOK AT THE STOCK MARKET. I SHOWED THIS CHART LAST WEEK, HIGHLIGHTING THAT THERE IS A LITTLE BIT OF A PROBLEM OUT THERE. STOCKS ABOVE THE 50 DAY MOVING AVERAGE LOOKS GOOD. STOCKS ABOVE THE 200 DAY MOVING AVERAGE IN WHITE DOES NOT LOOK AS GOOD. IT IS THE PROBLEM UNDERLYING SOME OF THE NERVOUSNESS IN THE MARKET. LET'S GET --CAROLINE: LET'S GET TO GRIPS ON THE NERVOUSNESS. ARE YOU NERVOUS THAT WE ARE AT PEAK GROWTH? SCOTT: WELL, CAROLINE, IN OUR OPINION, YOU HAD SUCH A HUGE RUN IN VALUE AND CYCLICALS AND A SMALL CAPS. AFTER THE LAST COUPLE OF MONTHS, THAT HAS NOT WORKED VERY WELL. IT HIT SOME BUMPY BUMPS IN THE ROAD. I THINK THAT IS NATURAL AFTER SUCH A BIG RUN. IN TERMS OF INFLATION, WE ARE CAN'T THE DEBATING THIS ON OUR -- WE ARE CONSTANTLY DEBATING THIS. DO WE THINK INFLATION IS TRANSITORY? WE GO BACK TO PRE-PANDEMIC LEVELS? WE DON'T THINK SO. WE THINK WE WILL SEE INFLATION PEAK IN MAY, JUNE, JULY, AUGUST, SOMEWHERE IN HERE. THE PPI AND CPI NUMBERS WERE HIGHER THAN EXPECTED, BUT IT IS SPEAKING, WE BELIEVE. WE THINK WE WILL SEE INFLATION DECELERATE NEXT YEAR. I AM IN EQUITY AND FOREIGN-EXCHANGE GUY HISTORICALLY. THE BOND MARKET IS TRICKY. BUT WE THINK THE BOND MARKET HAS SOME CONFIDENCE THAT IF THE FED NEEDS TO STEP IN, THEY WILL NOT LET INFLATION GET AWAY. YOU CAN ALSO READ IN TO IT THAT MAY BE GROWTH, WE EXPECT TO BE 7% NEXT YEAR, A TOUCH OF OUR 5% NEXT YEAR, THE BOND MARKET DOES NOT NECESSARILY BELIEVE WE WILL HAVE STRONG GROWTH OVER THE NEXT 18 MONTHS. ROMAINE: THE BOND MARKET SEEMS LIKE IT DOES HAVE MORE CONFIDENCE ON BEING LONGER ON DURATION HERE. I AM WONDERING, WHEN YOU CONSIDER THIS IDEA HERE THAT MAY BE THE FED DOES NOT HAVE ANY REAL REASON TO MOVE ANY HERE, DOES THAT ALSO MAKE A CASE FOR THEIR BEING LONG-DURATION IN THE EQUITY MARKET? SCOTT: WELL, FOR US, WE ARE STILL LEANING INTO A CONTINUATION OF THIS RECOVERY, ROMAINE. WE LIKE SMALL CAPS. WE LIKE EMERGING MARKETS. WE LIKE THE S & P 500. WE THINK WE WILL HAVE MAYBE 14% 15% BETWEEN THE END OF 2022. WE THINK THIS IS A BUMP IN THE ROAD. LOOK AT FISCAL STIMULUS. LOOK AT THE EASY FED. MAYBE THEY WHIPPED THEIR FOOT SLIGHTLY OFF THE ACCELERATOR, BUT IT IS STILL ON IT. WE THINK JOB OPENINGS, WE WILL LOOK FOR UNEMPLOYMENT TO BE DOWN BY NEARLY 4% BY THE IT OF NEXT YEAR. THESE ARE ALL GOOD THINGS THAT TELL US WE NEED TO LEAN IN TO FURTHER RECOVERY. THAT IS WHAT WE ARE TRYING TO DO. TAYLOR: DO BOND YIELDS SWING HIGHER FROM HERE? WHAT IS HE 192 ON THE 30 YEAR TELLING YOU? SCOTT: FOR US, TAYLOR, OUR OFFICIAL TARGET NOW AT THE END OF THIS YEAR IS 2.25. WILL WE HIT THAT? THE CLOCK IS RUNNING NOW. IT SEEMS LIKE IT IS A LONG WAY FROM 130. SO WE THINK RATES WILL WORK THEIR WAY HIGHER. ARE WE MAY BE TOO OPTIMISTIC ON THAT? WE COULD BE. BUT, WE CERTAINLY THINK THAT OVER THE NEXT 18 MONTHS OR SO, THE 10 YEAR YIELD WILL WORK ITS WAY HIGHER. THE RECOVERY WILL CONTINUE. THE BOND MARKET WILL START PERFECTING SOME OF THAT. TAYLOR: IS THE CYCLICAL TRADE THERE? SCOTT: IT IS ON A HIATUS, I THINK. FOR US, WE STILL LIKE ENERGY. WE LIKE FINANCIALS. WE LIKE MATERIALS. WE LIKE INDUSTRIALS. WE LIKE SMALL CAPS. THOSE ARE ALL GOOD PERFORMERS, TYPICALLY. WE THINK WE ARE IN THE EARLY PART OF THE CYCLE. AS THOSE PARTICULAR SECTORS AND PARTICULAR ASSET CLASSES UNDERPERFORM ON A RELATIVE BASIS, WE THINK IT IS A GOOD TIME TO STEP IN AND PUT MONEY TO WORK. WE THINK THEY ARE GOING TO BE LEADING THE CHARGE AS WE LOOK OUT THROUGH THE YEAR IN 2022. ROMAINE: HOW DO YOU FACTOR IN SOME OF THE ADDITIONAL FISCAL SPENDING THAT IS BEING PUSHED IN CONGRESS? SCOTT: THAT HAS BEEN ANOTHER QUESTION WE GO BACK AND FORTH ON. EVERYBODY HAS DIFFERENT OPINIONS. FOR US, CERTAINLY WE WILL SEE SOME BIPARTISAN INFRASTRUCTURE PAST. THEN, THROUGH RECONCILIATION, WE THINK THERE IS A PRETTY GOOD CHANCE YOU WILL SEE ANOTHER THREE OR $4 TRILLION IN ADDITIONAL SPENDING THEIR. IN OUR OPINION, WHAT IS LIKELY TO HAPPEN IF YOU HAVE A LOT MORE SPENDING DOWN THE PIPELINE. DOES A LOT OF THAT HAVE TO GO THROUGH ON A PARTYLINE VOTE FOR THE DEMOCRATS HOLD THE LINE? YES IT DOES. BUT, WE THINK THAT IS LIKELY. THERE IS PLENTY OF JUICE IN THE SYSTEM NOW. IT LOOKS LIKE THERE WILL BE MORE AS WE MOVE THROUGH THE END OF THIS YEAR. TAYLOR: VOLATILITY. IT DOES IT PICK UP FROM HERE? SCOTT: IT SHOULD. I HOPE IT DOES. THE REASON I SAY THAT IS A LOT OF RETAIL INVESTMENT -- INVESTORS HAVE A LOT OF CASH IN THEIR PORTFOLIOS. THERE IS A LOT OF CASH ON THE SIDELINES. THEY HAVE BEEN WAITING FOR PULLBACK. IT IS REALLY UNUSUAL YOU HAVE THIS KIND OF RUN IN THE MARKET WITHOUT A 10% PULLBACK. THEY HAPPEN PRETTY FREQUENT A, HISTORICALLY, AND WE HAVE NOT HAD ONE IN QUITE A WHILE. WE THINK THERE WILL BE OPPORTUNITIES. WE ARE TRYING TO FIGURE OUT, WHEN WE GET THE OPPORTUNITY, WHAT ARE WE GOING TO DO? WE DON'T WANT TO WAIT FOR THE 10% PULLBACK AND THEN START THINKING ABOUT IT. WE WANT TO THINK ABOUT IT NOW. WE THINK THERE WILL BE HIGHER VOLATILITY. THERE USUALLY IS EARLY CYCLE WHEN THERE IS UNCERTAINTY ABOUT INFLATION. I THINK IT IS NATURAL TO EXPECT VOLATILITY AND WE WILL GET SOME. ROMAINE: SCOTT READ --WREN OF WELLS FARGO INVESTMENT INSTITUTE. YOU ARE WATCHING BLOOMBERG. TAYLOR: THE BIDEN ADMINISTRATION IS BEGINNING TO DISTRIBUTE EXPANDED CHILD TAX CREDIT PAYMENTS, GIVING PARENTS ON AVERAGE $423 THIS MONTH WITH PAYMENTS CONTINUING THROUGH THE END OF THIS YEAR. LET'S WELCOME SENIOR ADVISOR TO THE PRESIDENT AND WHITE HOUSE AMERICAN RESCUE PLAN COORDINATOR. THERE HAS BEEN SOME CONCERN THIS MIGHT MEAN LOWER REFUNDS IN THE FUTURE OR SOME PARENTS MIGHT HAVE TO PAY THE MONEY BACK. DO YOU SEE ANY OF THE, PERHAPS, MAYBE CONCERNS OFFSETTING THE BENEFITS YOU ARE TRYING TO ACHIEVE WITH THIS? > > NOT AT ALL. THIS IS AN EXPANDED CHILD TRACK CREDIT -- ALL TAX CREDIT GOING FROM $2000, $3000 FROM CHILDREN SIX TO 17 AND 36 HUNDRED DOLLARS FOR THOSE UNDER SIX YEARS OLD. -- $3600 FOR THOSE UNDER SIX YEARS OLD. TAKE MAY BE A HARD-PRESSED $35,000 FAMILY WITH TWO YOUNG KIDS, THEY ARE GOING TO GET MORE DURING THE YEAR AND MORE AT THE REFUND. A PARENT WITH TWO CHILDREN OVER SIX IS GOING TO GET $500. THEY COULD GET AS MUCH OF -- AS A $600. SO, THEY ARE GOING TO GET A SIGNIFICANT AMOUNT MONTHLY ON THE 15TH OF EVERY MONTH. THAT IS EXTREMELY HELPFUL. THEY WILL GET THE REST AT APRIL. FOR A LOT OF THEM, THAT MIGHT BE MORE THAN THEY HAVE GOTTEN. IF SOMEBODY PREFERS TO GET ALL OF THE CHILD TAX CREDIT AT THE END OF THE YEAR, THEY CAN OPT TO DO THAT. THEY HAVE THAT OPTION. I THINK YOU WILL SEE, OVERWHELMINGLY, THAT MOST FAMILIES LIKE THE IDEA OF GETTING $600 OR $500 EACH MONTH ON THE 15TH OF EVERY MONTH. SO, WE ARE VERY PROUD THAT THE AMERICAN RESCUE PLAN WAS PASSED ON MARCH 11 AND JUST FOUR MONTHS LATER YOU GOT THE FIRST MONTHLY CHILD TAX CREDIT EVER COMING ON THE EXACT SAME DAY ON THE MONTH -- OF THE MONTH. I THINK THIS WILL BE OVERWHELMINGLY POPULAR WITH WORKING FAMILIES ACROSS OUR COUNTRY. CAROLINE: YOUR AIM IS TO CUT CHILD POVERTY IN HALF, JEAN. THAT IS AN AMAZING PAIN. FAMILIES WHO ARE NOT ALREADY REGISTERED WITH THE IRS, HOW ARE YOU TACKLING THAT? IF YOUR CHILD DOES NOT HAVE A SOCIAL SECURITY NUMBER, FOR EXAMPLE, AND THE NERVOUSNESS AROUND MIXED IMMIGRATION STATUS. JEAN: GOOD QUESTION. THE FIRST THING TO REMEMBER IS THIS IS LIKE SOCIAL SECURITY. IT IS A HUGE ECONOMIC SECURITY BOON FOR THE WHOLE MIDDLE CLASS, AS WELL AS BEING GOOD FOR LIFTING CHILDREN OUT OF POVERTY. SO, THIS ENTIRE TAX CREDIT GOES TO EVERY COUPLE, EVERY FAMILY MAKING OLD -- UNDER $150,000. THIS REALLY GOES TO THE VAST MAJORITY OF AMERICAN FAMILIES. ON YOUR QUESTION OF HOW IT WOULD HELP ON CHILD POVERTY, REMEMBER, I WAS JUST SAYING THAT 26 MILLION OF THOSE LOWER INCOME FAMILIES ARE GETTING IT AUTOMATICALLY. THEY WERE ALREADY IN THE SYSTEM. BUT, THEIR PARENTS MADE TOO LITTLE, PERHAPS BELOW THE POVERTY LINE, AND THEREFORE, THEY DID NOT GET THE FULL CREDIT. A BIG IMPACT IS THE 26.50 INTO -- 26.5 MILLION LOW INCOME CHILDREN WHO WILL BE BENEFITED AUTOMATICALLY. WE HAVE TO DO EVERY BIT OF OUTREACH WE CAN. FAMILIES DID NOT SIGN UP FOR THE STIMULUS PAYMENTS. SOME OF THEM ARE NOT NECESSARILY LOW INCOME FAMILIES, BUT SOME ARE. I THINK WE ARE GOING TO BE INVOLVED AS WE HAVE BEEN IN A NATIONWIDE EFFORT WORKING WITH THE MOST SERIOUS NONPROFITS, THE MOST SERIOUS OUTREACH WHO CAN CONVINCE YOUNG PEOPLE THEY SHOULD FILE, AND PERHAPS, HELP THEM WORK THROUGH THE NONVOLATILE PORTAL FOR THE CHILD TAX CREDITS WHICH IS BEING SET UP FOR THE FIRST TIME. -- THE NON-FILER PORTAL FOR THE CHILD TAX CREDIT WHICH IS BEING SET UP FOR THE FIRST TIME. ROMAINE: THE IMPACT BEING MEASURED BY ECONOMISTS AS WELL DOCUMENTED. I AM CURIOUS ABOUT SOME OF THE OTHER MEASURES THE BIDEN ADMINISTRATION HAS BEEN TAKING TO ADDRESS INEQUALITY. AND TO ADDRESS THE PRESSURES LOWER INCOME AND MIDDLE INCOME FAMILIES ARE FEEDING, PARTICULARLY WHEN IT COMES TO HOUSING. NEW DATA SHOWS THAT IF YOU MAKE A MINIMUM WAGE SALARY IN THIS COUNTRY, YOU CANNOT AFFORD TO RENT ANYWHERE IN THE COUNTRY. AT LEAST, NOT BASED ON ANY SORT OF GUIDELINES WE WOULD CONSIDER TO BE RESPONSIBLE. WHAT IS THE GENERAL PLAN? WHAT IS A STRATEGY TO ADDRESS SOME OF THOSE INEQUITIES? GENE: PART OF OUR LONG-TERM PLAN IS TO ACTUALLY INCREASE THE SUPPLY OF AFFORDABLE HOUSING. MORE SUPPLY OVER THE LONG RUN WILL BE HELPFUL WITH PRICES. IMMEDIATELY, YOU HAVE OBVIOUSLY SEEN STIMULUS CHECKS THE MAJOR HELP. THERE IS $45 MILLION IN EMERGENCY RENTALS. WE ARE DOING EVERYTHING WE CAN TO STAND UP AS QUICKLY AS POSSIBLE, PARTICULARLY WITH THE EVICTION MORATORIUM. THERE IS NO DOUBT THAT FOR MANY FAMILIES, THIS EXTRA SEVERAL THOUSAND DOLLARS A YEAR THEY WILL GET FROM THE CHILD TAX CREDIT WILL CERTAINLY BE HELPFUL FOR MANY FAMILIES STRUGGLING WITH HOUSING. BUT, WE UNDERSTAND THAT ISSUE. WE ARE VERY DEVOTED TO IT. FROM HOUSING VOUCHERS TO INCREASING HOUSING SUPPLY TO THE EMERGENCY RENTALS, WE HAVE A STRONG PLAN. BUT, WE UNDERSTAND THIS IS SOMETHING THAT WE ARE GOING TO HAVE TO STAY AT. TAYLOR: IN TERMS OF AFFORDABILITY, REAL WAGES ARE DONE ONE -- DOWN 1% ON THE YEAR-TO-YEAR BASIS. IS THAT SOMETHING YOU ARE WORRIED ABOUT? IS THAT WHAT FEELS LIKE A TAX ON LOWER INCOME AND MIDDLE AMERICANS? GENE: NO. I FEEL LIKE THIS ECONOMY THAT WILL BE GROWING 6% TO 7%, HAVING A TIGHTER LABOR MARKET, SEEING WAGES GO UP FOR MANY FAMILIES, YES, YOU ARE SEEING MORE PEOPLE COME IN, BUT YOU HAVE TO BE VERY CAREFUL LOOKING AT STATISTICS THAT MAY ONLY BE REFLECTING A COUNTRY COMING BACK FROM A PANDEMIC WHERE THEY SHUT DOWN THE ECONOMY. I THINK