Bloomberg Markets Full Show (11/19/2021)

Bloomberg Markets Full Show (11/19/2021)

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From the financial centers of the world. This is Bloomberg Markets with Alix Steel and Guy Johnson. Virus versus vaccinations lockdowns strike again in Europe while the FDA clears Madonna and Pfizer boosters shots for all adult stocks trade mix money rushing into the bond market. Tesla fourteen hundred. We're to speak to Dan Ives of Wedbush is now the biggest bull on Tesla. Calling it a leader in the green wave. We're gonna speak to Ives on his call. And historic bill.

The House passes Biden's human infrastructure plan. House Speaker Nancy Pelosi is set to speak at any moment. From New York I'm Alix Steel with my co-host in London Guy Johnson. Welcome to Bloomberg Markets. Happy Friday. Happy Human Infrastructure Day. Guy we're still a long way away though from this meaningfully getting into the economy. Well we're still a

long way away from becoming reality as well. It's still got to go to the Senate. And who knows what's going to happen there. Cinema Manchin. What are they going to do. So yes this is a nice nice step forward for the president. He's not going to enjoy it because I think he's having a colonoscopy a little bit later on. So the victory lap may have to wait maybe until tomorrow with

his birthday. But nevertheless it is a big step forward. What are we to 20 to 30 minds standing according to AMH Annmarie Horden in D.C. as the voting is now done. So we're kind of there but nevertheless this is a lot of money. So this gets done. This is let's call it one point six to two trillion that is going to go into the economy at a time when the economy is firing on all cylinders and it's starting to exhibit inflationary problems. Yes. Like is this a good thing or a bad thing. Well the journal had an editorial out today that said the actual real cost is going to be anywhere between 3 and 4 trillion because some of the programs won't really roll off after a year. So you could see a much much bigger infusion into the economy to their point. Do we really need four trillion. Do we need that kind of multiplier right now. Well I think probably maybe even the Democrats would argue that 4 trillion is a push and I'm maybe the fact that that number is not out there is an indication of the fact that they are maybe changing the calculus when it comes to inflation. So that is

certainly the thought that we're trying to figure out right now. I think the markets are going to wait and see. I think they're going to wait and figure out exactly what the Senate does on this. As I say we don't know what cinema is going to do. We don't know what Manchin is going to do. But we do know is. And you're looking at a live shot right now. Is that the House has passed it again. Of course it was meant to go through last night. McCarthy decided that he was going to get up and basically make that not happens before he went home. So they came back first thing this morning to get it done and they have

got it done. Let's get the latest now on what is happening in D.C. Amari Done. Bloomberg's Washington correspondent and Katie Koch joining us from Goldman Sachs Asset Management. Katie is the co head of fundamental equity business over at Goldman Sachs Asset Management. Anne-Marie let me start with you. So it's done but it's not done. And we still don't know what the final number is. It's a big hurdle. They cleared a big hurdle today to 20 to 13 passing of the House. Do you see Democrats if you're looking at the floor can chanting build back better there hugging each other there fist pumping. It is a big deal for this party. But

as you say guy they are not done because now this means this goes to the Senate and the Senate is where it's going to be very difficult for the Democrats to really corral on and have a consensus together. They only have 50. They need every single vote. So any single senator which we've seen happen with Senator Manchin and Sanderson Cinema but any single senator can have an issue with a policy a provision and that could potentially block or drag on the talks. Now Senator Schumer says he want to get

them before Christmas. That timeline is incredibly tight. Yes. I'll say that they on vacation in like two seconds. Katie first of all thanks for being here and that we really appreciate it. It's great to be here. So we don't know yet if it's going to. What's going to make it through the Senate. How are you playing it right now. Yeah. So I appreciated the comments before that

this could potentially be inflationary at a point in time where the economy is running hot. And I agree with that. But at the same time one of our key things is this here is that we are going to make a transition from outright recovery to actually more resilience. And that's a lot of the things reflected in this bill. We do think it eventually passes in some form. And this as a country we're going to build more resilience into the planet into the health care system into the way that millennial families operate. And we're very invested in a lot of the trends that have been outlined in this bill. And so our expectation is that it will eventually get through. Katy but that's short term long term. So yeah it gets through we start spending this money

and it starts to have a meaningful impact and that impact is positive. But that's going to be felt over potentially a decade. Right now we have an inflation problem. And even if some of this money is going to be spent further down the road some of it's going to be spent now do we really need to put extra government spending into the economy right now. I hear what you say about the long term story. But right now the president's biggest problem is inflation. The economy's biggest problem is inflation. We agree that inflation is an issue. And we've been pretty vocal

