Live on Bloomberg TV

00:00I AM MARK CRUMPTON, THIS IS BLOOMBERG. ♪ > > THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS BLOOMBERG MARKETS: THE CLOSE, WITH CAROLINE HYDE, CAROLINE -- ROMAINE BOSTICK AND TAYLOR RIGGS. ♪ CAROLINE: IT'S 2:00 P.M. IN NEW YORK, 7:00 P.M. IN LONDON. LIVE FROM BLOOMBERG WORLD HEADQUARTERS, THIS IS BLOOMBERG MARKETS: THE CLOSE. I'M CAROLINE HYDE. ROMAINE: I AM ROMAINE. SONALI: AND I'M SONALI BASAK. TAYLOR RIGGS IS OFF TODAY. CAROLINE: THE 10 YEAR YIELD SPIKED ABOUT 1.5% ON WILD COMMODITY MOVES. WE'VE GOT YOU COVERED. AND IN CHINA, MANAGEMENT SOUNDING THE ALARM ON CHINESE STOCKS. SOME MANAGERS SEE LONG-TERM POTENTIAL -- IT'S A HOT TOPIC AT THIS YEARS'S BLOOMBERG BEST GLOBAL CONFERENCE. AND THE FORMER FACEBOOK INSIDER-TURNED WHISTLEBLOWER IS SET TO [INAUDIBLE] ROMAINE: YOU TALK ABOUT TIME TO SELL, IT IS TIME TO BUY IF YOU ARE WAITING FOR THAT FULL AND OFFICIAL CORRECTION ON THE S & P 500 OR ANY OTHER MAJOR INDICES. YOU HAVE ANOTHER DAY TO WAIT HERE, THE DRAW ON THE S & P 500 GETTING PEELED BACK, SAME FOR THE 7.7% DRAWDOWN ON THE NASDAQ. NOTHING REALLY CHANGED YESTERDAY FROM THE DAY PRIOR, BUT NOTHING TODAY REALLY CHANGED FROM THE DAY PRIOR EITHER. YOU ARE LOOKING AT THE S & P 500 AROUND 43 66, THE RUSSELL 2000 UNDERPERFORMING ON THE DAY BUT STILL HIGHER, AND A MOVE HIGHER IN YIELDS ONCE AGAIN. WE WILL TALK ABOUT THIS RELENTLESS RALLY WE CONTINUE TO SEE IN THE COMMODITIES SPACE, ESPECIALLY WITH ENERGY. $79 ON WTI CRUDE, AND NATURAL GAS PRICES -- YOU DON'T WANT TO GO BACK TO THE U.K., CAROLYN. CAROLINE: THEY ARE MAD, AREN'T THEY? EXTRAORDINARY MOVES IN TECHNICALS LOOKING AT THE S & P 500, GUYS. TAYLOR RIGGS DOES US PROUD EACH TIME IN TERMS OF TALKING ABOUT THE HUNDRED DAY MOVING AVERAGE AND WHAT IT IS, AND MANAGING TO BEAT BACK ABOVE IT. WE SUNK BELOW, WE WERE WORRIED ABOUT THE NEW 5% CORRECTION TURNING INTO A 10% CORRECTION, BUT STEADY OUR NERVES, TECHNICALS HELP, AND WE HAVE THE FIRST DOUBLE TEST IN A YEAR. LET'S TALK ABOUT WHETHER IT'S TIME TO SELL OR TIME TO BUY. ROUGHLY .58 BILLION IN MANAGEMENT -- SOPHIA -- IS IT TIME TO BUY THE DIP? SOPHIA: I THINK IT IS TIME TO BUY THE DIP, EVERY TIME WE HAVE SEEN THESE PULLBACKS. YOU MENTIONED BEFORE, THE FUNDAMENTALS LOOK SIMILAR TO HOW THEY DID A WEEK AGO. THERE IS CONTINUED LIQUIDITY IN THE MARKETS, POTENTIALLY MORE LIQUIDITY TO COME INTO THE MARKET IF WE GET AN INFRASTRUCTURE BILL. WE HAVE TONS OF MONEY SITTING IN CASH ACCOUNTS, EARNING NOTHING. HOPEFULLY INVESTORS WILL PUT IT BACK INTO THE MARKET TO EARN SOME RETURNS THERE. COME -- FLUSH WITH CASH, STRONG BALANCE SHEETS. THE EARNINGS PICTURE HAS BEEN QUITE ROSY THIS QUARTER, AND I THINK WHEN YOU GET 5%, 10% PULLBACKS IN SOME OF THE MOST QUALITY TECH NAMES OUT THERE, LIKE AMAZON, FOR EXAMPLE, GOOGLE OR MICROSOFT ON A PULLBACK, IT'S A CHANCE TO GET IN. I WOULD DEFINITELY BUY THE DIP HERE. ROMAINE: A LOT OF PEOPLE BUYING THE DIPS NOW. THE NASDAQ 100 CROSSING THE 2% THRESHOLD, RECOUPING A GOOD CHUNK OF THE LOSSES IT SAW YESTERDAY. WE ARE HEADING INTO EARNINGS SEASON AND THERE ARE CONCERNS ABOUT FUNDAMENTALS, GROSS MARGINS, LEGITIMATE CONCERNS ABOUT THE PACE OF REVENUE GROWTH THAT A LOT OF INVESTORS HAVE GOTTEN ACCUSTOMED TO OVER THE PAST COUPLE OF YEARS HERE. HOW MUCH CONFIDENCE YOU HAVE RIGHT NOW THAT THE MESSAGING WE WILL GET OUT OF THESE COMPANIES AND A COUPLE OF WEEKS HERE, IT WILL FIT THE NARRATIVE WITH THE PRICE ACTION WE ARE SEEING IN THE MARKETS? SYLVIA: LAST QUARTER EARNINGS, WE DID GET A BIT OF THINGS ARE LIKELY TO SLOW DOWN FROM SOME OF THE TOP REPORTERS. WE ARE LOOKING AT S & P EARNINGS TO BE UP NEAR 20% YEAR-OVER-YEAR . I THINK THE PICTURE REMAINS THE SAME, WHERE THESE COMPANIES HAVE ESSENTIALLY BEEN ABLE TO BORROW MONEY FOR FREE FOR THE LONGEST TIME. THEY REMAIN STRONG IN THEIR CASH BALANCE SHEETS, SOME TOP NAMES ARE DISCUSSING DOING BUYBACKS, SO I EXPECT EARNINGS ARE GOING TO CONTINUE TO BE POSITIVE. ARE WE GOING TO SEE 60% YEAR-OVER-YEAR REVENUE GROWTH FROM SOME OF THE TOP PERFORMERS? I DON'T THINK SO, BUT IF I CAN GET ONE QUARTER OF THAT OR HALF OF THAT, I AM STILL HAPPY. THAT'S MORE THAN I WILL MAKE IN THE FIXED INCOME SPACE, SO I THINK WHILE EARNINGS MIGHT START TO SLOW DOWN, THEY ARE NOT GOING TO BE ABLE TO PULL BACK AND BE NEGATIVE. HOPEFULLY THE MARKET TAKES IT THAT WAY. WE ARE USED TO THESE STELLAR ANNOUNCEMENTS, AND I AM WORRIED ABOUT KNEE-JERK REACTIONS EVERY ONCE IN A WHILE, WHERE YOU HAVE 30% YEAR-OVER-YEAR EARNINGS -- SONALI: THE KNEE-JERK REACTIONS YOU ARE TALKING ABOUT IS WHAT I WANTED TO ASK YOU ABOUT. WE HAVE SEEN SO MANY KNEE-JERK REACTIONS, IT SEEMS LIKE THERE ARE A LOT OF RISKS BUILT INTO OCTOBER THAT COULD CAUSE SOME HICCUPS ALONG THE WAY. SYLVIA: THAT'S A GREAT QUESTION, BUT I WOULD ARGUE THAT THAT IS WHEN YOU GET IN, RIGHT? THE ENDS OF THE YEAR IS USUALLY SEASONALLY STRONGER THAN OCTOBER. IF YOU HAVE YOUR CASH ON THE SIDELINE, THIS IS IT. WE WOULD EXPECT THE END OF THE YEAR TO BE MORE ROBUST THAN SEPTEMBER OR OCTOBER HAVE BEEN. NONE OF THESE DIPS HAVE BEEN SIGNIFICANT. WE HAVE NOT SEEN IT WHEN HE PERCENT PULLBACK IN THE FULL MARKET. WE HAVE SEEN SHORT-TERM MOVES, BUT INVESTORS ON THE SIDELINES ARE GOING TO KEEP COMING IN AND GRASPING AT THESE OPPORTUNITIES, BUT GOING FORWARD, WE ARE GOING TO THINK ABOUT CORPORATE TAXES, LONG-TERM AND SHORT-TERM CAPITAL GAINS AND WHAT THEY ARE GOING TO LOOK LIKE , WHEN WILL RATES RISE -- THIS IS THE SWEET SPOT. FROM NOW UNTIL THE END OF 2022, NOW IS THE TIME. CAROLINE: THE SO-CALLED SMART MONEY, LIKE JOHN GRAY, BLOOMBERG EVENTS TODAY SAYING THIS IS THE PERFECT TIME TO SELL BECAUSE OF THE LOFTY VALUATIONS. THEY ARE BASICALLY CALLING THE TOP OF THE MARKET. IS IT THE RETAIL BUYER WHO IS COMING IN? WHO IS SEEING THE OPPORTUNITY AND KEEPS SUPPORTING THE MARKET? SYLVIA: WELL, IN TERMS OF THE SMART MONEY, AS YOU MENTIONED, THEY HAVE A FIDUCIARY -- TO INVESTORS. BEFORE THEY CAN FINISH OUT THE QUARTER STRONG AND IT LOOKS GREAT ON PAPER, MAYBE THEY ARE MINIMIZING RISK BY NOT GOING BACK INTO THE MARKET AND WRITING OUT THE VOLATILITY AND TAKING ANY CHANCES. I THINK IT'S THE RETAIL CLIENT COMING BACK INTO THE MARKET. I THINK $2.5 TRILLION ON THE SIDELINES THAT WE HEAR ABOUT IN SAVINGS ACCOUNTS AND MONEY MARKETS, THOSE PEOPLE ARE BENEFITING. IMAGINE IF YOU BOUGHT FACEBOOK YESTERDAY, YOU COULD JUST SELL IT TODAY. THERE ARE GREAT OPPORTUNITIES FOR SAVVY TRADERS TO MAKE SHORT-TERM PROFITS AND GET IN ON DIPS FOR LONGER-TERM HOLD PERIODS AND THE NEXT GENERATIONS OF TRADES OUT THERE, LIKE THE SEMICONDUCTOR SPACE, FOR EXAMPLE. ROMAINE: SYLVIA, ALWAYS GREAT TO GET YOUR THOUGHTS. SYLVIA JABLONSKI. THERE'S USUALLY A BREAK HERE WHEN TRADING IS OVER. MONEY NEVER SLEEPS. NOW APPARENTLY, THERE IS A NEW PLATFORM FOR TRADING STOCKS TO MAKE SURE TRADERS NEVER SLEEP EITHER. DOES CRYPTO EVER RISE AGAIN? AND AN UNPRECEDENTED MOVE IN LONDON. NATURAL GAS PRICES ARE RISING, UP SEVEN PER HUNDRED -- 700% IN ONE YEAR. ALMOST OCTUPLET. AND HOW THE SOCIAL NETWORK FACEBOOK ABOUT SOME OF THE MENTAL HEALTH RISKS FOR SOME OF ITS USERS. WE WILL HAVE THAT AND MORE, ♪ CAROLINE: TRADING AFTER DARK DARK -- A NEW PLATFORM WILL LET INVESTORS BUY AND SELL OUTSIDE OF TRADITIONAL U.S. MARKET HOURS. WE ARE GOING TO HAVE TO CALL IT MARKETS: NOT QUITE THE CLOSE OR SOMETHING, BECAUSE WHO IS GOING TO BE TRADING? CATHERINE: THIS IS TARGETING A SPECIFIC AUDIENCE, INVESTORS IN ASIA AND THE WEST COAST. IT'S NOT NECESSARILY THAT THESE INVESTORS, THEY ARE AWAKE, THEY ARE JUST EITHER ON A DIFFERENT TIME ZONE, BUT THEY ARE ALSO REACTING TO THE SAME NEWS THAT, AS WE ALL KNOW, COULD POP AT ANY TIME. THIS OPENS UP ACCESS AND GIVES THE OPPORTUNITY FOR INVESTORS TO MANAGE RISK IN A NEW WAY. ROMAINE: FOR THOSE OF OUR VIEWERS WHO ARE NOT DEGENERATE GAMBLERS, THEY KNOW THAT THE NORMAL CASH MARKET TRADES AT 4:00 P.M., BUT THEY CAN KEEP TRADING UNTIL 8:00 P.M., AND THERE WAS A SHUT DOWN UNTIL WHEN? KATHERINE: BEFORE THAT, THE HOURS THAT THIS PLATFORM IS NOW EXPANDING, IT'S FROM 8:00 P.M. TO 4:00 A.M. THEN YOU GOING TO THE PREMARKET TIME PERIOD, THE 9:30 TO 4:00 MARKET HOURS, THEN YOU GO INTO POST MARKET. SO IT IS A FREE-FOR-ALL. ROMAINE: WHEN THEY EXPANDED THE FREE MARKET AND THE POST MARKET -- PREMARKET AND POST MARKET, IT FORCED A LOT OF PEOPLE TO TRADE IN THOSE HOURS. SONALI: IT WILL COME DOWN TO THE STYLE OF INVESTING. THIS IS PARTICULARLY FOR INSTANCES WHERE NEWS OR OTHER EVENTS HIT OUTSIDE OF TRADITIONAL HOURS. IT'S NOT THAT THEY WANT TO, THEY JUST HAVE THE OPTION NOW. SONALI: THIS IS A FAIRLY DEFINED PRODUCT -- AT WHAT POINT DOES IT START TO ATTRACT MORE PEOPLE? MARKETS ARE ALREADY GLOBAL, RIGHT? THEY ARE ALREADY 24 HOURS A DAY AND WORRIED ABOUT WHAT'S HAPPENING IN CHINA WHEN THEY ARE TRADING. KATHERINE: THAT'S A GREAT POINT. THIS PLATFORM IS ACCESSIBLE TO THE CLIENT OF THE SPECIFIC COMPANY. WE ALREADY HAVE VERY BIG NAMES JANE STREET AND VIRTUE THAT ARE BACKING IT. YOU ARE ESSENTIALLY A SUBSCRIBER TO THE PLATFORM. WHEN THAT HAPPENS, YOU MIGHT ADD MORE SUBSCRIBERS AND IT WILL LEAD TO EXPANDING THE POOL. THAT WILL LEAD TO EXPANDING LIQUIDITY AND MORE TRADING AFTER HOURS. ROMAINE: I THINK IT COULD BE GOOD FOR OUR JOB HERE. WE COULD EXPAND THE HOURS. YOU WILL NEED US ALL THE TIME. CAROLINE: WE ARE GOING TO PASS THAT BLOCK OFF -- BLOOMBERG DAYBREAK ASIA. ROMAINE: KATHERINE, A GREAT STORY THERE. UP NEXT, WE HAVE A BLOOMBERG INVEST CONFERENCE GOING ON TODAY, TOMORROW, YOU DON'T WANT TO MISS IT. WE WILL BRING YOU SOME HIGHLIGHTS FROM THAT, THE BROOKFIELD CEO, SOME INTERESTING COMMENTS ABOUT INFLATION. WE WILL BRING YOU THAT FROM THE ROMAINE: ALL RIGHT, THE BLOOMBERG INVEST GLOBAL SUMMIT KICKS OFF TODAY, AND ALL THE TALK RIGHT NOW IS ABOUT THE TOM -- COMMENTS FROM JOHN GRAY AT BLACKSTONE, SAYING IT'S A GOOD TIME TO BE LIQUIDATING ASSETS. WE SPOKE EXCLUSIVELY TO FLATT AT THE SUMMIT AS WELL. TAKE A LISTEN. > > THE GOOD NEWS, THE HEALTH ISSUES ARE ABATING EVERYWHERE AND THE VACCINATIONS ARE WORKING AMAZINGLY AND THE WORLD IS OPENING UP. PEOPLE ARE BACK TO BUSINESS. PEOPLE ARE BACK DOING MEETINGS. WE ARE IN THE LATE STAGE OF THIS WHERE PEOPLE ARE BACK IN THE OFFICE. THEY