OVERALL, THIS STRONG ECONOMIC GROWTH IS A HISTORIC OUTGROWTH OF 3 MILLION IN THE FIRST MONTHS, MOST FOR A PRESIDENT EVER IN THIS TIME FRAME OF THE PRESIDENCY, I BELIEVE IN MANY INDUSTRIES YOU ARE SEEING THAT THE STRONGER ECONOMY IS BENEFITING MANY MANY LOW, MODERATE INCOME WORKERS WHO ARE ABLE TO GET WAGES AND HAVE A LITTLE BIT MORE DIGNITY AND ABILITY TO DEMAND RESPECT AND A BIT OF A HIGHER WAGE WHEN THEY ARE GOING INTO THE LABOR MARKET. CAROLINE: OF COURSE, SENATE REPUBLICANS, ANY REPUBLICANS, WILL SAY THAT SPENDING LEADS TO AN INFLATIONARY CYCLE. YOU WILL SEE MORE FURTHER PRESSURE ON FOOD INFLATION. DO YOU BELIEVE, ULTIMATELY, THAT INFLATION WILL GROW OVER AND THIS IS THE WE ARE AT THAT THE FEDERAL RESERVE HAS THE RIGHT POLICY TOKEN NOW? -- POLICY TOOLKITS NOW? GENE: I BELIEVE THIS IS TRANSITORY INFLATION. MOST OF THE ISSUES YOU'RE SEEING ARE PANDEMIC RELATED INDUSTRIES, HOTELS, AUTO, WHERE YOU ARE SEEING IMPACT JUST BECAUSE YOU'RE GOING FROM AN ECONOMY THAT WAS SHUT DOWN TO STARTING UP. TAKE AIRLINES. AIRLINE PRICES ARE UP. BUT, THEY ARE STILL BELOW WHERE THEY WERE PRE-PANDEMIC. SO, SOME OF THIS IS JUST THE EFFECT OF AN ECONOMY COMING BACK FROM THIS HISTORIC SHUTDOWN DUE TO THE PANDEMIC. AGAIN, I THINK IF YOU WOULD TAKE OUT FROM THE CALCULATION THE PANDEMIC RELATED INDUSTRIES LIKE AIRLINES, HOTELS, AUTOS, YOU WOULD FIND THAT REALLY THINGS STILL LOOK VERY SOLID. I THINK THAT IS HOW THE FED IS LOOKING AT IT AT HOW THE MARKET IS LOOKING AT IT NOW IS NOW. THERE IS CERTAINLY A CASE TO BE MADE FOR THAT GENE. IF EVEN WHEN YOU STRIP OUT FOOD, GAS, USED CARS, YOU ARE STILL TALKING ABOUT SOME OF THE HIGHEST INFLATION WE HAVE SEEN IN A COUPLE OF DECADES. THAT IS IN THE DATA. WE HEARD FROM A LOT OF THE FOLKS, THE MEMBERS OF CONGRESS WHO HAVE BEEN GRILLING JAY POWELL ON THE HILL THESE LAST COUPLE OF DAYS, A LOT OF ANECDOTAL EVIDENCE ABOUT PEOPLE SEEING REAL, TANGIBLE INCREASES IN PRICES, THINGS THAT AT LEAST, IN MY PERCEPTION, THEY DO NOT FEEL THAT WILL GO DOWN. WE HAVE TALKED A LOT ABOUT THIS WITH MEMBERS OF THIS OF THIS DURATION. A LOT OF THIS DATA IS NOT DATA TO REGULAR PEOPLE. IT IS A FEELING. IF PEOPLE FEEL LIKE PRICES ARE GOING UP, THAT WILL HAVE A TANGIBLE EFFECT. GENE: RIGHT NOW THE COUNTRY THE TANGIBLE EFFECT MOST FAMILIES ARE FEELING IS THAT EVERY WORKING FAMILY IS LOOKING INTO THEIR BANK ACCOUNT AND SEEING CHILD CDS -- CTC. A I THINK THAT TODAY YOU ARE SEEING AMERICAN FAMILIES ACROSS THE COUNTRY SEEING THE BENEFITS OF THE AMERICAN RESCUE PLAN, SEEING WHAT IT IS LIKE TO HAVE A PRESIDENT THAT PUTS A MIDDLE-CLASS FIRST AND FEELING THOSE BENEFITS. WE JUST SAW THE CONGRESSIONAL BUDGET OFFICE INCREASE THE ESTIMATE FOR GROWTH FROM 3.72 SEVEN POINT -- FROM 3.7 TO 7.4% BECAUSE OF THE AMERICAN RESCUE PLAN. THINGS LIKE THIS CHILD TAX CREDIT ARE GOING TO OUTWEIGH TRANSITORY IMPACTS. ROMAINE: WE WILL BE WATCHING TO SEE IF THAT HAPPENS. WHAT HAPPENS, THOUGH, WHEN YOU GET TO THE POINT WHERE THIS RUNS OUT? IS THERE A PLAN TO ADDRESS WHAT HAPPENS WHEN YOU GET TO THE END OF THE YEAR? ARE YOU GOING TO HAVE THE HELP OF CONGRESS? GENE: I THINK THE THING THAT IS SO SMART ABOUT THE PLAN JOE BIDEN HAS PUT FORWARD IS THAT IT IS DESIGNED, NOT JUST TO HAVE RESCUE THIS YEAR, WHICH IS THE STIMULUS CHECKS AND EMERGENCY RENTALS, BUT, IT HAS GIVEN STATE AND LOCAL GOVERNMENTS, GIVEN STOCK OUR CENTERS, THE ABILITY TO USE MONEY FOR OVER THREE YEARS. IT IS DESIGNED TO HAVE A STABLE, STRONG RECOVERY. I WILL ADMIT THAT AFTER THE GREAT RECESSION MONEY DID RUN OUT. STATE AND LOCAL GOVERNMENTS STARTED CONTRACTING. NOW, YOU HAVE A VERY STRONG STATE AND LOCAL PLAN THAT IS ALLOWING GOVERNORS, I JUST TALKED TO SEVERAL YESTERDAY, TO PUT IN PLACE PLANS THAT WILL LEAD TO NOT JUST THE RESCUE, BUT A STRONG AND STABLE RECOVERY, WHICH WILL ONLY FEEL MORE THAT WAY WHEN WE PASS A BIPARTISAN INFRASTRUCTURE BILLS AND THE PRESIDENT'S BUILD BACK BETTER PLAN. TAYLOR: SPEAKING OF NEW BELLS AND YOU MONEY, HOW WILL WE PAY FOR IT? -- SPEAKING OF NEW BELLS AND NEW MONEY, HOW WILL WE PAY FOR IT? GENE: YOU ARE SEEING VERY SERIOUS EFFORTS TO RAISE REVENUE IN PLACE THAT DO NOT -- IN WAYS THAT DO NOT APARTMENT MIDDLING OR MORE WORKING FAMILIES AND HELP PAY FOR THINGS LIKE FREE COMMUNITY COLLEGE, THE CHILD TAX CREDIT. ONE OF THEM IS SIMPLY THE NOTION THAT WE HAVE NEVER INVESTED ENOUGH IN THE IRS HAVING THE ENFORCEMENT ABILITIES FOR THOSE MOST WELL-OFF CORPORATIONS AND INDIVIDUALS WHO COST THE AMERICAN TAXPAYER TENS OF BILLIONS OF DOLLARS THROUGH EVASION. WE THINK THE RETURN ON THIS WILL BE VERY SIGNIFICANT, OBVIOUSLY, THE PRESIDENT IS -- HAS SHOWN HE IS WILLING TO RAISE TAXES IN A JUDICIOUS MANNER ON THOSE OVER $400,000, TO RAISE THAT PART OF THE CORPORATE TAX RATE CUT THAT WENT DOWN TO 21% TO BRING BACK SOME OF THE CAPITAL GAINS, OTHER MEASURES. WE THINK THESE ARE REASONABLE LONG-TERM MEASURES THAT WILL HELP FUND THIS NOTION OF BUILDING BACK OUR COUNTRY IN A WAY THAT IS STRONGER, MORE EQUITABLE. WE THINK EVERYBODY WILL BENEFIT. IT WILL LEAD TO A STRONGER, MORE SUSTAINED ECONOMIC RECOVERY. CAROLINE: ARE YOU WORRIED ABOUT THE DEBT LIMIT? ANY SORT OF MOVE BEING TOO SLOW IN TERMS OF RAISING IT OR SUSPENDING IT? GE NE: I THINK THIS COUNTRY HAS LEARNED HIS LESSON. IN 2011, WE WERE SUPPOSED TO HAVE A VERY STRONG RECOVERY. WE HAD A COUPLE OF EXTERNAL EVENTS LIKE THE OF SPRING LEADING TO HIGHER GAS PRICES THAN THE MELTDOWN IN FUKUSHIMA CREATING A GLOBAL SUPPLY CRUNCH. WE HURT OUR ECONOMY THROUGH A DEBT SCARE BY PEOPLE HOLDING THE DEBT LIMIT HOSTAGE, BASICALLY, HOLDING OUR ECONOMY HOSTAGE. I REALLY BELIEVE, AND HELP, -- I REALLY BELIEVE THAT EVERYONE HAS LEARNED THE LESSON THAT THAT IS A SELF-INFLICTED WOUND TO THE AMERICAN PEOPLE BY THE GOVERNMENT THAT NOBODY WANTS. I BELIEVE THAT PEOPLE WILL WORK HARD TO AVOID IT IN A TIMELY MANNER. ROMAINE: IT IS ALWAYS GREAT TO GET THE PERSPECTIVE OF THE WHITE HOUSE. THAT IS GENE SPERLING, NOW THE SENIOR ADVISOR TO THE BIDEN ADMINISTRATION HELPING THE ROLLOUT OF THE AMERICAN RESCUE PLAN. WE WANT TO JUMP NOW TO A CONVERSATION THAT IS ALREADY IN PROGRESS. THIS WAS THE CEO OF CARNIVAL CARL DONNELL SPEAKING WITH CAROL MASSAR AND TIM STENOVEC. LET'S GO LISTEN. CARL: NOW THE WORLD IS GETTING A GRIP ON THE VIRUS. SCIENTISTS AND TECHNOLOGISTS, THE FIRST RESPONDERS, EVERYONE HAVE GOTTEN US TO THIS POINT, WHICH IS A PHENOMENAL THING. FROM SOMETHING WE DID NOT EVEN UNDERSTAND 15 MONTHS AGO TO MULTIPLE VACCINES, ADVANCED TREATMENTS, KNOWN PROTOCOLS TO MITIGATE SPREAD. IF WE ACT RESPONSIBLY, WE CAN MANAGE THIS. CAROL: WE ARE TALKING WITH ARNOLD DONALD THE CEO OF CARNIVAL CORPORATION. WE ARE LIVE ON BLOOMBERG TV, BLOOMBERG RADIO, AND YOUTUBE. ARNOLD, LET ME PUSH ON THE DELTA VARIANT. HOW DOES THE DELTA VARIANT IMPACT YOUR RESTART, ESPECIALLY IN THE U.S.? CARNIVAL BREEZE IS GOING OUT THIS AFTERNOON. ARE YOU SEEING ANY IMPACT ON BOOKINGS OR CANCELLATIONS AS A RESULT OF THAT? ARNOLD: NO. WE HAVE NOT. WE HAVE NOT SEEN A MAJOR IN THAT. AGAIN, I THINK THE SCIENTISTS AROUND THE WORLD ARE PRETTY MUCH ALIGNED AROUND THE FACT THAT BEING VACCINATED PREVENTS TWO THINGS. ONE IS THE POSSIBILITY OF CONTRACTING THE VIRUS. THEN, IF YOU CONTRACTED, -- IF YOU DO CONTRACTED, THE PROBABLY -- IF YOU DO CONTRACT IT, THE POSSIBILITY OF SERIOUS EFFECTS. IT ALSO APPEARS TO MITIGATE THE SPREAD OF THE VIRUS. IF YOU HAVEN'T, YOU HAVE LESS OF A VIRAL LOAD. YOUR PROPENSITY TO TRANSMIT IS A LITTLE LESS. SO, WE HAVE NOT SEEN A BIG IMPACT. OBVIOUSLY, IT WILL IMPACT ACCESS TO DESTINATIONS. PLACES WHERE PEOPLE ARE NOT VACCINATED YET OR NOT ENOUGH OF THE POPULATION IS. SO, IT CAN SLOW DOWN PROGRESS THAT WAY. WE WILL PAY CLOSE ATTENTION. AS WE ALWAYS DO, WE WILL FOLLOW THE AUTHORITIES AROUND THE WORLD. WE HAVE TO BE IN COMPLIANCE EVERYWHERE. WE WILL FOLLOW THE GOOD COUNSEL FROM THE LEADING MEDICAL SCIENTISTS AND PERSONNEL THAT WE WORK WITH CONSTANTLY. CAROL: YOU SEEN A LOT OF ECONOMIC CYCLES. I THINK WE ARE TRYING TO ASSESS IN OUR CONVERSATIONS WITH EVERYBODY ON BLOOMBERG, WHAT IS THE ECONOMIC OUTLOOK? YOU WILL HEAR FROM ONE AIRLINE CEO THAT SAYS THINGS ARE GOING REALLY STRONG. YOU HEAR FROM SAID MEMBERS. THE FED CHIEF REMINDING US AGAIN THAT IT WILL TAKE TIME TO GET TO WHERE WE WERE PRE-PANDEMIC. WHICH IS WHY HE IS STILL IN SUPPORT OF THE MEASURES THE FED HAS TAKEN. HOW DO YOU SEE IT? SEE ECONOMY GETTING CLOSER -- IS THE ECONOMY GETTING CLOSER? HOW WOULD YOU DESCRIBE IT? ARNOLD: I AM NOT AN ECONOMIST. BUT, MY EXPERIENCE NOW IS THAT THE ECONOMY IS STRONG. THERE IS A LOT OF PENT-UP DEMAND. PEOPLE ARE ANXIOUS TO TRAVEL AND ENJOY THINGS AGAIN. FOR QUITE SOME TIME, A LOCKDOWN OR NEAR LOCKDOWN. THERE IS A LOT OF EXCITEMENT AND INTEREST PEOPLE ARE HAVING A HARD TIME HIRING PEOPLE BECAUSE OF STIMULUS PACKAGES AND OTHER THINGS. CAROL: ARE YOU HAVING PROBLEMS HIRING PEOPLE? ARNOLD: WE RECRUIT FROM COUNTRIES AROUND THE WORLD. FOR US, IT IS NOT THE ISSUE. ON THIS SHORT SIDE, I AM SURE WE WILL FACE SOME CHALLENGES IN SOME AREAS. TIM: YOU SAY YOU RECRUIT FROM 145 COUNTRIES AROUND THE WORLD. HOW DO YOU ENSURE YOUR STAFF HAVE ACCESS TO VACCINES, GIVEN THAT THE VACCINE ROLLOUT ACROSS THE WORLD HAS BEEN UNEVEN? ARNOLD: THAT IS A GREAT QUESTION. WE ARE VERY GRATEFUL TO SO MANY PEOPLE AROUND THE WORLD WHO HAVE HELPED US GAIN ACCESS TO VACCINES FOR OUR CREW. BECAUSE, THE REALITY IS, WE CAN, -- WE CANNOT, AS A COMMERCIAL ENTITY, DIRECTLY ACCESS THE BACK. IT IS LOCALITIES LIKE MIAMI AND OTHER PLACES AROUND THE WORLD THAT HAVE MADE THE VACCINES AVAILABLE. THEY DO SO BECAUSE THEY KNOW THE ECONOMIC IMPACT OF CRUISES. SO, WE CAN GET OUR CREW VACCINATED THAT WAY. TIM: -- CAROLINE: CARNIVAL CEO DON -- ARNOLD DONALD. ROMAINE: THERE IS A NEW INITIATIVE TO ELIMINATE PROBLEMS HAMPERING THE PRODUCTION AND GLOBAL ROLLOUT OF COVID-19 SHOTS. THE GROUP IS WORKING TO LINK MANUFACTURERS WITH THE SUPPLIERS OF MATERIALS SUCH AS FILTERS, FILES, AND OTHER KEY ITEMS USED TO MAKE VACCINES. THEY WANT TO GET MORE DOSES TO THE GLOBAL DISTRIBUTION PROGRAM. IN SOUTH AFRICA, THE NUMBER OF SOLDIERS DEPLOYED IS OVER 5000. THESE 72 PEOPLE HAVE BEEN KILLED. THE UPRISING IS THE DEADLIEST SINCE APARTHEID ENDED IN 1994. ONE OF THE WORLD'S LARGEST ALTERNATIVE MANAGEMENT FIRMS SAT DOWN WITH JASON KELLY TO TALK ABOUT HIS VISION, PUSHING THE FIRM INTO NEW MARKET AND SHAPING THE INVESTMENT LANDSCAPE. MARK ROWEN ALSO MENTIONED TWO OF THE FIRMS THREE COFOUNDERS, LEON WET, FORCED -- LEON WAGG FORSTER STEP DOWN. -- FORCED TO STEP DOWN. > > WE ARE IN THE PROCESS OF A GENERATIONAL SHIFT. THAT MEANS GOVERNMENT, THAT MEANS ONE SHARE ONE VOTE. THAT ALSO MEANS LEON STEPPING DOWN FROM THE FIRM. > > MR. ROHAN SAYS THAT IN THE LAST YEAR APOLLO SAW A RECORD PROFIT AND HAD FEWER EMPLOYEES LEAVE THE FIRM. LOCAL NEWS 24 HOURS A DAY -- GLOBAL NEWS 24 HOURS A DAY ON AND ON BLOOMBERG QUICKTAKE POWERED BY OVER $2700 AND ENDLESS IN OVER 120 COUNTRIES -- AND ANALYSTS IN OVER 100 20 COUNTRIES. I AM MARK CRUMPTON. THIS IS BLOOMBERG. ROMAINE: LET'S GET CAUGHT UP. IN THE COMMODITY SPACE, THE SETTLEMENT OF WTI BELOW THE $72 MARK. SOME CONCERNS ABOUT THE PACE OF GLOBAL ECONOMIC RECOVERY BEING REFLECTED IN CRUDE PRICES. IF YOU TAKE A LOOK AT INDUSTRIAL METALS PRICES, THOSE ARE HIGHER ON THE DAY. THERE WAS ENCOURAGING DATA OUT OF CHINA AND IN THE U.S. THAT SUGGEST THAT MAYBE THE ECONOMIC RECOVERY IS STILL ON TRACK. THIS IS THE YIN-YANG WE HAVE BEEN SEEING IN MARKETS FOR QUITE SOME TIME. WHETHER YOU BELIEVE IN THE LONGER-TERM GROWTH STORY OR THINK WE ARE HEADED TOWARDS A SIGNIFICANT RUSSIAN, AT THE BOTTOM OF THE SCREEN, THOSE ARE LUMBER PRICES. 