from our equity team saying that while a lot of the macro specialists have said that it's transitory we've actually seen something really different bottom up from our companies and they're all struggling with it. So we agree with that. At the same time I would say that we have a lot of tools to deal with inflation and I think that's what we're going to see the Fed start to do for the rest of this year. And that's how we think it'll probably be handled and addressed through a rising rate cycle. And one thing on inflation I'd like to just say from the D.C. point is that clearly the president is now using his economic agenda as a point to say that it's actually going to relieve inflationary pressures. But he's talking about those long term inflationary pressures. And the CBO score that I'm really looking out for. Obviously we have this score for the

bill on their analysis the Congressional Budget Office. But the inflationary impact we will get in January and I've always wondered when I heard that if this means that some key senators will use that as a way to potentially slow up the process and key senators I think of Senator Joe Manchin who has been for months talking about that he doesn't believe that inflation is quote unquote transitory. He wrote to Jay Palin in early August saying we're over prescribing our economy. We're overstimulating this patient. That is the US recovery. All right. So Katie drill drill deeper here. How do you hedge inflation right now and equity portfolio. Well obviously equities should in theory be a natural inflation if you pick the right companies because you want to pick the right companies that can pass on rising costs. And obviously generally that's what we're focused on. If we do

have a continued background of upward pressure both on legit wages excuse me as well as inputs then we want to find the companies that can pass that on to the end consumer. And so we're very focused on those sectors. And then there's other sectors that are actually inflationary beneficiaries. And I would put I would put commodities for example in that space. And we have selective exposure to those commodities particularly the ones that are gonna be used in building back better like lithium for example. Katie do you worry did that right psycho may have to be put on steroids that ultimately the feds decided it wants to be late when it has to actually pull the trigger and stop that right hiking cycle it's going to have to decide relatively quickly. Is there a danger that that starts to upend if it goes significantly higher and some people are talking about 3 4 percent then the market is anticipating currently the rally that we're seeing in equities right now. I think this is a risk obviously that we could have a policy misstep. We already have

as we've identified we have a strong inflationary backdrop and we're talking about adding more stimulus to it as I mentioned. I think it's stimulus that we need to get the country headed in the right direction and to build more resilience into our economy. But there's certainly the possibility that we could have a misstep here and that rates back up more than the market's currently pricing in. And obviously there we would see a correction. We all know markets have gone up a lot and they also go down and that's the reality. And so it is possible that that's ahead of us. But we think markets go down if they do for like a decade. And then there is often is just one more point on this. Going back to the bill I should point out that Chuck Schumer says a sentence going to act on Biden's plan as soon as possible. In

that plan and he mentions the lithium. We'll get to that in the next segment. Is there anything on the human part that you can actually make investable. Yes. So I really liked what part of this bill they're talking about health care and provision of affordable health care. I would say big picture. We have the lowest labor force participation rate in this country. And there's a lot of reasons for that which we can get into later. But one is barrier

has definitely been the lack of affordable daycare for four but all Americans and particularly working women. And so we're invested in a company called Bright Horizons which partners with corporates to provide affordable daycare a burden that falls on women. And one of the reasons that the labor force participation rate has been particularly weak amongst women. And so this is a solutions provider to one of those gating factors to labor force participation and women in particular. Good stuff. All right. Thank you very much. Emory thank you. It's been a long day for you. Annmarie Horden. And joining us from Bloomberg is going to

stick with us. Want to get your sector calls as well because coming up Tesla shares recently hitting a rough patch after Elon Musk sold some shares symbols that don't seem to care. Dan ISE of Wedbush raising his price target to a street high for two hundred dollars. He joins us next. This is Bloomberg. Forty one minutes into the session live from London I'm Guy Johnson Alix Steel over in New York.

This is Bloomberg Markets. Let's talk Tesla. Let's talk movies. The recent drop in Tesla shares not changing where Bush's view of the stock the firm raising its price target from eleven hundred to fourteen hundred reiterating its outperform rating. Apparently there's a bookcase there which is eighteen hundred. Let's join now the analyst that made that call. He is of course Dan ISE Wedbush Securities equity strategist covering Tesla the movie Space. Dan what gets you the fourteen hundred. What can see the eighteen hundred. It's China. I mean right now I think the China story that's where it's 400 dollars a share. Tesla you're seeing the acceleration not just in China but globally is part of the screen tidal wave. I think

for so this is a come that could do one point for one point five million units next year on these margins. Why we raised the price target and about the bull case that still does not include essays the robo taxis and others which could be incremental. So Dan does this mean that like the likes of revision for example are lucid or neo like they're not going to go anywhere. Or is there room for all of this in the pie. Well five trillion dollar market over the next decade and that's what you're seeing

