Bloomberg Markets: The Close (10/22/2021)
THIS IS BLOOMBERG. ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS "BLOOMBERG MARKETS: THE CLOSE." WITH CAROLINE HYDE, ROMAINE BOSTICK, AND TAYLOR RIGGS.
CAROLINE: WE ARE LIVE FROM THE ACADEMY MUSEUM OF MOTION PICTURES IN LOS ANGELES. THIS IS SPECIAL EDITION. ROMAINE: THE ENTERTAINMENT EDGE. WE ARE OVERLOOKING WILSHIRE
BOULEVARD IN LOS ANGELES. COMING UP, WE WILL SPEAK TO A BIG LINEUP OF FOLKS ABOUT THE ENTERTAINMENT INDUSTRY. WE WILL KEEP AN EYE ON THE MARKETS AS WELL. CAROLINE: WE WILL BE TALKING ABOUT THE RESTAURANT INDUSTRY. THE LABOR SHORTAGE, THEN WE WILL DIG INTO THE MEDIA LANDSCAPE. OUR GUEST IS THE OWNER OF A LOS ANGELES NEWSPAPER. ROMAINE:
TAYLOR, WE WILL BRING YOU BACK SOMETHING NICE. WHAT'S GOING ON IN NEW YORK? TAYLOR: I WANT SOME SOUVENIRS. THE EQUITY MARKETS ARE MISSING THE SUNSHINE. WE ARE COMING OFF OF RECORD HIGHS YESTERDAY.
THE NASDAQ IS THE BIGGEST UNDERPERFORMER. YOU ARE SEEING YIELDS ON THE LONG AND. -- ON THE LONG END. TECH IS THE BIG UNDERPERFORMER BECAUSE OF SNAPCHAT. HAVING THE WORST ONE-DAY DROP EVER. WE'VE BEEN TALKING ABOUT FACEBOOK AND THE CONCERN ABOUT THE APPLE IOS CHANGE TO PRIVACY. SNAP IS GETTING HIT HARD BY THIS.
A KEY QUESTION FROM ANALYSTS IS WHY DID WE GET A HEADS UP? -- WHY DIDN'T WE GET A HEADS UP? YIELDS ARE COMING IN MAYBE BECAUSE JAY POWELL SAID WE ARE ON TRACK TO TAPER. HE MADE IT CLEAR THE RISKS ARE TILTED TO THE UPSIDE. YOU ARE SEEING THESE BREAKEVENS START TO CLIMB. CAROLINE: WE HAVE THE PERFECT GUEST TO DISCUSS ABOUT THE SUPPLY CHAIN ISSUES.
THE INFLATIONARY TISSUES THAT JAY POWELL WAS TALKING ABOUT, ALSO FRANCINE LACQUA WHO WAS DISCUSSING THIS. OUR GUEST KNOWS ABOUT THE TENSION THE BOTTLENECKS PUT ON THE INDUSTRY. WHERE YOU STAND ON INFLATIONARY RISKS? >> INFLATIONARY RISKS ARE ELEVATED.
THE EXPECTATION WE CAN SEE IN THE MARKET FOR BONDS, THE DIFFERENCE BETWEEN TIPS AND NOMINAL'S IS SANGUINE. ELEVATED FOR A COUPLE OF YEARS GETTING THROUGH THE REOPENING OF THE ECONOMY THEN SETTLING BACK DOWN A FEW YEARS FORWARD DOWN TO JUST ABOVE 2%. THE RISKS TO THE CENTRAL TENDENCY I THINK ARE ELEVATED. WE ARE RUNNING AT 5% INFLATION. EVEN THE TRIMMED INFLATION, THE UNDERLYING RATE OF INFLATION, THERE ARE UNDERLYING GAUGES. THINGS THAT WE USE LIKE ENERGY, FOOD. IT'S STILL RUNNING AT 4%. WE ARE AT AN ELEVATED RATE OF INFLATION, BUT THE MARKET IS BETTING THAT IT COMES BACK. ROMAINE:
I'M CURIOUS OF HOW YOU MITIGATE THAT RISK. WE HAD HEADLINES EARLIER, JAY POWELL TALKING ABOUT INFLATION SIGNALING CONCERN THAT HE HASN'T NECESSARILY SIGNALED IN THE PAST. IT IS THE FED TOO LATE TO THE PARTY? >> IT'S LESS ABOUT THE FED AND MORE ABOUT MONETARY POLICY. WE HAD THE GREAT DISASTER RELIEF PAYMENTS -- FISCAL POLICY, I'M SORRY. IT'S MORE ABOUT THE SCOPE
POLICY. WE WERE WIRE TRANSFERRING MONEY INTO PEOPLE'S ACCOUNTS AS WELL AS MONETARY STIMULUS. WHEN YOU COORDINATE FISCAL AND MONETARY, THAT'S HOW YOU GET INFLATION. ROMAINE: YOU TALK ABOUT THE BIG SESSION WE HAD, THERE WAS AN INCREASE IN HOUSEHOLD INCOME. THERE'S MORE MONEY POTENTIALLY COMING DOWN THE PIPELINE. IS THAT TROUBLESOME? >> IT DEPENDS. FROM AN INFLATION RISK
PERSPECTIVE, IT IS TROUBLESOME IF WE ENACT NEW SOCIAL PROGRAMS AND DON'T PAY FOR WITH TAX REVENUE. THAT'S A RECIPE FOR CONTINUED HIGH INFLATION. THE MARKET IS BETTING THAT'S NOT WANT TO HAPPEN. IF YOU'RE LOOKING AT CORPORATE PROFITS, THAT'S GREAT FOR CORPORATE PROFITS.
THERE'S AN ACCOUNTING IDENTITY THAT BASICALLY SAYS THAT AN INCREASE IN GOVERNMENT DEFICITS FLOWS EITHER INTO INDIVIDUAL SAVINGS OR CORPORATE SAVINGS AND THAT'S ANOTHER WORD FOR PROFITS. IF YOU HOLD INDIVIDUAL SAVINGS CONSTANT, HIGHER SAVINGS MEANS MORE PROFITS. AT THAT WERE TURNAROUND AND THERE'S NO INDICATION IN WASHINGTON THE DEFICIT SPENDING IS WINTER AND. -- IS GOING TO AND.
-- GOING TO END, CAROLINE: SOMETIMES PEOPLE ARE LOOKING AT GROWTH STOCKS AS A HAVEN. WHEN YOU LOOK AT SNAPCHAT, THE OWNER BASED IN L.A. HAVING A TERRIBLE TIME IN THE MARKET TODAY.
OUR GROWTH STOCKS A POTENTIAL HAVEN WHEN WE LOOK AT INFLATIONARY PRESSURES? >> I DON'T THINK THAT STOCKS IN GENERAL ARE GOING TO BE A HAVEN FROM INFLATION. CERTAINLY NOT THE HIGHFLYING GROWTH STOCKS. THE SENSITIVITY TO THE DISCOUNT RATE SHOULD BE MUCH HIGHER. THEY HAVE MUCH MORE DISTANT FUTURE CASH FLOWS.