577. STRAIGHT DAYS OF DECLINE. ALIX: --CAROLINE: FED CHAIRMAN JEROME POWELL IS SUSPENDING CENTRAL-BANK SUPPORT FOR THE U.S. ECONOMY EVEN AS INFLATION RISES. POWELL IS TESTIFYING BEFORE A SENATE COMMITTEE. > > THIS IS A SHOCK GOING THROUGH THE SYSTEM ASSOCIATED WITH THE REOPENING OF THE ECONOMY AND DISTURBING INFLATION ABOVE 2%. WE ARE NOT COMFORTABLE WITH THAT. THIS PARTICULAR INFLATION IS UNIQUE IN HISTORY. WE DO NOT HAVE ANOTHER EXAMPLE. WE ARE TRYING TO BOTH UNDERSTAND THE BASE CASE AND ALSO THE REST. -- THE RISKS, CAROLINE: JOINING US NOW IS MICHAEL MCKEE FROM ROCKY MOUNTAIN ECONOMIC SUMMIT IN IDAHO. IT IS GREAT ROUGH TIME WITH YOU, MIKE. CHAIR POWELL SEEMS ONE OF THE MOST DOVISH ON THE ENTIRE FOMC. WE HAVE BEEN HEARING MORE HAWKISH TONES FROM OTHER FED PRESIDENTS. MICHAEL: WHAT IS INTERESTING IS THAT THEY ARE SAYING THE SAME THING ABOUT THE MODELING, THE UNDERSTANDING OF WHAT IS GOING TO HAPPEN WITH INFLATION. WE SPOKE WITH ST. LOUIS FED PRESIDENT JIM BULLARD THIS MORNING AND CHICAGO'S CHARLES EVANS. BOTH SAID THEY DO NOT HAVE A LOT OF CONFIDENCE IN THEIR FORECAST. THEY ARE NOT SURE WHAT WILL HAPPEN. THIS IS NEW TERRITORY. BULLARD SEES INFLATION RISING AT A FASTER PACE. HE THINKS IT WILL BE LESS TRANSITORY. EVANS THINKS IS THE OPPOSITE. THE FED AT THIS POINT JUST UP IN THE MIDDLE BETWEEN THE TWO CAMPS. THAT IS WHERE WE FIND JAY POWELL TAKING THE VIEW THAT THE FED HAS PROMISED IT WILL WAIT. SO, IT WELL. -- SO, IT WILL. TAYLOR: HAVE WE MADE ANY PROGRESS ON A DIGITAL DOLLAR? MICHAEL: JAY POWELL HAVE TOLD MEMBERS OF CONGRESS AT THE FED IS WORKING ON TRYING TO UNDERSTAND IT. THEY ARE NOT NECESSARILY WORKING ON A CURRENCY YET. THEY WILL PUBLISH A REPORT IN SEPTEMBER THAT LAYS OUT THE PROS AND CONS. THE IDEA OF A GENTLE DOLLAR IS EXTREMELY COMPLICATED, MUCH MORE SO THAN YOU WOULD THINK THAT A DIGITAL DOLLAR IS EXTREMELY COMPLICATED, MUCH -- A DIGITAL DOLLAR IS EXTREMELY COMPLICATED AND WE HAVE DIFFERING VIEWS IN THE FED. CHARLIE EVANS IS WORRIED ABOUT THE DOWNSIDES. HERE IS WHAT HE HAD TO SAY. > > THEY COME WITH RISKS. A LOT OF PEOPLE WHO USE CRYPTOCURRENCIES DEMAND ANONYMITY. I THINK THERE ARE A LOT OF NEFARIOUS ACTIVITIES THAT ARE FACILITATED AND ENHANCE THAT EMPLOYEE -- ENHANCED THAT EMPLOY THESE TYPES OF PAYMENT MECHANISMS. SO, WE HAVE TO BE VERY CAREFUL ABOUT THINK SECRECY AND MONEY LAUNDERING. -- BANK SECRECY AND MONEY LAUNDERING. MICHAEL: THERE ARE PEOPLE WHO WORRY WE WILL FALL BEHIND CHINA IN DEVELOPMENT OF A DIGITAL DOLLAR BECAUSE ATTORNEYS ARE ALREADY PUTTING OUT A DIGITAL YUAN. PAUL RYAN IS HERE THIS SUMMIT AND HE SAID THAT IS ONE OF HIS BIGGEST CONCERNS. THE FED'S ARGUMENT IS NO ONE WILL REPLACE THE DOLLAR ANYTIME SOON SO WE HAVE TIME TO LOOK AT THIS. IF WE ARE GOING TO DO IT, GET IT RIGHT. CAROLINE: THE ECB IS IN THE INVESTIGATION PHASE AT THE MOMENT. MEMBERSHIP COLLECTIVE GROUP AS A COMPANY BEHIND SOHO HOUSE AND ADJUST RAISED FOUR AND JUST RAISED WARNER $20 MILLION AS IT WENT PUBLIC. I CAUGHT UP WITH THE CEO. THAT CONVERSATION NEXT. THIS IS BLOOMBERG. CAROLINE: WHY WOULD A PRIVATE MEMBERS CLUB OUGHT TO GO PUBLIC? FOR THE COMPANY BEHIND SOHO HOUSE IT IS ABOUT PAYING OFF DEBT AND CONTINUING EXPANSION. THE COMPANY HAS A MARKET VALUATION OF $3 BILLION, FALLING SLIGHTLY AT THE MOMENT. I SPOKE WITH THE CEO, NICK JONES ON HIS BUSINESS MODEL. NICK: WE HAVE BEEN DOING BUSINESS -- MEMBERSHIP FOR 26 YEARS. AT THE CENTER IS SOHO HOUSE, BUT THERE IS ALSO EXPANDING GLOBALLY INTO METROPOLITAN CITIES INCLUDING NEW YORK. WE ALSO HAVE SCORPIUS, A BEACH BRAND COMING VERY SOON AND EXPANDING. ALL OF THESE HAVE MEMBERSHIP ELEMENTS. THEN, WE HAVE SOHO PLUS A RETAIL , ONLINE RETAIL LIFESTYLE STORE SUBSCRIPTION. ANYTHING WE HAVE AFFILIATE WITH AN ACQUIRE IN THE FUTURE. THE MEMBERSHIP COLLECTIVE IS A PLATFORM. AT THE CENTER IS SOHO HOUSE. SOHO HOUSE HAS ALWAYS FOLLOWED WHAT OUR MEMBERS WANT. EVERY DAY I THINK, HOW CAN I MAKE LIFE FOR OUR MEMBERS BETTER? WE THINK A COMING DEATH ROUTE WILL MAKE LIFE -- COMING THIS ROUTE WILL MAKE LIFE FOR OUR MEMBERS BETTER. CAROLINE: WHO ARE YOUR MEMBERS? NICK: THE AVERAGE AGE IS 38. OUR MEMBERS ARE FROM EVERYWHERE. WE ARE VERY INCLUSIVE. IT DOES NOT MATTER IF YOU ARE A STRUGGLING SCRIPT WRITER OR STRUGGLING ARTIST. IT IS NOT EXPENSIVE. WE LIKE ATTRACTING FROM EVERYWHERE. CAROLINE: IT IS A RELATIVE AMOUNT YOU ARE SPENDING FOR ACCESS. BUT, WHAT IS NOTABLE IS THE SUBSCRIPTION OFFER. YOU TALK ABOUT GOING BACK TO 1995, JUST WANTING TO SURVIVE THAT YEAR. I CAN ONLY IMAGINE WHAT 2020 FELT LIKE FOR YOU. NICK: THE LOYALTY OF OUR MEMBERS STOOD OUT TO ME. IT WAS INCREDIBLE. WITHOUT THE LOYALTY OF OUR MEMBERS, WE WOULD BE IN A DIFFERENT POSITION. THEY CARE ABOUT US. IT WAS GOOD TO SEE. SINCE WE HAVE STARTED REOPENING AGAIN AND HERE IN BRITAIN WE PROPERLY WE OPEN MONDAY, WHICH IS SUPER EXCITING, OUR MEMBERS ARE FLOCKING BACK TO THE HOUSES. THEY LOVE THE FACT THAT THEY KNOW EVERYONE IN THE HOUSE AND FEEL SAFE BILLION THEY LOVE -- AND FEEL SAFE. THEY LOVE THAT WE HAVE MADE SO ALLOWS MEMBERSHIP TOTALLY HYBRID. NOT ONLY CAN THEY HAVE AMBER SHIP TYPICALLY -- MEMBERSHIP PHYSICALLY BUT DIGITALLY AS WELL. WE THINK WE ARE COMING OUT OF COVID IN A VERY GOOD POSITION. WE THINK THERE IS A LOT OF EXCITING GROWTH OPPORTUNITIES, A LOT OF WHITE SPACE TO PUT NEW HOUSES. OUR MEMBERS LOVE NEW HOUSES. I GET SUPER EXCITED THAT WE ARE -- THEY GET SUPER EXCITED THAT WE ARE OPENING IN ROME, PARIS, AND TEL AVIV IN THE NEXT THREE MONTHS. CAROLINE: YOU ARE BECOMING A PUBLIC COMPANY IN NEW YORK. WHY DID YOU PICK AMERICA? NICK: AMERICA IS 60% OF OUR TONE OVER, OUR TURNOVER -- OUR TURNOVER, 60% OF OUR PROFIT AND HAS A HUGE ROADMAP OF NEW OPENINGS. WE THOUGHT NEW YORK WAS THE PLACE TO DO THIS. CAROLINE: TELL ABOUT TURNOVER AND PROFIT. YOU ARE A COMPANY THAT CONTINUES TO SCALE, THAT IS LOOKING TO DO THIS IPO AND PAY DOWN DEBT. THE AIM OF PROFITABILITY. WINDOWS THAT BECOME A REALITY FROM YOUR PERSPECTIVE? DOES IT TAKE GAIL? WHAT DOES THAT TAKE? -- DOES IT TAKE SCALE? WHAT DOES THAT TAKE? NICK: WE ARE GOING TO BE TURNING IN NET PROFIT IN THE NEXT FEW YEARS. THE WHOLE PROCESS OF GROWING PUBLIC -- GOING PUBLIC, WE HAVE A CAPITAL MODEL TO MOVE FORWARD. WE FEEL WE ARE DEFINITELY READY FOR THIS MOVE. CAROLINE: MY INTERVIEW WAS MEMBERSHIP COLLECTIVE GROUP CEO NICK JONES. THE BIDEN ADMINISTRATION WILL AIM TO ISSUE A HONG KONG MORNING AS INVESTORS ARE SHRUGGING OFF RISK. THE U.S. BUSINESS ADVISORY ON FRIDAY WILL FLAG CHINA'S GRIP ON THE COUNTRY. MEANWHILE, TIME FOR OUR STOCK OF THE HOUR. BIOGENIC SHOWS ARE DROPPING AFTER CONTROVERSIAL TREATMENT. THIS IS A STORY THAT RUNS AND RUNS. ROMAINE: I WAS NOT HERE A WEEK AGO TALKING ABOUT HOW BIOGEN WENT UP WHEN THEY NARROWED LABORING -- THE LABELING OF HIS ALZHEIMER'S TREATMENT. THE CLEVELAND CLINIC AND NEW YORK'S MOUNT SINAI SYSTEM ARE NOT GOING TO ADMINISTER THE DRUG , WHICH REQUIRES AN INFUSION. YOU'RE TALKING ABOUT A HOSPITAL SETTING. WE KNOW SOME BLUE CROSS AND BLUE SHIELD PLANS WILL NOT COVER IT. IT COST $66,000 A YEAR. UNITED HEALTH GROUP CAME OUT TODAY AND TALKED ABOUT HOW THEY ARE STILL FIGURING OUT WHAT TO DO. THIS IS A STOCK THAT ROSE 38% ON THE DAY LAST MONTH WHEN U.S. REGULATORS APPROVED THE DRUG. IT HAS GIVEN BACK MOST OF THE GAINS SINCE THEN. YOU ARE TALKING ABOUT A PRODUCT THAT IS REALLY CRUCIAL FOR REVENUE DOWN THE LINE. PEAK SALES IN THE U.S. MAYBE $4 MILLION. THERE IS A QUESTION OF WHETHER THAT WILL COME THROUGH. ROMAINE: DAVE WILSON WITH OUR STOCK OF THE HOUR, BIOGEN, HAVING A LITTLE BIT OF TROUBLE. WE WILL BE BACK IN A MOMENT. FROM NEW YORK, YOU ARE WATCHING BLOOMBERG. ♪ CAROLINE: JEFF BEZOS IS SCHEDULED TO HEAD TO SPACE NEXT WEEK. FOLLOWING THE SUCCESS OF VIRGIN GALACTIC. BLUE ORIGIN WILL JOIN BEZOS AND CREW. THE FIRST PAYING CUSTOMER AND YOUNGEST PERSON EVER IN SPACE. IT IS SUCH A JOY TO HAVE YOU HERE, DANIELLE. LOOK AT THIS. WHEN YOU SEE BILLIONAIRES GOING TO SPACE, MAKING IT A TRAVEL DESTINATION. DOES IT MAKE YOU FEEL POSITIVE OR NEGATIVE ON HOW WE ARE INTERACTING WITH SPACE? DANIELLE: I WANT THE AUDIENCE TO THINK ABOUT TWO THINGS. THE FIRST IS THE HUMAN STORY. ANYTIME A HUMAN GETS TO EXPERIENCE ZR FROM SPACE OR WEIGHTLESSNESS -- THE EARTH FROM SPACE OR WEIGHTLESSNESS , THAT IS SOMETHING ANY HUMAN CAN APPRECIATE. IT IS MAGICAL. THE OTHER IS THE HISTORY OF THIS. ROMAINE: LET'S TALK MORE ABOUT THAT. MAYBE YOU CAN CONNECTED TO THE PREVIOUS SPACE RACE, WHICH WAS MORE OF A GOVERNMENT PROJECT. IT LED TO A LOT OF INNOVATION. THEY LOOK AT BRANSON, BEZOS, AND ELON MUSK AND ALL THESE BILLIONAIRES DOING THEIR THING AS NOTHING MORE THAN A VANITY PROJECT. BUT, THERE IS REAL SCIENCE HERE, REAL RESEARCH. I AM WONDERING, WHAT DO YOU ULTIMATELY SEE IS THE ENDGAME AS TO WHAT WE'LL GET OUT OF THIS AS HUMANS? DANIEL: A LOT OF MY WORK IS SPENT TALKING ABOUT AND WONDERING -- DANIELLE: A LOT OF MY WORK IS SPENT TALKING ABOUT MAKING SPACE TECHNOLOGY RELEVANT TO OUR DAILY LIVES. YOU HAVE GOVERNMENTS AROUND THE WORLD SPEND MONEY ON HAVING SATELLITES THAT MONITOR THE ENVIRONMENT. WE ALSO USE A SATELLITE NAVIGATION SYSTEM THAT IS STATE ENABLED. WE BENEFIT FROM HUMANS GOING TO SPACE. THEY STUDY HOW THE HUMAN BODY, PLANS, AND ANIMALS -- PLANTS, AND ANIMALS CHANGE IN A ZERO GRAVITY ENVIRONMENT. I WANT TO HIGHLIGHT TOO THAT GOVERNMENT INVESTMENT OFTEN LEADS TO A CYCLE WITH PRIVATE INVESTMENT. IT IS NOT JUST ONE OR THE OTHER. RIGHT NOW, THEY