HAVE A PLAN TO BE BACK IN THE OFFICE OR THEY ARE SOON TO BE BACK IN THE OFFICE, AND THAT'S REALLY GOOD. I WOULD SAY BUSINESS IS GETTING BACK TO NORMAL. > > TAKE ME INSIDE THE REAL ESTATE PART. WE ARE GOING TO BREAK DOWN THE BROOKFIELD EMPIRE AND LOOK ACROSS THE ENTIRE $600 BILLION OR SO IN ASSETS. BUT I HAVE TO START WITH REAL ESTATE. IT'S WHAT YOU ARE BEST KNOWN FOR. YOU ARE A MASSIVE LANDLORD IN CITIES LIKE NEW YORK AND LONDON, AND I KNOW YOU TRAVEL TO THOSE PLACES AND MANY MORE. WHAT HAS CHANGED ABOUT BIG CITIES AND WHAT HAS CHANGED IN THE WORLD OF REAL ESTATE OVER THE PAST 12, 20 4, 36 MONTHS? WHERE DO WE GO FROM HERE? > > THERE'S BEEN A LOT OF CONFUSION. IT WAS NATURAL, BECAUSE THINGS GOT SHUT DOWN AND YOU COULD NOT USE AN OFFICE. SO CONFUSION REIGNED. BUT LIKE EVERYTHING, THINGS GENERALLY GO BACK TO NORMAL. THESE URBAN CITIES ARE URBAN CITIES BECAUSE THEY ARE URBAN CITIES. PEOPLE LIKE TO BE IN THEM. PEOPLE LIKE TO BE BY EACH OTHER, GO TO RESTAURANTS NEAR EACH OTHER, WORK BESIDE THEIR COLLEAGUES, AND MOST EMPLOYMENT IN THOSE OFFICE BUILDINGS, PEOPLE GET TRAINED BY BEING BESIDE THEIR COLLEAGUES. I THINK WE ARE GOING BACK TO SOMEWHERE NEAR WHERE WE WERE BEFORE, AS THE WORLD IS CHANGING, A LITTLE MORE ONLINE REMOTENESS AND A FEW JOBS CONTINUE TO GET OUTSOURCED TO PLACES LIKE INDIA OR OTHER PLACES, AND THAT CONTINUES. JASON, WHAT I KNOW FOR YOU, IN ALL THESE GREAT CITIES, THE CREATIVE JOBS ALWAYS CHANGE. I WILL USE NEW YORK AS AN EXAMPLE. YOU CAN LOOK 100 YEARS AGO WHAT BUILT THE CITY, 75 YEARS AGO, 50 YEARS AGO, 20 YEARS AGO AND TODAY. IT ALWAYS CHANGES. IT'S THOSE CREATIVE USES AND THE PEOPLE THAT ARE NEEDED TO DRIVE THEM THAT WANT TO BE IN THE CITY. JASON: THAT'S REALLY INTERESTING. IT'S ALSO INTERESTING TO LOOK AT THE REAL ESTATE MARKETS. AS YOU DIG INTO THE NUMBERS, YOUR NUMBERS ESPECIALLY, IT FEELS LIKE THERE WERE A LOT OF TRADES GOING ON EARLY IN THE YEAR, A LOT OF REALIZATIONS, A LOT OF PROPERTY CHANGING HANDS. TELL ME ABOUT THAT AND WHAT YOU SAW FROM YOUR PERSPECTIVE? BRUCE: LOOK, THERE WERE THREE OR FOUR MONTHS OF 2020 WHEN THE WORLD ESSENTIALLY SHUT DOWN. CENTRAL BANKS PUMPED A LOT OF MONEY IN THE SYSTEM, AS IT IS WELL-KNOWN TODAY, AND WHAT CAME OUT OF THAT, THERE IS SIGNIFICANT MONEY OUT IN THE MARKETS TODAY, BOTH IN THE DEBT MARKETS, EQUITY MARKETS, AND FUNDS TO BE PUT INTO ASSETS. IT'S BEEN A VERY GOOD TIME FOR REALIZATION, BOTH FOR INFRASTRUCTURE, RENEWABLES, PRIVATE EQUITY, REAL ESTATE, AND WE HAVE BEEN REALIZING A LOT OF ASSETS. WE SOLD 3 BILLION OF ASSETS IN THE FIRST QUARTER, 0 BILLION IN THE SECOND ORQUARTER, THAT WE DON'T THINK THAT'S THE ONLY THING TO BE DOING. WE ARE BUYING A LOT OF THINGS TOO, BUT IT'S A GOOD TIME TO BE LIQUEFYING ASSETS. IT'S JUST THAT IT'S, THE WEDGE IS OPENING UP AND PEOPLE ARE REALIZING IT. ROMAINE: BRUCE FLAT, THE CEO OF BROOKFIELD, ONE OF THE BIGGEST ASSET MANAGERS OUT THERE ON ONE OF THE BIGGEST PROPERTY OWNERS OUT THERE TALKING ABOUT A GOOD TIME TO LIQUIDATE SOME ASSETS. JASON KELLY DOING THAT IN TERVIEW FROM THE BLOOMBERG INVEST GLOBAL SUMMIT. CAROLINE: UP NEXT, THE FORMER FORD EXECUTIVE TO BE THE NEW INTERIM CEO. THIS COMES AFTER THE AUTO RENTAL COMPANY EMERGED FROM BANKRUPC TCY. FIELD IS THE ADVISOR AT CE CAP FIELD AND JOIN THE HERTZ FAMILY IN JUNE. TESLA HAS BEEN ORDERED TO PAY AN UNPRECEDENTED 37 MILLION IN DAMAGES IN A CASE INVOLVING RACISM. THE COMPANY WAS NOTED TO TURN A BLIND EYE TO RACIAL HARASSMENT AND VANDALISM A WORKER FACED IN THE CALIFORNIA PLANS. AND -- SPOKE EXCLUSIVELY TO BLOOMBERG'S ERIK SCHATZKER. > > I'M NOT SURE BITCOIN IS ONLY VIEWED AS AN INFLATION HEDGE HERE. I THINK IT'S ACROSS THE CHASM, IT'S MAINSTREAM, CRYPTOCURRENCIES NOW HAVE A MARKET CAP OF OVER $2 TRILLION. THERE IS 200 MILLION USERS AROUND THE WORLD. I THINK IT HAS GONE MAINSTREAM. CAROLINE: WE WILL BE HEARING MORE FROM HER AND A LITTLE BIT, BUT TO THAT END, TO HER PERSPECTIVE ON WHETHER OR NOT BITCOIN HAS CAUGHT SOME SORT OF RUBICON, IT'S ABOUT $50,000 TODAY AND BANK OF AMERICA IS SAYING EXACTLY WHAT SHE IS SAYING. CRYPTO IS TOO BIG TO IGNORE. ROMAINE: THAT IS THE MESSAGE WE ARE GETTING FROM A LOT OF THESE BANKS NOW. EVEN IF THEY AREN'T NECESSARILY CRYPTO FAITHFUL OR BUY INTO IT, IF THEIR CLIENTS WANT IT, THEY'VE GOT TO OFFER IT. SONALI: BANK OF AMERICA SAID IT WAS LIKE APPLE DID WITH THE APP STORE. THE FIRMS, THE COINS, THE PROTOCOLS THAT CAN HAVE MORE APPLICATIONS BUILT ON THEM WILL GAIN MORE IN VALUE. IT'S NOT JUST BITCOIN ANYMORE GOING MAINSTREAM, ETHEREUM, NFT'S, DFI. CAROLINE: IT IS TRYING TO UPEND THE WORLD OF FINANCE, DECENTRALIZATION -- D EFI IS WHERE IT IS THAT. SONALI: NASDAQ THINKING ABOUT IT A LOT, APOLLO THINKING ABOUT IT. CAROLINE: KEN GRIFFIN THINKING A LOT ABOUT IT, ROMAINE. ROMAINE: KEN GRIFFIN ON BITCOIN. GOOD OLD MR. GRIFFIN THERE AND THE REST OF THE FAITHFUL OUT THERE. FOR NOW, JUMPING ON THE BANDWAGON, CAROLINE. CAROLINE: NOTHING TO DO WITH ME IN TERMS OF THE BANDWAGON, BUT I HAVE BEEN INTERESTED IN THE SPACE FOR A LONG TIME. IT IS CERTAINLY GETTING A BIT. IT WAS BACK ON TOP TODAY IN TERMS OF CRYPTO, THE S & P 500, GETTING INTO CRYPTO LIKE BITCOIN ABOVE $50,000 WHEN YOU ARE GETTING INTO THE U.S. DOLLAR, UP AS WELL, ROMAINE. ROMAINE: DOLLAR STRENGTH, COMMODITY STRENGTH AS WELL. ♪ ROMAINE: THIS IS "BLOOMBERG MARKETS, THE CLOSE." IT IS A LITTLE AFTER 2:30 P.M. HERE IN NEW YORK. WE ARE LOOKING AT FUTURES, MAKING A PUSH TOWARD A $79 A BARREL. WE ARE STILL CAMPED OUT AROUND A SEVEN-YEAR HIGH. PRINT CRUDE CONTINUES -- BRENT CRUDE CONTINUES TO HOLD FIRM. WE HAVE TO TALK ABOUT NATURAL GAS, CAROLINE. THESE ARE U.K. PRICES, AT ONE POINT TOPPING 300 TENTHS, WHICH IS ABOUT FOUR FREEDOM DOLLARS HERE IN THE UNITED STATES, BUT UP AS MUCH AS 23%. THIS IS UNPRECEDENTED IN TERMS OF THE PERCENT GAIN IN HIS AGO THEY COMBINED WITH THE LEVEL OF WHERE IT STANDS. YOU TALK ABOUT OVER THE PAST FIVE OR SIX MONTHS, GOING BACK TO MARCH, IT IS UP SOMETHING LIKE 600%. IN A YEAR, MORE THAN 700%. THIS IS HAVING REVERBERATIONS THROUGH FACTORIES, THROUGH ALL TYPES OF OTHER KINDS OF ENERGY HERE. A MAJOR IMPACT IN THE U.K. AND ACROSS EUROPE, AND IN OTHER PARTS OF THE WORLD AS WELL. CAROLINE: YOU CAN SEE THE KNOCK ON EFFECT HERE THE U.S. WITH ENERGY PRICES, BUT WE WANT TO TALK ABOUT WHAT IS HAPPENING IN U.K. AND AROUND THE WORLD WITH OUR MANAGING EDITOR FOR THE WORLD OF COMMODITIES, ENERGY AND A MAN WHO IS LOOKING AT WHAT WE USED TO CALL HOME. THERE'S A PERFECT STORM GOING ON AND THEY ARE BLAMING LORI -- LORREY DRIVERS, BUT WHAT IS HAPPENING WITH PRICES IN THE U.K. AND WHY IS THIS HAPPENING? > > THIS COUNTRY HAS BEEN SLEEP WALKING INTO THIS. THEY'VE CLOSED DOWN STORAGE CAPACITY IN THE LAST 18 MONTHS. AT THE SAME TIME, -- CAME DOWN. AND PEOPLE WERE TAKEN ABACK BY THE SUPPLY COMING DOWN FROM RUSSIA. AT THE SAME TIME, THE GLOBAL ECONOMY BOUNCING BACK REALLY STRONG, PARTICULARLY IN ASIA. BUT THE U.K. IS HEAVILY DEPENDENT ON ENERGY. AND IT IMPORTS A SIGNIFICANT PROPORTION OF THE ENERGY IN THE FORM OF NATURAL GAS. IT'S HEAVILY TRADED BY SEA. THOSE CARGOES ARE BEING COMPLETED FOR WITH ASIA, AND ASIA IS ATTRACTING A LOT OF THOSE CARGOES AWAY, AND THE PRICES ARE RESPONDING. AS A RESULT, PRICES HAVE BEEN DRIVEN UP. AND NOW THERE IS A FEAR IF WE HAVE A COLD WINTER IN THE NORTHERN HEMISPHERE, THE DEMAND WILL BE EXCEPTIONALLY HIGH, NOT JUST IN THE U.K. BUT ACROSS EUROPE AND INTO NORTH AMERICA AS WELL. AND THAT'S KIND OF A FEAR THAT HAS GRIPPED THE MARKET. SONALI: WE HAVE A STORY WHERE TRADERS AND BROKERS SAY THEY ARE CONSIDERING THIS IDEA OF GAS RATIONING PRICING. THIS IDEA THAT YOU HAVE TO PRESERVE THE INVENTORY TO MEET NEEDS. WHAT DOES THAT MEAN AND WHAT WOULD IT MEAN TO THE MARKET? > > IT IS DIFFICULT TO SAY. WE ARE IN A HYPOTHETICAL STAGE AT THE MOMENT, UNCHARTED TERRITORY TO A LARGE EXTENT, PARTICULARLY IN THE WESTERN ECONOMIES. IT'S SELDOM BEEN DONE. THESE KINDS OF RESTRICTIONS, THE LAST TIME WE SAW SOMETHING LIKE THIS IN THE UNITED STATES WAS DURING THE TEXAS WINTER STORM IN FEBRUARY, WHEN WE HAD THE DANGER OF MASS BLACKOUTS, PEOPLE FREEZING TO DEATH, AND THE ORDER CAME FROM THE TEXAS GOVERNOR TO STOP EXPORTING GAS. BUT THAT IS THE KIND OF EXTREME SITUATION WHERE YOU WOULD CONSIDER THESE MEASURES. IT SHOWS YOU THE KIND OF FEAR THAT'S OUT THERE. ROMAINE: THERE IS A LOT OF FEAR, BUT BORIS JOHNSON SEEMS TO BE NOT AS ALARMED BY THIS AS MAY BE THE PUBLIC. HE TALKS ABOUT THE IDEA HERE THAT THE PROBLEMS THE U.K. IS HAVING, OTHER COUNTRIES ARE HAVING SIMILAR ISSUES. THIS IS SOMETHING GLOBAL. I'M NOT SURE THAT THAT PLAYS OUT. IT SEEMS LIKE THE FORCES DRIVING THE PRICES HIGHER IN THE U.K. ARE SLIGHTLY DISCONNECTED FROM OTHER PARTS OF THE WORLD. > > IT'S HARD TO PULL IT ALL APART. BUT YOU ARE RIGHT, BREXIT DOES COME UP IN THESE CONVERSATIONS. AND TIES INTO BROADER FEARS ABOUT WHERE THE COUNTRY IS HEADING IN TERMS OF INDUSTRIAL STRATEGY AND SO FORTH, AND OTHER ISSUES LIKE LABOR TIGHTNESS. WE SHALL SEE. THIS CRISIS IS SPILLING OVER INTO COUNTRIES ALL AROUND THE WORLD. AND EVEN HERE, GAS PRICES HAVE GONE UP SIGNIFICANTLY. THEY HAVE GONE UP 10%. AND THE WAY IT IS HERE IS VERY BENIGN. CAROLINE: BORIS JOHNSON WAS AT THE GENERAL ASSEMBLY OF THE UNITED NATIONS, TALKING ABOUT GREEN ENERGY. HOW IT IS EASY TO BE GREEN. BUT IS IT? ARE THESE ISSUES WITHIN NATURAL GAS PRICES, THE NEED TO DEPEND ON FOSSIL FUELS PAINTING US INTO A CORNER WITH RENEWABLE ENERGY? > > YOU COULD MAKE A CASE THAT IT IS NOT EASY TO BE GREEN. SO FAR, THE EFFORTS DONE IN THAT DIRECTION HAVE BROUGHT MORE RISK. WE HAVE AN EXTENSIVE STORY OUT TODAY THAT TRIES TO EXPLAIN HOW THIS IS ARGUABLY GLOBALLY THE FIRST BIG ENERGY CRISIS OF THE TRANSITION ERA, AND IT PROBABLY WILL NOT BE THE LAST, UNLESS YOU HAVE A BIG EFFORT OF GLOBAL COORDINATION TO MANAGE THE TRANSITION. AND IT'S GOING TO HAPPEN AGAIN. ROMAINE: THE TRANSITION, IS THERE A CONCERN THAT SOME OF THE ISSUES IN THE TRANSITION PERIOD MIGHT BE EMBLEMATIC OF WHAT A FREE WORLD WILL LOOK LIKE? > > AND A SIGNIFICANT BACKLASH. YOU HAVE TO CONSIDER A BACKLASH FROM THE PUBLIC. IN THE U.K. -- YES, IN ALL SERIOUSNESS, YOU HAVE A CONSERVATIVE GOVERNMENT IN THE U.K. AND THEY ARE