with a lot of these stocks continuing to go up because this is the biggest transformation to the auto industry since 1960s. I think half that pies pass the two and a half trillion. The other two and a half that's going to be up for grabs for the likes of GM Ford VW igloos should Caribbean and others. That's when investors are playing here. In terms of who does winners are as part just as massive jump ball in the auto industry. Dan we just seen Build Back Better passed in the House. We've obviously got the infrastructure bill that looks like it's going to go through. How big a part of the puzzle that kind of the

conundrum here relating to have quickly you can make this story works depends on that infrastructure money being spent depends on the US catching up ranging Tsotsi remains a real worry for many potential TV buyers. Yeah it's a great question. The U.S. is wag. Clearly China which is over 10 percent TV is in Europe as well. I think this is a watershed event in terms of the bill because it leaves the seeds to what's going to be much more infrastructure building around. Charging stations need to get the five hundred thousand charging stations by the end of the decade only one hundred thousand today as well as grid upgrades and others. And I think this is just that first steps today 2 percent of automobiles are even in the U.S. We think by 25 that's going to be 10 percent and 25 percent by 2030. Hey and Apple is apparently working on its apple car looking at a fully autonomous vehicle in just a few years. Is Apple going to eat Tesla. Well look I think for Apple it's a matter of when not if

they get on the Apple car. We view that as anywhere from two thousand twenty to two thousand twenty five. And I think the report yesterday confirms what we believe is going to happen now. It's not a zero sum game. So we don't view Apple getting is necessarily killer for any of the other names like could Jim for. But it speaks to this massive market opportunity. We also

think there's a 5 percent chance that Apple could partner with the likes of VW or the likes of a lucid or Ford or a GM and didn't. Turns out that right and do it themselves. All right Dan thanks a lot. Really appreciate you jumping on with us. Dan Ives of Wedbush Securities Kate Cox of Goldman Sachs Asset Management still with me as well. All right. We get that for Jihye Lee price target for Tesla. Do you play Tesla. Do you play evey sector what you do. We love the evey sector. So you know right now about 5 percent of auto sales are in Eevee. But as Dan articulated I think it's really important for people to focus on this. We're at an inflection point of exponential growth. And a lot of the things that are happened in the market right now is the market trying to price that which is actually really difficult to do. But it

is really an incredible inflection point. And the bill is going to help this because what we're seeing is cost curves inflect. And when that happens that's when you get explosive innovation and explosive growth. And the cost curves just to put that into context where people were now almost at cost parity between a traditional ISE and an electric vehicle. In fact the battery

price has gone down by 90 percent since 2010. So taking a step back how do you play this space. We obviously talked about the pure play even companies. We have some exposure to that. The second area to look would be the OEM. So the traditional auto companies can they actually transition to take market share here. This is going to be really difficult. We've picked one person we think one company we think is going to win there which is GM. But it is a very difficult thing to reinvent your business. The third would be the existing tech platforms getting into the

space. You mentioned Apple. Google's doing it too. This is smart for them because they are the tech titans and history shows it's unlikely that they'll keep that head Germany over the next 20 years and they have to tap into an exponential growth opportunity. Maybe this is it. It's a little tough because it's diluted. You can't when you buy those companies you're not getting a lot of exposure. The fourth area that we would say we're most excited about is actually the supply chain because it doesn't matter who wins. As Dan just articulated it's a little bit complicated to figure out who is going to be the big winner. Yes. Have exposure to some of those. But we know the unambiguous winner is going to

be people supplying in the supply chain. And so we like on active which makes the electrical wiring for for the vehicles. We like Wolf Speed which is one of the semi providers. And then the third area I would say is a company called NASDAQ which is Japanese but it makes the small motors used in a lot of these vehicles. Katie are you suggesting that the big traditional OEM don't survive. You talk about GM surviving revisions worth what it was earlier this week worth more than Volkswagen. Is that an indication of the future. Does Volkswagen cease to exist. I wouldn't. I think that what you're going to see is what you see

when you have disruption in any sector which is that there are gonna be some winners. And right now we believe that GM is the best positioned of them. And that's why we have our capital allocated. And then there may be a few that are not able to reinvent themselves as much. I don't have a strong of a view on not just to say that you're going to have to be highly selective in this space. And so we're more focused on who could reinvent themselves and come out the other side. And for us that's that's GM by the way a great book for people to read that want to educate themselves on what happens in this space would be Clay Christensen's innovator's dilemma and how difficult it is for these incumbent businesses to continue to run the old business but disrupt that and get into a brand new market to see what's happened to us on the oil companies too as they're trying to do the green transition. Okay. Part of all of this also has to do with chips. Yeah. A lot of the traditional yams are trying to now make their own chips like a Ford. Yeah. How do you play that trend particularly around the supply shortage. Yeah I think that