ARE BOTH HAPPENING AT THE SAME TIME. I THINK IT WILL BENEFIT, ESPECIALLY IF THEY LEAD TO PUBLICLY AVAILABLE SERVICES. TAYLOR: YOU ARE HELPING LEAD A DESIGN OF THE GLOBAL SPACE SUSTAINABILITY RATING SYSTEM. I AM SHOCKED THAT THERE IS NO MORE CARBON FOOTPRINT GOING TO SPACE THAN ANY OTHER TRANSPORTATION SYSTEM. IS THAT TRUE? HOW ARE YOU THINKING ABOUT DOING THAT IN A SUSTAINABLE WAY? DANIELLE: WHAT HAPPENS WHEN YOUR VEHICLE IS FLYING THROUGH THE ATMOSPHERE? WE HAVE CREATED ANOTHER BIG PROBLEM. WE AS A HUMAN COMMUNITY HAVE LEFT A LOT OF PHYSICAL TRASH IN ORBIT AROUND THE EARTH. THAT CREATES A RISK OF COLLISION. SATELLITES COULD HIT EACH OTHER OR OLD PIECES OF TRASH. THAT LOSE -- LEADS TO RISK. SO, WE HAVE A CONCERN THAT THERE IS ALREADY HUNDREDS OF THOUSANDS OF PIECES OF TRASH. THERE'S PROBABLY EVEN MORE WE CANNOT SEE. CAROLINE: WHOSE RESPONSIBILITY IS THAT? ARE YOU SEEING THE RULES OF THE GAME BEING PUT IN PLACE TO MARK -- BEING PUT IN PLACE? COUNTRIES, GOVERNMENTS, THE U.N. , WHAT IS THEIR ROLE IN THIS? DANIELLE: THE UNITED NATIONS BROUGHT TOGETHER COMMUNITY -- A COMMITTEE THAT WORK TOWARDS MAKING MULTIPLE TREATIES FOR MOST COUNTRIES OPERATING IN -- THAT MOST COUNTRIES OPERATING IN SPACE HAVE ALREADY SIGNED. EACH STATE GOVERNMENT IS RESPONSIBLE FOR THE BEHAVIOR OF ITS GOVERNMENT AND ALSO ANY PRIVATE ACTIVITY UNDER ITS FLAG, JUST LIKE A SHIP AT SEA. THAT GOVERNMENT SHOULD BE MANAGING WHAT THEY DO. OF COURSE, THE ISSUE OF ENFORCEABILITY IS ONGOING. PART OF SUSTAINABILITY RAISING IS ASKING GOVERNMENT TO VOLUNTARILY ADOPT THIS RATING SYSTEM THAT SHOWS THEY ARE DOING THEIR BEST TO REDUCE SPACE DEBRIS AND COLLISIONS. ROMAINE: THERE ARE ALSO SOME ETHICAL QUESTIONS ABOUT WHAT WE ARE DOING WHEN WE GET TO MARS, OR, WHEN WE LAND ON AN ASTEROID. WE HAVE HEARD A LOT OF FINANCIERS TALK ABOUT THE IDEA THAT WE CAN MINE FOR CERTAIN MINERALS. HAS THERE BEEN AN ETHICAL DEBATE ABOUT, NOT JUST CAN WE DO IT, BUT SHOULD WE DO IT? ARE THERE CONSEQUENCES? DANIELLE: THAT IS AN EXCELLENT QUESTION. NOW IS THE TIME TO INCREASE THAT DEBATE. PEOPLE LIKE ME WHO WORK IN THE FIELD DEBATED ALL THE TIME. PEOPLE OUTSIDE -- NOW IS THE TIME FOR PEOPLE OUTSIDE OF THE SPACE COMMUNITY TO DEBATE IT. I ALSO ASKED CHILDREN IN MIDDLE SCHOOL WHAT THEY THINK, BECAUSE THEY WILL BE THE ADULTS A VOTE ON IT. COULD WE PRESERVE THE NATURAL BEAUTY OF THESE ENVIRONMENTS FROM THE BEGINNING OF HUMAN ACTIVITY? I VOTE THAT WE TAKE THAT APPROACH. TAYLOR: BEFORE WE GET TO MARS, WE HAVE TO DEAL WITH ISSUES ON EARTH. SOME BEING THE DISPARITIES WE CONTINUE TO SEE. HOW ARE YOU HOPING THAT THROUGH SPACEFLIGHT WE CAN HELP SOME OF THE LOWER INCOME AREAS THAT HAVE NOT BEEN ABLE TO FLOURISH YET? DANIELLE: MUCH OF MY WORK IS PARTNERING WITH LEADERS WHO ARE LOCAL LEVEL AROUND THE WORLD IN PLACES LIKE AFRICA, SOUTH AMERICA, AND SOUTHEAST ASIA. THEY ALREADY -- THEY ARE INTERESTED IN USING SATELLITE DATA TO IMPROVE RESILIENCE IN THINGS LIKE COASTAL AREAS AND FORESTRY. IT IS HAPPENING. CAROLINE: CAN WE USE THIS BACKGROUND ALL THE TIME, ROMAINE? ROMAINE: I THINK WE SHOULD. DANIEL BOYD, IT IS SO GREAT TO HAVE YOU HERE, THE DIRECT -- DANIELLE WOULD --WOOD, IT IS SO GREAT TO HAVE YOU HERE. SHE WAS NAMED ONE OF BLOOMBERG'S NEW ECONOMY CATALYSTS, DRIVING SOLUTIONS TO SOCIETY'S BIGGEST CHALLENGES. CAROLINE: LOOK HOW GOOD YOU LOOK WITH THIS BACKGROUND. ROMAINE: I AM MARK CRUMPTON. THIS IS BLOOMBERG. ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS "BLOOMBERG MARKETS: THE CLOSE" WITH CAROLINE HYDE, ROMAINE BOSTICK, AND TAYLOR RIGGS. CAROLINE: WE ARE COUNTING YOU DOWN TO THE CLOSE. LESS THAN AN HOUR LEFT IN TRADING. ROMAINE: STOCKS CONTINUE TO BE IN THE RED. TAYLOR: LET'S LOOK AT A SECTOR LEVEL. SEEING MORE ROTATION WITH BONDS COMING DOWN. UTILITIES GETTING A BOOST TODAY, UP .8%. TECHNOLOGY ALSO AT THE BOTTOM, DOWN ALMOST 1%. ROMAINE: WE ARE SEEING BANKS LAG A LITTLE BIT. MORGAN STANLEY CAME OUT WITH EARNINGS. THE NUMBERS TOLD THE SAME STORY WE SAW FROM THE OTHER BANKS. KNOCKED IT OUT OF THE PARK WITH REGARDS TO INVESTMENT BANKING. SHARES HAVE BEEN HIGHER A GOOD PORTION OF THE DAY BUT NOW STRADDLING THE LINE BETWEEN GAINS AND LOSSES. APPLE OPENED HIGHER AND LOOKED LIKE IT WAS SET UP FOR ANOTHER RECORD HIGH BUT PULLED BACK. GAMESTOP HAS BEEN ON A DOWNTREND. THE STOCK DOWN MORE THAN 50% FROM THE ALL-TIME HIGH, DOWN 2% ON THE DAY, SEVENTH STRAIGHT DAY OF DECLINES. NETFLIX SELLING OFF AS WE GET INTO THEIR EARNINGS SEASON THAT KICKS OFF NEXT WEEK. CAROLINE: WE TRY TO DIGEST WHERE WE ARE IN THE ECONOMIC GROWTH STORY, WHERE WE ARE WHEN IT COMES TO MONETARY POLICY. JAMES BULLARD SPEAKING EARLIER TO MIKE MCKEE TALKING ABOUT THE EMERGENCY MEASURES. > > I THINK WE ARE IN A SITUATION WHERE WE CAN TAPER. I THINK SETTING THOSE PARAMETERS THE RIGHT WAY. WE DON'T WANT TO JAR MARKETS, BUT I THINK IT IS TIME TO END THE EMERGENCY MEASURES. CAROLINE: ON THE MORE HAWKISH END OF THE SPECTRUM WHEN IT COMES TO THE VOTERS. A PIECE TODAY TALKING ABOUT HOW THE BOND MARKET AND HOW THEY WILL START HIKING TO EARLY. -- TOO EARLY. ROMAINE: JAY POWELL ON THE HILL FOR TWO DAYS OF TESTIMONY. LET'S HEAR FROM A SENIOR MANAGING DIRECTOR AT STATE STREET GLOBAL ADVISORS. WE HAVE TO START OFF WITH THE INFLATION DEBATE. A LOT OF MESSAGES COMING FROM THE FED MEMBERS. IT APPEARS MARKETS ARE HAVING TROUBLE TRYING TO SQUARE THE CIRCLE. > > I THINK WE ARE GOING TO SEE THE MARKET CONTINUE TO HAVE TROUBLE. THEY WILL SEE THIS AS A RISK THEY CANNOT WORK OUT WHAT TO DO WITH FOR THE MONTHS TO COME. THE CENTRAL THESIS IS THAT INFLATION WILL MODERATE FROM THE SPIKE WE HAVE SEEN. THAT IS WHAT WE EXPECT THE REMAINDER OF THE YEAR. BUT MAYBE THE NEXT COUPLE OF YEARS, IT WILL BE HIGHER AS IT WAS THE 10 YEARS BEFORE THE PANDEMIC. TAYLOR: HOW ARE YOU THINKING ABOUT INVESTIGATING FOR TEMPORARY SPIKES AND NOT LONG-TERM INFLATION? > > WE HAVE BEEN LOOKING CAREFULLY AT MARKETS. SINCE THE MIDDLE OF MAY WHEN THE WEB TRAFFIC AROUND INFLATION REALLY PEAKED, THERE HAS NOT BEEN INFLATION SINCE TEDDY -- SENSITIVITY FOR THE DRIVER OF RETURNS. VALUE TO GROWTH IS SIGNIFICANT DRIVING RETURNS. WE ALSO THINK VOLATILITY AND RISK WILL BE A MAIN DRIVER OF RETURNS, JUST LIKE WHAT WE ARE SEEING TODAY. CAROLINE: HOW DO YOU GET THOSE RETURNS FROM VOLATILITY AND RISK? WHERE SHOULD YOU BE PUTTING YOUR MONEY TO WORK? > > WE THINK IT IS ABOUT A BALANCE BETWEEN THE THINGS THAT HAVE POSITIVE INFLATION OR POSITIVE INTEREST RATE AND NEGATIVE INTEREST RATE EXPOSURE. YOU MIGHT WANT TO HAVE SOME FINANCIALS IN YOUR PORTFOLIO. WE HAVE A REASONABLE VIEW OF FINANCIALS. ON THE DEFENSIVE SIDE WHICH MAY BE LESS EXPOSED ON THE UPWARD TRAJECTORY OF INTEREST RATES WOULD BE SOME OF THE TELECOM KINDS OF STOCKS, HEALTH CARE. THOSE DO PROVIDE A GOOD BALANCING ACT. I THINK WE ARE JUST TEETERING ON THIS FINE BALANCE BETWEEN ACCOMMODATIVE MONETARY POLICY KEEPING MARKETS INFLATED AND THE NERVOUSNESS OF WHAT HAPPENS WHEN IT HAS TO BE UNDONE. ROMAINE: THERE DOES SEEM TO BE AN EFFORT TO TALK THIS MARKET DOWN A LITTLE BIT IN PREPARATION FOR WHEN THE FED MAY ANNOUNCE. I'M CURIOUS ABOUT YOUR OUTLOOK FOR VOLATILITY IN THE MARKETS. WE HAVE SEEN VOLUMES COME DOWN THE PAST FEW DAYS. THERE IS SOME CHATTER THAT VOLATILITY COULD REMAIN SUBDUED FOR SOME TIME. > > VOLATILITY IS ONE OF THOSE THINGS THAT SPIKES WHEN YOU LEAST EXPECT IT. THE MARKET METTLE WOULD SUGGEST IT STAYS LOW. BECAUSE MONETARY POLICY IS SO ACCOMMODATIVE, THIS ENVIRONMENT COULD CARRY ON FOR SOME TIME, PROBABLY A FEW MONTHS MAYBE. BUT IT JUST MAKES IT MORE VULNERABLE AS THE MARKETS CLIMB HIGHER. THOSE WHO LOOK BEYOND THE PEAK GROWTH AND INFLATION, I THINK IT BECOMES MORE LIKELY VOLATILITY SPIKES OCCUR. TAYLOR: WITHIN EQUITIES, ARE YOU TAKING CUES FROM THE BOND MARKET WHEN YIELDS ARE FALLING BUT SPREADS HAVE NOT BUDGED? > > WE SEE IT AS A SIGN THAT TAKING BETS THAT AREA -- IN THAT AREA IS TOUGH, WHICH IS WHY WE TRY TO BALANCE AND NEUTRALIZE FOR EXPOSURE. WE ARE FORECASTING AND ESTIMATING SENSITIVITY OF OUR FORECASTS TO INTEREST RATES, THAT IS A KEY MEASURE WE BUILD INTO OUR PORTFOLIOS AND FORECASTING. CAROLINE: OLIVIA ENGEL, THANK YOU FOR JOINING US. REALLY INTERESTING TAKES AMID THE INFLATION DEBATE. COMING UP, THE EXCLUSIVE INTERVIEW AS HE DISCUSSES HIS VISION FOR THE INVESTING POWERHOUSE. PLUS, WALL STREET SURRENDERS TO THE ETF RUSH. ANGELA MERKEL WILL HOLD A JOINT NEWS CONFERENCE. HER LAST TERM COMES TO AN END. ALL THAT AND MUCH MORE COMING UP. THIS IS BLOOMBERG. ROMAINE: THIS IS "BLOOMBERG MARKETS: THE CLOSE." ABOUT 49 MINUTES TO GO IN THE TRADING DAY. THE S & P 500 PULLING BACK ON THE DAY. A LOT OF WHAT LED THE MARKET HIGHER THE LAST FEW DAYS, BIG CAP AND TECH, NOT PROVIDING A BOOST TODAY. THOSE NAMES ARE LOWER ON THE DAY. CYCLICALS AND SMALL-CAP STOCKS ALSO LOWER ON THE DAY. YOU ARE GETTING AND EVERYTHING SELLOFF. NOT A MAJOR SELLOFF, BUT THE IDEA THAT YOU ARE NOT SEEING THE ROTATION WE HAVE SEEN IN OTHER SELLOFFS A CAUSE FOR CONCERN. DOLLAR STRENGTH ON THIS DAY. TREASURY STRENGTH AS WELL. A LOT OF PEOPLE BUYING IN. FEW INDIVIDUAL STORIES. U.S. BANCORP IS YOUR BIG MOVER OF THE DAY, BIGGEST MOVER IN THE S & P 500. KEEP AN EYE ON MODERNA AND BED, BATH & BEYOND. LOWER DESPITE A PARTNERSHIP WITH CASPER. CAROLINE: THE NEWLY MINTED CEO DISCUSSES HIS VISION PUSHING THE FIRM INTO NEW MARKETS. HE SAT WITH JASON KELLY EARLIER. TAKE A LISTEN. > > I HAVE TOLD OUR INTERNAL TEAM OUR BUSINESS WILL CHANGE MORE IN THE PAST FIVE YEARS AND IT HAS IN THE PAST -- THEN IT HAS IN THE PAST FIVE YEARS. WE ARE SEEING THIS COLLISION OF COMMODITIZATION OF THE MARKET AND A VARIETY OF OTHER THINGS THAT MAKE PUBLIC MARKETS REALLY EFFICIENT. IN THE ABSENCE OF SPREADS IN THE FIXED INCOME MARKETS AND THE ABSENCE OF AVAILABLE RETURNS IN THE EQUITY MARKETS, HUGE IMPLICATIONS FOR HOW THE BUSINESS WORKS. YOU ARE SEEING FIRMS LIKE APOLLO STANDING UP FOR AN UNDERWRITING INVESTMENT-GRADE DEALS. WE ARE NOW SENDING UP AND TAKING DOWN $6 BILLION TRANSACTIONS AND HOLDING A PIECE FOR OURSELVES AND INDICATING TO OTHER INVESTORS. YOU'RE ALSO SEEING A PARTNERSHIP WITH OTHER WALL STREET FIRMS OF THE SAME SIZE AND SCALE. THERE ARE NO PERMANENT FRIENDS. THERE ARE NO ENEMIES. EVERYONE IS A PARTNER. PEOPLE ARE VERY AWARE OF THEIR BEHAVIOR AND MARKET CONDUCT GIVEN THE ENVIRONMENT WE LIVE IN. YOU HAVE ON TOP OF THIS AMAZING MIX TECHNOLOGICAL CHANGE AND FINTECH AND DEMOCRATIZATION OF FINANCE. THINK ABOUT IT. MILLIONS OF AMERICANS SENT THEIR MONEY TO A PLACE CALLED ROBINHOOD TO TRADE