FULLY BEHIND THE ENERGY TRANSITION, YET THERE'S RISKS FOR THEM AS WELL. IF THE LIGHTS GO OUT AT CHRISTMAS TIME, THERE COULD BE PAYBACK. ROMAINE: THAT IS AN UNDERSTATEMENT. OUR EDITOR FOR ENERGY, SALMON, GIVING US AN UPDATE ON BLOOMBERG. WE'LL GO DOWN TO WASHINGTON, THE FORMER FACEBOOK INSIDER WRAPPING UP HER TESTIMONY BEFORE CONGRESS, URGING LAWMAKERS TO TAKE ACTION AGAINST THE SOCIAL MEDIA COMPANY. WE'LL GO DOWN THERE FOR THE ♪ ROMAINE: TIME FOR OUR TOP CALLS, A LOOK AT MOVERS ON ANALYST RECOMMENDATIONS. THIS HAS BEEN DOWNGRADED AT MORGAN STANLEY, TWO DOLLARS THE NEW PRICE TARGET. THE PLAINTIFFS OUT OF FOXCONN FOR LESS THAN 20% OF THE VALUE SHARES. POSHMARK WITH ANALYSTS CITING A TAILWIND FOR DEMAND. UP ON THE DAY. ALBERTSONS GETTING THE DOWNGRADE OVER AT BMO. THE ANALYSTS SEE RISK BECAUSE OF THE COMPANY'S GROSS MARGIN PRESSURES, DOWN 3% ON THE DAY. THOSE ARE YOUR TOP CALLS. CAROLINE: LET'S TALK ABOUT ANOTHER KEY MOVER, NETFLIX. WON BIG AT THE EMMYS. AND CUSTOMERS AGREE, SENDING SHARES TO A NEW HIGH. DAVE WILSON, WHO KNEW THAT ACTUALLY WINNING THESE AWARDS HELPS? DAVE: IF NOTHING ELSE, IT SHOWS YOU HOW POPULAR NETFLIX'S PROGRAMMING IS. THAT PLAYS INTO THE SURVEY OF 2400 U.S. CONSUMERS, WHERE THEY BASICALLY DREW THE SAME CONCLUSION, IN ESSENCE, AS THE VOTERS. WHEN YOU CONSIDER THAT NETFLIX WON 44 AWARDS, AS MUCH AS THE NEXT THREE STREAMING SERVICES COMBINED. THAT JUST TELLS YOU HOW POPULAR ALL THE PROGRAMS THAT NETFLIX COMES OUT WITH ARE FOR THE STREAMING VIEWER. LOOK, THIS IS ALSO A COMPANY THAT IS POPULAR WITH ANALYSTS, WHEN YOU FIGURE THAT 33 BUY READING, THAT IS AS MANY AS THE STOCK HAS HAD. EARLIER THIS YEAR IT HAD 34. IT GOES TO SHOW YOU THAT THERE'S A REAL BACKING FOR THIS COMPANY AMONG ANALYSTS AT THIS POINT. AND INVESTORS, YOU COULD SAY THE SAME FOR THEM, CONSIDERING THE SHARES ARE UP FOR THE SEVENTH YEAR IN A ROW. OVER THAT STRETCH, THEY HAVE RISEN AT LIKE A 46% ANNUAL RATE. YOU GO BACK TO WHEN THEY WENT PUBLIC IN 2002, UP MORE THAN 53,000%. SO, THERE'S ONLY ONE OTHER STOP IN THE S & P 500 THAT'S HAD A BIGGER GAIN, THAT WOULD BE MONSTER BEVERAGE. ROMAINE: IS THERE A CORRELATION BETWEEN THEM? SONALI: THIS COMES AS NETFLIX ONLY ADDED 1.5 MILLION CUSTOMERS LAST QUARTER. IT WAS THE SLOWEST FIRST HALF SINCE 2013. DOES THIS MEAN SOME OF THIS WILL START BOUNCING BACK? DAVE: IT IS A BIG QUESTION, BECAUSE LET'S FACE IT, EVERYTHING IS POINTING TOWARDS GROWTH. THEY CANNOT SUSTAIN GROWTH, IT IS DIFFICULT GIVEN THE STOCK PERFORMANCE, ESPECIALLY. BUT THE GOOD NEWS IS COWEN DID THIS SURVEY OF CUSTOMERS AND THEY LIKE WHAT THEY SEE. THEY ARE LOOKING AT 3.6 MILLION SUBSCRIBERS BEING ADDED IN THE THIRD QUARTER. NETFLIX ITSELF IS OUT WITH 3.5 MILLION AS THEIR ESTIMATE. SO, COWAN IS EVEN MORE OPTIMISTIC. WE'LL SEE IF IT IS JUSTIFIED. YOU THINK ABOUT THE POPULARITY OF SHOWS LIKE "SQUID GAME." CAROLINE: HE HAS BEEN TALKING ABOUT IT ALL WEEK. DAVE: IT IS A KOREAN DRAMA. LIKE THE HUNGER GAMES ON STEROIDS. SONALI: THERE IS ALSO THE BRITNEY SPEARS DOCUMENTARY. ROMAINE: THAT IS ALSO DYSTOPIAN. CAROLINE: WE WILL NOT GET INTO THE FACT THAT THE HOLLYWOOD UNIONS ARE AUTHORIZING A STRIKE. BUT LET'S TALK ABOUT ANOTHER KEY, WELL, ONE OF THE NAMES TO WATCH -- FACEBOOK. FRANCES HAUGEN APPEARING BEFORE THE SENATE TODAY AFTER SHE EXPOSED INTERNAL DOCUMENTS, SAYING THAT THE SOCIAL MEDIA GIANT HAS FAILED TO PROTECT USERS. IT COMES A DAY AFTER FACEBOOK EXPERIENCED A WORLDWIDE CRASH. WE ARE IN WASHINGTON WITH OUR SOCIAL MEDIA REPORTER, NAOMI. FIRST AND FOREMOST, FACEBOOK HAS COME BACK FIGHTING ON THIS, SAYING, YES THEY NEED TO MAKE CHANGES, BUT SHE WAS NOT IN THE C-SUITE DISCUSSIONS. SHE DIDN'T HAVE OVERSIGHT ON THE AREAS SHE IS TALKING ABOUT. NAOMI: THEY HAVE REALLY TRIED TO DISCREDIT HER POSITION OF AUTHORITY ON THIS TOPIC. OF COURSE, WHAT SHE DID HAVE, AND WHAT SHE SAID IN THE HEARING WAS, I DID NOT WORK ON THIS TEAM BUT THIS IS WHAT THE DOCUMENTS SAY. AND THEY DO SHED A LOT OF LIGHT ON FACEBOOK'S INTERNAL DISCUSSIONS IN TERMS OF THE EFFECT OF MENTAL HEALTH ON ITS PLATFORM. ROMAINE: IT DOES NOT APPEAR THAT MANY PEOPLE ARE REALLY QUESTIONING THE VERACITY OF THE CLAIMS OR THE VERACITY OF THE DOCUMENTS, WHAT HAS FACEBOOK SAID SPECIFICALLY ABOUT THIS? HAVE THEY BEEN ABLE TO OFFER SIGNIFICANT COUNTER TO THE CLAIMS SHE HAS BEEN MAKING? NAOMI: FACEBOOK HAS SAID THAT THE DOCUMENTS, IN THE WAY THEY CAME TO LIGHT, IT HAS MISCHARACTERIZED THE INTERNAL RESEARCH. THEY SAY THEY DOWNPLAYED AT SOME OF THE FINDINGS THAT SOME OF THE SOCIAL AND NETWORKS -- THE SOCIAL NETWORKS PLAY A POSITIVE ROLE IN YOUNG USERS' MENTAL HEALTH. BUT FRANCES HAUGEN IS SAYING EVEN IF IT IS HARMING A SMALL AMOUNT OF KIDS, THAT IS STILL TOO MANY KIDS AND THE COMPANY SHOULD TAKE ACTION TO ADDRESS THAT. ROMAINE: WE WILL BE WATCHING THIS, OBVIOUSLY SOME BIG IMPLICATIONS HERE FOR FACEBOOK. INVESTORS, AS ALWAYS, SEEMING TO SHRUG IT OFF. COMING UP, BLOOMBERG TECHNOLOGY WILL HAVE THE FACEBOOK VICE PRESIDENT OF CONTENT POLICY JOINING EMILY CHANG. THAT WILL BE AT 5:00 P.M. EASTERN TIME, SO WE WILL GET FACEBOOK'S TAKE ON THIS HOPEFULLY DURING THAT PROGRAM. COMING UP HERE, WE WILL DIVE INTO A NEW BOOK, "WHAT UNIVERSITIES OWE DEMOCRACY." IT'S A BOLD STATEMENT. THE MAN WHO WROTE THE BOOK WILL BE WITH US IN A MOMENT TO EXPLAIN. ALL THAT AND MORE, COMING UP CAROLINE: IN A NEW BOOK CALLED THIS IS BLOOMBERG., -- CALLED "WHAT UNIVERSITIES OWE DEMOCRACY", RONALD DANIELS SAYS UNIVERSITIES MUST STEP UP. QUITE A CONTROVERSIAL STATEMENT. DIG INTO THE DEMOCRACY PART, WHY DO YOU SEE IT, WHERE DO YOU SEE IT? RONALD: IF YOU LOOK AT THE STATISTICS IN TERMS OF COUNTRIES FROM DEMOCRACY TO AUTHORITARIANISM, WE HAVE SEEN A DEGRADATION OVER THE LAST SEVERAL YEARS IN TERMS OF THE NUMBER OF COUNTRIES THAT SEE THEMSELVES AS DEMOCRATIC. THAT'S AT AN INTERNATIONAL LEVEL. IN TERMS OF OUR DOMESTIC SITUATION, IF YOU LOOK AT THE LEVEL OF POLARIZATION, THE DISTRESSED PEOPLE HAVE -- DISTRUST PEOPLE HAVE FOR THOSE IN THE OPPOSITE POLITICAL PARTY, EXTREMISM, THE RELIANCE ON FACTS, ALL OF THESE THINGS GNAW AT THE CORE OF OUR DEMOCRACY. THEY ARE SERIOUS AND REQUIRE THE UNIVERSITY TO ENHANCE THE ROLE IT PLAYS IN COMBATING THAT. ROMAINE: THAT HAS BEEN THE ROLE OF UNIVERSITIES FOR YEARS, PROBABLY CENTURIES. THERE IS BIG CONCERN HERE THAT UNIVERSITIES THEMSELVES ARE NOT LIVING UP TO THAT, THAT THERE'S NOT ENOUGH OF AN OPEN DOOR TO ALLOW ENOUGH SPEECH AND DISCOURSE. I AM WONDERING HOW YOU COMBAT THAT TREND WITH WHAT IS HAPPENING IN SOCIETY, BY DEFAULT SEEPING INTO YOUR UNIVERSITY IN ONE WAY OR ANOTHER? RON: IT IS WHERE THE UNIVERSITY HAS A ROLE TO PLAY, UNDERSTANDING THAT AT THE CORE WE ARE ABOUT TRUTH, FACT AND REASON. IN ORDER TO BE ABLE TO ACHIEVE THOSE THINGS, YOU NEED AN ENVIRONMENT IN WHICH CONTESTATION OF IDEAS TAKES PLACE, WHERE PEOPLE SHOULD BE FREE TO ADVOCATE WITH PASSION AND HOPEFULLY, WITH EVIDENCE IN FAVOR OF THE POSITIONS THEY HOLD. YOU DO NOT WANT TO HAVE A LIMITING EFFECT ON THAT KIND OF DEBATE. ROMAINE: HOW DO YOU DO THAT IN A LARGE UNIVERSITY SETTING? IF YOU A SMALL LIBERAL ARTS COLLEGE, OR YOU HAVE A HOMOGENOUS STUDENT BODY, AND A FAIRLY HOMOGENOUS FACULTY, IT SEEMS EASIER TO CORRAL PEOPLE. BUT WHEN YOU HAVE STUDENTS FROM DIFFERENT WAYS OF LIFE, ALL DIFFERENT BACKGROUNDS, ALLOWING DISCOURSE TO COME FROM EVERYONE, NO MATTER HOW OFFENSIVE IT MAY BE, HOW DO YOU ALLOW THAT? RON: THIS IS WHERE I THINK IT IS IMPORTANT FOR LEADERSHIP TO MAKE IT CLEAR, I DO NOT JUST MEAN PRESIDENTS, BUT I MEAN DEANS, CHAIRS OF DEPARTMENTS, WE HAVE TO MAKE IT CLEAR THAT THE KEY ROLE OF THE UNIVERSITY IS TO HAVE THESE DEBATES. IT'S NATURAL. BUT MORE THAN THAT, IN THE WAY THAT YOU DESCRIBED, WITH SUCH AMAZING DIVERSITY WITH PEOPLE OF REPRESENTING DIFFERENT RELIGIOUS GROUPS, SOCIOECONOMIC GROUPS AND IN DIFFERENT PARTS OF THE COUNTRY, AND WORLD, THAT IS THE PLACE WE WANT TO FIND WAYS TO INCREASE THE LIKELIHOOD OF ENGAGEMENT ACROSS THOSE DIFFERENCES. AND HOPEFULLY WE CAN MODEL AN ENVIRONMENT WHERE WE CAN DO BETTER THAN THE WORLD AROUND US, WHERE THERE IS SO MUCH POLARIZATION. SONALI: HOW DOES THIS PLAY INTO CURRICULUM? NOT ONLY WITH WHAT PEOPLE ARE TALKING ABOUT OUTSIDE THE CLASSROOM, BUT HOW DO YOU BUILD IT INSIDE THE CLASSROOM WHERE SO MANY STUDENTS ARE JUST WORRIED ABOUT WHAT KIND OF JOBS THEY WILL GET COMING OUT? RON: IT STARTS AS SOON AS THEY ENTER UNIVERSITY. WE MADE IT CLEAR AT JOHNS HOPKINS AND THAT THE CHALLENGES OF DEMOCRACY ARE SERIOUS, AND THEY WILL BE CALLED UPON TO BE ADVOCATES FOR THE DEMOCRATIC IDEAL. WE WANT THAT ENGAGEMENT TO START AT THE BEGINNING. HOW THAT HAPPENS IS FIRST AND FOREMOST, WITH AND ATTENDING THE EVENTS WHERE THEY ARE NOT JUST IN ECHO CHAMBERS WITH PEOPLE WHO SHARE THE SAME IDEAS, BUT FINDING OPPORTUNITIES WHERE THEY CAN SEE DEBATES, WHERE THERE IS CONSERVATIVES AND LIBERALS, DEBATES HAPPENING WHERE THEY CAN SEE THE POSSIBILITIES OF UNDERSTANDING, AN AGREEMENT THAT COULD BE CREATED ACROSS DIFFERENT POLITICAL PERSPECTIVES. CAROLINE: HAVE WE FORGOTTEN THE ART OF DEBATE? WHEN I WAS AT SCHOOL, I WAS ON THE DEBATE TEAM WHERE YOU TOOK UP POSITIONS YOU DIDN'T AGREE WITH, BUT IT WAS NOT EMOTIONAL. IT WAS THE ART OF DEBATING. HAS THAT BEEN FORGOTTEN, THAT ELEMENT THAT YOU HAVE TO PICK UP A BATON YOU DO NOT BELIEVE IN AND TRY TO DESCRIBE IT AND FIGHT FOR IT? RON: WE DO NOT EMPHASIZE DEBATE AS MUCH AS WE HAVE IN THE PAST, BUT MORE THAN THAT WHAT IS REALLY IMPORTANT IS THAT WE GET STUDENTS TO COME INTO ENVIRONMENTS WHERE THEY HAVE TO THINK ABOUT, WHAT ARE THE BEST AND MOST GENEROUS WAYS YOU COULD ARGUE FOR THE POSITION OF SOMEBODY YOU DO NOT AGREE WITH. AND STARTING TO BUILD THE CAPACITY, AGAIN, TO TURN DOWN THE ANGER AND THE ATTACKS THAT WE SEE ALL TOO FREQUENTLY IN AMERICA, AND ATTRACTIVE MAKE USE OF THE DIVERSITY WE HAVE IN OUR STUDENT BODIES TO BUILD BRIDGES OF UNDERSTANDING. THAT'S THE EXCITING OPPORTUNITY THAT SHOULD AWAIT US AT UNIVERSITIES IN THIS COUNTRY. ROMAINE: WELL SAID. THIS IS "BLOOMBERG MARKETS, THE CLOSE." HAS A GREAT NEW -- RONALD HAS A GREAT NEW BOOK OUT, "WHAT UNIVERSITIES OWE DEMOCRACY," WHICH YOU CAN PICK UP TODAY. JOHNS HOPKINS UNIVERSITY IS SUPPORTED BY MICHAEL