what's happening in chips right now and in the semi industry generally is very very interesting. We clearly have major supply chain issues broadly but in the semi industry specifically we're at a record high in terms of from when we put in order to when you get a chip delivered 22 weeks and that's for a basic chip that's even longer for the leading edge. So this country has and I think Wall Street's a little guilty for pushing us in this direction. We focus too much on optimization of supply chain and

not as much on resilience of supply chain. That's obviously why part of this is a focus of the bill that's in the process of being passed right now. And so what we think's going to happen in the semi space for these for 5G for other technologies that are very foundational to future growth is that we're gonna have to reassure parts of that supply chain back to the US. And so

yes we like the front end semi companies like a Marvell for example which is leading edge of 5G. But we're actually very interested also in the semi equipment manufacturing companies in some of the industrial gas companies that are being used to manufacture chips. We expect more of that to happen. In the US 15 percent of US GDP roughly runs through the factory floors in Asia and that's a vulnerability for this country which we expect to get addressed. One of the reasons why that vulnerability is been highlighted is as a result of Covid. Katie we're seeing countries in Europe

going into lockdown Austria today Germany potentially tomorrow. You've got cases building in places like Vermont and New Hampshire the Great Lakes area apparently as well. How much of an are you keeping on this. What do you think you need to do in terms of positioning the portfolio if we all going to see another winter surge. Yeah I think this is of course a real risk. And we've said for a long time we're going to have to continue to work through a lot of the pressures from this

pandemic. We already know what the obvious path to solving a lot of this which is increasing vaccination rates in this country and around the world. So that's obviously one path we're focused on and invested in the companies that are going to drive that vaccination. And then we also need to build prophylactics because we know that people are vaccinated are actually still able to transmit the disease. And we need to address that too. So we think you know it is going to be a couple of years until we get this fully under control. What I would say though is that we're not going to see the stop in GDP that we saw in the first

quarter of 2020 again because we actually have more tools to address it from a health care system perspective but also more business resilience to address it at an easier ability to go from it to a flexible work arrangement for example across a lot of industries. So while there be some disruption and we have to be prepared for that we're not going to see that the stoppage that we saw in the first quarter. So I feel like before you bought our V's then you're buying pool makers. Would you buy like hotels and airlines now based on like it's not going to be a full stop. Would you still like this. It's been in pools and Arby's. We do still a very big picture. We love the millennial consumer. The millennial consumer likes experiences over things. So pools and the great outdoors including are that kind of being the experience bucket. Maybe I'll give you a new idea today. The other thing that we like which is connected to working from home and working at work

is the footwear space. And so we are having overweight in sneakers I guess would be the best way to say that as well as crocs that we own. Crocs we own on running which is a Swiss company that makes running shoes like light running shoes. We own all birds and we own Decker is which make both OGs as well as the hook a running shoe. So this is a play on the millennial preference for an active lifestyle. And it's also a view that people are while they've given up their sweat pants and coming back to work. If you looked at the feet of all the people coming into the Goldman Sachs office they're wearing a lot of a lot of athletic footwear. I don't

know what you're wearing guy now but maybe you're. Are you. Are you in sneakers the note. Yes maybe later. But let me be very clear. But apparently the big thing in London now is guys over here wearing brown shoes is being completely anathema. You've never been able to wear branches in the city of London apparently. That is now acceptable. So we're kind of inching forwards. You guys are making huge strides. You got to get into those. She you want to project activity and that you're on the leading edge and you're out there doing stuff. So really he really does. Well I really hope he's going to take a shot on my

feet right now. You bet. There you go. You're in the wrong. You are against my investment thesis. OK well next time you come back I'm going to have no tie and I'm going to have sneakers. All right. Never gonna do what the boss says about never going to happen. We'll see. You never know. Things are changing. Katie great to see you. It was awesome here. Always always nice to see you in the studio. And and bringing fashion advice as well as investment advice. What more can I ask for. Getty coach Goldman