WHEN WE SEE AN INFLATION SCARE, WE SEE THE NASDAQ UNDERPERFORM THE S&P AND THE DOUBT. -- AND ABOUT -- AND THE DOW. SENSITIVITY IS OVERBLOWN. THINK ABOUT THE PROFITS GENERATED BY GOOGLE, MICROSOFT, APPLE, AMAZON AS BEING DEPENDING ON YOUR POLITICAL PERSUASION, YOU CAN THINK OF IT AS HAVING A MOAT AROUND YOUR BUSINESS.
A PROGRESSIVE MY CALL IT MONOPOLY RENTS. IT'S LESS ABOUT INFLATION MISSING TO THE UPSIDE AND MORE ABOUT POLICY THAT IS DESIGNED TO ADDRESS THE LACK OF COMPETITION. MAKE NO MISTAKE, THERE ARE A NUMBER OF PEOPLE ON JOE BIDEN'S ECONOMIC TEAM WHO TEND TO ADDRESS THIS. -- WHO INTEND TO ADDRESS THIS. ROMAINE: WHAT ABOUT VALUE? WHEN YOU TRY TO DEFINE VALUE IN THIS ENVIRONMENT, WHAT IS IT? >> IT'S AN ENORMOUS DISPERSION BETWEEN THE PRICING OF GROWTH STOCKS AND VALUE STOCKS. WE ARE NOT AT THE HIGHEST
VALUATION DISPERSION EVER. THAT WOULD HAVE BEEN THIS TIME LAST YEAR. EXCLUDING THAT TIME, WE ARE AT THE WIDEST DISPERSION, THE BIGGEST DIFFERENCE IN THE PRICING OF GROWTH STOCKS VERSUS VALUE STOCKS. BASED UPON WHAT WAS HAPPENING OVER THE LAST DAY OR TWO, I WILL GIVE YOU A TRADE THAT GETS AT THE ESSENCE OF WHAT WE DO IN OUR CONTRARIAN VALUE ORIENTED INVESTING. I DON'T HAVE DEEP EXPERTISE ON INDIVIDUAL STOCKS.
WHEN I SEE INTEL TRADE-OFF BASED ON A TEMPORARY ISSUE, SO FAR AS I UNDERSTAND IT MISSED ON TOPLINE REVENUE BECAUSE FOLKS LIKE COMPAQ AND HP ARE CONSTRAINED IN THE PARTS THEY ARE GETTING SO THEY REDUCED THEIR CPU ORDERS. THAT'S WHAT COME BACK. NOW IT'S PRICED AT LESS THAN $50 PER SHARE. IT'S HARD TO GET A DECENT RETURN FROM THOSE PRICES.
THE MARKET PRICE HIDES THE ENORMOUS DISPERSION. SHORTING WE WORK RECENT SPAC IPO , I GIVE IT -- WE TEND TO HAVE A DIVERSIFIED SET OF POSITIONS THAT WERE LONG ON CHEAP STOCKS ON'S -- RECENTLY HAD TROUBLE. WE TEND TO AVOID STUFF YOU CAN'T EVEN FIGURE OUT HOW TO PRICE A COMPANY THAT HAS NEVER MADE MONEY AND CONTINUES TO BURN CASH. THOSE ARE THE OPPORTUNITIES
THAT PRESENT THEMSELVES IN TODAY'S MARKET. ROMAINE: THE FOLKS AT RESEARCH AFFILIATES ALWAYS FIND A WAY TO SNIFF THOSE OUT. WE ARE LIVE FROM THE ACADEMY MUSEUM OF MOTION PICTURES HERE IN LOS ANGELES. A LOT MORE COMING UP ON THE SHOW. CAROLINE: ABOUT HOW CAN WE HELP BUILD WEALTH. ROMAINE: ALSO, THE CHALLENGES IN THE RESTAURANT INDUSTRY.
OUR GUEST IS OPENED THREE NEW RESTAURANTS THIS YEAR. AND A BILLIONAIRE FOUNDER OF IMMUNITY BIO. HE PLANS TO BUILD A COMPLEX IN SOUTH AFRICA TO PRODUCE VACCINES . HE WILL BE HERE TO TALK ALL ABOUT THAT. TO OUR VIEWERS WORLDWIDE, THIS IS BLOOMBERG.
TAYLOR: WE ARE LOOKING AT SNAPCHAT HAVING THE WORST DAY EVER. FACEBOOK WARNED US ABOUT THE CHANGES TO THE SOFTWARE. SNAP SAID THEY WON'T WORRY. THAT CHANGED YESTERDAY. OUR GUEST IS A SENIOR ANALYST. WHY WEREN'T WE GIVING -- GIVEN A HEADS UP THAT IT WAS GOING TO IMPACT THEM? >> TWO THINGS HAPPENED. ONE IS PRICING. ADVERTISERS ARE SEEING LOWER ROI FURTHER SPENDING DOLLARS FOR ADS. THESE COMPANIES CAN TRACK USER
ACTIVITY OUTSIDE THE APP. THE STOCK WAS PRICED PERFECTION IN TERMS OF THE RICH VALUATION. THEY WERE TRADING AT OVER 20 TIMES SALES. THE ROOM TO MISS WAS MARGINAL AND THEY CAME OUT WITH A MUTED FORECAST. THAT'S WHY WE SAW SUCH A WILD REACTION IN THE STOCK. TAYLOR: ROMAINE, OUT TO YOU IN LOS ANGELES. ROMAINE: SANTA MONICA ISN'T THAT FAR
AWAY. NBA OR CFA? THAT'S A BIG DEBATE. ROBIN YOUNG IS A CEO OF BEHAVING WEALTHY. SHE WILL BE HERE TO TALK ABOUT
THAT AND EDUCATION, FINANCIAL LITERACY. ROMAINE: FROM ONE COAST TO THE NEXT, WE ARE AT THE ACADEMY MUSEUM OF MOTION PICTURES. WE'RE GOING TO TALK NOT ABOUT ENTERTAINMENT, BUT ABOUT WEALTH, INEQUALITY, AND HOW YOU ADDRESS THAT. CAROLINE: THE HAVE AND HAVE-NOTS. THE RICH GET RICHER, THE POOR GET WITH BEHIND -- LEFT BEHIND. ROMAINE: ROBIN YOUNG IS A CERTIFIED FINANCIAL PLANNER AND A CEO.