R. BLOOMBERG, WHO AT YOU MAY HAVE NOTICED, IS THE FOUNDER OF BLOOMBERG LP, AND AFFILIATED HERE WITH THE NETWORK YOU ARE WATCHING. WE ARE GETTING READY TO RESET AT THE TOP OF THE HOUR, THE FINAL HOUR OF TRADING THIS AFTERNOON. WE ARE RECOUPING LOSSES FROM YESTERDAY. CAROLINE: BRENT CRUDE IS UP. GAS PRICES ARE GOING THROUGH THE ROOF. BUT YIELDS -- SONALI: GAS PRICES GETTING CLOSE TO $80, AND THE NASDAQ IS UP MORE THAN ♪ ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS "BLOOMBERG MARKETS, THE CLOSE," WITH CAROLINE HYDE, ROMAINE BOSTICK AND TAYLOR RIGGS. CAROLINE: THIS IS THE COUNTDOWN TO "THE CLOSE." ROMAINE: WE ARE READY TO GO. SONALI: I AM EXCITED ABOUT THE YIELDS. TAKE A LOOK AT THE SECTORS. A DATE OF GREEN LED BY FINANCIALS -- DAY OF GREEN LED BY FINANCIALS. ROMAINE: YOU DUCK ABOUT THE INDIVIDUAL MOVERS, AND THIS IS THE TAG REBOUND. FACEBOOK IS UP, DESPITE HEARINGS. FINANCIALS ARE MOVING HIGHER AS WELL, INCLUDING INVESCO. YOU TALK ABOUT THE SELLOFF WE SAW YESTERDAY, THE 5% DRAWDOWN ON THE S & P 500, THE 8% DRAWDOWN ON THE NASDAQ. THE MAJORITY OF THE STOCKS ARE STILL SIGNIFICANTLY DOWN FROM THEIR 52 WEEK HIGHS. THE S & P 500 GOT 293 STOCKS DOWN TODAY BY AT LEAST 10% FROM THEIR 62 WEEK HIGHS. SO WE ARE IN CORRECTION TERRITORY, EVEN IF IT IS NOT AN OFFICIAL CORRECTION. YOU CAN SEE THE AUTOMAKERS SELLING OFF, INCLUDING CARVANA. AND WEAK AUTOMOTIVE DATA. CAROLINE: THERE HAS BEEN TECHNICAL CORRECTIONS, BUT MANY SAY THIS IS STILL THE TIME TO LIQUIDATE ASSETS. MAYBE ROMAINE GOT HIS HAIR DID BECAUSE HE WILL BE AT THE BLOOMBERG INVEST GLOBAL CONFERENCE TOMORROW. IT'S BEEN GREAT SO FAR. SO MANY OF THE VOICES THAT HAVE BEEN TALKING ABOUT HOW MAYBE THIS IS THE MOMENT WHERE YOU SHOULD SELL OUT. > > THERE IS NOT A LOT OF PLACES TO GO IN A REGIME LIKE WE ARE IN NOW. > > IT IS A GOOD TIME TO LIQUEFY ASSETS. > > MARKETS ARE LIQUID, SO IT MAKES SENSE. > > I AM NOT SAYING THE MARKET WILL GO DOWN 20% TOMORROW, BUT THERE IS SENSITIVITY. > > YOU WANT TO OWN EQUITIES. > > IF WE HAVE REASONABLE GROWTH EQUITIES, IN THE END IT THEY ARE THE ONLY ALTERNATIVE FOR MOST PEOPLE. > > YOU DO NOT WANT A LONG-DURATION. > > IT SEEMS LIKE THE WRONG ANSWER. > > THERE IS NO PLACE TO HIDE THERE. > > MANY INSTITUTIONS HAVE A HOME FOR CRYPTO IN THEIR PORTFOLIOS. > > WHETHER BITCOIN SURVIVES AT THE END OF THE DAY, I AM NOT SURE. > > THE RISK REWARD POTENTIAL OUTWEIGHS ANY OTHER THING THEY MAY BE ABLE TO OFFER. CAROLINE: A WEALTH OF VOICES. MALCOLM ASSET MANAGEMENT -- TOMORROW, ASSET MANAGEMENT TO DISCUSS. BUT TODAY, WHAT A WORLD OF VOICES. ROMAINE: GREAT VOICES. TOMORROW, JULIAN SALSBERRY. BUT RIGHT NOW WE HAVE ANOTHER SMART VOICE, THE SENIOR PORTFOLIO MANAGER BRYCE JOINING US. I WANT TO START WITH COMMENTS WE HEARD OUT OF THE BLOOMBERG INVEST GLOBAL CONFERENCE, PARTICULAR WITH REGARDS TO FIXED INCOME. THE IDEA THAT BEING LONG-DURATION RIGHT NOW IS NOT THE BEST BET. WHAT DO YOU SAY? BRYCE: I'M IN AGREEMENT. INFLATION IS THE BIGGEST DEMON AND DESTROYER OF LONG-DURATION BONDS. IT'S REARING ITS HEAD. THERE'S NO REASON TO FALL ON A SWORD FOR THAT. THE FED IS STIRRING UP TROUBLE WITH THEIR TAPER TALK, POSSIBLY RAISING RATES. THAT WILL CAUSE ISSUES. THERE'S A LOT OF MINEFIELDS OUT THERE. WE LIKE TAKING CASH OFF THE TABLE, EITHER FROM EQUITIES OR LONGER BONDS, AND STASHING IT SOMEWHERE IN A LITTLE SHORTER. OUR ETF VAULT IS DESIGNED FOR THAT, SO WE CAN TAKE ADVANTAGE OF THESE KINDS OF THINGS. WE CAN BUY SECURITIES. WE CAN BUY CHIPS TO BENEFIT FROM THE RISING INFLATION. AND ALL THE TIME YOU HAVE PEACE OF MIND, BECAUSE YOU HAVE DRY POWDER TO GO BACK INTO THE MARKETS IF THEY GET A LITTLE TOO BEATEN-DOWN FROM WHAT IS TO COME BETWEEN CONGRESS AND ALL SORTS OF ISSUES GOING ON IN WASHINGTON. THERE OUGHT TO BE BUMPS IN THE ROAD IN THE EQUITY MARKET THAT YOU CAN TAKE ADVANTAGE OF LATER, BUT RIGHT NOW IT SEEMS LIKE YOU SHOULD TAKE PROFITS OFF THE TABLE. CAROLINE: AGAIN AND AGAIN, WHETHER IT IS RETAIL INVESTORS OR WHOEVER, THEY BUY THE DIP PRICE. BRYCE: I CAN SEE WHY, THERE ARE CROSSCURRENTS. LET'S SAY THAT D.C. WENT HOME AND WE WERE LEFT TO DEAL WITH THE FUNDAMENTALS OF THE ECONOMY, THEY ARE ALL POSITIVE. THERE'S A LOT OF CASH ON THE SIDELINES ALREADY, AND EARNINGS ARE GOING TO BE GREAT. YOU SEE WHY PEOPLE CONSTANTLY BUY THE DIP. I'VE BEEN IN THAT CAMP ALL SUMMER LONG, NOW THE FALL, BUT NOW I AM LOOKING AT TAX INCREASES ON THE HORIZON. THEY MIGHT TAX A LOT OF CAPITAL GAINS NEXT YEAR. ALL OF A SUDDEN DECEMBER BECOMES DICEY. YOU DO NOT KNOW WHETHER TO BUY THE DIP THEN OR NOT. MAYBE DO NOT BUY IT NOW, MAY BE THE TIME WILL BE DECEMBER. NOW I AM NOT QUITE SO SURE OF MYSELF. SONALI: INTERESTING VIEW ON TAXATION, BUT IS THAT THE ONLY BIG RISK? ARE THERE BIGGER RISKS WASHINGTON POSES THAT WOULD BE A BIGGER ISSUE THAN TAXES? BRYCE: I SEE BIG RISK. I SEE THE DEBT CEILING IS OBVIOUSLY A RISK, BUT THAT IS INFINITELY SOLVABLE BECAUSE THE DEMOCRATS HAVE USED THE RECONCILIATION BILL TO SOLVE THINGS IN THE PAST AND THEY CAN DO THE SAME THERE. BUT THEY MIGHT TRY TO SPOOK PEOPLE OR WHATEVER. BUT WHAT IS MORE DANGEROUS IS HOW DOES THE FED COPE WITH ADDITIONAL STIMULUS PLANS, AND TYING THE INFRASTRUCTURE BILL TO TAXES. THE BIGGER THE INFRASTRUCTURE BILL, THE BIGGER THE TAX HIT. THE FED IS GOING TO BE, WE WANT FULL EMPLOYMENT, BUT STIMULUS ME MAKE PEOPLE NOT WANT TO GO BACK TO WORK. HOW DO WE TAPER AND RAISE RATES, WITH A BIG TAX HIT COMING, MAYBE WE SHOULD HOLD OFF. ON TOP OF THAT, YOU HAVE THE FISCAL STIMULUS THAT WILL GO DOWN THE MATTER WHAT, FROM LAST YEAR. SO THAT WILL START TO TAKE MONEY, EXCESS CASH, OUT OF THE FINANCIAL MARKET. THOSE ARE THE RISKS. ROMAINE: I WANT TO TALK ABOUT THE TACTICAL OPPORTUNITIES. WE TALKED ABOUT THIS LAST HOUR. FOLKS LOOK AT THE DISRUPTIONS IN OUR ECONOMY, WHETHER IT IS THE CONTAINERS FLOATING OFF OF OUR PORTS, SHIPPING ACROSS THE NATION, AND PEOPLE ARE LOOKING FOR WAYS TO EXPLOIT THAT, MAKE MONEY IN THE SHORT TERM -- DO YOU SEE OPPORTUNITIES WITH THAT KIND OF TACTICAL TRADE? BRYCE: THERE'S ALWAYS TACTICAL OPPORTUNITIES, AND I AM GLAD THAT YOU BROUGHT IT UP. THE CONTAINER SHORTAGES, AND SHORTAGES ON THE WHOLE, ARE JUST GOING TO GET WORSE. ESPECIALLY GOING INTO THE CHRISTMAS SEASON, THERE IS GOING TO BE BARE SHELVES. THERE'S A GREAT ETF TO TAKE ADVANTAGE. SO, THAT IS GOING TO GO UP AND UP. OVER 6 BILLION DOSES OF COVID VACCINATIONS HAVE BEEN ISSUED. TRAVEL RESTRICTIONS ARE BEING LIFTED ALL OVER THE PLACE. AND THAT IS JUST RAMPING UP. SO -- IS ANOTHER GREAT ETF TO TAKE ADVANTAGE OF THERE. THERE'S SECULAR TRENDS. IPAY IS PAID TO DIGITAL PAYMENTS. NO MATTER WHAT, THERE ARE ALWAYS TACTICAL PLAYS TO TO GET A VANTAGE OF. LOOK AT FACEBOOK YESTERDAY, THEIR PLATFORM GOING OUT AND ALL THE PROBLEMS THEY HAD HAD A RIPPLE EFFECT IN THE S & P 500. THAT MADE YESTERDAY LIKE THE POSTER CHILD TO SELL THE S & P 500 AND BUY HACK. WHO KNOWS WHY THEIR PLATFORM WENT OUT, BUT IT WILL BOOST THOSE SECTOR PLAYS. CAROLINE: YES. WE WILL GET EXPOSURE TO IT IN SOME SHAPE OR FORM. BRYCE DOTY, HAS ALL THE COOL NAMES FOR ALL THE ETF'S. WE ARE WATCHING IN MARKETS AS WE PUSH CLOSER TO THE CLOSING BELL. WE'LL HEAR FROM OUR INTERVIEW WITH DAWN FITZPATRICK, WHO HAS BEEN TALKING CRYPTO AND CHINA. DAVID WESTIN IS IN WASHINGTON TO INTERVIEW ELIZABETH WARREN FROM MASSACHUSETTS. YOU HAVE TO TUNE IN FOR THAT, AND SO MUCH MORE, COMING UP. THIS IS BLOOMBERG. ROMAINE: THIS IS THE COUNTDOWN TO "THE CLOSE." 46 MINUTES LEFT. IT IS A BUY THE DIP TODAY, BUT WE HAVE A REBOUND IN THE MAJOR INDUSTRIES, LARGELY BECAUSE THEY CAME CLOSE TO THOSE OVERSOLD CONDITIONS YESTERDAY. THE NASDAQ UP ABOUT 2%. THAT'S YOUR OUTPERFORM AS BIG TECH CAP STOCKS GET A BID . THERE IS YOUR CRUDE. THERE IS YEAR YIELD ON THE 10 YEAR. MICROSOFT, GOOGLE, A LOT OF THESE NAMES THAT FELL YESTERDAY, FALLING BELOW KEY MOVING AVERAGES, REALLY PUT TO THE TEST OF LONG-TERM THEORIES HERE ABOUT THE RESILIENCY OF THOSE NAMES. MICROSOFT IS UP 2.5%. NETFLIX WITH A MONSTER DAY, UP 6%. FINANCIALS GOING UP. TESLA ACTUALLY ROSE AGAINST THE TIDE YESTERDAY, I BEGAN HERE, BUT FLUCTUATING BETWEEN GAINS AND LOSSES. LET'S BRING ABIGAIL DOOLITTLE INTO THIS CONVERSATION, AS WE DO EVERY DAY FOR OUR OPTIONS INSIGHT. A A LOT OF PEOPLE OVER THE LAST COUPLE DAYS HAVE BEEN LOOKING AT THE VIX. IT DID GO ABOUT ONE POINT, NOW IT SEEMS TO HAVE MODERATED. ABIGAIL: BUT IT IS BACK ABOVE 20, AND THAT IS THE LEVEL THAT TELLS YOU THAT SOME LEVEL OF VOLATILITY OR RISK AWARENESS IS BACK. OVER THE LAST THREE MONTHS, WE HAVE HAD HIGHER LOWS, WHICH TELLS YOU VOLATILITY HAS BEEN RISING AND MAY CONTINUE TO RISE. LET'S TALK MORE ABOUT WHETHER OR NOT WE HAVE SEEN IT FOR VOLATILITY OR IF WE ARE BUILDING TOWARDS SOMETHING BIGGER. WHAT DO YOU THINK? WILL LIV-EX EXPLODE HIGHER -- WILL THE VIX EXPLODE HIGHER OR DO WE GO BACK DOWN TOWARDS COMPLACENCY? > > IT IS GREAT TO BE BACK. GREAT TO BE BACK IN MY OFFICE. I'M LOOKING FOR TO SEE MORE PEOPLE. BUT I THINK WHAT WE ARE SEEING NOW IS A LOT OF BACK AND FORTH. WE EXPECT THE VIX TO GO HIGHER GOING FORWARD. THEY ARE MAKING IT EXPENSIVE TO HEDGE AND PROTECTIVE PORTFOLIOS. THE S & P GOING DOWN NOT THAT MUCH, WITH THE VIX SPIKING, BUT IT IS SHORT-LIVED. WE THINK THE VOLATILITY IS NOT GOING TO GO TO 15. I DO NOT KNOW IF WE WILL SEE 40 QUICKLY, BUT I THINK WE WILL GET CLOSER TO THE 18, 20 LEVEL. THIS IS GOING TO BE A CAP. ABIGAIL: I ALWAYS THOUGHT THAT 20 ON THE VIX WAS HEALTHY BECAUSE TRADERS ARE HEDGING AGAINST THE POSSIBILITY OF A DECLINE, BUT YOU TAKE A LOOK AT IT RELATIVE TO THE S & P 500, THE SPREAD SUGGESTS THAT IF THE VIX AND S & P 500 COME BACK TOGETHER IT COULD MEAN A BIG CORRECTION. IF YOU WERE TO SEE THAT ACTION, WHAT DOES THAT MEAN FOR THE VIX? ALON: I THINK IT MEANS IN GENERAL WHAT THE VIX IS TELLING US AND THE SKEW IS MONEY IS EXPENSIVE AND WE EXPECT A HEALTHY AMOUNT OF FEAR GOING FORWARD. THERE'S A LOT OF FACTORS THAT COULD DERAIL THE MARKET. WE HAVE SUPPLY CHAIN ISSUES. YOU STILL HAVE CHINA. THE FED'S POTENTIAL TAPERING. THERE IS ENOUGH NEGATIVES THAT AT SOME POINT PEOPLE MIGHT CARE, AND THAT IS WHY WE CONTINUE TO LIKE HEDGING PORTFOLIOS INTELLIGENTLY. HOWEVER, YESTERDAY -- AND WE ARE MOVING FORWARD TOWARDS