Sachs asset manager. Thank you very much indeed. What's next. ETF Friday. This is Bloomberg. ETF Friday let's talk about Bitcoin. Bitcoin seeing signs of support after falling nearly 20 percent. Dave Wilson is here to tell us more. Well Guy you've definitely got support in the Bitcoin futures ETF market now. Yes a month ago we had about

five of these funds coming out fully. Three actually made it. And the latest was Vanek. This week I had pro shares in Bokhari. Pro shares clearly is the winner in terms of assets. They at one point four billion. They've managed to have inflows almost every day since they started trading last month. And now it's gotten to the point where you've got a new global ex fund that is combining investments from blotchy shares and bitcoin futures. So there's plenty of support. All right David good stuff. Thanks very much. Bloomberg's Dave Wilson joining us there. Coming up here set for the most expensive Thanksgiving ever. We're going

to talk to the CEO of National Grocers Association president. This is Bloomberg. So we're an hour into the World Session on Wall Street. What do we need to know. Alex the story out of Austria I think speak to a lot of people first thing this morning the fact that it's going back into lockdown maybe starting to raise fears that this is going to happen not only in Europe but potentially over in the United States. But at the moment the S&P is only down one tenth of one percent. European equities definitely off a little bit more volumes reasonably okay today but definitely kind of Europe peripheral Europe under a bit of pressure here. But I think it's it's kind of like what is down versus up. So on the

downside it's energy financials and industrials is all the cyclical guys that would benefit with higher yields and any kind of reopening and travel. Right. That's gonna get and put the kibosh on it. You don't even know if you're gonna get to take your Christmas holiday which you will not be happy about. At the same time you're seeing money definitely flow into the bond market. You're seeing very strong buying in the front end of the curve yields down by about 5 basis points. All that pointing to

maybe the central banks. Now we're gonna have to ease off and those up maybe price hikes get priced out in some kind of capacity. On the flip side and I mentioned this earlier. Guy Maddern at Pfizer those stocks up really strongly because of the booster. Yes. Yeah and and you can understand that there is gonna be an increased need for potentially those boosters as well so you need to slowly pay attention to that. It is interesting though if you think is this. Will this exacerbate the inflationary story or will this ease the inflation. Oil is down. So that is a fact that is this worth thinking about in terms of what the president's been looking

for. The president's been super worried about what's been happening with gas prices. They are going to certainly start in those off fairly quickly if this oil move that we're seeing in Brent continues low because Brent gasoline. That's the that's the link. But but if we do see more Kobe cases more lockdowns. Is that going to exacerbate the supply chain problem that we have at the moment that is so inflationary. Or is the demand is demand going to drop. And therefore that removes some of the impetus. I don't know. But it's going to be really NYSE to see how the market kind of deals with this one. But I do think it's understanding Japan's a good example. They unveiled extra stimulus. They're

just basically starting to write checks for people who make under a certain amount as part of a stimulus bill to help after the pandemic. We were there like a year ago and Japan is still there. That would imply that we're going to see that consumer demand sort of continue for use as microcosmic. And the flip side if you're dealing with hybrid or local lockdowns or a whole country wide lockdown again the waiters for example the bartenders they don't need to go to work. So that's going to take away any sort of price pressure and wage pressure that we might have seen their. Yeah I agree that there's definitely two ways of looking at this. But if you think about the the impact last time was we ordered more stuff right. Yeah. We didn't use services. And I appreciate

what you're saying about the way it is in the labor shortages. And that's where certainly an area is certainly an area that we need to focus on. But we ordered more stuff last time. We already know that we're already backed up when it comes to buying stuff. There's not a there's tons of it on the water. It can't get in. So I'm wondering if we were to revert to that behavior whether that would only exacerbate the issue further. Yep. And it's already hard enough now where just just come at

the holidays Thanksgiving and then Christmas here in the US and all. And you guys do. But everything is so expensive. That's a big part of it. All food particularly where you are your Christmas turkey is going to definitely cost a lot. On that point Cargill's CEO I spoke at the Bloomberg New Economy Forum in Singapore earlier this week and he focused on a panel about feeding the world and talked about these price pressures on food producers. The food and ag system has proven to be very resilient perhaps surprisingly resilient. I think it underscores the importance and the benefits of an interconnected food supply system. So we've been able to get food from where it's produced to where it's needed with some exceptions that have been spot shortages. There has been district disruptions.

But we are seeing food prices starting to pick up. While MACLENNAN says the industry has been resilient you could see with this chart here and this is the UN Food and Agricultural World Food Price Index plus also the Bloomberg index that prices have picked up and precursor picked up really quite sharply. You think about why gas prices go up. Natural gas prices go up. That feeds into fertilizer fertilizers more expensive. John Deere just had a strike because of labor. That means the tractors. The latest kit not available. That is another issue for farmers. This stuff is heavy. It needs to be moved around the world. That's again a problem because fuel prices are high and there's a shortage of drivers and there's a shortage of ships. So all of

this kind of comes together and you can see that pickup that we've seen in fruit prices. It is absolutely enormous. The question is does it continue and is it going to be manageable. Gregory Ferrara National Grocers Association president and CEO joining us now. His group represents 21 hundred grocers grocery stores around the world. So 21000 grocery stores around the United States. Gregory thanks for your time today. Food prices are going up. We're about to hit Thanksgiving. Just give us a sense of what supermarket shelves look like right now. They have everything on them and how much of the price is going up.