COMPLEX OPTIONS AND OTHER PRODUCTS. NOT POSITIVE OR NEGATIVE. BUT IT STRUCK ME, IF THAT IS NOT A SIGN THAT THE MARKETS ARE MOVING AND CHANGING, ALL MANNER OF FINTECH COMPANIES ARE GEARING UP TO PROVIDE THE KIND OF SERVICES THAT HAVE BEEN PROVIDED BY TRADITIONAL INVESTMENT FIRMS ON ONE HAND AND BANKS ON THE OTHER HAND. SOME OF THOSE FIRMS WILL HAVE BALANCE SHEETS. SOME WILL NOT HAVE BALANCE SHEETS AND WILL PARTNER WITH PEOPLE LIKE APOLLO WHO WILL BE THERE BALANCE SHEETS. HOW THIS WHOLE REALIGNMENT TAKES PLACE, I CAN'T TELL YOU. I BELIEVE IT WILL RESULT IN DEMOCRATIZATION OF FINANCE I DON'T JUST MEAN ON THE RETAIL SIDE. I ALSO MEAN ON THE ORIGINATION SIDE. THE FINANCIAL CRISIS IN 2008 PUSHED A LOT OF ACTIVITIES OUT OF THE BANKING SECTOR INTO THE NON-BANK LENDING SECTOR. SOME OF IT FOR GOOD. SOME OF IT FORBADE. IT IS A WIDE-RANGING DEBATE. IT HAS HAPPENED. THOSE ACTIVITIES WILL CONTINUE TO TAKE PLACE AS CREDIT FORMATION IS INCREASINGLY DONE BY INVESTORS WHO HAVE MATCHED CAPITAL WITH PROVIDERS. WE ARE IN A REALLY INTERESTING TIME. IT MAKES IT INCREDIBLY EXCITING TO COME TO THE OFFICE. IT ALSO MEANS THE CULTURE NEEDS TO ACCEPT IT. PART OF MY JOB IS TO PREPARE THE CULTURE TO ACCEPT IT, TO MAKE SURE THE SPEED OF DECISION-MAKING ACCEPTS IT. > > YOU MENTIONED ROBINHOOD. AS WE LOOK BACK, IT WILL BE ONE OF THE LEGACIES OF THIS TUMULTUOUS PERIOD. THE OTHER ONE LIKELY WILL BE THE SPAC. SOMETHING THAT BURST ONTO THE SCENE NOW SEEMS TO BE RECEIVING -- RECEIVING -- RECEDING A LITTLE BIT. HOW DID YOU ASSESS THAT IN THE MOMENT? WHAT DOES IT TELL US IN THE BROADER SCHEME? > > WE ARE WATCHING, ABSENT CHANGE, IT WILL BE PLENTIFUL. WE ARE IN A HISTORY OF FINANCIAL INNOVATION. IF YOU LOOK FROM THE START OF MY CAREER TO TODAY AND LOOK AT THE PRODUCTS OFFERED BY TRADITIONAL MUTUAL FUNDS, IT WAS PRETTY VANILLA. LOOK AT THE OFFERINGS TODAY, THERE IS AN ENCYCLOPEDIA NOW. SPAC IS ANOTHER FORM OF FINANCIAL INNOVATION. IT WAS A WAY FOR A GROWTH ORIENTED SET OF COMPANIES TO ACCESS CAPITAL MARKETS IN A MUCH FASTER, CLEANER WAY THAN THE TRADITIONAL IPO PROCESS. YOU HAVE THAT ALONG WITH DIRECT LISTING. I THINK THE SPAC ECOSYSTEM IS HERE TO STAY. MAYBE NOT AT THE SAME SIZE AND SCALE. WE HAVE BEEN BENEFICIARIES OF THE SPAC ECOSYSTEM. REVIEW IT AS AN EXTENSION OF GROUP -- WE VIEW IT AS AN EXTENSION OF GROWTH. TAYLOR: THAT WAS MARC ROWAN. TIME FOR OPTIONS INSIGHT. 45 MINUTES TO THE CLOSING BELL. WE HAVE TO GET YOU UP TO SPEED WITH OPTIONS TRADING. WE ARE OFF THE LOWS OF THE SESSION. ABIGAIL: IT HAS BEEN A JITTERY DAY WITH TECH AND SMALL-CAP SELLING OFF. THIS IS A REVERSAL OR NEW STORY RELATIVE TO THE STORY WE HAVE SEEN OVER THE LAST MONTH. TIM BIGHAM MADE THE POINT THAT SINCE THE JUNE EXPIRY, IT HAS PULLED OFF. TODAY EVERYTHING HAS PULLED OFF. WHAT IS GOING ON? > > WE HAVE SEEN THE BIG MEGA CAP TECH NAMES HAVE DONE ALL THE HEAVY LIFTING. IT IS A BIT OF A CHANGE. MARKET SENTIMENT HAS BEEN EXTREME. WE ARE SEEING SIGNALS IN THE NASDAQ. I THINK IT IS TIME FOR A MEAN REVISION WITH THE NASDAQ OR QQQ. ABIGAIL: YOU HAVE A GREAT CHART WITH A SPECIAL INDICATOR THAT YOU WORKED WITH BLOOMBERG TO CREATE SUGGESTING TO YOU MORE CORRECTIVE ACTION COULD BE AHEAD. > > THIS INDICATOR SHOWS THE TRIPLE CUES ---- QQQ'S ABOVE THE 50-DAY MOVING AVERAGE. WHEN IT CROSSES DOWN AND TURNS TO A DARKER RED BUBBLE, THAT IS A CELL SIGNAL -- SELL SIGNAL. I THINK WE ARE GOING TO SEE A MOVE BACK DOWN TO THE 50-DAY MOVING AVERAGE WHICH IS JUST UNDER 6%. ABIGAIL: THAT IS COMPELLING SUGGESTING A PULLBACK COULD BE AHEAD. THE ARK INNOVATION ETF AND TESLA HAVE BEEN FLYING HIGH BUT THE LAST FEW MONTHS DOWN. DO YOU THINK WE WILL SEE OTHER INDEXES AND STOCKS FOLLOW? > > WITH ARK, TESLA IS THERE LARGEST HOLDING AT OVER 10% WHICH IS DOUBLE THE NEXT LARGEST HOLDING. THE ARK PHONED HAS BEEN CORRELATED WITH TESLA AND MADE ANOTHER LOWER HIGH. BOTTOM LINE IS I THINK THIS CAN GO LOWER. I SEE A LOT OF BORROWERS TRAPPED. ABIGAIL: YOUR TRADE SUGGEST YOU DO THINK TECH COULD GO LOWER. YOU LIKE A PUT SPREAD ON THE QQQ? > > I LIKE BUYING THE AUGUST EXPIRATION QQQ, 355, 340 PUT SPREAD. IT COSTS ABOUT 350. I THINK IT IS A GOOD RISK-REWARD. ALL IT NEEDS TO GET TO IS THE 50-DAY MOVING AVERAGE. WE HAVE A FED MEETING, A LOT OF EARNINGS IN TECH, SO THERE ARE A LOT OF CATALYSTS THAT CAN MOVE THE NASDAQ DOWN. ABIGAIL: GREAT PERSPECTIVE, TOM THORTON. THANK YOU FOR JOINING US FOR OPTIONS INSIGHT. FROM NEW YORK, THIS IS BLOOMBERG. TAYLOR: BIG ECONOMIC DATA OVERNIGHT. CHINA'S GDP AT 7.9%. THAT SOUNDS GOOD BUT SLIGHTLY BELOW THE 8% ANALYSTS WERE LOOKING FOR. LET'S DO IT ALL IN OUR EMERGING ACTION SEGMENT WITH SHERY AHN. RETAIL SALES LOOKED GOOD. HOW ARE YOU THINKING ABOUT 2 P.M. CHINESE GROWTH? SHERY: THAT IS WHY ECONOMISTS WERE OPTIMISTIC ABOUT GROWTH IN CHINA. RETAIL SALES ON A TWO-YEAR AVERAGE JUMPING 4.9% WHICH IS A FASTER ACCELERATION THAN THE PREVIOUS MONTH. ALSO GOING BACK TO PRE-PANDEMIC LEVELS. FINALLY, WE ARE THERE ON THE CONSUMPTION SIDE OF THINGS. ECONOMISTS SAYING THE GROWTH TARGET OF MORE THAN 6% FOR THE YEAR WILL BE ACHIEVED COMFORTABLY. SPECULATION ABOUT QATAR SUBSIDING, BUT THE RISK IS ALWAYS THERE. YOU GUYS BROKE THE STORY ABOUT THE BIDEN ADMINISTRATION RELEASING THE BUSINESS ADVISORY ABOUT BUSINESSES IN HONG KONG. THEY ARE NOT EXPECTING ANY SPECIFIC ACTIONS FROM BANKS OR BUSINESSES IN HONG KONG. BUT GIVEN THE RISING GEOPOLITICAL TENSIONS, THIS WILL BE AT THE FOREFRONT WHEN WE LOOK AT CHINA FROM NOW ON. ROMAINE: LET'S GO FROM THE SECOND LARGEST ECONOMY TO JAPAN. WE ARE EXPECTING PROJECTIONS OUT OF THE BOJ. SHERY: WE DO HAVE THE BOJ ECONOMIC PROJECTIONS COMING UP LATER TONIGHT. WHEN IT COMES TO ACTIONS FROM THE BOARD, NOTHING REALLY EXPECTED EVEN THOUGH THEY ARE KEEPING THE SHORT-TERM RATE WHERE IT IS AND THE 10-YEAR YIELD ANCHORED NEAR ZERO. PROJECTIONS WILL BE INTERESTING GIVEN TOKYO PROJECTIONS HAVE RISEN TO MORE THAN 1300 CASES OVER THE LAST 24 HOURS JUST AHEAD OF THE OLYMPIC GAMES. THIS IS THE GOVERNOR TOLD ME ABOUT THE GAMES LAST NIGHT. > > WE ARE PREPARING FOR WHATEVER THE CIRCUMSTANCES. THE SUCCESS OF THE GAMES WITH THE EXCITEMENT FOR THE ATHLETES. SHERY: I ASKED HER ABOUT THE LOW INOCULATION RATE IN JAPAN. SHE SAID IT IS ACCELERATING. SENIOR CITIZENS ARE GETTING LESS INFECTED. CAROLINE: LET'S GO INTERNATIONAL NOW. WHAT IS IN THE NEWS EVERY DAY IS PROTESTS WHETHER YOU LOOK AT SOUTH AFRICA, CUBA. CONCERNS ABOUT FOOD INFLATION, DEVASTATION FROM COVID. WHAT ARE YOU SEEING FROM CUBA? SHERY: IN DEVELOPING NATIONS, THIS HAS BEEN AN ONGOING STORY. YOU MENTIONED SOUTH AFRICA. COLOMBIA HAS BEEN ANOTHER. WE HAVE THE BIGGEST PROTESTS IN DECADES. FOOD INFLATION BEING ONE OF THE BIGGEST REASONS. FOOD INFLATION WILL TOP 400% THIS YEAR IN CUBA. WE ARE SEEING U.S. LAWMAKERS BACKING THE PROTESTS. ROMAINE: INFLATIONARY PRESSURES HAVE BEEN A BIG DRIVER. A LOT OF THESE NATIONS WERE STARTING FROM A HIGHER BASE. SHERY: WHICH IS WHY CUBA HYDRATES LAST NIGHT AS WELL -- HIKES RATES LAST NIGHT. CAROLINE: 400% THERE, WE ARE TALKING ABOUT 5% HERE. IT PUTS IT IN PERSPECTIVE. IN OVER 120 COUNTRIES. I AM MARK CRUMPTON. THIS IS BLOOMBERG. ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS "BLOOMBERG MARKETS: THE CLOSE" WITH CAROLINE HYDE, ROMAINE BOSTICK, AND TAYLOR RIGGS. CAROLINE: LESS THANCAROLINE:. ARE -- LESS THAN 28 MINUTES TO GO. WE ARE COUNTING YOU DOWN TO THE CLOSE. TAYLOR: BOND YIELDS FOLLOWING. UTILITIES NOW UP 1%. YOU HAVE TECHNOLOGY STILL ON THE BOTTOM. ROMAINE: LET'S LOOK AT INDIVIDUAL MOVERS. ADVANCED MICRO DEVICES MOVING LOWER DESPITE POSITIVE COMMENTARY OUT OF J.P. MORGAN. THEY SAY TO SHORT INTEL. INVESTORS TODAY NOT BUYING INTO IT. SIMILAR STORY FOR TWITTER THAT GOT AN UPGRADE AT CITIGROUP. THE IDEA THAT USED BY THE STOCK INTO EARNINGS. INVESTORS TODAY SEEM TO BE RETICENT. THEY ARE JUMPING INTO BLACKSTONE AND UNITED HEALTH. UNITED HEALTH CAME OUT WITH EARNINGS THAT WERE GOOD ENOUGH. THE BLACKSTONE DEAL IS A HUGE DEAL. AMC IS SELLING OFF SOME ASSETS. THIS IS A HUGE DEAL FOR BLACKSTONE. CAROLINE: CONTINUING TO SPEND BILLIONS AT BLACKSTONE. THE REOPENING TRADE WE DECIDED IS ALL FOR THE TIME BEING. I'M LOOKING AT THE RUSSELL 2000. WE ARE NOW AT A TWO-MONTH L OW. NO PLACE TO HIDE TODAY. WE ARE SELLING OFF CYCLICALS AND BIG TECH AT THE SAME TIME. WE HAVE TO QUESTION AT WHAT POINT ENERGY AND FINANCIALS PICK UP AGAIN. TAYLOR: I THINK WHERE WE ARE HIDING OUR MONEY IS ETF'S. THE RECORD WAS $497 BILLION SETBACK IN 2020. THAT RECORD COULD BE BROKEN IN WEEKS OR DAYS. JOINING US, CLAIRE VALENTINE, WITH THE EXCLUSIVE. YOU THINK IT COULD BE A MATTER OF DAYS AND SURPRISED IT HASN'T HAPPENED ALREADY. > > YEAH. THE TREND HAS BEEN FOR ETF'S AND MUTUAL FUNDS. THERE HAS BEEN A STAMPEDE INTO THE PRODUCTS THIS YEAR. I THINK PART OF IT IS THE FACT MARKETS HAVE DONE SO WELL. EVERYONE WANTS EXPOSURE, ESPECIALLY TO EQUITIES. THERE IS NO OTHER PLACE TO BE BESIDES EQUITIES, SOME SAY. A LOT OF PEOPLE ARE TURNING TO ETF'S. ROMAINE: WE HAVE SEEN THAT REFLECTED IN THE CREDIT MARKETS AS WELL. > > DEFINITELY. WE HAVE SEEN SO MANY PEOPLE INTERESTED IN THESE PRODUCTS. A LOT OF PEOPLE FAVOR ETF STRUCTURE OVER MUTUAL FUNDS. A LOT OF TIMES, THEY ARE CHEAPER, EASIER TO TRADE, AND TAX EFFICIENT. ANALYSTS THINK THIS IS THE WAVE OF THE FUTURE FOR ASSET MANAGERS WHO OFFER UNIQUE PRODUCTS. CAROLINE: TALK ABOUT ASSET MANAGERS. WHO IS LEADING THE CHARGE? > > IN THE ETF INDUSTRY, THEY ARE CALLED THE BIG THREE. THEY ARE THREE PLAYERS THAT MAKE UP ABOUT 80% OF TOTAL ASSETS. IT IS INCREDIBLE. VANGUARD, BLACKROCK, AND STATE STREET. EVERYONE ELSE IS TRYING TO CHIP AWAY AT THEIR DOMINANCE. THEY HAVE COMPLETELY CONTROLLED THE MARKET. A LOT OF THAT IS DUE TO LOW FEES. AT THE SAME TIME, THERE HAVE BEEN MORE FAMOUS ASSET MANAGERS AND BANKS JUMP INTO THE ETF WORLD. WELLS FARGO IS PLANNING SOME FUNDS. J.P. MORGAN, GOLDMAN SACHS. WE HAVE SEEN SOME ASSET MANAGERS CONVERT THEIR MUTUAL FUNDS INTO ETF'S. TAYLOR: SPEAKING OF LOW FEES, DOES THIS FURTHER EXACERBATE THE RACE TO ZERO WHEN IT COMES TO FEE STRUCTURE? > > IT DOES ON ONE END OF THE SPECTRUM. A LOT OF CASH IS GOING INTO DIRT CHEAP PRODUCTS WITH BROAD INDEX EXPOSURES. AT THE OTHER END, YOU HAVE MORE EXPENSIVE PRODUCTS. THINK ABOUT SOME OF THE OFFERINGS BY CATHIE WOOD AT ARK. THOSE ARE PRICEY. THEY HAVE HAD INFLOWS BECAUSE PEOPLE BELIEVE IN THE STRATEGIES. A LOT OF MONEY MANAGERS ARE BALANCING THAT WITH THE MORE EXPENSIVE, SPECIALIZED FUNDS AND THE REALLY CHEAP PRODUCTS. ROMAINE: CLAIRE BALLENTINE BREAKING