NICE TO SEE YOU. WE HAVE SPOKEN WITH YOU BEFORE. IN THE CONTEXT ABOUT AFRICAN-AMERICANS AND PEOPLE WHO DIDN'T NECESSARILY FIT INTO THE TRADITIONAL WORLD OF FINANCE AND HOW WE HAVE REACHED THE STAGE WHERE THERE'S A LOT MORE AWARENESS ABOUT BEING INCLUDED AND MORE IMPORTANTLY, ASSERTING YOURSELF INTO THAT. >> I FOUND THAT CREDENTIALS OPEN THE DOOR FOR YOU. WHETHER IT'S CFA OR MBA, THEY CAN OPEN THE DOOR BUT YOU HAVE TO BUILD SOFT SKILLS TO TURN THAT INTO SUCCESS. CAROLINE: SOFT SKILLS, MARKETING SKILLS, HOW HAVE YOU ENSURED THAT YOUR BUSINESS REMAINS RELEVANT AND IS GETTING ITS MESSAGE ACROSS TO THE RIGHT PEOPLE? >> MY FAVORITE GROUP OF PEOPLE, I CALL THEM THE EMERGING WEALTHY. THEY HAVEN'T TURNED THEIR
INCOME INTO WEALTH. MY CLIENT IS THE PERSON WHO SAYS THE END OF THE YEAR WHERE DID MY MONEY GO? IT'S IMPORTANT THAT YOU UNDERSTAND THERE ARE CERTAIN MONEY HABITS YOU MUST EXHIBIT IN ORDER TO TURN IN -- INCOME INTO WEALTH. THAT'S THE KEY. ROMAINE: A LOT OF PEOPLE IN THE BLACK COMMUNITY, IT WAS ALL ABOUT SAVER CERTAIN PERCENTAGE OF YOUR PAYCHECK OR DON'T SPEND AS MUCH ON THE FRIVOLOUS CONSUMER GOODS.
A LOT OF YOUNGER PEOPLE, THEY ARE LOOKING AT THAT AND SAYING IT'S NOT GOING TO CUT IT. >> CORRECT. IT WAS AN INCOMPLETE LESSON WE WERE YOUNGER. A MORE COMPLETE LESSON HAPPENED, I MANAGED $1 BILLION FOR 500 CLIENTS IN MY PREVIOUS JOB AND I LEARNED THESE WEALTHY HABITS.
INCOME EARNERS DIDN'T KNOW THESE HABITS. I SAID WHAT IF I HELP THEM LEARN THESE HABITS? SOME OF THEM ARE WHAT DO YOU REALLY WANT? INCOME EARNERS CAN BE VAGUE. WEALTHY PEOPLE ALWAYS KNOW WHAT THEY WANT. NUMBER TWO, THEY HAVE TO KNOW WHAT IT COSTS. WHERE ARE YOU IN RELATIONSHIP TO YOUR GOALS? NUMBER THREE, HOW DO YOU TURN YOUR INCOME INTO WEALTH? WEALTHY PEOPLE ARE SO FOCUSED ON THAT. INCOME EARNERS ARE LIKE HERE ARE MY EXPENSES, THIS IS WHAT I WANT TO DO AND WE WILL SEE WHAT HAPPENS. THOSE HABITS, IT'S THE
DIFFERENCE BETWEEN WEALTH AND FREEDOM AND THE RAT RACE OF SPENDING AND EARNING. CAROLINE: WE ARE STARTING TO SEE A MORE DISRUPTIVE FINANCE. WE CALL IT DEMOCRATIZATION. THE ABILITY TO CHEAPLY YOUR MONEY TO WORK IN ASSETS. IS THAT HOW YOU'RE SAYING YOU
NEED TO PUT YOUR INCOME TO WORK? HOW ARE YOU SAYING YOU CAN SAFELY BUILD AND FOR THE LONG-TERM? >> YOU HAVE TO UNDERSTAND WHAT YOUR GOALS COST? ONCE YOU KNOW THAT, YOU KNOW HOW MUCH OF YOUR INCOME TO ALLOCATE THEIR. -- ALLOCATE THERE. YOU DON'T KNOW HOW TO ALLOCATE IF YOU DON'T KNOW WHAT TO DO. THEN YOU HAVE TO BALANCE GROWTH WITH PRESERVATION. HOW LONG IS IT TAKE YOU TO GROW THAT MONEY AND YOU WANT TO MAKE SURE YOU PROTECT IT. YOUNGER PEOPLE DON'T ALWAYS THINK THROUGH THE BALANCE OF GROWTH AND PRESERVATION.
WHEN YOU SAY WHAT CAN YOU DO, YOU HAVE TO SAY WHERE ARE YOU GOING? WHAT RETURN DO YOU NEED TO GET TO YOUR GOAL? I SAY YOUR FIRST 500,000 DOLLARS SHOULD BE A SIMPLE EXERCISE IN INVESTING. ROMAINE: THE LINE IS RISK AND WHAT RISK PEOPLE ARE WILLING TO TAKE. >> PART OF RISK IS UNDERSTANDING YOUR STOMACH. IF YOU'RE YOUNG, PEOPLE SO YOU CAN BE AGGRESSIVE AND YOU HAVE TIME. BUT WHAT IF YOU HAVE A LOW TOLERANCE FOR RISK? OR YOUR OLDER AND YOU HAVE A HIGH TOLERANCE FOR RISK? LET'S PROTECT MY MONEY, THEN GROW. FOR EXAMPLE, IF YOU HAVE
$100,000 AND YOU LOSE 40% OF THAT, YOU HAVE TO RETURN 67% TO GET BACK TO $100,000. LET'S PROTECT WHAT YOU HAVE FIRST. CAROLINE: HOW ARE YOU TARGETING PEOPLE AT A YOUNGER AGE TO UNDERSTAND THAT? >> THERE IS NOT ENOUGH FINANCIAL LITERACY. THERE IS A MYTH THAT IF YOU DON'T HAVE A LOT TODAY, THAT YOU SHOULD WAIT UNTIL YOU HAVE A LOT. THAT'S THE ABSOLUTE WRONG MESSAGE. THE RIGHT HABIT IS WHAT ARE YOU
DOING WITH THE INCOME THAT YOU HAVE TODAY AND TURNING THAT INTO RETURNS? ONE BEHAVIOR SHOULD YIELD YOU THREE TIME RICHER RESULTS. ROMAINE: ROBIN YOUNG IS THE CEO OF BEHAVING WEALTHY. WE ARE TOP THE ACADEMY MUSEUM OF MOTION PICTURES BROADCASTING LIVE TO OUR VIEWERS WORLDWIDE. YOU ARE WATCHING BLOOMBERG.
♪ I'M MARK CRUMPTON. THIS IS BLOOMBERG. ♪ ROMAINE: LIVE FROM THE ACADEMY MUSEUM OF MOTION PICTURES, THIS IS A SPECIAL EDITION. CAROLINE: TAYLOR, YOU'RE HOLDING DOWN THE FORT IN NEW YORK. TAYLOR: MY LAST DAY OF COMMODITY CLOSE.
LET'S LOOK AT CRUDE. EARLIER, WE WERE LOOKING AT HIGHER. WE ARE NOW UP ON OIL FOR NINE STRAIGHT WEEKS. THE HIGHEST YOU HAVE SEEN SINCE OCTOBER 2014. GAS IS UP AS WELL. ALUMINUM, COPPER, YOU NAME IT. THEY HAVE BEEN DOWN. ERASING EARLIER GAINS GIVEN THAT THE ENERGY CRISIS CONTINUES TO ROIL SOME OF THE MARKETS.
YOU ARE GETTING A SUPPLY OUTLOOK IMPROVING AND MANNED COMING FROM CHINA. LET ME BRING YOU TO THIS TERMINAL CHART. IT IS RISING GLOBALLY EVERYWHERE YOU GO. IT HAS GONE VERTICAL. THAT'S A SCARY CHART. CAROLINE: ENERGY PRICES GOING UP. CRUDE PRICES GOING UP.