NOVEMBER WITH THE HEDGES. ABIGAIL: VOLATILITY BREEDS VOLATILITY. IT WILL BE GREAT TO TALK TO YOU MORE ON THIS IN THE NEXT MONTH OR SO. ALON, THANK YOU FOR JOINING US TODAY. BACK TO YOU. ROMAINE: WELCOME BACK, ABIGAIL. WE WANT TO ALERT YOU THAT THERE IS A BIG CONFERENCE GOING ON TODAY AND TOMORROW, THE BLOOMBERG INVEST GLOBAL CONFERENCE. WE HEARD FROM MANY PEOPLE TODAY, INCLUDING A WARNING FROM DAWN FITZPATRICK, WHO SAYS SOROS IS STEERING CLEAR OF INVESTING IN CHINA. THIS CHAPTER BEIJING HAS BEEN TAMPING DOWN IN MANY INDUSTRIES. SHE SPOKE EXCLUSIVELY WITH ERIK SCHATZKER. DAWN: CHINA IS INCREDIBLY INTERESTING AT THIS MOMENT. IF YOU THINK ABOUT WHERE THEY ARE, THEY HAD RESIDENTIAL INVESTMENTS, DEPENDING ON IF WERE IN FIRST ORDER, SECOND OR THIRD ORDER, SOMETHING AROUND 10% TO 29% OF GDP, BUT THEY HAVE A SHRINKING POPULATION. SO THAT IS DEFINITIVELY UNSUSTAINABLE GROWTH. SO, IF YOU THINK ABOUT WHAT XI IS TRYING TO DO, HE'S TRYING TO REBALANCE HIS ECONOMY. BY THE WAY, IN A WAY THAT I DO NOT THINK YOU OR I WOULD ARGUE IS NOT SMART -- ERIK: HE IS TRYING TO DO THINGS THAT PEOPLE HERE WOULD WANT TO DO, BUT IT IS DIFFICULT BECAUSE IT THEY ARE SO POLITICALLY DIVISIVE. DAWN: I HAVE NO DOUBT THAT THERE ARE POLITICIANS THAT ARE JEALOUS ABOUT THE FREEDOM THAT XI HAS, BUT I THINK THAT WHAT HAS CAUGHT WESTERN INVESTORS BY SURPRISE IS THE STEP FASHION HE IS DOING IT IN, AND THE ECONOMIC DAMAGE HE IS WILLING TO TOLERATE TO GET FROM HERE TO THERE. AS AN INVESTOR, BASED ON WHAT HAS HAPPENED THE PAST COUPLE MONTHS, IT'S CLEAR THAT EVERY CHINESE COMPANY IS VIEWED TO BE A STATE OWNED ENTERPRISE TO ONE DEGREE OR ANOTHER. FROM AN INVESTMENT PERSPECTIVE, WHAT IS REALLY INTERESTING, IS THE VIE OR SHELL COMPANY STRUCTURE OF CHINESE COMPANIES THAT ARE LISTED HERE. AND I THINK THAT THOSE COMPANIES IT WILL LARGELY HAVE TO DELIST. BY THE WAY, FOR A A LOT OF THEM THERE IS A MECHANISM FOR THEM TO EXPORT TO HONG KONG, BUT FOR 20 YEARS CHINESE TECH COMPANIES HAVING WESTERN CAPITAL AND A WESTERN VESTED INTEREST IN THEIR SUCCESSIVE VERY MUCH SUITED CHINA'S GOALS. BUT THEY DO NOT NEED THAT ANYMORE, SO THEY CAN TAKE THEIR $700 BILLION AND TO GET BACK TO HONG KONG. AND I THINK THAT IS WHAT THEY ARE GOING TO DO. WHEN IT COMES TO THE U.S.-CHINA LISTINGS, I WOULD BE CAREFUL AS AN INVESTOR HERE. ERIK: WHAT ABOUT EARLY STAGE INVESTMENTS, CHINESE VENTURE CAPITALISM FOR EXAMPLE? DAWN: I THINK IT WILL BE A WHILE BEFORE THOSE HAVE AN AVENUE TO GO PUBLIC. THERE'S BIG NAMES THAT MIGHT GO PUBLIC NEAR-TERM IN HONG KONG. TO MAKE A POINT. BUT OVERALL, THAT PATH FROM PRIVATE TO PUBLIC IS GOING TO TAKE LONGER, AND VALUATIONS, I THINK, ARE PERMANENTLY AT LOWER MULTIPLES BECAUSE OF EFFECTIVELY THE STATE TAX AND STATE UTILITY. CAROLINE: FASCINATING CONVERSATION WITH DAWN FITZPATRICK, THE CEO OF SOROS FUND MANAGEMENT. NOW WE WILL CONTINUE THE CONVERSATION ON CHINA NEXT. MEANWHILE, LOOKING AT THE U.S. MARKETS, THAT IS A BIT OF CAROLINE: WE WERE JUST HEARING SOROS'S TAKE ON EMERGING MARKETS, LET'S GO BROADER WITH OUR VERY OWN ANCHOR, SHERY AHN. WE ARE TALKING ABOUT A DAY WHERE WE HAVE A BOUNCE BACK UPON US, TECHNOLOGY HAVING A GREAT DAY, BUT WHAT ABOUT ASIA? YOU HAVE A GREAT CHART WHICH SHOWS WHAT AN UGLY DAY IS WAS IN JAPAN. WE KNOW THAT -- IS HAVING A DIFFICULT DAY, TOO. WHAT IS SO SOUR IN ASIA? SHERY: IT IS INTERESTING TO SEE THAT THESE MARKETS THAT LED EARLIER IN THE YEAR ARE LEADING THE DECLINES NOW IN ASIA. TTHERE SEEMS TO BE INFLATIONARY CONCERNS. YOU HAVE TREASURY YIELDS RALLYING AT THE SAME TIME. AND INVESTORS ARE SAYING, PERHAPS THIS IS A WHIFF OF TANTRUM IN ASIAN ASSETS. ALREADY, WE HAVE SEEN THOSE CALLS. AND THEY HAVE BEEN INTENSIFYING. NOT SURPRISING, GIVEN THAT WHEN YOU LOOK AT EMERGING MARKETS, YOU HAVE THE RISK OF INFLATION TO BONDS AND CURRENCIES, BUT YOU ALSO HAVE THE BENEFITS. YOU WOULD FIND ENERGY EXPORTERS IN LATIN AMERICA, BUT IN ASIA MOST COUNTRIES ARE NET OIL IMPORTERS, ASIDE FROM MALAYSIA. AND MALAYSIA ACTUALLY RALLIED LAST NIGHT. SO YOU CAN SEE THESE COUNTRIES LIKE THAILAND, INDIA, THEIR CURRENCIES ARE LOSING GROUND. SONALI: SO MANY COUNTRIES ARE TRYING TO EASE THE POWER CURRENT. WHAT ARE THEY DOING TO EASE THE HURT? SHERY: THERE HAS BEEN AN EFFORT FROM AUTHORITIES. IN CHINA, BEIJING ORDERING BANKS TO PRIORITIZE LENDING TO ENERGY COMPANIES. THEY DO NOT WANT, THOUGH, THE CAVEAT IS DID NOT SPECULATE WITH THE FINANCING WE ARE GIVING YOU, WE DO NOT WANT THE DISORDERLY EXPANSION OF CAPITAL. INDIA ALSO SAYING TO RAMP UP PRODUCTION. ROMAINE: THERE IS SOMETHING BIGGER GOING ON, BECAUSE NOW WE ARE TALKING ABOUT SOUTH AMERICA. WE I TALK ABOUT HYDROELECTRIC POWER. THERE IS A SHORTAGE THERE BECAUSE OF A DROUGHT. IS IT THE IN TIMES? SHERY: IT IS NOT GREAT, BECAUSE IN INDIA, COAL PRODUCTION HAS BEEN HIT BY THE FLOODS. SO THOSE MINES CANNOT OPERATE. YOU MENTIONED IT SOUTH AMERICA, BRAZIL, THEIR FACTORY OUTPUT JUST TOOK A HIT. THEY ARE GETTING HURT BY NOT ONLY BEING ABLE TO NOT SECURE THE SUPPLIES BUT SHOULD BE DISRUPTIONS AS WELL. PRODUCTION NUMBERS HAVE DROPPED. AND WE HAVE ALREADY SEEN ECONOMIC ACTIVITY STARTING TO SLOW DOWN FOR MONTHS. CAROLINE: KEEPING US ABREAST OF A VERY GLOBAL STORY WHEN IT COMES TO COMMODITIES. SHERY AHN, YOU DO NOT WANT TO MISS HER LITTLE BIT LATER. NOW LET'S TAKE A LOOK AT WHAT IS HAPPENING IN TERMS OF U.S. MARKETS. THE S & P 500 WITH A PRETTY STELLAR DAY. ROMAINE: THIS IS THE BEAT DOWN RALLYING PEOPLE WERE LOOKING FOR A PULLBACK. ♪ ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS "BLOOMBERG MARKETS, THE CLOSE," WITH CAROLINE HYDE, ROMAINE BOSTICK AND TAYLOR RIGGS. ♪ CAROLINE: COUNTING YOU DOWN TO THE CLOSE. ROMAINE: YOU WANTED A REBOUND, WE GOT A REBOUND. SONALI: IT CERTAINLY IS. MOST ARE IN THE GREEN WITH THE EXCEPTION OF REAL ESTATE AND UTILITIES. THE FINANCIALS ARE UP MORE THAN 2%. GIVEN THE RISE IN YIELDS, THE NASDAQ ALSO RISING. ROMAINE: EVEN WELLS FARGO IS HIGHER ON THE DAY, SO YOU KNOW SOMETHING IS GOING RIGHT IN THE MARKET. WE ARE UP 2% ON THE DAY. CHIPMAKERS ARE ALSO GETTING A BID. THIS PRECEDED THE CURRENT DRAW DOWN WE SAW OVER THE LAST COUPLE WEEKS, CONCERNS AND THAT CHIPMAKERS WERE BASICALLY AT THEIR CYCLE PEAKS. WE TALKED EARLIER ABOUT THE UPGRADE FOR POSH MARK, THAT WAS PART OF A BROADER MOVE FOR OTHER RETAILERS, INCLUDING APPAREL MAKERS, WHO WILL BENEFIT FROM A REBOUND IN CONSUMER MARKET, AS WELL AS THE SUPPLY CHAIN ISSUES THAT WILL FINALLY ABATE. THE SELLOFF WE HAVE SEEN IN THESE NAMES COULD HAVE BEEN TOO FAR, TOO FAST. MERCK, WHICH HAS GOTTEN A BOOSTER THESE LAST COUPLE DAYS, WITH A LITTLE BIT OF PROFIT TAKING, DOWN TODAY. CAROLINE: AND MAYBE PART OF THE BUY THE DIP TODAY. WE HAVE SEEN THE SELLOFF IN BIG TECHNOLOGY, WHETHER OR NOT HAD TO DO WITH THE INFLATION OUTLOOK, PEOPLE WORRYING ABOUT WHERE THE YIELDS WILL GO -- BUT FINALLY WE SAW THE TECHNICAL INDICATORS LOOK SO UGLY THAT MAYBE IT WAS TIME TO START BUYING AGAIN. LOOK AT THIS. IT'S A GREAT CHART THAT SHOWS THE STRENGTH IN THE INDEX HAS NOT LOOK TO BAD. THE CELL GOING -- SELL GOING SUB 30, WHICH MEANS WE HAVE OVERSOLD, BUT HAS NOT LOOK LIKE THAT SINCE MARCH OF 2020. TECHNICAL INDICATORS POINTING THE THE REBOUND ON HER HANDS WHEN IT COMES TO THE NASDAQ 100. ROMAINE: LET'S TALK ABOUT THE FRIENDLY COMPETITION, AND NOT SO FRIENDLY COMPETITION BETWEEN U.S. BANKS AND EUROPEAN COUNTERPARTS. THE U.S. BANKS LIKE GOLDMAN SACHS AND MORGAN STANLEY, SEIZING MARKET SHARE FROM EUROPEAN RIVALS. THIS IS ALL ABOUT TRADING REVENUE. THE IDEA THAT U.S. COMPANIES ARE OUTPERFORMING THE EUROPEAN COMPANIES. WHO BETTER TO TALK ABOUT THIS THAN SONALI. YOU COVERED THIS A LOT. THIS IS NOT A TOTAL SURPRISE GIVEN THE WAY THAT EUROPEAN BANKS HAVE RESTRUCTURED OVER THE LAST FEW YEARS. SONALI: THEY HAVE BEEN TALKING ABOUT THIS, KEEP AN EYE ON THE NUMBERS. WE ARE TALKING ABOUT A FORWARDING MILLION DOLLAR POOL OF MONEY -- A $40 MILLION POOL OF MONEY. THERE'S BEEN CHANGES IN THE WAY THAT CLIENTS ARE MOVING, THAT LEAVES THE QUESTION -- ROMAINE: NOBODY TALKS ABOUT ARCHEGOS ANYMORE. SONALI: WE SHOULD. CAROLINE: BUT WE NEVER KNOW HOW TO SAY IT. ROMAINE: DO YOU THINK WE WILL HEAR ABOUT IT ON THE CONFERENCE CALLS? SONALI: IT IS NOT SO MUCH ABOUT THE LOSSES, BUT THE CLIENT SIDE HAS SHIFTED. WE ABSENT CONSOLIDATION, PARTICULARLY WITH PRIME BROKERAGE. AND THEN TRYING TO GAIN THE REST OF THE SHARE. THE CANADIAN BANKS, JEFFRIES, WE HAVE SEEN THEIR FIGURES RISE SIGNIFICANTLY. AND I KNOW THAT WE HAVE TALKED ABOUT DEUTSCHE BANK LOSING A LOT OF SHARE. THEY GOT OUT OF EQUITIES. BUT THERE IS STILL ROOM LEFT TO GAIN MORE SHARE. CAROLINE: SHUT UP TO MY EUROPEAN BANKS. WHO IS STILL MANAGING TO GROW WHEN THE REST OF THAT PARTICULAR PART OF THE MARKET SEEMS TO BE TAKING OVER. SONALI: BARCLAYS BY THE NUMBERS IS DEFINITELY GAINING SHARE, BUT DEUTSCHE BANK, EVEN THOUGH THEY HAVE SHRUNK, I WOULD KEEP AN ION THE FIXED-INCOME BUSINESS BECAUSE THEY UNDERWRITE SO MUCH WHEN IT COMES TO LOANS, WHEN IT COMES TO THE RISKIER STUFF. AND THE EXTENSION IN ESG, THAT IS WHERE THEY CAN GAIN SHARE, THE EUROPEANS. ROMAINE: IT IS SORT OF ON THE SAME TOPIC, BUT WE TALK A LOT ABOUT BANKS BUMPING UP PAY, PARTICULARLY FOR THE ENTRY-LEVEL EMPLOYEES. MAYBE YOU HAVE TO OFFER A LITTLE BIT MORE TO GET PEOPLE TO COME TO YOUR FIRM, AS OPPOSED TO THE COMPETING FIRM. SONALI: SO MUCH OF THE MONEY IS NOT JUST GOING TO TALENT, ESPECIALLY IN PRIME BROKERAGE, BUT IT IS ALSO GOING TOWARDS TECHNOLOGY. THE EQUITIES DIVISIONS HAVE SHRUNK WITH TECHNOLOGY COME UP THE FIXED INCOME DIVISION, I'M WAITING FOR THE DAY THAT GOLDMAN, J.P. MORGAN, THEY TELL YOU HOW MUCH THEY ARE SPENDING AND HOW MUCH THEY WILL GAIN FROM IT. ROMAINE: I WOULD LOVE TO SEE THAT. BUT WHEN YOU SAY THEY ARE SPENDING ON TECHNOLOGY, THAT IS STILL PEOPLE, RIGHT? SONALI: AN EXAMPLE OF THIS WAS FROM A FEW YEARS AGO WHEN A GROUP AT TOLD ABOUT $500 MILLION WAS BROUGHT DOWN TO THREE PEOPLE. THAT'WHAT TECHNOLOGY CAN DOS -- TH ISAT -- THAT IS WHAT TECHNOLOGY CAN DO. THAT IS MARGINS. ROMAINE: I WAS PROMISED ONCE THE MACHINES TOOK OVER, THEY STILL NEED PEOPLE TO OPERATE THEM. CAROLINE: BUT YOU JUST NEED THREE OF THEM. THEN YOU NEED TO SPEND ON CYBERSECURITY. SONALI: EXACTLY. ROMAINE: WONDERFUL. THE WORLD IS IMPLODING. WE'LL BE HERE TO COVER IT. AND WE WILL BE COVERING BANK EARNINGS IN A COUPLE WEEKS TIME. WE ARE GETTING READY TO COUNT YOU DOWN TO THE CLOSE, 22 MINUTES LEFT. IT'S A REBOUND. IT DOES NOT RECOUP ALL THE LOSSES FROM YESTERDAY, BUT CERTAINLY SOMETHING THAT PROVIDES A LITTLE BIT OF ENCOURAGEMENT. CAROLINE: SHOULD I DO THEY TAYLOR TOP. YIELDS -- TALK. YIELDS! SONALI: IT IS JP MORGAN AND BANK OF AMERICA THAT HAVE HIT A RECORD TODAY. CAROLINE: SOME STOCKS ARE DOING WELL. YIELDS ARE UP FIVE BASIS POINTS. THAT MEANS IT IS RED. ROMAINE: IT IS. I FINALLY LEARNED THAT. THEY CHANGED IT ON US. CAROLINE: CAROLINE: A LITTLE UNDER 18 MINUTES UNTIL THE CLOSING BELL. WE ARE UP ON THE S & P 500 BY 1.4%. TECH ON THE BOUNCE BACK. THE DOLLAR RISING FOR THE FIRST TIME IN A FEW DAYS. AND WE ARE LOOKING AT YIELDS PUSHING HIGHER. THE COMMODITY INDEX IS UP. GAS WITH AN EXTRAORDINARY MOVE. AND LO FOR CRYPTOVE -- LOVE FOR CRYPTO WITH BITCOIN ABOVE $50,000. NOW LOOK AT THE S & P MARKET. IT'S WAS A JOY TO HAVE SCOTT WREN ON. WHAT DO YOU MAKE OF THE TALK IF THIS IS THE RIGHT TIME TO BE SELLING? SCOTT: A COUPLE DAYS AGO, I THOUGHT FOR SURE THAT WE WERE GOING TO TOUCH OR GET CLOSER TO THE DOING TODAY MOVING AVERAGE. WE HAVEN'T TOUCHED IT SINCE JUNE OF 2020. TYPICALLY, THAT WOULD ACT AS A MAGNET. BUT FOR US, WE WANT TO BUY THE DIP. WE HAVE HAD TO PUT OUR FOOT ON THE ACCELERATOR AND REMIND CLIENTS AT THAT WE THINK THE MARKET HAS MORE TO GO IN THE COURSE OF THE NEXT 15 MONTHS, AND WE WANT THEM BUYING ECONOMICALLY SENSITIVE SECTORS AND THINGS THAT ARE GOING TO BENEFIT FROM A CONTINUATION OF THE RECOVERY. SO WE ARE DEFINITELY BUYING THE DIP. ROMAINE: HOPEFULLY YOU CAN RECONCILE THE ASSET TRANSIT, BECAUSE ALL THE CONDITIONS THAT LIMIT SOMEBODY LOOK AT THE MARKET AND SAY BUY THE DIP SEEMED TO BE THE SAME CONDITIONS THERE A COUPLE WEEKS AGO WHEN PEOPLE STARTED TO SELLOFF. SO WHAT CHANGED? SCOTT: I THINK FOR US, YOU KNOW, THE BIGGEST RISK TO US IS INFLATION. THERE'S MORE AND MORE PEOPLE, WE THINK IT WILL DECELERATE NEXT YEAR. OUR NUMBERS ARE HIGHER THAN WHAT THE LOCAL FED PRESIDENT PUT OUT. WE THOUGHT IT WOULD BE HIGHER THAN WHAT HE SAID. BUT THERE ARE STILL PEOPLE WHO FEAR INFLATION. LOOK AT OIL AND GAS PRICES, LOOK AT THE SUPPLY CHAIN DISRUPTION, WHICH WILL TAKE TIME TO EASE, BUT WE THINK SOME OF THESE COMMODITIES ARE GETTING TOWARD THE TOP END OF THAT. GROWTH, I AM SURE YOU HAVE HAD GUESTS WHO HAVE DOWNGRADED THEIR GROWTH. WE ARE LOOKING AT 6% THIS YEAR, 5% NEXT YEAR. EVEN THOUGH WE BROUGHT THE NUMBER DOWN, IT IS GOOD WHEN YOU LOOK AT THINGS HISTORICALLY, AND WE ARE WELL ABOVE AVERAGE. WE ARE TRYING TO LOOK THROUGH THE BUMPS AND SAY, IS THE FED GOING TO REMAIN EASING. WE THINK IT WILL. WILL VACCINE NEWS CONTINUE TO BE GOOD? WE THINK IT WILL. AND WE THINK WE WILL GET MORE STIMULUS. AND THERE IS OTHER THINGS IN PLACE. I TALKED ABOUT INFLATION. THOSE ARE ALL POSITIVES. THAT'S WHY WE ARE TRYING TO TAKE IT VANTAGE OF THE PULLBACKS IN THE MARKET. ROMAINE: IN CONVERSATION WITH SCOTT WREN, SENIOR GLOBAL EQUITY STRATEGIST FOR WELLS FARGO INVESTMENT INSTITUTE. HE'S STICKING WITH US. WE'LL RESET. TAKE A LOOK AT WHERE WE STAND IN THE MARKETS. BACK TO SCOTT IN A MOMENT. THERE WAS A THRESHOLD THAT FOR MANY FOLKS WAS -- GOING TO REACH. IT WAS 5%, 10%. SONALI: THE QUESTION IS WILL BE SEE ANOTHER PULLBACK, OR NOW WE HAVE GOTTEN THROUGH SOME OF THESE? CAROLINE: ARE YOU CALLING US A THEY CUT HER? -- DAY CUTTER -- DEAD COUNTER? ROMAINE: THERE IS NO SUCH THING. CAROLINE: THIS IS THE COUNTDOWN TO "THE CLOSE." SONALI: TAYLOR RIGGS IS OFF TODAY. ROMAINE: WE WILL GET YOU A COUNTDOWN TO THE CLOSE IN HUMAN AND A CHECK ON THE MARKETS. WE WANT TO CHECK IN ON THE PRESIDENT RIGHT NOW, THE PRESIDENT DELIVERING REMARKS RIGHT NOW ON THE BIPARTISAN INFRASTRUCTURE BILL AND THE BUILD BACK BETTER AGENDA. HE'S IN MICHIGAN, ONE HOUR WEST OF DETROIT, SPEAKING AT A UNION HALL, I BELIEVE. ALSO TALKING ABOUT THE VIRTUES OF UNION SHIP. YOU CAN FOLLOW ALL THESE EVENTS ON THE BLOOMBERG TERMINAL. IF HE SAYS ANYTHING OF UTMOST IMPORTANCE, WE WILL BRING YOU THAT NEWS. BUT LET'S GET BACK TO THE MARKETS. WHAT DO WE GOT? CAROLINE: YIELDS RISING, BUT TECH IS NOT DOING BAD, TOO. THIS AS WE SHAKEUP WORRY FROM YESTERDAY. INFRASTRUCTURE, THE GOVERNMENT'S INABILITY TO COME TO AN AGREEMENT WAS PART OF THE WORRY, BUT SO TOO IS COMMODITIES PUSHING HIGHER. FOR SOME REASON, TODAY WE HAVE DECIDED WE WILL BUY THE DIP, YIELDS ARE PUSHING HIGHER AND WE ARE BUYING INTO TECH. ROMAINE: THERE ARE STATISTICS WHEN YOU LOOK UNDER THE HOOD WITH THE PERCENTAGE OF STOCKS THAT ARE DOWN 10% OR MORE, DOWN 5% OR MORE. SO IT IS A LITTLE BIT OF AN UNEVEN REBOUND. 1.5% ON THE KBW BANK INDEX. SOME WEAKNESS IN UTILITIES AND IN REAL ESTATE. GAS HAS BEEN ALL OVER THE MAP. BACK BACK UP NOW. CAROLINE: LET'S GET BACK TO OUR GUEST, SCOTT WREN, SENIOR GLOBAL EQUITY STRATEGIST FOR WELLS FARGO INVESTMENT INSTITUTE. TALK ABOUT WHAT IS ON YOUR WORRY LIST. YOU TALKED ABOUT THE 5% CORRECTION. YOU HAVE GOT BACK WITH CLIENTS, SAYING BUY THE DIP. BUT IS IS THERE ANYTHING THAT IS TELLING YOU THE MARKET WILL GO BLOOMBERG CONSISTENTLY -- WILL GO LOWER MORE CONSISTENTLY? SCOTT: THE BIGGEST RISK IS INFLATION. AS I MENTIONED EARLIER, FOR US, WE WILL SEE INFLATION DECELERATE NEXT YEAR. OUR CPI NUMBER IS AT 3.5% NEXT YEAR. HIGHER THAN WHAT JAMES BULLARD SEES. IF HE IS RIGHT, AND WE SEE 2.8% NEXT YEAR, ANYWHERE BELOW 3%, THAT WOULD BE A POSITIVE FOR THE MARKET. BUT AS WE SEE WHAT THE COMMODITIES ARE DOING, YOU SEE WITH THE SUPPLY DISRUPTIONS ARE DOING, THE HOLIDAY SHOPPING PRICES IT WILL PROBABLY BE HIGHER -- SO, INFLATION FOR US IS SET TO DECELERATE, BUT THE RISKS OUT THERE, THAT IS PROBABLY THE BIGGEST ONE. ROMAINE: PRESIDENT BIDEN IS SPEAKING ABOUT HIS A SPENDING PROPOSAL, THE OTHER SIDE OF THAT EQUATION IS TAXATION. DOES THAT CONCERN YOU RIGHT NOW IN PLANNING OUT YOUR PORTFOLIO? SCOTT: NORMALLY, WE WOULD BE CONCERNED ABOUT HIGHER TAXES, MORE REGULATION, BUT U.S. COMPANIES ARE GOOD AT PLAYING THE HAND AND THEY ARE DEALT. THEY HAVE DEALT WITH REPUBLICANS, DEMOCRATS, HIGHER TAXES, LOWER TAXES -- THE BOTTOM LINE IS WE ARE EXPECTING A SUBSTANTIAL NUMBER TO PASS CONGRESS FOR INFRASTRUCTURE. WHILE RIGHT NOW WE ARE SEEING HOW THE SAUSAGE IS MADE, WE ARE TRYING TO GET CLIENTS TO LOOK FURTHER DOWN THE ROAD AND SAY, WILL BE SEE SOME SORT OF INFRASTRUCTURE PACKAGE? YES. IS IT GOING TO BE A SUBSTANTIAL AMOUNT OF MONEY? YES. THAT IS THAT WE WE HAVE BEEN LOOKING AT IT. BETWEEN NOW AND WHEN ALL OF THAT HAPPENS, OF COURSE WE HAVE DEBT CEILING BATTLES TO GO THROUGH, BUT LET'S FACE IT, THE U.S. IS GOING TO PAY ITS DEBTS. THOSE WILL CAUSE VOLATILITY, BUT I THINK WE WILL SEE COME FIND OF -- SOME KIND OF INFO SEARCH AND IT WILL BE A HIGH AMOUNT OF MONEY. SONALI: WHAT ABOUT THE RELATIONSHIP BETWEEN YIELDS TO TECHNOLOGY COME INTO MORE SO THE GROWTH NAMES? -- TO TECHNOLOGY, AND MORE SO THE GROWTH NAMES? WE HAVE SEEN THE PICKUP AND THE NASDAQ. IS THERE A POINT AT WHICH THEY DECOUPLE AS PEOPLE SEARCH FOR YIELDS IN THE MARKET? SCOTT: TYPICALLY, YOU WILL SEE TECH NOT REACT WELL IN A HIGHER INTEREST RATE ENVIRONMENT. BUT RIGHT NOW, INTEREST RATES ARE GOING HIGH BECAUSE INFLATION IS A LITTLE BIT HIGHER. GROWTH, THOUGH WE ARE LOWER THAN A COUPLE MONTHS AGO, IT WILL STILL BE STRONG. SO I THINK THE DECOUPLING WOULD BE HIGHER. WE HAD BEEN OVERWEIGHT TECHNOLOGY FOR A LONG TIME, ABOUT FOUR OR FIVE MONTHS AGO. WE BACKED OFF TO AN EVEN WAIT. -- WEIGHT. BUT IT IS A HUGE PART OF THE S & P 500, SO WE WANT TO MAKE SURE WE HAVE GROWTH. AND WE ARE KEEPING THAT GROWTH COMPONENT THERE, WE ARE JUST NOT AS OVERWEIGHT AS WE HAD BEEN. WE'RE CLOSER TO NEUTRAL. AND WE HAVE CONTINUED TO LEAN INTO THESE A SECTORS OF THAT HAVE BEEN UNDERPERFORMERS, WHETHER IT IS INDUSTRIALS, FINANCIALS -- THOSE KINDS OF THINGS, AND ENERGY. BUT WE WANT TO BE CYCLICAL, BUT WE ALSO WANT AT THE GROWTH COMPONENT. CAROLINE: SCOTT WREN, THANK YOU. ROMAINE: THE STOCK OF THE HOUR, KELLOGG. FOUR MINUTES LEFT TO GO IN THE TRADING DAY. SHARES ARE LOWER ON REPORTS -- ABOUT 1400 WORKERS THAT MAKE REASON BRAND AND FROOT LOOPS -- BUT THIS IS A BIG ISSUE BECAUSE IT BOILS DOWN TO WAGE COSTS AND PRESSURE THAT A LOT OF THESE COMPANIES ARE SEEING, INCLUDING KELLOGG. NABISCO RATIFIED A CONTRACT WITH ITS UNION. THIS'LL WILL BE A BIG ISSUE. I WANT TO GO OVER TO THE ISSUES WE ARE STARTING TO SEE WITH REGARDS TO THE PRICE PRESSURES. THIS IS A CHART THAT SHOWS YOU THE DIFFERENTIAL BETWEEN COMPANIES THAT HAVE A LOT OF PRICING POWER AND OF THE COMPANIES THAT DON'T. IT WOULD THINK THOSE WOULD OUTPERFORM, BUT THEY ARE UNDERPERFORMING. THIS IS WHAT INVESTORS ARE FOCUSING ON, NOT NECESSARILY THE PRICING PRESSURES, OR INFLATION, THEY ARE FOCUSING ON INTEREST RATES AND GROWTH. SCOTT, I WANT TO BRING YOU BACK INTO THE CONVERSATION, BECAUSE WE ARE HEADING INTO AN EARNINGS SEASON. AND A LOT OF PEOPLE WILL BE LOOKING AT THESE GROSS MARGINS, TO STATE OF THESE COMPANIES HAVE THE POWER TO PASS THE PRICE INCREASES TO CONSUMERS. ARE YOU CONFIDENT WE WILL SEE THAT? SCOTT: WE HAVE GOOD MARGINS RIGHT NOW. THINK THAT COMPANIES ARE FEELING LIKEI THEY HAVE PRICING POWER. CAROLINE: WOW. SCOTT, KEEPING IT SHORT AND SWEET. WE LOVE IT. ALL THINGS CYCLICAL. SCOTT WREN, REALLY GREAT TALKING ABOUT WHY HE SAYS WHETHER IT IS A CORRECTION OR NOT, IT'S TIME TO BE BUYING BACK IN. ROMAINE: WE HAVE TALKED A LOT ABOUT THE TECHNICALS LEADING UP TO THE LAST COUPLE DAYS, AND THEY ALMOST SEEMED TO SIGNAL WE ARE HEADING TOWARDS THIS INFLECTION POINT. WE ARE HEADING CLOSER TO THE CLOSING BELL, AS WE TAKE YOU TO THE BELL AND BEYOND. ANNOUNCER: BEYOND THE BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT NOW. ROMAINE: WE ARE ONLY TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. WE ARE COUNTING YOU DOWN TO THE CLOSING BELL. HERE TO HELP TAKE US TO THE CLOSING BELL IS CAROL MASSAR AND TIM STENOVEC. THIS IS, I GUESS, A BUY THE DIP MOMENT. ARE YOU BUYING INTO IT? CAROL: IF FEEL LIKE EVERY 24 HOURS WE GO THROUGH DIFFERENT CYCLE WITH S & P. WE ARE UP AND DOWN. I'VE BEEN WATCHING BITCOIN, UP 4.5%. PICK YOUR