IT DOWN FOR US. THIS IS AN ETF WORLD AND WE JUST LIVE IN IT. CAN WE GET OUR SPACE BACKGROUND BACK? THAT WAS THE HIGHLIGHT OF THE DAY. CAROLINE: ETF'S BECOME THE SEXY THING. MAYBE WE SHOULD HAVE A SPACESHIP. ROMAINE: LET'S CHECK IN ON THE MARKETS. THE DOW JONES INDUSTRIAL AVERAGE IS UP ABOUT .1%. EVERYTHING ELSE PRETTY MUCH DOWN. THE S & P 500 AND THE RUSSELL, THIS IS THE FIRST TIME IN A FEW DAYS WE ARE SEEING BOTH DOWN TRENDING. CAROLINE: USUALLY YOU SEE THE FLIGHT TO BIG TECH OUT OF CYCLICALS. IT IS NOT HAPPENING TODAY. WHAT CONTINUES TO FALL IS THE U.S. DOLLAR. SORRY, ON THE HIGHER SIDE THE U.S. DOLLAR, ON THE DOWNSIDE THE YIELDS. TAYLOR: HE SAID IN THE INTERMEDIATE TERM TO LOOK FOR DOLLAR WEAKNESS. ROMAINE: DID HE HAVE SOMETHING TO SAY ABOUT YIELDS? CAROLINE: MAYBE ONE OR TWO THINGS. ROMAINE: 21 MINUTES TO GO. THIS IS BLOOMBERG. CAROLINE: 18 MINUTES UNTIL THE MARKET CLOSES. THE S & P HAVING THE WORST DAY SINCE JULY 8. WE SAW EUROPE ALSO UNDER PRESSURE AS WE QUESTION THE GROWTH STORY. HOW MUCH OF AN ONGOING NARRATIVE VISIT THAT THE MONETARY POLICY IN THE UNITED STATES WILL BE THERE TO SUPPORT THE MARKET? THE DOLLAR UP .25%. MAYBE WE ARE QUESTIONING JAY POWELL'S DOVISH POLICY. I AM LOOKING AT CRYPTO GETTING HIT TODAY, DOWN 4%. ECB GETTING IN ON THE ACTION, LOOKING AT ITS OWN INVESTIGATION INTO ECB CRYPTOCURRENCIES. WE WILL TALK ABOUT HIS FOCUS ON THE MARKETS FROM CREDIT SUISSE. THE S & P 500 DOWN BUT STILL NEAR HIGHS. YOU SEE IT CONTINUING HIGHER. WHY? > > MORE THAN ANYTHING ELSE, IT IS A NARRATIVE STORY. WE ARE ABOUT 10% THROUGH WITH THE EARNINGS SEASON. WE JUST STARTED. THE AVERAGE COMPANY IS BEATING BY OVER 20%. WE SEE NO REASON THAT IS NOT GOING TO CONTINUE FOR THE REST OF THE EARNINGS SEASON. THAT HAS BEEN FEELING MARKETS THE LAST YEAR. ROMAINE: WHEN WE LOOK AT RESULTS SO FAR, PRIMARILY LIMITED TO THE BANKS, THERE HAS BEEN A RELATIVELY NEGATIVE REACTION DESPITE THE FACT THE NUMBERS SEEM TO BEAT MOST OF THE TOP LINE EXPECTATIONS. DO YOU THINK EXPECTATIONS ARE TOO HIGH AND THERE IS NO WAY THESE COMPANIES WILL BE ABLE TO SATISFY THE MARKET? > > YOU ARE MENTIONING A COUPLE OF THINGS. LET'S LOOK AT THE EARNINGS SEASON. THE BANKS ARE BEATING BY ABOUT 30%. THE NONFINANCIAL COMPANIES ARE BEATING BY ABOUT 18%. EVEN IF YOU THROUGH THE BANKS OUT, THIS IS STILL FOUR TIMES THE SIZE OF A NORMAL BEAT, SO THIS IS VERY POWERFUL. IF YOU LOOK AT LAST EARNINGS SEASON AND THE ONES BEFORE, WE HAD THIS WEIRD THING WHERE EARNINGS WERE OFF THE CHARTS GREAT AND THE MARKET RESPONDS TO INDIVIDUAL ANNOUNCEMENTS WITH A SHOULDER SHRUG. I WANT TO BE CLEAR THAT IS ON INDIVIDUAL ANNOUNCEMENTS. OVERALL, THE BACKDROP IS ONE WHERE THE EARNINGS ESTIMATES CONTINUE TO RATCHET HIGHER FUELING THE BROAD MARKET BUT YOU ARE NOT GETTING THE SINGLE BOND RESPONSE YOU WOULD NORMALLY GET. TAYLOR: ARE WE THINKING WE ARE AT PEAK MARGINS AND PEAK GROWTH? > > WE ARE DEFINITELY AT PEAK ETF GROWTH. THIS EARNINGS SEASON, WE ARE ON TARGET FOR SOMETHING LIKE AN 85% EARNINGS GROWTH NUMBER. YOU ARE NOT GOING TO GET ANY BETTER THAN THAT THIS CYCLE. NEXT QUARTER, YOU MAY SEE 40% WHICH WOULD STILL BE EXCEPTIONAL. AS FAR AS PROFIT MARGINS ARE CONCERNED, THOSE ARE GOING TO KEEP GOING HIGHER. THERE IS A REAL CONCERN PEOPLE HAVE WITH ALL THIS INFLATION WITH THE PRICE OF SHIPPING THINGS AND LABOR, THAT THERE WILL BE A MARGIN SQUEEZE. AND YET, ABOUT 80% OF THESE BEATS ARE COMING ON THE MARGIN LINE. WE THINK THIS WILL CONTINUE THROUGH THIS EARNINGS SEASON AND THE NEXT QUARTER OR TWO. ROMAINE: WE HAVE QUITE A FEW MORE QUESTIONS FOR JONATHAN. JONATHAN WILL BE STICKING WITH US AS WE COUNT DOWN TO THE CLOSING BELL. JONATHAN GOLUB, CHIEF EQUITY STRATEGIST AT CREDIT SUISSE. PRETTY MUCH EVERYTHING IN THE RED ON A BROADER MARKET BASIS. CAROLINE: HE HAS THE STRONGEST CALL ON THE STREET FOR WHERE THE S & P 500 WILL END THE YEAR. THE RUSSELL 2000 BOUNCING OFF THE LOWS. TAYLOR: CAROLINE: THIS IS COUNTDOWN TO THE CLOSE. I AM CAROLINE HYDE. TAYLOR: I AM TAYLOR RIGGS. ROMAINE: I AM ROMAINE BOSTICK. CAROLINE: WE ARE BOUNCING BACK OFF THE LOWS. AROUND 2:00 IS WHEN WE HIT THE SESSION LOWS. UNDERPERFORMANCE SHOWN ACROSS THE BOARD. NO PLACE TO HIDE. NOW, THE DOW IN THE GREEN. ROMAINE: A LOT OF THAT IS BECAUSE A BID COMING BACK INTO THE BANK STOCKS. KBW BANK INDEX UP ABOUT .5%. SOME NAMES LOWER ON THE DAY NOW MOVING HIGHER AS WE GET CLOSER TO THE CLOSE. TECH IS DOWN AFTER A GOOD STRETCH OF GAINS, GIVING BACK SOME OF THAT. THE TRENDLINE ON TECH HAS BEEN HIGHER GOING BACK TO MID-MAY. GOING IN THE OPPOSITE DIRECTION IS THE OIL AND GAS COMPANIES. THAT INDEX DOWN 2%. THE ETF DOWN 2% ON THE DAY. A LOT OF CRUISE LINES OFF ON THE DAY AS WELL. TAYLOR: JONATHAN GOLUB, WE LEFT THE LAST CONVERSATION WHERE YOU SAID WE MIGHT NOT BE AT PEAK MARGINS, THAT YOU ARE SEEING COMPANIES BEING ABLE TO PASS THROUGH SOME COSTS. HOW DOES THAT CHANGE THE WAY YOU THINK ABOUT INVESTING? JONATHAN: I DON'T THINK IT CHANGES THE WAY I THINK ABOUT INVESTING. WE FIND THERE ARE TWO KINDS OF INFLATION FROM A MARGIN PERSPECTIVE. THE COMMODITY PRICE INFLATION, WHETHER IT BE OIL OR COPPER OR THE PRICE OF SHIPPING, GETS PASSED THROUGH. THAT IS POSITIVE FOR MARGINS. INTERESTINGLY, WAGE INCREASES IN THE QUARTER THEY GET PAID GET PASSED ON FINE. THE PROBLEM WITH WAGES IS YOU ARE STUCK WITH THEM IN A QUARTER IN A YEAR FROM NOW, SO THEY CREATE THE POTENTIAL FOR A NEGATIVE SET UP ON MARGINS IF THE ECONOMY WERE TO ROLL OVER, WHICH I AM NOT PREDICTING, BUT THAT IS THE RISK. RIGHT NOW, THE GENERAL BASKET OF INFLATION IS REASONABLY FAVORABLE. COMPANIES ARE COMPLAINING LIKE CRAZY ABOUT INPUT COSTS, AND YET MARGINS ARE SURPRISING MAGICAL BLEAK -- MASSIVELY TO THE UPSIDE. CAROLINE: YOU LISTENED TO FED CHAIR POWELL. ARE YOU WORRIED THEY COULD DO A MISSTEP? THE BOND MARKET ALMOST LOOKS LIKE IT IS SIGNALING IT SEES LOWER LONG-TERM GROWTH AND PERHAPS A HIKE AT THE END OF THE YEAR. A HAWKISH MISTAKE? JONATHAN: I DON'T THINK SO. I THINK YOU RAISED AN IMPORTANT POINT. WE ARE NOT GOING TO KEEP THIS LEVEL OF ECONOMIC GROWTH. THIS WILL BE THE FASTEST YOU TO SINCE 1952. SAME THING FOR-PROFITS. THEY ARE WAY OUTSIZED. A YEAR-AND-A-HALF FROM NOW, WE ARE GOING TO BE BACK TO HIGH SINGLE DIGIT ETF'S AND LOW SINGLE-DIGIT GDP GROWTH. THAT IS A NORMAL PATH. IT IS NOT SOMETHING WE SHOULD FEAR. THE FED AND THE MARKETS BELIEVE INFLATION IS TRANSITORY. BUT TRANSITORY IS GOING TO BE LONGER. MAYBE IT IS A YEAR. I DON'T KNOW. WE NEED TO WORK THROUGH THESE SUPPLY CHAIN PROBLEMS BEFORE WE GET RID OF INFLATION. RIGHT NOW, YOU CAN'T GET A CAR. YOU CAN'T GET PATIO FURNITURE. UNTIL THOSE THINGS ARE CLEARED UP, YOU WILL HAVE DISRUPTION IN THIS ECONOMY. ROMAINE: YOU ARE ALREADY SEEING SOME CORRECTIONS IN SOME AREAS THAT MAYBE BRINGS US BACK DOWN TO NORMAL. THE ANXIETY IN THE MARKET RIGHT NOW, WHAT DO YOU THINK IT WOULD TAKE TO GET PEOPLE MORE COMFORT IN THE IDEA THAT THIS IS TRANSITORY AND THE GROWTH STORY IS INTACT? DO THEY NEED TO HEAR SOMETHING DIFFERENT FROM THE FED? JONATHAN: I DON'T THINK IT IS A FED ISSUE. WE HAD A CPI AND PPI PRINT THAT WERE JUST INSANELY STRONG. WE UNDERESTIMATED THE LEVEL OF INFLATION AGAIN THAT WE ARE SEEING. THAT IS PROBABLY THE MOST IMPORTANT THING. THE OTHER THING, COMBINED WITH THAT, IS FALLING INTEREST RATES. BIG INSTITUTIONS ARE SCRATCHING THEIR HEADS. [INDISCERNIBLE] THE 10-YEAR FOALLING AND INFLATION RISING HAS A LOT OF PEOPLE STARTING TO SAY, DOES THIS SMELL OF STAGFLATION? AND YET THE PRICING OF GOODS AND SERVICES IS GOING UP. THE MARKET WOULD LOVE TO SEE INTEREST RATES GO UP TO 1.5% AND INFLATION COME DOWN. IF THAT IS THE CASE, IT WILL BE MORE COMFORTABLE. ROMAINE: WE ARE SPEAKING WITH JONATHAN GOLUB AT CREDIT SUISSE. WE WANT TO JUMP OVER TO THE BOARD WITH TAYLOR. TAYLOR: WE ARE TRYING TO WORK OFF OUR PANDEMIC WEIGHT. THIS MIGHT BE THE WAY TO DO IT. WE SPOKE WITH THE CEO EARLIER. COMPANY BACKED BY MARK WAHLBERG. THEY TRIED TO GO PUBLIC VIA SPAC. THAT DID NOT WORK OUT. THEY DID TRADITIONAL IPO AT $16 A SHARE. HOVERING AT $16.03. THAT WILL BE SOMETHING WE ARE WATCHING GOING INTO THE CLOSING BELL. I WOULD LOVE TO BRING YOU BACK INTO THIS CONVERSATION WITH THE CONCERNS ABOUT INFLATION. I'M LOOKING AT THE TWO YEAR BREAKEVEN, MUCH HIGHER THAN 10 AND 30. IS THAT A BULLISH SIGNAL OVERALL FOR EQUITY MARKETS? JONATHAN: THE MARKET, I DON'T KNOW IF IT IS LISTENING TO JAY POWELL OR MAKING CONCLUSIONS. THE MARKET BELIEVES INFLATION WILL BE BACK TO 2% OR SO BY LATE NEXT YEAR. THE SURVEY OF ECONOMISTS ON YOUR BLOOMBERG SCREEN IS SHOWING ECONOMISTS BELIEVE INFLATION WILL COLLAPSE AND IS NOT A LONG-TERM PROBLEM. I THINK THAT IS WHAT THE 10 YEAR IS SAYING, THAT THERE IS NO INFLATION PROBLEM AND ECONOMIC GROWTH WILL WEAKEN TO THE KIND OF LEVELS WE SAW BEFORE THE PANDEMIC. WE ARE GOING BACK TO WHAT IT FELT LIKE AT THE BEGINNING OF 2020, WHICH WAS STILL LOW INTEREST RATES, MODEST GROWTH, AND YET STILL A PRETTY GOOD STOCK MARKET. CAROLINE: PRETTY GOOD STOCK MARKET. AT WHAT POINT DO WE HIT 4600? JONATHAN: THAT IS MY CALL FOR THE END OF THE YEAR. IT IS ABOUT A 6% UPSIDE. THE EARNINGS ARE GROWING MUCH FASTER THAN MY TARGET IS. IF THINGS GO AS I EXPECT, THE MARKET WILL BE UP ANOTHER 5% OR 6%. ROMAINE: I LOVE THAT GUY. HERE WE ARE COUNTING DOWN TO THE CLOSE. HE ALWAYS BACKS UP EVERYTHING HE SAYS. WE ARE MOVING CLOSER TO THE CLOSING BELL. FULL MARKET COVERAGE RIGHT HERE ON BLOOMBERG AS WE TAKE YOU TO THE BELL AND BEYOND. ANNOUNCER: "BEYOND THE BELL" STARTS RIGHT NOW. ROMAINE: WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK, CAROLINE HYDE, AND TAYLOR RIGGS COUNTING YOU DOWN TO THE CLOSING BELL. HERE TO TAKE US "BEYOND THE BELL" ARE CAROL MASSAR AND TIM STENOVEC BRINGING TOGETHER OUR AUDIENCES WORLDWIDE. TODAY, EVERYONE SEEMS TO BE TALKING ABOUT ANXIETY. CAROL: THERE IS A LOT OF ANXIETY. IT DOES NOT HELP WHEN YOU HAVE JAY POWELL ON CAPITOL HILL REMINDING US THE ECONOMY STILL HAS TO RECOVER. AND THEN YOU HAVE JIM BULLARD AT THE ST. LOUIS FED SAY IT IS TIME FOR THE FED TO START UNWINDING. ROMAINE: HAVE GOT TO STOP. IS TIM STENOVEC WEARING A TIE? CAROLINE: IT IS HIS BIRTHDAY. CAROL: HE HAD TO GO TO TRAFFIC COURT THIS MORNING. I THINK THAT'S WHAT I HEARD. TIM: I DID IT FOR YOU GUYS. IT HAS BEEN A CHOPPY DAY OF TRADING. STOCKS ARE MIXED INSIDE THE MAJOR EQUITY AVERAGES. KIND OF SPLIT HALF-AND-HALF ON THE S & P 500. WE ARE STILL AT THE BEGINNING OF EARNINGS SEASON. WE HAVE HEARD FROM THE BIG BANKS . WE HAVE HEARD FROM A HANDFUL OF COMPANIES. THE FUN IS JUST