INFLATION. RESTAURANTS HERE ARE AT THE HEART OF WHAT HAPPENS. THE INDUSTRY IS SUFFERING GLOBALLY SINCE THE PANDEMIC BEGAN. OUR GUEST IS THE OWNER OF A GROUP, A MEMBER OF THE INTERNATIONAL RESTAURANT COALITION WHO JUST OPENED TO RESTAURANTS IN LOS ANGELES THIS WEEK. KNOWN FOR FABULOUS FOOD AND WINE , NOW GOING ON TO OPEN MORE AND A HOTEL COMPLEX. WHAT IS IT LIKE OPENING IN THIS
CURRENT ENVIRONMENT? >> I HAVE BEEN IN THE INDUSTRY FOR A VERY LONG TIME. I HAVE NEVER EXPERIENCED WHAT WERE GOING THROUGH RIGHT NOW. NORMALLY, WE HAVE AN ENORMOUS STAFF, TOO MANY PEOPLE THAT WE TRAIN. WE OPEN UP AND WE ARE BUSTLING AND FULL OF STAFF. WE ARE STRUGGLING RIGHT NOW.
WE DON'T HAVE ENOUGH STAFF TO OPEN ALL OF THE VENUES SEVEN DAYS PER WEEK. WE DON'T HAVE ENOUGH STAFF FOR BRUNCH OR LUNCH. IT HOLDS BACK OUR ABILITY TO OPEN, OPERATE, GROW, AND CREATE A BUSTLING ECONOMIC ENVIRONMENT. ROMAINE: WITH REGARD TO THE LABOR, WHERE IS THE SHORTAGE? >> IT'S ACROSS THE BOARD. SOMETIMES I THINK THE KITCHEN MIGHT BE WORSE OFF BECAUSE FINDING SKILLED LABOR, PEOPLE WHO REALLY KNOW WHAT THEY'RE DOING AND A KITCHEN IS HARD.
WE ARE HIRING A LOT OF PEOPLE THAT DON'T HAVE EXPERIENCE AND HAVING TO TRAIN THEM FROM ZERO. SERVERS, BARTENDERS, THESE ARE NORMALLY WELL-PAID JOBS BECAUSE THEY GET TIPS, BUT NOW IT'S IMPOSSIBLE. CAROLINE: EUROGROUP, I NATURE IT'S -- YOUR BY NATURE IS FIND DANNING. -- FINE DINING. CAN YOU PASS ON COST INCREASES? >> THAT IS A FINE LINE THAT WE HAVE TO BALANCE ALL THE TIME. WE ARE CONSCIENTIOUS OF WHAT WERE CHARGING. WE DON'T WANT PEOPLE TO FEEL THAT THEY ARE BEING GOUGED, BUT AT THE SAME TIME THE RESTAURANT INDUSTRY CURRENTLY DOES NOT CHARGE ENOUGH FOR WHAT WOULD PROVIDE.
THE COST OF THE FOOD, LABOR, FUEL TO GET THE FOOD TO US. OUR ENERGY COSTS. ALL OF THAT HAS GONE UP DRAMATICALLY. THE PUBLIC DOESN'T HAVE THE TOLERANCE FOR THE INCREASED PRICE THAT COMES ALONG WITH IT.
WE ARE CONSTANTLY TRYING TO DO MORE WITH LESS. WE ARE REALLY SENSITIVE TO IT. WE CAN'T PASS IT ON THROUGH AUTOMATICALLY. WE HAVE TO BE VERY CAREFUL. ROMAINE: THESE WERE FREE PANDEMIC ISSUES AS WELL. -- PRE-PANDEMIC ISSUES AS WELL.
WERE THERE CHANGES MADE TO THE BUSINESS MODEL WHERE MAYBE IT MADE THE MARGINS A LITTLE MORE SECURE? >> WE HAVE WANTED TO MAKE CHANGES TO THE BUSINESS MODEL. IT'S LIKE RESTARTING A WHOLE NEW SYSTEM. SOME PEOPLE HAVE BEEN VERY SUCCESSFUL WITH IT. WE HAVE BEEN TRYING TO INCLUDE THE BACK OF THE HOUSE, THE KITCHEN IN THE GRATUITY POOL BECAUSE HISTORICALLY, THOSE WHO WORK IN THE BACK OF THE HOUSE ARE THE LOWEST PAID AND THEY WORK INCREDIBLY HARD. WE ARE TRYING TO BALANCE THAT
OUT. A LOT OF RESTAURANTS ARE DOING SERVICE CHARGES INSTEAD OF GRATUITIES. THERE CHALLENGES WITH THAT ALSO. THE ROOTS GO SO DEEP IN THE SYSTEM AND IT'S SO HARD TO MAKE DRAMATIC CHANGE. IT'S MORE ABOUT CHIPPING AWAY GRADUALLY. CAROLINE:
YOU HAVE BEEN ONE OF THE KEY VOICES ON A GROUP OF INDEPENDENT RESTAURANT TOURS WHO LOBBIED THE GOVERNMENT TO SAY WERE HAVING A DISASTROUS TIME, NOW WHAT. ARE YOU LOOKING TOWARD THE ADMINISTRATION FOR HELP WHEN IT COMES TO EDUCATING PEOPLE WHO WANT TO GET INTO THE INDUSTRY? REBALANCING WHAT IT TAKES TO GET THERE? >> WE ARE ACTIVELY LOBBYING CONGRESS AND THE SENATE RIGHT NOW. EARLIER IN THE YEAR, THEY PASSED THE RESTAURANT REVITALIZATION ACT AS PART OF THE GREATER RESCUE PACKAGE. IT PROVIDED MONEY TO RESTAURANTS AND GRANTS. ONLY A FRACTION OF THE RESTAURANTS WERE ABLE TO GET THEM BECAUSE THE MONEY RAN OUT. THEY'RE STILL ABOUT A HUNDRED THOUSAND RESTAURANTS THAT DIDN'T GET THE GRANTS.
WE HAVE BEEN DESPERATELY BEGGING CONGRESS TO RE-UP THE FUND. THIS IS THE LIFELINE WE NEED AT THE MOMENT. WE ARE FACING THE FALL AND WINTER. WE DON'T KNOW WHAT'S GOING TO HAPPEN WITH ANY OF THE VARIANTS THE COME ALONG. HERE IN LOS ANGELES, WE DEAL WITH COLD WEATHER AND RAIN.
PEOPLE ARE MORE RELUCTANT TO EAT OUTSIDE, BUT THEY WANT TO EAT INDOORS. WE'RE NOT SURE WHAT WERE FACING. ROMAINE: GIVE US A SENSE OF WHAT THE RESTAURANT SCENE IS LIKE HERE. HAVE THE NUMBERS GOTTEN BACK TO 2019 LEVELS WITH REGARD TO THE NUMBER OF PEOPLE COMING IN OR ARE YOU STILL SHORT? >> THE DESIRE ON THE PART OF THE GUEST IS THERE. PEOPLE WANT TO GO OUT AND FEEL LIKE IT'S OLD TIMES. THEY ARE TIRED OF MAKING SOURDOUGH BREAD AT HOME.