CRYPTO. ETHERIUM IS UP. BITCOIN IS ABOVE $50,000 NOW FOR THE FIRST TIME IN SOME TIME. DEFTLY BUY IN. TIM: THE FIFTH STRAIGHT DAY IN A ROW WHERE THE S & P 500 HAS CHANGED DIRECTIONS. SO, I GUESS THAT PEOPLE ARE BUYING THE DIP. JUST NOT BUYING IT ON THE SAME DAY THAT WE HAVE SEEN STOCKS MOVE LOWER. CAROLINE: YOU WERE TALKING ALL THINGS CRYPTO, CAROL. BU WET ARE ALSO HEARING FROM THAT -- THE SUMMIT THAT IT IS A GOOD TIME TO LIQUIDATE ASSETS. BLACKSTONE IS DOING IT. BUT IT FEELS LIKE THE RETAIL INVESTOR, OR THE GENERAL INVESTOR, IS STILL WANTING TO GET IN ON THE MARKET. SONALI: IS IT BECAUSE OF THE MARKET LEVELS WE ARE AKAMAI THAT MUST BE SOME OF IT. BUT THE IDEA THAT AS TAXES INCREASE NEXT YEAR, THERE MAY BE RIGHT NOW IS THE DIP TO BE SELLING. ROMAINE: CITIGROUP TALKING ABOUT HOW THE LONG POSITIONS, THEY'VE BEEN UNWOUND TO SUCH A DEGREE THAT THERE HAS BEEN A PLACE TO GO OTHER THAN UP. YOU ARE LOOKING AT THE NASDAQ COMPOSITE RIGHT NOW LOOKING LIKE IT WILL FINISH THE DAY HIGHER BY 2%. NOT QUITE RECOUPING ALL OF YESTERDAY'S LOSSES, BUT A RESPECTABLE RALLY TO BE SURE. THE S & P 500 IS UP A PERCENT. THE DOW JONES UP, NOT QUITE 1%. THE RUSSELL 2000, THIS IS INTERESTING, WE DID NOT SEE THE RE-EMBRACE OF SOME OF THE VALUE NAMES IN THE SAME WAY YOU WOULD THINK, IF YOU HAD A TRUE REBOUND RALLY GOING ON. BUT IT IS HIGHER BY ABOUT 5/10 OF 1%. A TEPID RALLY WITH REGARD TO THE RASUL. -- THE RUSSELL. CAROL: WE GOT THINGS FROM BANK OF AMERICA TODAY. THE IS TO BE ABOUT HUNDRED TENDS T O END UP THE WEEK. TONS OF RESEARCH TO MAKE. AND WE WILL HAVE JESSE WITH THE TREND IS, ESPECIALLY WHEN WE GET THE JOBS REPORT ON FRIDAY. THAT WILL ALSO HELP TO SET THE TONE. CAROLINE: ALL EYES WILL BE ON FRIDAY INTO THE INFLATIONARY PRESSURES. ALL EYES, FROM A SECTOR PERSPECTIVE, ON THOSE IN THE GREEN. WELL, IT WAS BENEFICIAL FOR YIELDS TO RISE, FINALLY THE BANKS GETTING SOME LOVE. INSURANCE COMPANIES ARE DOING WELL. BUT THAT WE GOT THE BUYBACK ELEMENT OF THIS. THE CHIP STOCKS ARE DOING WELL TODAY. MEDIA IS LOOKING GOOD. SO STRONG MOVEMENT INTO THE HIGHER. TWO SECTORS IN THE RED WHEN YOU LOOK AT THIS BREAKDOWN. AND IT IS THOSE THAT USUALLY DO WELL WHEN THE BONDS DO WELL. UTILITIES ARE A LITTLE BIT LOWER AS WELL. CAROL: CARL ICAHN ON THE PROWL, DISCLOSING A STAKE IN -- HOLDINGS. THAT WAS UP 6%. LOOKING FOR THE U.S. COMMITTEE TO SCRAP A PURCHASE OF A PIPELINE FROM DOMINION ENERGY. SO WE SAW A POP IN THAT NAME. INVESCO AMONG THE TOP IN THE S & P 500 TODAY, UP ALMOST 5.4%. AND FINANCIAL TIMES SAYING THAT INVESCO STATE STREET MAY STILL BE TALKING ABOUT PLANS TO MERGE THEIR ASSET MANAGEMENT OPERATIONS. THERE'S A LOT OF PARTICULARS. APPARENTLY, C3 HAS HELD TALKS WITH OTHER COMPANIES. INVESCO IS UP, NONETHELESS. NETFLIX AT THE TOP OF THE S & P 500. COWAN SAYING IT SURVEYED 2500 U.S. CONSUMERS -- I WAS NOT ASKED -- BUT THE SURVEY SAYS IT HAS THE BEST CONTENT AMONG PLATFORMS. "BRIDGERTON?" THERE IS A PRICE TARGET OF $650. TIM: HAVE YOU WATCHED "SQUID GAME?" CAROLINE: I AM ALL ABOUT "THE CROWN." TIM: NOTABLE DECLINERS TODAY, THE REAL ESTATE -- DOWN TODAY. IT CONNECTS WAS UNDER PRESSURE AND CREDIT SUISSE DOWNGRADED IT, CUTTING THE PRICE TARGET OF $731 FROM $941. THE REASON, SUPPLY CHAIN PRESSURES DISRUPTING IT. EQUALLY MAKES'S SUPPLY CHAIN DISRUPTIONS WILL IMPACTED CUSTOMER'S ABILITY TO DEPLOY EQUIPMENT. LORDSTOWN MOTORS DOWN BY 11%. THE ELECTRIC VEHICLE STARTED PLUNGING TODAY, FALLING TO ITS LOWEST LEVEL SINCE AUGUST 23. ADAM JONAS CUT IT TO UNDERWEIGHT FROM EQUAL RATE, LOWERING THE PRICE TARGET DOWN TO TWO DOLLARS FROM EIGHT DOLLARS AND NOW TRADING AT $5.20. MERCK DOWN FRACTIONALLY, ABOUT 1.8%. INTERESTING PRICE ACTION. NOT REALLY ANY NEWS TODAY, BUT IT FOLLOWS FOUR DAYS OF GAINS, THE LAST THREE AS A RESULT OF THE GOOD DATA THAT MERCK ANNOUNCED ON A COVID TREATMENT TAKEN IN PILL FORM. BUT FINISHING THE DAY DOWN. CAROLINE: A LITTLE BIT OF PROFIT TAKING. FX MARKETS FLIPPING REVERSAL. THE SENTIMENT WANTING TO SEE A SEARCH FOR A HAVEN MEANS IS THAT TODAY WE ARE GOING THE OPPOSITE DIRECTION. WE ARE UP 5% ACROSS ASSETS. AND -- HAS BEEN DOING WELL AGAINST THE U.S. DOLLAR IN THE LAST FEW DAYS. TODAY, THE UBER INDEX -- DOLLAR INDEX IS HIGHER. THE MOOD MUSIC CHANGES WHEN IT COMES TO THE FX MARKET. COMMODITIES ARE STILL MANAGING TO FIND GREEN WHEN YOU HAVE THE DOLLAR HIGHER. EXTRAORDINARY MOVES IN COMMODITIES. OIL IS ON A TEAR. AND GAS, CAN WE TALK ABOUT GAS? A 12 YEAR HIGH IN THE U.S. AS WE WORRY ABOUT SUPPLY ISSUES. WE ARE LOOKING AT WHAT HAPPENED WITH GAS IN THE U.K., RECORD HIGH MOVES. SUPPLY CONSTRAINTS CONTINUE, AND THAT FEEDS INTO THE BOND MARKET. GAS PRICES ARE PUSHING UP SO HIGH, INFLATIONARY WORRIES ARE SO SIGNIFICANT, THAT PRICES ARE HIGHER. YIELDS ARE PUSHING HIGHER ACROSS THE BOARD. ROMAINE: THIS IS A BIG DEAL. WE MISSED IT EARLIER, THE EFFECT THE NATURAL GAS ASSIDUOUS IS HAVING. AND WE ARE EXPECTING TO HEAR FROM BORIS JOHNSON LATER. IN THE U.S., YIELDS HIGHER ACROSS THE BOARD. HEAVY VOLUME HERE ON THIS DAY. ONE THING I WANT TO POINT OUT, IT IS NOT ON THE SCREEN, BUT THE BREAKEVENS, PARTICULAR ON THE 10 YEAR, BACK TO JUNE LEVELS. GETTING CLOSER TO 2.5%. CONNECTED TO THE REFLATION TRADE WE TALKED ABOUT LAST WEEK. THERE DID SEEM TO BE BUY INTO THE IDEA THAT INFLATION IS HERE TO STAY AND IT WILL BE PART OF THE TRADE GOING FORWARD. CAROL: WHEN YOU TALK ABOUT THE DIP OF BUYERS, WE WILL SEE IF WE HAVE INCREASED VOLATILITY. WE HAVE THE FIFTH DAY IN A ROW WHERE THE S & P HAS BEEN CHANGING DIRECTION. DAVE WILSON TALKED TO US ABOUT THE MOVES, HOW THEY ARE GETTING LARGER ON THAT. TIM: AND WE SPOKE TO SOMEONE FROM WELLS FARGO, WHO SAID WE HAVE GOTTEN SPOILED, BUT WE HAVE LEARNED THE DELTA VARIANT IS BAD, BUT NOT AS BAD AS WE THOUGHT. WE COULD BE TURNING A CORNER WHEN IT COMES TO THE VIRUS. CAROLINE: WHAT IS ALSO INTERESTING IS WE HAVE SEEN THE INFLATIONARY PRESSURE, BUT WE WILL BE TALKING ABOUT CRYPTO WITH AN INFLATION HEDGE. ABOUT BANK OF AMERICA'S CALL. YOU TALKED ABOUT EARLIER, FINALLY SAYING THAT CRYPTO IS NOT JUST A SMALL ASSET CLASS. SONALI: AND TALKING ABOUT ALL ASSET CLASSES IN CRYPTO. BITCOIN WAS HIGHER. JUDGE GOING HIGHER, BELIEVE IT OR NOT. SOME OF THE FAVORITES DOWN ON THE DAY, SO YOU HAVE TO WONDER WHAT IS FUELING THE PRICE MOVEMENT HERE. CAROL: WHEN YOU ARE TALKING ABOUT BUYING THE DEBT, MICHAEL -- TALKED ABOUT THE DECLINES IN BITCOIN. CHECK IT OUT. > > BITCOIN PRICES MOVED AROUND QUITE A LOT, EVEN RECENTLY. SO WHEN WE SEE DIPS, WE OFTEN SEE THAT AS AN OPPORTUNITY, AND INVESTORS MOVING IN TO BUY THOSE DIPS. IF THEY CANNOT CHANGE THEIR CONVICTION IN INVESTMENT, BUT BUY AN ASSET SOMETIMES 20% CHEAPER THAN A DAY AGO, THAT IS A COMPELLING OPPORTUNITY. CAROL: THAT IS THE CEO OF GRA YSCALE. INCREASINGLY JAY POWELL IS TALKING ABOUT IT, THE FED STAYING WE WILL NOT BAN CRYPTO, AND FINANCIAL FIRMS LOOKING AT IT AS MUCH MORE A NORMAL PART OF WHAT THEY ARE DOING. TIM: WE SHOULD NOTE BITCOIN'S DAILY HIGHS ARE HIGHER BY 4%, BUT IT IS EARLY DAYS. THERE'S SO MUCH CONFUSION ABOUT WHAT CRYPTO IS INTO WHAT IT DOES WITH CONSUMERS, IT IS VERY COMPLEX. CAROLINE: AND NEEDS REGULATION. WHAT CAN GRIFFIN WAS SAYING. THAT DOES IT FOR OUR CROSS-PLATFORM COVERAGE OF THE CLOSE. WE WILL BE BACK TOMORROW. CLEARLY, THIS IS AN AREA OF FOCUS -- WE'LL BE TALKING ABOUT TOMORROW, TOO. WE'LL BE TALKING ABOUT TECHNOLOGY NOW. CAROL MASSAR HAS A KEY VOICE IN THAT SECTOR. CAROL: WE WILL CONTINUE OUR COVERAGE ON RADIO, TV AND YOUTUBE. WE'RE DELIGHTED TO WELCOME THE CHAIRMAN OF DELL TECHNOLOGIES. WHEN HE FIRST STARTED IN 1984, IT WAS DELL COMPUTER CORPORATION AND HE WAS 19. AND HIS JOURNEY IN CREATING THIS COMPANY IS IN HIS NEW BOOK. AND WE ARE GOING TO TALK ABOUT THAT BOOK A NEW MOMENT. MICHAEL JOINING US FROM AUSTIN, TEXAS. THANK YOU SO MUCH FOR BEING WITH US. MICHAEL: IT IS GREAT TO BE WITH YOU. CAROL: WE HAVE GOT TO ASK ABOUT THE BIG TECH PICTURE AT THIS POINT, BECAUSE WE HAVE SEEN PRESSURE ON BIG TECH COMPANIES IN THE STOCK MARKET, THERE IS A LOT OF BIG TECH COMPANIES TALKING ABOUT THE WORLD BECOMING DIGITAL, THE DIGITALIZATION OF EVERYTHING WE DO, ND YET TECH COMPANIES ARE FORECASTING A LONG-TERM GROWTH A LITTLE ABOVE GDP. YOUR OUTLOOK IS 3% TO 4% ANNUAL GROWTH. HOW DO WE SQUARE THOSE? WE ARE BECOMING DIGITAL BUT GROWTH IS NOT SO DYNAMIC? MICHAEL: IT WILL BE A SECTOR THAT CONTINUED TO OUTGROW THE ECONOMY. IF YOU THING ABOUT THE WAY THAT TECHNOLOGY IS BEING USED, IT'S NOW GOING BEYOND THE I.T. DEPARTMENTS. IT USED TO BE WHEN WE WERE SELLING THINGS, IT WAS TO THE I.T. DEPARTMENTS, NOW TECHNOLOGY IS FOCAL FOR EVERYTHING. AS A SECTOR, IT WILL OUTGROW DDP PROBABLY BY A SIGNIFICANT AMOUNT -- GDP PROBABLY BY A SIGNIFICANT AMOUNT. THIS YEAR HAS BEEN GREAT FOR OUR COMPANY, 15% GROWTH IN THE LAST QUARTER INTO THE SECOND HALF IS LOOKING STRONG. TIM: SHARES ARE HIGHER THIS YEAR AS WELL. I'M WONDERING ABOUT THE I.T. SPEND, HOW MUCH OF IT WAS PULLED AFFORD DURING THE PANDEMIC, AND DO YOU HAVE CONCERNS ABOUT GROWTH SINCE IT WAS PULLED AFFORD? MICHAEL -- FORWARD. ? MICHAEL: WHEN YOU THING ABOUT THE LOCKDOWN, THE ONLY THING THAT REALLY WORKED WAS DIGITAL. SO COMPANIES ARE ACCELERATING THEIR INVESTMENTS IN THAT. IF YOU THING ABOUT HYBRID WORK, THAT FEELS LIKE IT IS BECOMING MORE OF A PERMANENT WAY THAT WORK GETS DONE. THAT'S AN ENORMOUS STIMULANT FOR US, AND CERTAINLY A GREAT TAILWIND. THERE'S 700 MILLION PCS OUT THERE ON THE DAY THAT WINDOWS 11 GETS INTRODUCED, THAT DO NOT RUN WINDOWS 11. SO YOU PUT THAT ALTOGETHER WITH THE EXPANSION, AND CERTAINLY THERE'S BEEN SUPPLY CHAIN CHALLENGES, EVEN THOUGH WE ARE SHIPPING RECORD NUMBERS OF MACHINES, MORE THAN WE HAVE EVER SHIPPED, IT FEELS LIKE THE DEMAND WILL CONTINUE IN A ROBUST WAY. CAROL: ON THE SUPPLY CHAIN CHALLENGES, COMPUTING HAS BEEN HURT BY THE SEMI CONDUCTOR SHORTAGE. WHEN DO WE START TO SEE THE SUPPLY AND DEMAND GET BACK IN STEP? MICHAEL: IT TAKES ABOUT THREE YEARS TO BUILD A NEW SEMI CONDUCTOR PLANT, SO WINDED THE -- WE ARE ONLY 18 MONTHS INTO THIS. IF YOU BELIEVE THERE IS A DEMAND ACCELERATION THAT IS SIGNIFICANT, IT WILL TAKE TIME FOR SUPPLY TO CATCH UP WITH DEMAND. AND, YOU KNOW, WE ARE ALL CHALLENGED BY THAT. AS I SAID, EVEN