Good morning. It's great to be with you today. Yeah absolutely. We're seeing you know businesses ticked up significantly ahead of the holiday season in our remember stores. The good news is overall we're in pretty good shape up in store shelves. Occasionally you're going to find that item that might be out of stock on the Tuesday when you're the store you're back through on a Wednesday or Thursday we'll probably have it back on the shelf. And that's just really tied up not in a production issue

not in availability of food. It's getting the product from the manufacturer from the distribution center to the store. And that could be certainly a bit of a challenge. You mentioned about food prices where obviously have seen the impact of inflation in our industry as well. The good news is the supermarket industry is really one of the most competitive industries there is. And our members are working really hard to ensure that the customers coming into stores are going to still find great deals great prices and be able to find those items they need for their holidays. So the producing you guys buy does that when crimping margins. If you're still trying to stay really competitive you absolutely don't have an impact on on margin. Inherently the supermarket industry particularly independent supermarket industry is a fairly low margin business. On average less than 2

percent net profit. So we need to sell a lot of items and we need to make sure we're being very competitive so we can have the show value to those customers who are coming in our member stores but they are going to see some of that be passed on. The reality is when we're seeing cost increase coming down the supply chain you can't absorb everything. And so some of that is going to be passed on. And therefore our members will continue to look at how do we really make sure there are good deals good sales and good value for their customers coming into the store to help them out.

Gregory where are the biggest bottlenecks. Where are the biggest shortages. Are apples going out vs. oranges frozen goods vs. known frozen. Just give me a sense of kind of where the real pain points are in terms of prices rising. You know I think it's spread across all the different departments in the store. Certainly we've seen it in the meat department. We're seen in centers stores so much dry grocery type items but we're likely to see it across most most of the departments in the store. A

lot of this is being driven quite frankly by acute labor shortage throughout the whole supply chain particularly a trucker shortage now. We've been short truck drivers for a number of years now. That certainly wasn't it was an issue that we had before the pandemic. But the pandemic has really exasperated that issue and made it more acute. So when there's certainly increased demand in our member stores and there's less truckers there's less labor to get it there that absolutely is going to impact price. What about in the store though. So you mentioned the labor being an issue and the back up in terms of

the transportation for example. There's no shortage of a produce in the store. But what about the workers to put it on the shelves yet. Look where our members are. I would say every single one of them have help wanted signs out front of their stores right now. They are certainly working to get more people in the stores. Not only have they remained at me during the pandemic and I think you've done a great job of taking care of their frontline workers. We call them supermarket superheroes because they really are. But we need to increased business going into the holidays. It's going to be important that we've got enough labor to be able to serve those customers. So our members are doing some other things as well. Right. You're employing

technology. They're employing a mix of self checkout and force full service checkout and redeploying workers throughout the store so that those workers are really in areas that are customer facing and can make sure they're serving those customers in the best way possible. What happens after Thanksgiving. What happens after Christmas. What does the new year look like. Well you know what we're hearing is is Q1 we're going to continue to to experience inflation. We're hearing from the supply chain and then we're going to likely to continue to get some price increases into Q1. I think a lot of it depends on what happens. Right. If we continue to have success with vaccines we continue to have success with Covid in the United States. We will likely see an uptick in cases but hospitalizations have been fairly steady.

We're seeing its therapeutics come out onto the marketplace. Boosters are now available for folks. And so I think that we're going to continue to see some pressures but hopefully we continue to move in the right direction. Well here in the U.S. before we let you go Gregory ISE want to get your take on that because we're seeing renewed lockdowns over in Europe and we are seeing cases rise in certain areas in the U.S. particularly now focus on the Midwest. Your members are they doing anything differently. Are they having to shut some stores limit hours do different requirements. Now for the most part it's business as

usual. Look we've had safety protocols. Protections have been in place from day one. We've leaned in. We've been ahead of government quite often and a lot of areas in protecting our employees. That's what we will continue to do. We're not just beaten CMU lockdowns. We just need to continue to focus on vaccinations and making sure that we're taking care of our communities and we'll be there for them. All right Greg thanks a lot. We really appreciate you saying this time with us. Gregory Ferrara National Grocers Association president and CEO. I come out here talking about it earlier. The E.B. Revolution is bound