THERE WERE TO HAVE THAT EXPERIENCE. WE ARE COMMUNAL, SOCIAL BEINGS. WE WANT TO BE IN A ROOM WITH PEOPLE. A LOT OF RESTAURANTS MAY NOT BE ABLE TO TAKE ALL OF THESE RESERVATIONS AND GUEST BECAUSE WE DON'T HAVE ENOUGH STAFF TO SERVE THEM.
WE DON'T HAVE THE SUPPLIES WE NEED AND THE PUBLIC WANTS THINGS TO BE NORMAL AND WERE HAVING A HARD TIME PROVIDING NORMAL AGAIN. ROMAINE: IT'S A BIG CHALLENGE. MAYBE ONE DAY, WE WILL GET THERE. WE GOT TO A FEW RESTAURANTS AND PEOPLE WANT TO COME BACK. WE APPRECIATE YOU STOPPING BY TO BE WITH US TODAY. SHE IS THE OWNER OF A RESTAURANT GROUP. WE ARE GOING TO PIVOT FROM THAT TO CHIPOTLE.
THE CEO JOINING US RIGHT NOW IN THE NEXT HOUR LIVE FROM LOS ANGELES, THIS IS BLOOMBERG. ♪ CAROLINE: THE ACADEMY MUSEUM OF MOTION PICTURE, IT'S ALL ABOUT HOW THE MAGIC IS MADE. ROMAINE: THERE ARE A LOT OF PEOPLE BEHIND THE SCENES THAT WE DON'T TALK ABOUT. CAROLINE: THE MAKEUP ARTISTS, THE CREW,
THEY ARE NOW FIGHTING FOR BETTER REPRESENTATION, BETTER LABOR WAGES. ROMAINE: WE WILL TALK ABOUT THAT WHILE WERE OUT HERE. ALSO THE OTHER ISSUES GOING ON WITH FREEDOM OF SPEECH AND CONTENT. CAROLINE: NETFLIX, THE RECENT WALKOUT. WERE GOING TO DIG INTO ALL OF. TAYLOR: FUN HAVING THEM OUT IN L.A..
WE ARE LOOKING AT THE STOCKS HAVING GOOD DAYS. AMERICAN EXPRESS HEADING TO ITS BEST DAY IN ALMOST A YEAR AFTER THIRD QUARTER SALES AND PROFIT TOPPED ESTIMATES. DAVE, ARE YOU GETTING EXTRA PERKS WITH THESE AMEX POINTS? DAVE: I HAVE GOTTEN A NUMBER OF SOLICITATIONS FOR THE PLATINUM CARD. THAT'S A BIG DEAL. IT'S A BIG REASON WHY THE COMPANY'S EARNINGS AND REVENUE, NOT MY SOLICITATIONS BUT THE PUSH FOR THE PLATINUM CARD WHY EARNINGS AND SALES BEAT ESTIMATES.
YOU LOOK AT THE NUMBERS IN TERMS OF CUSTOMERS USE OF CARDS, AN INCREASE OF 37% FROM A YEAR AGO IN TERMS OF DOLLARS. 10% JUST FROM THE SECOND QUARTER. YOU CAN REALLY SAY THAT SPENDING IS BACK AFTER TAKING A HIT LAST YEAR DURING THE CORONAVIRUS PANDEMIC. ALL OF THAT COMES AT A COST.
THE PLATINUM CARD, YOU PAY $695 PER YEAR. BUT, ACCESS TO JETS AND CREDITS ON STATEMENTS. 27% OF THE REVENUE -- $.22 OF EVERY DOLLAR TURNING INTO PROFIT. WHICH WORKS TO THEIR FAVORITE. THE CARD REWARD EXPENSE WAS HIGHER THAN ESTIMATES. NOW WE TURN TO THE INCOME SIDE. PEOPLE USING THEIR CARDS MORE,
THAT MEANS THEY MAKE MORE MONEY FROM FEES. AN INCREASE THEIR. THE CARD FEES, $695 FOR THE PLATINUM CARD UP 10%. PUT THAT TOGETHER, YOU HAVE A 25% INCREASE IN REVENUE. IT'S BETTER IN TERMS OF CARD ISSUANCE. AMEX A WHOLE LOT BETTER THAN DISCOVER FINANCIAL.
CAPITAL ONE, THEIR RESULTS ARE DUE ON TUESDAY. WE WILL SEE IF THERE IS ANY CARRYOVER FROM WHAT WE SEE OUT OF AMERICAN EXPRESS. TAYLOR: WE WILL BE SURE TO GET YOU BACK. COMING UP, A BILLIONAIRE FOUNDER AND OWNER OF THE L.A.
TIMES, HE IS NEXT. WE WILL TALK ABOUT THE EFFORT TO DEVELOP A NEW COVID-19 VACCINE AND BUILD A NEW COMPLEX IN SOUTH AFRICA. CAROLINE: WE ARE LIVE FROM THE ACADEMY OF MOTION PICTURES IN LOS ANGELES. A STORY DRIVEN BY OUR OWN REPORTING HAS BEEN THE EMPLOYEES AND NETFLIX NOT PLEASED. AFTER THE CONTROVERSIAL DAVE
CHAPELLE COMEDY SPECIAL FEATURED JOKES, TALK, AT THE EXPENSE OF TRANS PEOPLE. SOME EMPLOYEES WALKED OUT THE COMPANY'S HEADQUARTER ON WEDNESDAY. THE CEO WAS DEFENDING THE DECISION ON AIR TO STAND BY THE SPECIAL. THIS WAS ALL BLOWN OPEN BY OUR OWN REPORTING OF WHAT THEY WERE PAYING THE SHOW FOR DAVE CHAPELLE. ROMAINE: IT RAISES BROADER ISSUES WHEN YOU HAVE A PLATFORM LIKE NETFLIX THAT OUT SO MUCH CONTENT ACROSS A DIVERSE RANGE OF TOPICS AND INTERESTS. YOU'RE ALWAYS GOOD TO HAVE A
SITUATION WHERE MAYBE ONE PERSON'S COMEDY IS ANOTHER PERSONS OFFENSE. IT SEEMS LIKE EMPLOYEES WENT TO NETFLIX EXECUTIVES TO SAY MAYBE YOU SHOULDN'T DO THIS AND THEY MADE IT CLEAR THAT THEY WANTED TO SUPPORT THE FREEDOM OF THESE ARTISTS TO MAKE WHAT THEY MAKE. THAT THERE ARE CONSEQUENCES, THEY HAVE TO DEAL WITH IT.