BEGINNING. WE WANT TO LOOK AT HOW THEIR REPORTING AND HOW THEY ARE THINKING ABOUT THE SECOND HALF. ROMAINE: IBM MONDAY, NETFLIX -- ROMAINE: IBM -- CAROLINE: IBM MONDAY, NETFLIX TUESDAY. VOLUME IS UP A LITTLE BIT. TAYLOR: FURTHER FALLING YIELDS WE CONTINUE TO GET. HAVING A GREAT CONVERSATION WITH JONATHANSAYING THEY AGREE WITH THE FED. ROMAINE: THANK YOU, TAYLOR. HERE IS THE CLOSING BELL IN NEW YORK. THE S & P 500 LOOKS LIKE IT IS GOING TO END THE DAY DOWN 14 POINTS. THE NASDAQ COMPOSITE DOWN 7/10 OF A PERCENT. GREEN ON THE SCREEN FOR THOSE OF YOU WATCHING. THE DOW JONES INDUSTRIAL AVERAGE 55 POINTS. UP TO TENTHS OF A PERCENT HERE ON THE DAY. AS FOR THE RUSSELL 2000, THAT DID COME WELL OFF THE LOWS OF THE DAY. DOWN AS MUCH AS 2% ON THE DAY. GOING TO FINISH THE DAY DOWN 5/10 OF A PERCENT. CAROL: I DO WONDER ABOUT U.S. INVESTORS WATCHING WHAT IS GOING ON IN CHINA. SECOND QUARTER GROWTH SLOWING LARGELY. CHINA CONTINUES TO GIVE US A WINDOW OF WHAT FINANCIAL MARKET LIFE IS LIKE POST-PANDEMIC. A LITTLE CONCERN U.S. GROWTH WILL SLOW DOWN. TIM: TAYLOR, I KNOW YOU ARE WATCHING THE BOND MARKET. THE MAJOR INDICES -- MAJOR INDUSTRY AVERAGES. YOU HAVE TO ASK THE QUESTION. TAYLOR: SHOULD I JUST AND HERE? -- JUST STAND HERE? LET'S TAKE A LOOK AT OUR BONDS. YIELDS FALLING WITH UTILITIES. SOME OF THE BEST PERFORMERS UP 1.2%. BANKS DO NOT DO WELL WHEN YIELDS ARE FALLING. WE ARE AT LEAST HAPPY SOME OF THE HEADLINE NEWS IS BEHIND US. FOR THE LOSERS FOR OUR RADIO AUDIENCE, THE ROTATION OUT OF ENERGY. CAROL: WHAT DID ROMAINE SAY? CAROLINE: FEELING BACK ABOUT THE BOND MARKET. ROMAINE: I TELL YOU HAVE TO LEARN TO IGNORE ME. CAROL:CAROL: I NEVER WANT TO IGNORE YOUR. ROMAINE: TAYLOR LEARNED THAT. CAROL: WE ARE SLOW TO THE PARTY. LET'S GET TO MY DHARNA. IT IS -- LET'S GET TO MODERNA. 25967 A SHARE. WHEN HUNDRED MILLION DOLLAR MARKET CAP TODAY. THE BLOOMBERG BUSINESSWEEK COVER STORY TALKS ABOUT HOW IT IS LOOKING TO TAKE THE MESSENGER RNA TECHNOLOGY AND EXPAND IT. JEFFREY C -- JEFFRIES RAISING THE PRICE TARGET. EXPECTING A SLIGHT SECOND QUARTER. U.S. BANCORP WATCHING THE FINANCIALS. CLIMBING AFTER EARNINGS URGE MORE THAN 200%. HYPER SANDLER SAYING IT WAS A REVENUE DRIVEN BEAT. USB UP THREE .2%. AIG AGREEING TO SELL A 9.9% EQUITY STAKE. $7.3 BILLION DEAL IN CASH. AIG SHARES UP 3.6%. TIM: YOU GOT THE GAINERS. I GOT THE DECLINERS. YOU AND I SPOKE TO THE CARNIVAL CEO EARLIER. THE COMPANY FINISHING THE DAY DOWN 2.8%. HE DID TELL US DEMAND IS ROBUST. PRICING IS STRONGER THAN IT WAS IN 2019. A HANDFUL OF THE COMPANIES TOOK A BEATING TODAY. BIOGEN FINISHING THE DAY DOWN 6.8%. SHARES SANK IN THEIR LOWEST POINT IN MONTH. -- IN A MONTH. ROMAINE: WHAT IS GOING ON WITH J & J? I KEEP HEARING THEY ARE PULLING ALL THE STUFF FROM THE SHELVES? TIM: HAS TO DO WITH SUNSCREEN. WE LEARNED YESTERDAY J & J IS VOLUNTARILY RECALLING SOME SPRAY AEROSOL SUNSCREENS FROM THE MARKET ENDED CONCERNS THE PRODUCTS COULD BE CONTAMINATED WITH A CANCER-CAUSING CHEMICAL. ROMAINE: THAT IS A CRAZY STORY. TIM: CVS PULLED PRODUCTS TODAY. CAROLINE: A SERIES OF MISHAPS FOR THE COMPANY. LET'S GO CROSS ASSETS. TODAY IS THE STORY OF DOLLAR STRENGTH. YEN STRENGTH. THE STORY OF A DOLLAR HAVEN. THE CURRENCIES MOST RELATED TO COMMODITIES ON THE DOWNSIDE. THE AUSSIE DOLLAR UP -- OFF BY A TENTHS OF A PERCENT. OIL TUGS LOWER AS WELL. WTI CRUDE, DOWN 2.2%. BRENT CRUDE FALLING AS WE ANTICIPATE AND OPEC PLUS INCREASE IN PRODUCTION. DOLLAR STRENGTH HITTING LIKELIHOOD OF BUYING AND TOIL. U.K. GUILDS BOUNCING ON THE SHORT-TERM KID WE DO NOT HAVE JUST INFLATION IN THE U.S. INFLATION BEING SEEN IN THE U.K. AND SOME OF THE COMMITTEE MEMBERS SAYING MAYBE WE WILL HAVE TO PUSH BACK ON STIMULUS. TAYLOR: I CANNOT CONTINUE TO UNDERSTAND WHAT IS GOING ON IN THE BOND MARKET. WE HAVE TRIED TO GET EXPERTS TO EXPLAIN FURTHER FALLING YIELDS WE CONTINUE TO SEE ACROSS THE CURVE CARED WE ARE DOWN A FEW BASIS POINTS ON THE DAY. ALMOST FIVE BASIS POINTS LOW A1 30. BELOW A 193. IT COMES ON WE GOT INTERESTING COMMENTS THAT CPI AND PPI ARE SHOWING A MUCH DIFFERENT STORY. THE BOND MARKETS AT LEAST FOR NOW BELIEVING IN THE FEDERAL RESERVE. WE HAVE THESE YIELDS CAP. -- YIELDS CAPPED. CAROL: WELLS FARGO WAS A GUEST EARLIER. CAP SAYING WE GET MIXED SIGNALS FROM THE BOND MARKET. WE CAUGHT UP WITH MICHAEL MCKEE EARLIER TODAY, THE PRESIDENT OF THE ST. LOUIS FED. HERE IS WHAT HE HAD TO SAY ABOUT ACTION THAT SHOULD BE TAKEN BY THE FED. > > WE ARE IN A SITUATION WHERE WE CAN TAPER AND I THINK SETTING THOSE PARAMETERS THE RIGHT WAY, WE DON'T WANT TO JAR MARKETS, BUT I THINK IT IS TIME TO END THESE EMERGENCY MEASURES. CAROL: HE SAYS TIME TO START THE TAPERING. ROMAINE: I NEED TAYLOR OR SOMEBODY TO EXPLAIN WHY WE HAVE NOT SEEN THE FREAK OUT WITH YIELDS GOING BACK A LOW 130 ON THE 10 YEAR WITH THE REAL YIELD GOING BACK BELOW -1%. BEFORE, EVERYONE WAS FREAKING OUT. SOME PEOPLE SAY IT IS JUST TECHNICALS. PEOPLE WERE SHORT OR SOMETHING. WHAT IS THE NARRATIVE I'M SUPPOSED TO BELIEVE? TAYLOR: THE TRUTH IS I DON'T THINK PEOPLE KNOW. JUST HAD JONATHAN KILLING IT FROM CREDIT SUISSE AND HE SAYS THE BOND MARKETS ARE NOT FREAKING OUT BECAUSE THEY BELIEVE THE FED HAS EVERYTHING UNDER CONTROL. HE GOES, THE BOND MARKET IS WELL BEHAVED. EXPERTS ARE BELIEVING THAT SHOULD TIM: IT SEEMS THAT IS THE MESSAGE IT IS SENDING. CAROL MADE A GREAT POINT EARLIER. WHICH FED OFFICIAL ARE WE SUPPOSED TO LISTEN TO ABOUT THIS? WE ARE GETTING MIXED SIGNALS FROM OFFICIALS. IT SEEMS LIKE THE BOND AND EQUITY MARKETS ARE LISTENING TO JAY POWELL WITH HIS TESTIMONY. HE IS SAYING WE ARE GOING TO SUPPORT THE ECONOMY. CAROLINE: BECAUSE FOR EVERY BULLARD, THERE IS A STRONG EVIDENCE. GENERALLY SAYING A FAR MORE DOVISH TRACK. WHEN NARRATIVE CONTINUES. THERE ARE CRYPTO AS WELL. PERHAPS GETTING CENTRAL-BANK ACTION. ROMAINE: DO YOU THINK THAT IS GOING TO HAPPEN? DO YOU THINK THEY'RE GOING TO MOVE FORWARD WITH THAT? CAROLINE: THEY ARE INVESTIGATING. ROMAINE: IS THE IDEA HERE THAT THIS IS GOING TO BE REAL COMPETITION FOR THE BANKS? DO THINK THE BANKS WILL ALLOW THAT TO HAPPEN? IS THIS GOING TO BE SOME SORT OF COMPLEMENT? CAROL: TALKING WITH THE RAYTHEON CO YESTERDAY AND HE SAYS YOU HEAR THINGS ABOUT TRANSITORY. THESE ARE EXECUTIVE CEOS WHO HAVE TO MAKE DECISIONS. ROMAINE: THE RAYTHEON TALK TO YOU ABOUT STABLE GOING? TIM, YOU HAVE A TIE ON. EXPLAIN THIS TO ME. TIM: FED CHAIR POWELL WAS ACTIVE AT THIS -- WAS ASKED ABOUT THIS YESTERDAY. HE SAID THEY WOULD NOT BE A MARKET FOR BITCOIN OR STABLE COIN IF THE UNITED STATES HAD A DIGITAL CURRENCY. ROMAINE: WE USED AIRSPACE BACKGROUND ON THE CAROL: I DIDN'T KNOW YOU HAD A SPACE BACKGROUND. THAT IS GOING TO DO IT FOR OUR CLASS PLATFORM -- OUR CROSS-PLATFORM COVERAGE. CAROLINE: WE GO FROM WALL STREET FROM CRYPTO TO WASHINGTON. JEAN SPERLING, SENIOR ADVISOR TO PRESIDENT BIDEN. ROUGHLY $15 BILLION PAID TO FAMILIES FOR ELIGIBLE CHILDREN IN THE EXPENDED CHILD TAX CREDIT. JOE WEISENTHAL IN THE HOUSE. JOE: THANK YOU FOR HAVING ME. EARLIER TODAY, SPEAKING EARLIER WITH THE U.S. DEPUTY TREASURY SECRETARY. TAKE A LISTEN TO PART OF OUR CONVERSATION. > > BECAUSE WE LACK A SUPPLY IN SOME PLACES, WE HAVE SEEN PRICES GO UP AND WE THINK THIS IS TEMPORARY AND TRANSITORY. WE CONTINUE TO THINK ABOUT WHAT WE CAN DO TO MAKE SURE WE CAN GROW THE ECONOMY, INVEST IN WAYS THAT CREATE JOBS AND EXPAND THE POTENTIAL OF THE ECONOMY GOING FORWARD. JOE: WHAT DOES THAT LOOK LIKE SPECIFICALLY? WHEN YOU SAY WE ARE THINKING ABOUT THE NEXT ROUND OF INVESTMENT PLAN FOR LATER IN THE YEAR, WHAT DOES THAT LOOK LIKE TO EXPAND THE POTENTIAL SUPPLY-SIDE CAPACITY OF THE ECONOMY? > > INVESTING IN TWO AREAS. ONE IS INFRASTRUCTURE. THE PRESIDENT HAS PUT OUT A PLAN. WE HAVE SEEN THE BIPARTISAN GROUP THAT IS WORKING ON THIS. INVESTING IN INFRASTRUCTURE WILL NOT ONLY IMPROVE OUR ECONOMY IN THE NEAR TERM BUT IT WILL ENSURE WE EXPAND THE ECONOMY IN THE LONG TERM. THE SECOND PART OF THAT IS INVESTING IN HUMAN CAPITAL. EXPANDING THE CHILD TAX CREDIT TO MAKE SURE WE ARE INVESTING IN OUR CHILDREN AND INVESTING IN OUR PEOPLE TO MAKE SURE OUR ECONOMY IS MORE COMPETITIVE GOING FORWARD. JOE: ONE AREA THAT IS A SOURCE OF ANXIETY AND THE WHITE HOUSE HAS ACKNOWLEDGED IT IS HOUSING. THERE WAS AN AWARENESS OF THE RAPID DEPRECIATION OF HOME PRICES. PEOPLE ARE CONCERNED RENTS ARE GOING TO TAKE OFF AS WELL. ARE THERE ANY POLICY LEVERS THE WHITE HOUSE HAS IN THINKING ABOUT HOUSING RIGHT NOW? THE HOUSING PRICES RIGHT NOW, HOUSING AVAILABILITY. > > HOUSING SUPPLY SHORTAGES HAVE BEEN A PROBLEM HAVE HAD IN OUR ECONOMY LONG BEFORE COBBETT -- BEFORE COVID. IT HAS BEEN EXACERBATED BY THE COVID CRAZIES. THE REALITY IS WE NEED MORE HOUSING. THE PRESIDENT HAS MADE PROPOSALS AS PART OF THE BUDGET TO INCREASE THE NUMBER OF HOUSES BUILT IN THE COUNTRY AND TO APPROVE AFFORDABILITY. LIKE OTHER AREAS OF THE ECONOMY, AS WE GET MORE SUPPLY ONLINE, WE EXPECT TO SEE PRICES NORMALIZE. THE KEY FOR US IS TO MAKE SURE NOT ONLY THAT WE BUILD HOUSING BUT WE ARE APPROVING AFFORDABILITY FOR PEOPLE THROUGHOUT THE ACCOUNT -- THE ECONOMY. GO: THERE ARE RAW MATERIAL CONSTRAINTS. THERE ARE LAND CONSTRAINTS. THERE ARE REGULATORY CONSTRAINTS IN THE STATES AND CITIES THAT MAKE IT DIFFICULT TO BUILD. WHAT KIND OF ACTIONS CAN THE WHITE HOUSE TAKE TO GREASE THE SKID? > > PART OF THIS IS BAKING SURE WE GET THE INCENTIVES RIGHT TO A BAIT -- IS MAKING SURE WE GET THE INCENTIVES RIGHT. A BIG PIECE IS PROVIDING TAX CREDITS TO THOSE WHO NEED AFFORDABLE HOUSING. BUT ALSO PROVIDE INCENTIVES TO IMPROVE ZONING IN COMMUNITIES TO ENSURE WE ARE TO PLACE WHERE HOUSING HAS BEEN BUILT NEAR THE CITY CENTER AND A PLACES WHERE PEOPLE HAVE THE ABILITY TO LIVE WHERE THEY WORK TO ENSURE WE HAVE ECONOMIES THAT ARE GROWING AND PROVIDING PEOPLE WITH THE OPPORTUNITIES THEY NEED TO GROW THEIR FAMILIES. TIM: THAT WAS PART OF MY -- JOE:THAT WAS PART OF MY CONVERSATION EARLIER WITH THE DEPUTY TREASURY SECRETARY. CAROLINE: WHAT WAS THE MOST INTERESTING THING? HOW MUCH DID YOU PUSHING ON INFLATION? JOE: WE THINK OF INFLATION AS BEING THE FED'S JOB. SO MANY OF THE INFLATION PRESSURES WE ARE SEEING, HARD TO CONNECT TO MONETARY POLICY. IF WE ARE TALKING ABOUT USED CARS, WE ARE TALKING ABOUT THE INABILITY OF HOMEBUILDERS TO GET LAYING THERE LUMBER. TRYING TO FIGURE OUT THE DEGREE TO WHICH SUPPLY-SIDE CAPACITY, EXPANDING SUPPLY-SIDE CAPACITY TO RAISE THE SPEED LIMIT OF THE ECONOMY IS ON THEIR MINDS AS THEY THINK ABOUT THIS BUDGET. IT IS CLEARLY SOMETHING THERE THING ABOUT. HOW MANY