to change the way that we drive and travel. So we're going to talk with the CEO of an auto tech startup about how will adapt to that world. Richard BARLOW we Joe CEO and founder is coming up next. This is Bloomberg. This is Bloomberg Markets you're looking at a live shot of the principal room. Dr. Stephen Currin. Coming up at New York Presbyterian Hospital CEO joining Bloomberg at 12:00 p.m. in New York and 5:00 p.m. in London. This is Bloomberg. Let's check in on Bloomberg. First word newsroom Alix Steel. President Biden will briefly turn over power to Vice President Kamala Harris today. That will happen when the president is under anesthesia. I actually cannot say that word. While

undergoing a mascot at Walter Reed Medical Center the White House says George W. Bush followed the same process twice during his presidency. The infrastructure bill that President Biden signed into law could end up saving lives. The legislation calls for requirements that new cars will be equipped with whatever tech new technology best prevents drunk driving deaths. There are also calls for regulations involving other safety technology like automatic emergency braking. And that is your first word

news guy who crushed it. Hugh IBEX Wilder. Hugh mocking go. I actually my husband I spend a very long time getting you to try and say that we're word anaesthesia. And I actually I literally can't do it. Anaesthesia can't do it. And an anesthesia. And it's yeah it's it's tough. You look at it on on an auto cue it's not the easiest word to say but you work your way through it. You know that. That wasn't nice of me. That big. Got to decipher this one. So much I understand. Well well deserved. Well deserved. I mean I really tank that word so. Fair enough. If you can if you get to take the mickey out of my shoes you are going to get something back. I tell you. Anyway let's park that for the moment. So I use that word Operative Lee.

Joining us now is someone who helps develop I.T. solutions for safety on roads Richard BARLOW WI Joe CEO and founder. Now the company collects data from eleven point nine million. Vehicles are basically converted into insights about what is happening with road traffic conditions accident black spots health of cars. We all increasingly use this technology. I'd certainly do pretty much everywhere I go. I picked up a map in a very long time. It's gone public today. Virus back. Richard thank you very much indeed for joining us. We really appreciate it. First of all let's just deal with the Covid the mechanics of the spark. Why did you go this way. What difference is it going to make.

What are you going to do with the money. Or access to capital on a gross basis. We now have access to it attention. Twenty five million dollars. We have huge automotive manufacture demand to roll out products in Japan the whole of a pack the whole of Europe beyond in the US we've operates in the US the last three four years. So this this gives us that this enables us to supercharge our business. With that we've now got from Microsoft and Palin to we we will already the market leader in the U.S. we intend to be market leader globally on a real time look right now. Are people moving around right now. What can you tell us right now. I can see from less than a minute ago 7 percent of vehicles moving around New York 12

percent in Austin. We receive over 450000 data points every second. So less than a minute. So we can see at intersections we can see traffic light changes all the trends basis setters. So very much the consumers that control the drivers and control about what they share with us. But we we're helping cities be safer. We're helping reduce emissions in cities. We're helping reduce congestion in real time. One of our key map partners is Microsoft. We're helping them improve their mapping product.

In terms of what is going to happen next. This feels like it's been evey week. We've not only had the kind of whole story around revision lucid except for in the share price gains and losses that we've seen. We've also seen the infrastructure bill going through that's going to be huge for the United States and is certainly going to turbo charge. We've used turbo charged. We now use supercharge in terms of what is going to happen. What what is the impact of this going to be do you think on mobility in the United States the acceleration of the story. And what does it mean for your business.

I mean infrastructure bill includes an eight billion dollar budget to install charging points. We're working with most manufacturers we're working with utilities companies to establish where to install these charging points. We actually run a hackathon a couple weeks ago a Palin tear and we won at one of our use cases we came came up with is how we can in real time now establish where I'm E.D. parking. What is the battery level. Where are they going home to. So where we're helping install or in a real time environment now where should evey charges be installed which has fundamentally changed since since Covid has changed the profile driving. Who do you work with on that. How does that come up from the data to execution. So we get a lot of data from vehicle with consent of the driver so we understand the battery life with some battery temperature in some environments. We understand the temperature outside. So for example charging an navy in Alaska is different to charging

an ATV in Texas is a fundamentally different a performance of the battery life. So we've got partners like Heller. How Heller a 6 billion euro T1 manufacturer. There are big evey manufacturer. We're helping them make more informed decisions. Well with partners like Palantir helping form the whole utility sector. In terms of kind of how this process is going to accelerate. We've had Apple today talking about the fact that it thinks that