CAROLINE: WHAT'S INTERESTING IS THE CULTURE AT NETFLIX. IT HAS A TRANSPARENT RADICAL OPENNESS THAT SHARES DOCUMENTATION OF EACH OTHER'S PAY, OF DEALS STRUCK WITH CERTAIN SHOWS. THE FLIPSIDE WAS YES WE WILL SHARE THIS WITH YOU ONLY IF IT REMAINS WITHIN OUR FOUR WALLS. THAT WAS BROKEN DOWN. TAYLOR: IT'S INTERESTING NOT ONLY WITH NETFLIX, BUT IT FEELS LIKE TECH IN GENERAL, THEY HAVE THESE CRISES WHERE THEY ORGANIZE WALKOUTS AFTER INTERNAL DISCUSSIONS WITH CEOS AND MANAGEMENT OVER ISSUES THAT THEY DO OR DON'T BELIEVE IN. CERTAINLY WITHIN THE TECH INDUSTRY, IT FEELS LIKE THIS HAPPENS A LOT. ROMAINE: ONE THING WE'RE TRYING TO GET
AT IN OUR TRIP OUT HERE TO THE MUSEUM IS THE INTERSECTION OF ALL THIS. YOU HAVE THE CONTENT CREATORS, THE PLATFORM, THE PEOPLE BEHIND THE SCENES. SOMETIMES, THEY ARE IN CONFLICT AND YOU WONDER HOW THEY MANAGED TO BRING IT ALL TOGETHER SO THAT YOU GET THE FINAL PRODUCT IN A WAY THAT -- IT'S FAIR. CAROLINE: WE HAVE JUST SEEN THE AVOIDANCE OF A WALK OUT MORE BROADLY THE COMMUNITY. BUT IT'S ON THE SCENES IN
MOVIES. THAT WAS MANAGED TO BE AVOIDED, BUT IN L.A. ON A DAY WE HAD TRAGIC NEWS OF THE FILM WITH ALEC BALDWIN WHERE AN EXCELLENT OCCURRED, LET'S NOW PIVOT TO OUR SPECIAL GUEST. HE IS THE FOUNDER AND
CHAIRMAN AND GLOBAL CHIEF OF HIS COMPANY. ALSO THE OWNER OF L.A. TIMES. HE IS A MEDIA MOGUL BUT ALSO A MAN HELPING FOSTER MEDIA PARTICULARLY HERE IN L.A.. LIKE -- WHAT'S IT LIKE TO MAKE SURE THAT THE NEWS OCCURS AND PRESENTED TO THE MARKET IN A WAY THAT MAKES SENSE TO YOU? >> TO TAKE THE BRAND TO A NEWS ORGANIZATION IS VERY EXCITING. WITH THEIR EXECUTIVE EDITOR, WE WILL BE ABLE TO SEE THE EVOLUTION OF THE NEWSPAPER. ROMAINE:
WITH REGARD TO APPETITE FOR THAT, PARTICULARLY AT A LOCAL LEVEL IN LOS ANGELES AND EVEN ACROSS THE COUNTRY, IS THE CONSUMER APPETITE STILL THERE? >> WE NEED TO ENGAGE. IN LOS ANGELES, WHERE THE SPORT CENTER OF THE COUNTRY WITH THE DODGERS, LAKERS, CLIPPERS, RAMS. WE HAVE THE MUSIC CENTER, THE FOOD CENTER, THE ENTERTAINMENT CENTER, AND NOW THE WEST COAST LEADS IN INNOVATION AND CLIMATE CHANGE. THERE ARE SO MANY AREAS THAT ARE SPECIFIC TO THIS REGION BUT ALSO WE LEAD THE NATION AND THE GLOBE AND THE OPPORTUNITY FOR THE L.A. TIMES TO REPORT ON THAT AND THE VOICE FOR THE PEOPLE HERE ON THE WEST SIDE OF THE NATION IS REALLY EXCITING. CAROLINE: WHAT'S AMAZING IS THE BREATH OF WHAT YOU COVER. TIN EWING TO FOSTER THE WORLD
OF MEDIA -- MEDIA AND NEWS ALSO THE WORK YOU HAVE DONE PREVIOUSLY. FIGHTING CANCER, ENSURING THAT VACCINES AGAINST COVID-19 ARE MORE ACCESSIBLE AND EMERGING MARKETS. CAN YOU TALK US THROUGH WHAT YOU'RE FOCUSING ON? >> WHEN I SOLD THE COMPANY IN 2010, WE EMBARKED ON A TENURE PROGRAM -- 10 YEAR PROGRAM. THE COMPANY NOW WHICH WE HAVE TAKEN PUBLIC IS THE COMBINATION OF DECADES WORTH OF WORK. COVID, WE WERE ALREADY IN 150 PATIENTS WITH OUR VACCINE AND CANCER AND WE VOWED TO EMBARQ ON ONE OF THE FIRST PREVENTATIVE CANCER TRIALS AND COLON CANCER. THE DATA THAT WE HAVE NOW WITH PANCREATIC CANCER, BREAST CANCER, LUNG CANCER, AND BLADDER CANCER VIOLATES -- ELEVATES THIS CONCEPT.
IF YOU ACTIVATE YOUR IMMUNE SYSTEM, YOU CAN CHANGE THE PARADIGM OF CANCER. WHERE USING THAT EXACT SAME APPROACH FOR COVID. IN ORDER TO ADDRESS THE PANDEMIC AND COVID, WE NEED TO STOP THE TRANSMISSION. ROMAINE: REALLY IMPORTANT STUFF. I WISH WE HAD MORE TIME WITH
YOU. WE APPRECIATE YOU TAKING THE TIME TO BE WITH US. THAT'S THE FOUNDER OF IMMUNITY BIO. WE ARE OUT HERE IN LOS ANGELES ATOP THE ACADEMY MUSEUM OF MOTION PICTURES. A BEAUTIFUL DAY. CAROLINE: PART OF THE MUSEUM HAS BEEN OPEN FOR A COUPLE OF WEEKS. WONDERFUL NEW EXHIBITS THAT YOU HAVE TO COME SEE.
GO ONTO INSTAGRAM, TWITTER. CHECK OUT THE BEHIND-THE-SCENES GOING ON HERE IN A LIGHT. THIS IS BLOOMBERG. ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS "BLOOMBERG MARKETS: THE
CLOSE." WITH CAROLINE HYDE, ROMAINE BOSTICK, AND TAYLOR RIGGS. CAROLINE: WE ARE LIVE FROM THE AMERICAN ACADEMY OF MOTION PICTURES. ONE HOUR LEFT IN TRADING. ROMAINE: WE HAVE A LOT TO TALK ABOUT IN TERMS OF WHAT IS HAPPENING IN THE MARKET AS WELL AS OUTSIDE THE MARKET. THE DIRECTOR OF THIS MUSEUM IS GOING TO JOIN US LATER THIS HOUR. CAROLINE: LET'S CHECK IN ON WHAT'S HAPPENING WITH THE MARKETS.
TAYLOR: I AM TRYING TO BE ALL OVER. WE'RE LOOKING AT THE WINNERS AND LOSERS. BOND YIELDS ARE FALLING ACROSS THE BOARD.
YOU ARE GETTING A MIXED. TECHNOLOGY IS THE LAGGARD ON THE DATE. IT'S PULLING DOWN EVERYTHING WITH IT.
MATTEL IS HIGHER -- IT WAS SNAP IS NOT HAVING A GOOD DAY. ONE OF THE WORST DAYS ON RECORD GIVEN THE SUPPLY CHAIN AND THE IMPACT FROM THE APPLE IOS SYSTEM. ANALYSTS ARE SAYING INTEL CONTINUES TO HAVE A SERIES OF PICKUPS BUT THAT MEANS IT'S GOOD NEWS FOR AMD. CAROLINE: THE MOOD MUSIC SURROUNDING THE MARKET IS ONCE AGAIN FOCUSED ON INFLATION. WHAT DOES THAT MEAN IN TERMS OF POLICY? JAY POWELL SOUNDS LIKE HE MAY BE MORE WORRIED ABOUT INFLATION THAN PREVIOUSLY THOUGHT.