LEVERS THEY CAN PULL PARTICULARLY ON THE HOUSING. THERE IS STUFF THEY WANT TO DO AROUND ZONING. THAT ANY THEORY COULD IMPROVE THE HOUSING STOCK. THAT IS NOT ANYTHING THAT WOULD MOVE THE DOLLAR IMMINENTLY. TAYLOR: WONDERING IF REAL WAGES ARE DECLINING BECAUSE OF INFLATION, IT DOES HIT PEOPLE EVEN THOUGH AS ROMAINE WAS MENTIONING, IT MIGHT I FIT INTO THE ECONOMIC MODEL BUT THE REAL PEOPLE FEEL IT. DID THEY COMMENT ON THAT? JOE: I THINK THEY ARE ACUTELY AWARE OF THE ISSUES. IT IS VERY DIFFICULT. OBVIOUSLY, THERE IS THIS -- WHETHER YOU CAN DRAW A STRAIGHT LINE BETWEEN THE A POLICY AND THE INFLATION OR NOT, THEY'RE TRYING TO PASS TRILLIONS OF DOLLARS OF SPENDING. PEOPLE DON'T LIKE INFLATION. PEOPLE NOTICE AT THE GROCERY STORE. THEY NOTICE AT THE GAS STATION. THEY'RE TRYING TO PUT IT IN JOB CONTEXT. IT IS CLEARLY AN ISSUE FOR THIS TREASURY AND THIS WHITE HOUSE. ROMAINE: WAS THERE ANY DISCUSSION ABOUT -- WAS THERE ANY DISCUSSION ABOUT DECENTRALIZATION? JOE: WE DID NOT GET INTO -- CAROLINE: YOU DID NOT GET INTO THE WORLD OF CRYPTO WITH HIM? JOE: YOU KNOW WHAT, I THOUGHT MAYBE WE COULD HAVE ONE CONVERSATION THIS YEAR THAT WAS NOT ABOUT CRIB APPEARED -- NOT ABOUT CRYPTO. CAROLINE: THIS IS ALL COMING FROM JACK DORSEY. HE IS SAYING SQUARE IS CRATING A NEW BUSINESS. FOCUSING ON BUILDING AND OPEN IT DEVELOPER -- AN OPEN DEVELOPMENT PLATFORM. HE HAS GOT THE BIG BITCOIN CONFERENCE NEXT WEEK. ROMAINE: THIS IS NOT A TOTAL SURPRISE. HE HAS BEEN BANGING THIS DRUM FOR A WHILE. WHAT HE HAS DONE WITH CASH APP IS PUSH SQUARE IN THAT DIRECTION. JOE: A LOT OF THIS IS NOT CORPORATE. YOU DON'T SEE A LOT OF BIG CORPORATIONS INVOLVED IN THIS. WILL BE INTERESTING TO SEE THE TECH THEY ENVISION BECAUSE A LOT OF IT IS BUILT ON A T ETHEREUM. ROMAINE: I LOVE WE BROUGHT HIM ON TO TALK ABOUT THE TREASURY AND WE END UP TALKING ABOUT CRYPTO. CAROLINE: IT PULLS YOU BACK. YOU TRY AND ESCAPE CRYPTO AND IT PULLS YOU BACK. WE ARE GOING TO BE DISCUSSING JOE'S INTERVIEW A LOT MORE IN A MOMENT. LET'S TAKE ON THE POLITICAL SPECTRUM BECAUSE WE ARE ANTICIPATING AN IMPORTANT MEETING AT THE WHITE HOUSE WHERE JOE BIDEN AND GERMAN CHANCELLOR ANGELA MERKEL PARTICIPATED IN AN EXPANDED BILATERAL MEETING DISCUSSING A FULL RANGE OF ISSUES. OUR CHIEF WASHINGTON CORRESPONDENT IS STANDING BY AT THE WHITE HOUSE. THIS IS A FAREWELL TOUR OF ANGELA MERKEL IN TERMS OF WITH THE UNITED STATES. > > HER MORE THAN 15 YEARS AS THE LEADER OF GERMANY. WE DO HAVE GERMAN ELECTIONS COMING UP IN SEPTEMBER SHOULD YOU LISTED -- IN SEPTEMBER. YOU LISTED A HOUSED OF ISSUES. WHAT WE ARE GOING TO WANT TO HEAR FROM WHEN PRESIDENT BIDEN TAKES THE PODIUM IS WHAT SHE HAS TO SAY ON NORD STREAM 2, WHICH IS A POINT OF CONTENTION BETWEEN THE TWO COUNTRIES AS WELL IN CHINA, WHICH WE DID SEE PRESIDENT BIDEN TRIED TO WRANGLE ANGELA MERKEL AND OTHER EUROPEAN LEADERS TO GET ON BOARD WITH TAKING A TOUGHER STANCE ON CHINA. IT WILL BE INTERESTING TO SEE WHAT HER COMMENTS ARE TODAY, IF THERE IS ANY SHIFT OF TONE ON THOSE TWO ISSUES. ROMAINE: WE ARE TOLD SHE HAS ALREADY MET WITH THE VICE PRESIDENT. WHAT DO WE KNOW ABOUT THE MEETING THEY HAD? > > SIMILAR TO WHAT WE WILL SEE OFF THIS EXTENDED BILATERAL. THEY TALKED ABOUT GEOPOLITICAL ISSUES. THE KEY CONCERN IS NORD STREAM 2. THIS IS SOMETHING THAT HAS BIPARTISAN SUPPORT IN WASHINGTON, D.C. SECRETARY OF STATE TONY BLINKEN HAD SAID IT IS GOING TO BE DONE BY THE END HAVE THIS MONTH. WHAT THE UNITED STATES IS GOING TO LOOK FOR IS ANY ASSURANCES FROM BERLIN THEY COULD HELP PROTECT THE ECONOMIC AND NATIONAL SECURITY OF UKRAINE KID UKRAINE IS THE ONE THAT IS GOING TO LOSE BECAUSE THEY LOSE OUT ON ALL THOSE GAS TRANSIT FEES THAT WOULD COME THROUGH UKRAINE AND INSTEAD, YOU'RE GOING TO GET THAT GAS PUMPING FROM RUSSIA TO GERMANY. WHAT IS A LITTLE PERSONAL FOR ANGELA MERKEL. HER DISTRICT IN GERMANY AND HER POOR IS WHERE ALL THOSE RUSSIAN VESSELS ARE. THIS IS NOTHING THAT COULD BE A LITTLE AWKWARD FOR HER IN A PRESS CONFERENCE. TAYLOR: YOU BRING UP AN INTERESTING POINT. JOIN US AFTER SPENDING A LOT OF TIME IN YOUR. I AM CURIOUS HOW MUCH OF THIS IS SIGNALING A STRENGTHENING RELATIONSHIP BETWEEN THE U.S. AND EUROPE. BIDEN HAS TALKED ABOUT TAKING OFF THE THREAT OF DEMOCRACY FROM RUSSIA AND CHINA. HOW MUCH OF THIS IS SIGNALING THE U.S. AND EUROPE CAN BE STRUNG TOGETHER? > > ESPECIALLY SINCE THOSE FOUR YEARS OF DONALD TRUMP WHERE WE DID NOT SEE A RELATIONSHIP BETWEEN ANGELA MERKEL AND PRESIDENT TRUMP, THE 2017 G7 MEETING, SHE FAMOUSLY SAID FIGURES ARE RELYING ON OUR ALLIES, THE UNITED STATES, THOSE DAYS ARE OVER. THIS IS A CHANCE FOR THEM TO RESET THOSE TRANSATLANTIC OWNERSHIPS. WE SAW ALL THAT BEING DONE BY PRESIDENT BIDEN WHILE HE WAS ON THE OTHERS OF THE POND AND WHEN HE WENT TO THE NATO SUMMIT. THIS IS A CHANCE FOR HER TO STAND NEXT TO THE PRESIDENT AND SET THOSE RELATIONSHIPS AFTER THEY DID NOT GO WELL BETWEEN PRESIDENT TRUMP AND PRESIDENT MERKEL. CAROLINE: WE ARE GOING TO WAIT TO SEE WHAT COMES OUT OF THAT MEETING AND THE PRESS CONFERENCE AND THEIR DINNER. THANKS SO MUCH. ROMAINE: ISN'T SHE GETTING AN HONORARY DOCTORATE TODAY LACK OF JOHNS HOPKINS UNIVERSITY -- DOCTORATE TODAY? JOHNS HOPKINS UNIVERSITY. CAROLINE: WHAT A NICE HONORARY DOCTORATE TICKET. LET'S GET TO OUR HONORARY PERSON ON THE SHOW. MARK CRUMPTON IS WITH US. MARK: THANK YOU. GERMAN CHANCELLOR ANGELA MERKEL WHO IS IN THE UNITED STATES MEETING WITH PRESIDENT BIDEN PLEDGED SWIFT HELP BACKED BY ALL THE POWER OF THIS STATE FOR PEOPLE AFFECTED BY DEVASTATING FLOODING IN WESTERN GERMANY. FLOODING THERE AND IN BELGIUM HAS KILLED AT LEAST 60 PEOPLE AND DOZENS MORE ARE MISSING. CHANCELLOR ANGELA MERKEL SAYS EVERYTHING IS BEING DONE TO FIND THOSE MISSING. AND THE FLOODS ARE AMONG THE MOST DEVASTATING IN DECADES. RESIDENTS CLIMBED ON TOP OF GROOVES AND INTO TREES AFTER HOUSES WERE INUNDATED OR COLLAPSED. THOUSANDS OF HOMES ARE WITHOUT ELECTRICITY. A FORMER WARNING THE BIDEN ADMINISTRATION -- THAT INVESTORS ARE NOT TAKING THE RISK OF OPERATING IN THE CITY SERIOUS ENOUGH. THE KEY MESSAGE IS THAT THE ADMINISTRATION BUSINESS ADVISORY SET FOR FRIDAY WILL BE THAT HONG KONG'S ONCE INDEPENDENT LEGAL SYSTEM IS NOW AS SUBJECT TO GOVERNMENT INTERFERENCE AS MAINLAND CHINA WHERE THE RULING COMMUNIST PARTY HAS ALMOST COMPLETE CONTROL. LEBANON'S PRIME MINISTER HAS STEPPED DOWN AFTER THE COUNTRY'S PRESIDENT REJECTED HIS LATEST CABINET PROPOSAL. THE POLITICAL CRISIS HAS ADDED TO THE ECONOMIC DOWNTURN. HE CLAIMS THE PRESIDENT TOLD HIM THE TWO COULD NOT AGREE EVEN GIVEN MORE TIME TO WORK IT OUT. GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND ON QUICKTAKE BY BLOOMBERG, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN OVER 120 COUNTRIES. I'M MARK CRUMPTON. THIS IS BLOOMBERG. TAYLOR: IT IS TIME FOR FINAL PLAY. CAN WE DO BONDS AND FINANCIALS TOGETHER? LET'S TRY IT. MORGAN STANLEY POSTING ADS SECOND MOST PROFITABLE QUARTER ON RECORD. A NEW VOICE IS LEADING WALL STREET THROUGH THOSE NUMBERS. OUR SENIOR BLOOMBERG INKING REPORTER IN HER FIRST INTERVIEW SINCE THE APPOINTMENT. WHAT DID YOU LEARN? LET'S START WITH THE NUMBERS WE RECEIVED. > > PRETTY MUCH LIKE ALL ACROSS WALL STREET, MORGAN STANLEY HAD A STELLAR QUARTER. INVESTMENT ANCHORS GOT THE SPOTLIGHT. PICKING UP SOME OF THE SLACK APPEARED THAT WAS TO BE EXPECTED. ACROSS WALL STREET, IT WAS EVERY TRADING DESK MINTING LOADS OF MONEY. YOU CANNOT HAVE EXPECTED THAT TO CONTINUE. YOU DID SEE A CLIMB FROM THAT LEVEL. THE FRENETIC PACE OF ACTIVITY HAS MEANT THE GOOD TIMES FOR WALL STREET HAVE CONTINUED TO LAST AND MORGAN STANLEY PARTICULARLY SLOW BECAUSE HALF OF THEIR BUSINESS IS THE WEALTH MANAGEMENT BUSINESS THAT FITS CASH QUARTER AFTER QUARTER. THAT HAS BEEN ON A GOOD RUN BECAUSE OF THE BROADER ENVIRONMENT. ROMAINE: I WENT TO ASK YOU -- I WANT TO ASK YOU BECAUSE IN IT, SHE TALKED ABOUT THE ROLE OF BEING A CFO AND HOW IT HAS EVOLVED INTO SOMETHING THAT IS A LOT MORE IMPORTANT. BEFORE, IT WAS THE BEAN COUNTER BEHIND THE QUARTER -- THE BEHIND THE CURTAIN. THE BANKS HAVE TAKEN ON A MORE OUTSIZE ROLE. > > IT IS AN INTERESTING POINT. THIS IS A POINT SHE TRIED TO MAKE BECAUSE IT IS UNCONVENTIONAL PART. SHE HAS NEVER HEADED A SERIOUS REVENUE MAKING POSITION. SHE STARTED OUT IN RESEARCH. HER TWO MOST IMPORTANT GIGS HAD BEEN CHIEF OF STAFF AND HEAD OF INVESTOR RELATIONS. HER ARGUMENT HAS BEEN THE CFO SEAT HAS TAKEN ON A MUCH MORE STRATEGIC -- AS HEAD OF INVESTOR RELATIONS, YOU ARE PART OF A LOT OF THOSE CONVERSATIONS AND YOU CONTINUE TO SHAPE THE FUTURE DIRECTION OF THE FIRM. FROM THAT PERSPECTIVE, IT WAS INTERESTING HOW SHE FRAMED IT AS MORE OF THE STRATEGY. CAROLINE: IT IS SO INTERESTING THE CONVERSATION YOU HAD WITH HER. SHE IS AUTHENTIC AND TRUE SAY I WAS SCARED. I WAS 34 WHEN SHE WAS GOING UP TO HAVE THAT INTERVIEW TO BECOME CHIEF OF STAFF FOR JAMES GORMAN. THE RELATIONSHIP BETWEEN THE TWO OF THEM, HOW WAS IT ON THE CALL? > > THE WORRY OVER -- WHEN YOU GET [INDISCERNIBLE] JUST LIKE EVERY CORPORATE EXECUTIVE, YOU WORRY THEY BECOME BLAND AND BORING. IT WAS -- SHE KNEW SOME OF THESE ANALYSTS WELL AND SOME INVESTORS. SHE CARRIED OUT HER RESPONSIBILITIES TODAY WITHOUT APPEARING LIKE ANYONE WAS MISSING. TAYLOR: WONDERFUL INTERVIEW. ALWAYS LOVE THE STORIES YOU DO ON BANKS AND MORGAN STANLEY. OUR BLOOMBERG SENIOR BANKING REPORTER. BLOOMBERG MARKETS CLOSE IS COMING TO AN END. I KNOW WE ARE STILL WAITING ON BIDEN AND ANGELA MERKEL. IS THAT ALL WE SHOULD BE LOOKING FORWARD TO? ROMAINE: CRYPTO. CAROLINE: FRACTIONS IN THIS MARKET. BUT ALSO SOME GREAT INTERVIEWS WE HAVE BEEN DOING ARE GOING TO BE AIRED. JOE TALKING ALL THINGS IN TERMS OF THE TREASURY SECRETARY. TAYLOR: HUGE INTERVIEW COMING UP. MAKE SURE TO STICK AROUND FOR THAT. THE PRESS CONFERENCE ALSO COMING UP MOMENTARILY. I AM FINISHED FOR NOW. THIS IS BLOOMBERG.

No schedule data available.

Bloomberg Markets: The Close (07/15/2021)

Caroline Hyde, Romaine Bostick & Taylor Riggs bring you the latest news and analysis leading up to the final minutes and seconds before the closing bell on Wall Street and tackle the child tax credit, the space race and Biden & Merkel's meeting. Guests today: Scott Wren of Wells Fargo Investment Institute, White House Senior Advisor Gene Sparling, Arnold Donald of Carnival, Nick Jones of Membership Collective Group, Danielle Wood of MIT Media Lab Space Enabled Research Group, Olivia Engel of State Street Advisors, Jonathan Golub of Credit Suisse, Deputy Treasury Secretary Wally Adeyemo. (Source: Bloomberg)