it can produce fully autonomous vehicle by 2025. That sounds like a stretch to me. But nevertheless how how is your data going to make that step possible. I communication is going to be absolutely critical extremely granular. Data is going to be absolutely critical. What have you got that is going to help that process. So we've machine learned every line of every highway. We've machine led to three to three meter accuracy from the eleven point nine million vehicles on platform. We get data from their real time environment. We've received over 477 billion miles of

data. That's 20 times more than Tesla 20 times more than alphabets whammo. So we got a huge data set and we're machine learning all the time the outcomes we're helping. Most manufacturers already design parking utilities where an ATV an autonomous vehicle will know where to park once. Once it stops the driver off it they'll then inform other 80s in the area as to where where they could then park. So this can be a huge number of infrastructure requirements and data requirements and we just positioned with a huge data asset already built and nothing to a weight becoming a central component of the industry the media industry. Wow. Very cool. Richard thanks a lot. We really appreciate spend some time with us today. Congrats this back over to BARLOW. We do the founder and seat breaking news for you. Fed Reserve Governor Chris Wallace saying he favors a

faster taper on jobs gains. Michael McKee is here with the latest. Mike you are seeing sort of yields come off the lows the session on the front end from this one we learn. Well it's a little interesting because we haven't had a Fed governor descent since 2005. So while they are taking a very strong position here may indicate that we're beginning to see some movement on the

Fed towards that faster taper. Here's Waller's key quote for my part. The rapid improvement in the labor market and the deteriorating situation deteriorating inflation data have pushed me towards favoring a faster pace of tapering and a more rapid removal of accommodation in 2022. Now you could read the last phrase as maybe starting rate increases because as long as you are still adding to the balance sheet you're not removing accommodation. So at this point it is an interesting development that he is speaking out so firmly. But of course a lot's going to depend on who's with him on the fact that we get to next

year. Yep and potentially this has the effect of bringing forward the opportunity to raise rates as well. The whole time change the whole time sequencing starts to change. Mike thanks very much indeed. It's gonna be a busy week next week. We are going to hear from from a lot of Fed speakers ton of Fed speak next week.

This is Bloomberg. Every Friday and a guy near here we label and look at the best chance of the week nut versus not a competition. OK this is mine. This is tech guy. You're getting hit on the down the S&P today but tech is holding up well and this is a very interesting non explanation. So this blue line here is the percentage of members in at the Nasdaq 100. That's below its 50 day moving average. That's rolling over at the same time. You're the Nasdaq 100 continuing to move higher. So that divergence is quite interesting. But a large part of this white line is Apple and Tesla. You take those out and you're going to have the rally that we've seen in that index since the beginning of November. So it feels like we're back to

that kind of theme. Those large cap facing tech stocks are moving moving the needle. Yeah absolutely. It is evey week so you have to roll that in. So nice to get that that little elements within that too. I got to talk about the euro. I know about this chart here. Friends with benefits. So the euro is down. What year to date. 8 percent with we're down at a 16 month low. Clearly one of the factors that we are watching here is the divergence between the ECB and the Fed. But I'd be interested to see whether or not the pick up in Covid we're seeing drives the euro down even further. But there's obviously an effect and we're starting to see it spilling over. Think about what this

could mean for Europe. So this chart here basically models the euro area exporters and the euro area domestic stocks. The blue line is the domestic stocks. They've been doing better as the recovery has started to kick into gear. The exports have done less well. They've done okay but less well than the domestic stocks. Now what you could see is that being completely flipped on its head Alex as a result of this weaker euro because it will give the opportunity for the exporters to do a little bit better. Think about what is happening in the health care sector which is huge obviously across Europe. The luxury sector massive impact in France that could have a huge benefit in terms of the impacts of the CAC on. So think about those exports and how they could benefit from this if the euro continues to weaken from here. We've come all the way down. We're kind of circa 113 right

now. Some people are talking about a move to 110. Yeah I've seen a lot of calls for next year for 110 or even below. A UBS Deutsche Bank for example. I have to wonder what point guy is the weak euro become a negative because it's actually a growth scare a lockdown scare versus just a central bank divergence. Well that's I think that's the story we're now going to try and calculate isn't it. We've watched what has happened here in terms of the pickup in cases over the last few days. We've seen the Austrian locked down today. Will Germany now follow. I think that's the question people are trying to ask themselves.

We're going to try and answer that next. The European close is coming up. We've got just the person to talk to Rasmus back. Hansen FTSE joining us next. He's the guy you want to talk to about modelling this data. He'll be joining us very shortly. This is Bloomberg.

2021-11-22 03:00

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