>> NO ONE KNOWS WHERE INFLATION IS GOING TO BE NEXT YEAR. IF WE FORECAST TO RAISE THE RATE NOW AND WE DO THAT, THEN WE HAVE BRIDLED THE ECONOMY AND IF WE ARE WRONG AND INFLATION COMES BACK DOWN, THEN WE HAVE BRIDLED THE ECONOMY WITH MILLIONS OF WORKERS ON THE SIDELINES NOT ABLE TO COME BACK IN. THAT'S A COST TO THEM. THE OTHER THING I WOULD LIKE TO MENTION IS A COST TO US AS THE ECONOMY. CAROLINE:
HER BUTTON IS ALMOST AS NICE AS YOURS. ROMAINE: IT'S BEAUTIFUL. I SHOULD START THAT TREND. CAROLINE: MEANWHILE, WE TALK ABOUT THE TREND OF INTEREST RATES. IT'S WONDERFUL TO BE HERE LIVE IN CALIFORNIA WITH YOU.
>> I LIVE ABOUT FIVE MILES AWAY. IT TOOK ME ABOUT 90 MINUTES TO GET HERE. [LAUGHTER] CAROLINE: IT'S HILARIOUS HOW LONG IT TAKES TO GET EVERYWHERE. EXTRAORDINARY HOW LONG IT TAKES TO GET YOUR GOODS ANYWHERE AT THE MOMENT.
WE WERE AT THE PORT OF LONG BEACH YESTERDAY. HOW IS THAT INFECTING -- AFFECTING WHERE YOU INVEST? >> THERE'S NO QUESTION INFLATION IS THE PROBLEM OF THE DAY. THE THING ABOUT COVID IS, IT'S AN EQUAL OPPORTUNITY PAIN IN THE BUT. IT'S AFFECTING SUPPLY-SIDE AND DEMAND-SIDE. YOU HAVE PANDEMIC RELATED PICKED UP DEMAND ISSUES, LABOR SHORTAGES. THEN YOU ADD OIL AND WHETHER ON TOP OF THAT.
EACH OF THESE PRESSURES HAS A DIFFERENT SOURCE, A DIFFERENT HALF-LIFE. AND A DIFFERENT REMEDY TO JULIE. WE SEE THEM MAINLY AS TRANSITORY. THE LABOR WAGE ISSUE IS CLEARLY THE DOMINANT PRESSURE. CHAIRMAN POWELL NOTED THAT IN HIS COMMENTS. WE ARE THAT CAREFULLY. ROMAINE: LET'S TALK ABOUT CHAIRMAN
POWELL AND HOW THE FED REACTS TO THIS. DO YOU NORMALIZE FED POLICY IN THIS ENVIRONMENT OR DO YOU WAIT FOR MORE EVIDENCE? >> ACCORDING TO THE NEW PLATFORM, THE NEW TARGETING POLICY, THEY WILL HAVE TO WAIT A LITTLE LONGER. I DON'T PRETEND TO KNOW EXACTLY WHAT THEY ARE TAPERING. THAT LEAVES OPEN THE WINDOW FOR THEM TO HIKE MID 2022 IF NECESSARY. WE DON'T SEE IT COMING BEFORE THAT. THE INFLATIONARY PRESSURES THERE ARE DIFFERENT ONES AND MANY MAY SETTLE DOWN IN THE NEXT FEW MONTHS. CAROLINE:
MEANWHILE, YOU HAVE TO WHETHER THE TREND -- GYRATIONS IN THE MARKET. WE HAVE SUDDENLY PRESSURE ON YIELDS. WHAT DO YOU DO IN TERMS OF A MULTIPLE ASSET APPROACH? ARE YOU CHANGING THINGS FROM A MANAGEMENT PERSPECTIVE? >> WE REMAIN NEUTRAL ON OUR OVERALL VALUATIONS. THE GLASS IS HALF EMPTY HAVE FULL. I LOVE THE ARNOLD PALMER. IN YOUR FIXED INCOME PORTFOLIOS, HERE'S WHERE YOU CAN TUNE IT, DILUTE IN BETTER. WE REMAIN SHORTER IN DURATION. IN NOMINAL AND REAL TERMS. SHORT-TERM DIPS SO YOU'RE
COVERED ON THE INFLATION AND STRAIGHT ASPECT. ON THE EQUITY SIDE, -- ROMAINE: SO YOU ARE SHORTENING THE DURATION, BUT IS THE VALUE STILL THERE? >> YES, OUR STOCK BOND ALLOCATION, WE ARE STANDING AT WHATEVER OUR NEUTRAL OR STRATEGIC LONG-TERM ALLOCATION IS FOR THE PORTFOLIO WE ARE TALKING ABOUT. WITHIN THE EQUITY PORTFOLIOS, OR TRYING NOT TO GET TOO CUTE BY FIGURING OUT WHICH SECTORS HAVE PRICING POWER.
YOU DON'T KNOW WHICH OF THE INFLATION SHOCKS ARE GOING TO AFFECT THE EQUITY SECTORS. IF IT'S OIL, THAT'S DRASTICALLY DIFFERENT THAN IF IT'S SUPPLY. WE ARE LEANING TOWARD SMALL-CAP STOCKS.
YOU HAVE A VALUATION MORE ATTRACTIVE IN THAT SECTOR THAN POSSIBLY IN LARGER CAP SECTORS. THAT'S WHERE WERE LEANING. CAROLINE: IS GOLD WORKING FOR PEOPLE AT THE MOMENT? DARE I SAY CRYPTOCURRENCY. ARE YOU LOOKING AT MORE VARIED TYPE OF ASSET ALLOCATION? >> GOLD, A GREAT SAFE HAVEN. WHEN THE STUFF HITS THE FAN, GOLD IS ONLY PLACE TO GO. OR UNDER YOUR MATTRESS. YOU CAN'T MANAGE A PORTFOLIO TO THE WORST CASE SCENARIO. GOLD HAS BEEN AROUND A LONG TIME. BITCOIN IS NO GOLD.
IT IS NOT A SAFE HAVEN, QUITE THE OPPOSITE. ALTHOUGH IT APPEARS TO DO WELL ON THE PANIC HITS THE MARKET, I WOULDN'T ON BITCOIN FOR A SAFE HAVEN ASSET. THE ECONOMY IS DOING WELL. WE ARE RECOVERING. U.S. AND GLOBAL ECONOMIES, WE ARE RECOVERING NICELY. WE HAVE A LITTLE BIT OF FEVER IN TERMS OF INFLATION, BUT RECOVERING SMARTLY. U.S.
ECONOMIC GROWTH IS EXPECTED TO BE 5.5% IN REAL TERMS. THINK BACK TWO YEARS AGO, WE WOULD HAVE KILLED FOR 4% REAL GROWTH. OVERALL, WE ARE DOING WELL FOR RECOVERING ECONOMY.