THOUGH WE SHIPPED MORE LAST QUARTER THAN EVER, THE BACKLOGS ARE AT RECORD HIGH LEVELS. CAROL: IS THERE PANIC BUYING BECAUSE OF THE CONCERNS OVER SUPPLY CHAIN, THAT WE ARE SEEING THE DOUBLE ORDERING BEING DONE BY COMPANIES TO MAKE SURE THEY GET WHAT THEY NEED, AND AS A RESULT WE WILL SEE A BUBBLE BURST AS A RESULT OF IT? MICHAEL: WE HAVE BEEN WATCHING THE CANCELLATION RATES VERY CAREFULLY, AND WE HAVE INCREDIBLE DATA ON THIS. WE HAVE NOT REALLY SEEN THAT. WHAT WE HAVE HEARD FROM OUR CUSTOMERS AND PARTNERS IS THAT OUR SUPPLY CHAIN IS FUNCTIONING BETTER THAN OTHERS. WHILE IT MIGHT NOT WIPE THE LEAD TIME THAT WE GIVE THEM, IT IS PREDICTABLE AND RELIABLE. AND WE HAVE NOT REALLY SEEN, YOU KNOW, SIGNS OF DISTRESS THERE IN TERMS OF PEOPLE ORDERING, THEN CANCELING. IT HAS NOT BEEN A FACTOR. TIM: THEY CHIP SHORTAGE HAS REVIVED TALKS OF EUROPEAN OR U.S. CHIP MANUFACTURING, DO YOU THINK THAT IS NECESSARY AT THIS POINT? MICHAEL: I THINK IT IS A GOOD THING. YOU KNOW, WE HAVE NOT REALLY HAD -- INDUSTRIAL POLICY HAS BEEN KIND OF A DIRTY PHRASE THAT NOBODY WANTS TO TALK ABOUT, BUT WHEN YOU HAVE CHINA INVESTING SO AGGRESSIVELY IN THESE STRATEGIC INDUSTRIES, AND THE U.S. AND EUROPE NOT, IT CREATES A REAL CHALLENGE. AND THE THEME IN SUPPLY CHAINS HAS BEEN RESILIENCE, AND MOVING FROM JUST IN TIME TO JUST IN CASE. SO GIVEN THE IMPORTANCE OF ALL THESE INDUSTRIES FOR THE FUTURE, FOR EVERYTHING GOING ON IN 5G, I THINK THAT HAVING GOVERNMENT SUPPORT TO CREATE THE INFRASTRUCTURE, YOU KNOW, FOR OUR TECHNOLOGY FUTURE, SEMI CONDUCTORS BEING A BIG PART OF THAT, I WOULD BE IN SUPPORT OF THAT. CAROL: YOU GUYS SEEM TO HAVE DONE A BETTER JOB AT MANAGING YOUR SUPPLY CHAIN THAN YOUR PEER S, KEEPING YOURSELF SUPPLIED WITH COMPONENTS. HOW IS THAT POSSIBLE? ARE HIGHER COSTS BEING PASSED TO CONSUMERS? MICHAEL: THERE HAS BEEN COST AND COMPONENT INFLATION, THAT IS SOMETHING THAT WE ALL FEEL. IT'S A SHARED EXPERIENCE, IF I CAN CALL IT THAT. WE'VE HAD SUPPLY CHAIN STRENGTH IN OUR COMPANY FOR DECADES. AND IT HAS PROVEN ITSELF WELL, YOU KNOW, DURING THE LAST YEAR OR SO. WHEN A LOT OF COMPANIES OUTSOURCE THINGS, I THINK THAT THEY ALSO OUTSOURCE, IN MANY CASES, A COMPLETE UNDERSTANDING OF ALL THE COMPONENTS THAT GO INTO THESE MACHINES. AN YOU ARE SEEING INSTANCESD WHERE A $50,000 PRODUCT IS HELD UP BY A ONE DOLLAR PART. YOU REALLY NEED A COMPLETE UNDERSTANDING OF THE SUPPLY CHAIN IN ORDER TO RUN IT EFFECTIVELY. CAROL: YOUR BOOK IS A GREAT READ, IT TALKS ABOUT YOUR JOURNEY, AND YOU WEAVE IN THE CREATION OF YOUR COMPANY, TAKING A PRIVATE. YOU TALK ABOUT ACQUISITIONS AND THE TRANSFORMATIONS YOU WERE MAKING AT THE COMPANY. ONE THING THAT CAME UP AT AN INVESTOR DAY, IS WHAT YOU EXPECT IN TERMS OF M & A FOR THE COMPANY AND RUMORS OF MAY BE TAKING IT PRIVATE AGAIN. IS THAT A POSSIBILITY? MICHAEL: I DO NOT HAVE PLANS TO DO THAT. WE DID TALK ABOUT OUR CAPITAL ALLOCATION, NOW THAT A COUPLE DAYS AGO WE GOT A DOUBLE NOTCH UPGRADED BY S & P TO INVESTMENT GRADE. WE'RE DOING A LARGE SHARE BUYBACK. AND ISSUING DIVIDENDS STARTING IN THE FIRST QUARTER. AND WE HAVE PAID DOWN AN ENORMOUS AMOUNT OF DEBT, AND WE FEEL GREAT ABOUT THE COMPANY'S POSITION GOING FORWARD. LOOK, WHAT WE SAID IS, DO NOT HOLD YOUR BREATH FOR MASSIVE M & A , LIKE THE KIND WE DID WHEN WE DID THE LARGEST ACQUISITION MERGER EVER IN TECH. IT WILL BE ON A SMALLER SCALE. TIM: WHAT ARE THE AREAS OF INTEREST, WHAT PEAKS YOUR INTEREST? CAROLINE: YOU HAVE BEEN LISTENING TO TIM STENOVEC AND CAROL MORRIS OR -- CAROL MASSAR SPEAKING WITH MICHAEL DELL AND THE MARKET THAT HE WORKS IN, DISCUSSING SUPPLY CHAIN AND THE WAY HIS BUSINESS CONTINUES TO PERFORM IN THIS ENVIRONMENT. A NEW REPORT SAYS -- WILL GET OUTGUNNED. WE ARE TALKING BONDS. CAROLINE: THE MARKET DECIDED TO BUY THE DIP TODAY, EVEN THOUGH SOME IN A GLOBAL INVESTORS ARE SAYING IT IS TIME TO LIQUIDATE ASSETS. IT'S A NICE TIME TO BE SELLING. BUT TIME TO BUY THE DIP IN THE S & P 500. BANKS ARE DOING WELL. U.S. TREASURIES ARE GETTING SOLD OFF. BANKS WERE BEATEN UP YESTERDAY AND THE DAY BEFORE. NOW TECHNOLOGY GETTING A BID. THE NASDAQ IS UP. WE ARE OFF THE HIGHS EARLIER IN THE DAY, BUT MONEY IS MOVING INTO THE SECTOR. THE RUSSELL 2000, BANKS ARE DOING WELL. ENERGY STOCKS ARE DOING WELL, COMMODITIES ARE ON FIRE. AND YIELDS CONTINUE TO RISE HIGHER. THIS WAS NOT A WORRY FOR THE BIG TECH COMPANIES TODAY, WHO DECIDED THAT YIELDS ARE UP ABOUT FIVE BASIS POINTS ON THE 10 YEAR WAS NOT A REASON NOT TO BUY INTO THE NASDAQ. THE NASDAQ HAVING ITS BEST DAY SINCE MAY. WE CAME OFF THE HIGHS, AS YOU CAN SEE WITH THE BLUE LINE, NEVERTHELESS A STRONG DUE FOR SOME OF THESE BIG TECH COMPANIES. NETFLIX IS DOING WELL. A COMMON REPORT SAYING THEY LIKE WHAT THEY SEE IN TERMS OF THE ENEMIES BEING WON BY NETFLIX. AND FACEBOOK IS OF HIGHER, EVEN THOUGH THE WHISTLEBLOWER IS GIVING EVIDENCE IN FRONT OF CONGRESS. AND CRYPTO IS HAVING A NICE DAY, UP ABOVE THAT $50,000 LEVEL FOR BITCOIN. A A LOT OF TALK TODAY ABOUT THIS BECOMING, WELL, NO LONGER SOME SMALL ASSET CLASS THAT YOU CAN IGNORE. SOROS'S CEO SAYING THAT THIS IS NOW A TRUE AND A TRUSTED ASSET CLASS. BANK OF AMERICA SAYING IT IS TIME TO GET INTO THE LIKES OF CRYPTO BECAUSE IT IS GOING SO PROMINENT -- BECAUSE IT IS BECOMING SO PROMINENT. ROMAINE: ANOTHER TRUSTED ASSET CLASS, TREASURY, 153 BASIS POINTS ON YOUR 10 YEAR. WE TALK ABOUT IT IN ABSOLUTE TERMS , AND THIS IS ALWAYS A RELATIVE GAME. LIZ MCCORMICK IS HERE TO TALK ABOUT THE RELATIVE DANGER OF THE TRADE. AND THE IDEA OF WHETHER YIELDS CAN ACTUALLY KEEP PACE WITH INFLATION. A REPORT BY J.P. MORGAN SAYS MAYBE NOT. LIZ: EXACTLY. WHICH IS REALLY THE BOTTOM LINE. IF YOU ARE MAKING A RETURN, AND IT IS NOT BEATING INFLATION, THEN YOU ARE LOSING. THEY ARE SAYING, YES, THE RECOVERY WILL PICK UP, YIELDS WILL GO UP, BUT NOT ENOUGH TO KEEP UP WITH INFLATION. SO THAT LEAVES REAL YIELDS NEGATIVE, OR AT LEAST A VERY LOW THEY ARE SAYING. WE TALK ABOUT IT A LOT, 10 YEAR REAL YIELDS ARE NEGATIVE FOR NOW. SONALI: IT SEEMS LIKE A BLEEDING HOLE IN THE MIDDLE OF THE PENSION INDUSTRY. THE OTHER THING THAT YOUR INTERVIEW BROUGHT FORWARD WAS AT THE IDEA OF LOOKING FOR FIXED INCOME -- WHERE COULD YOU GO IF THIS IS THE SCENARIO WE ARE FACING? LIZ: THAT IS THE DILEMMA. THEY SAID, WE ARE FOCUSED ON INSTITUTIONAL INVESTORS, NOT RETAIL FOLKS. BUT INSTITUTIONAL INVESTORS, THEY ARE SAYING THEY LIKE THE SHORT-TERM, SECURE DEBT. IF YOU LIKE THE CONSUMER IS IN A GOOD SPOT. THEY ARE PAYING THEIR BILLS. DEBT LOAD HAS GONE DOWN IN THE PANDEMIC. SO J.P. MORGAN SAYS THAT IS A GOOD AREA, THAT THEY WILL DO BETTER AS THE ECONOMY GOES UP AND INFLATION WILL NOT HURT AS MUCH. NOT THE TRADITIONAL FIXED INCOME, TALKING ABOUT A TREASURY OR EVEN SHORT DURATION YIELDS BY THEMSELVES, WHICH IF YOU ARE LOSING ON INFLATION, YOU ARE LOSING LIKE THE TWO YEAR YOU ARE TALKING ABOUT RIGHT NOW, WELL UNDERWATER WITH A TWO-YEAR. CAROLINE: EARLIER TODAY BRYCE DOTY WAS ON THE SHOW AND HE IS A FIXED INCOME GUY, BUT HE OFTEN TALKS ABOUT OPPORTUNITIES IN THE, WELL, IN ETF'S, STOCK RELATED ONES. AND GETTING INTO THE CANNABIS SECTOR, PLAYING AREAS IN TERMS OF THE SUPPLY CHAIN ISSUES. TALKING EQUITIES IN RELATION TO BONDS. HOW HEART IS IT TO BE AN INVESTOR RIGHT NOW? LIZ: YOU HEAR EVERYBODY SAYING THAT. YOU HEARD ROMAINE SAY THAT HE IS 90% STOCKS, BUT PEOPLE ARE LOOKING FOR OTHER THINGS. HIGH DIVIDEND STOCKS WHERE YOU CAN FIND THEM, AND OTHER ASSET CLASSES. PEOPLE ARE LOOKING INTO, I DO NOT KNOW A LOT ABOUT CRYPTO, BUT I MIGHT GO FOR A CRYPTO ETF. WHERE I CAN DO INVESTMENT THAT MAY MAKE RETURN. BUT YOU HAVE TO REALIZE WHERE THERE IS MORE RISK, THERE IS RETURN. J.P. MORGAN SAYING LESS LIQUIDITY, MORE VOLATILITY, JUST TO BE CAREFUL. ROMAINE: THE COUNTERARGUMENT IS EVEN WITH THE FED "TIGHTENING," IT'S NOT NECESSARILY COMPLETELY REMOVING LIQUIDITY FROM THE MARKET, IT'S BASICALLY TAPERING IN THE AMOUNT OF LIQUIDITY GOING IN. LIZ: EXACTLY, ALTHOUGH YOU NEED TO KNOW YOUR SPOTS. IF YOU ARE NOT LONG-TERM TREASURY, OR EVEN SOME OF THE TECH STOCKS THAT ARE REALLY BASED ON FUTURE EARNINGS, EVEN AS RATES GO UP A LITTLE THAT IS NOT A HELP. BUT YOU ARE RIGHT, JEROME POWELL WOULD BE VERY CLEAR TO SAY THAT WE ARE STILL ACCOMMODATIVE, EVEN IF WE TAPER. HE SAYS THEY ARE A LONG WAY FROM RAISING RATES. SO YOU ARE RIGHT, THERE IS LIQUIDITY IN THE SYSTEM. CAROLINE: THAT IS LIZ MCCORMICK, WHO FINDS PEOPLE MOVING AWAY FROM RATES AND INTO OTHER TYPES OF ASSET CLASSES. MEANWHILE, WE HAVE BEEN TALKING ABOUT THE FED. AS WE WIND UP "THE CLOSE," WE WILL BE TALKING ABOUT WHAT YOU MISSED. AND PERHAPS THE FED, NOT JUST IN TERMS OF MONETARY POLICY, BUT WHAT THE FEDERAL RESERVE HAS BEEN UP TO IN TERMS OF CRITICISM. ROMAINE: THAT IS AN UNDERSTATEMENT. CRITICISM ABOUT THE TRADES WITH REGARDS TO KAPLAN, AND APPARENTLY NOW WITH OTHERS, AND WE KNOW JAY POWELL MENTIONING HIS HOLDINGS OF MUNICIPAL BONDS, NOT NECESSARILY TRADING THERE. AND ELIZABETH WARREN HAS REALLY BEEN TAKING DO IT. SHE'S NO STRANGER TO TRYING TO CREATE TRANSPARENCY. SHE IS ACTUALLY COMING UP ON THE PROGRAM AND WE WILL HEAR WHAT SHE HAS TO SAY ABOUT THIS. SONALI: SHE HAS ALREADY HAD FIGHTING WORDS FOR JAY POWELL. SHE WILL BE TALKING TO DAVID WESTIN. ROMAINE: AND MAY BE WE WILL HEAR FROM HER ON CRYPTO. SHE HAS NO SHORTAGE OF IDEAS AND OPINIONS. THAT'S COMING UP RIGHT HERE ON BLOOMBERG.

No schedule data available.

BTV Channel FinderWatch BTV in your area

Bloomberg Markets: The Close (10/05/2021)

Caroline Hyde, Romaine Bostick & Sonali Basak bring you the latest news and analysis leading up to the final minutes and seconds before the closing bell on Wall Street and tackles the Facebook hearings, U.S. vs. European banks and big tech. Guests today: Sylvia Jablonski of Defiance ETFs, Ron Daniels of Johns Hopkins University, Bryce Doty of Sit Investment Associates, Scott Wren of Wells Fargo Investment Institute, Michael Dell of Dell Technologies. (Source: Bloomberg)

More From Bloomberg Markets: The Close
All episodes and clips

Bloomberg Markets
"Bloomberg Markets" is focused on bringing you the most important global business and breaking markets news and information as it happens.
More episodes and clips