NO REASON TO PANIC. CERTAINLY NO REASON TO RUN TO YOUR MATTRESS. CAROLINE: GREAT TO HAVE YOU HERE AND WE LOVE YOUR SENSE OF HUMOR. LET HIM GET BACK TO HIS HOUR AND A HALF COMMUTE FIVE MILES FROM HERE. TAYLOR: IN NEW YORK, WE CAN AVOID THOSE PESKY COMMUTES.
COMING UP, WE ARE KEEPING A CLOSE EYE ON THE MARKETS. OUR GUEST IS A FUND PORTFOLIO MANAGER. PLUS, WE WILL BE SPEAKING WITH CHIPOTLE CEO. HIS OUTLOOK FOR THE FOURTH QUARTER AND WHY BRISKET IS LEAVING THE MENU. AND WE WILL SPEAK WITH THE
COFOUNDER OF THE NATIONAL WOMEN'S SOCCER LEAGUE TEAM ANGEL CITY WITH HER PARTNER ACTRESS NATALIE PORTMAN. ALL THAT AND MORE COMING UP. THIS IS BLOOMBERG. TAYLOR: WE ARE COMING OFF THE HIGHS. WE HAD A RECORD HIGH YESTERDAY. WE ARE SIX POINTS FROM THAT. THE NASDAQ AND TECHNOLOGY IS THE UNDERPERFORMER TODAY. BOND YIELDS ARE FALLING. THAT'S TYPICALLY THE
RELATIONSHIP THAT WE DON'T SEE. VOLATILITY IS GOING NOWHERE. WHAT -- LET'S DO ALL OF THIS AND MORE IN OUR OPTIONS INSIGHT. JOINING US NOW IS FRANCIS STACY. WITH NO VOLATILITY, YET WE ARE NEAR RECORD HIGHS, WHAT IS THIS CLIMBING THE WALL OF WORRY? >> WE ARE IN EVERY DAY. EVEN THOUGH VOLATILITY HAS BEEN BACKING OFF, YOU HAD A LITTLE BIT OF UPTICK IN THE SKEW FROM OCTOBER 5 THROUGH 15TH. PEOPLE ARE BUYING OUT OF THE
MONEY PROTECTION. THAT'S CLIMBING THE WALL OF WORRY. STILL, I DON'T SEE MUCH SELLING MOMENTUM TODAY GIVEN THE FACT THAT WE HAVE JUST HIT ALL-TIME HIGHS. MARKETS HAVE MOSTLY PRICED IN
THE TAPER CONVERSATION AND THEY THINK THAT JAY POWELL IS GOING TO START TAPERING IN NOVEMBER. MARKETS ARE PRICING IN AND BALANCE SHEETS AND EARNINGS ARE ABSORBING THESE WORRIES QUITE NICELY. TAYLOR: ARE YOU TAKING ADVANTAGE THROUGH TRADE? WE HAVE BEEN LOOKING AT OIL A LOT. >> OIL IS INTERESTING BECAUSE OIL HAS LOW STOCKPILES AT THIS POINT. WITH INCREASING DEMAND. IF WE HAD PEAK DELTA VIRUS CASES IN Q3, WE HAD A POTENTIAL FOR RATE ACCELERATION FROM Q3 TO Q4.
THE LIKELIHOOD OF THAT WILL BE DEPENDENT ON THURSDAY GDP NUMBER. IN THAT CASE, YOU HAVE A LOT OF DEMAND WITH LOW STOCKPILES. THE LAST TIME THAT OCCURRED, OIL WENT UP TO $100 PER BARREL. TAYLOR:
WE ARE SEEING IT TRADE HERE WITH USO. CAN YOU WALK US THROUGH THAT? >> YES. IN THE SHORT-TERM, OIL IS OVERBOUGHT SO OUR TRADE IS NOT GOING TO BE DIRECTIONAL. WE LIKE USO.
WE ARE BUYING THE USO DECEMBER 17 56 CALLS AND PUTS. TAYLOR: WONDERFUL. WE APPRECIATE YOUR TIME. IT'S THE REFLATION TRADE THAT CONTINUES TO REMAIN EN VOGUE.
COMING UP, WE GOING TO TALK ABOUT INFLATION WITH CHIPOTLE. WE ARE LOOKING AT SHARES TRADING LOWER TODAY AFTER THE CHAIN BEAT TOP SALES ESTIMATES. WHAT'S COMING FOR THE FOURTH QUARTER? WE ARE GOING TO HEAR IT ALL FROM CHIPOTLE CEO. BUT BEFORE THAT, BEHIND THE SCENES WITH CAROLINE AND REMAIN AT THE ACADEMY MUSEUM IN LOS ANGELES. CAROLINE: THE MOVIE INDUSTRY, TV TRIBUTE A LOT TO THE ECONOMY. WAGES, JOBS, 90,000 COMPANIES SUPPORTED BY THIS. ROMAINE:
A LOT OF THAT IS DEPENDENT ON GETTING PEOPLE IN THE SEATS THEATERS. WE ARE AT THE ACADEMY MUSEUM IN LOS ANGELES. IT ALL STARTS WITH CONTENT AND THE FOLKS WHO MAKE IT. CAROLINE: WE WILL BE TALKING ABOUT THE FUTURE OF CONTENT. THE WAY IN WHICH YOU PAY FOR CONTENT AND THE CREATORS. PERHAPS TRIP TO ACTION.
TAYLOR: DOES THIS MEAN CONCERN OVER SHARES OF CHIPOTLE FOR THE FOURTH QUARTER. THEY ALREADY RAISED THEIR PRICES EARLIER THIS YEAR. WE ARE GETTING A PLANT-BASED CHORIZO.
NO MORE CAULIFLOWER RICE FOR ME. LET'S DO IT ALL WITH THE CEO OF CHIPOTLE. TALK TO US FIRST ABOUT FOURTH-QUARTER OUTLOOK. >> THANKS FOR HAVING ME. GOING FORWARD, WE ARE DEALING WITH A SIMILAR CHANGES -- CHALLENGES YOU ARE SEEING ACROSS THE INDUSTRY IT'S A DIFFICULT LABOR MARKET AND THE SUPPLY CHAIN CONTINUES TO BE UNDER PRESSURE. WE ARE PRETTY CONFIDENT ABOUT HOW WE CAN NAVIGATE THE HEADWINDS OVER THE COMING MONTHS.
AND KEEP OUR LONG-TERM PLANS IN PLACE WHICH IS GETTING AFTER $3 MILLION AVERAGE UNIT VOLUMES. ADDING OVER 3 MILLION RESTAURANTS IN THE FUTURE AND -- ADDING RESTAURANTS OVER THE FUTURE AND HAVING MARGINS TO GO WITH THAT. CAROLINE: YOU HAVE BEEN VERY TRANSPARENT ABOUT RAISING THEIR PRICES. BECAUSE YOU WANTED TO PAY MORE FOR LABOR.
WHAT ELSE ARE YOU HAVING TO COME UP WITH TO ATTRACT NEW PEOPLE TO COME UP WITH YOU AND NOT MOVE SOMEWHERE ELSE OR DEMAND HIGHER WAGES? >> ONE OF THE THINGS THAT WE HEAR RECENTLY IS IT'S A BIG DEAL. WE HAVE TO DO A BIG JOB OF COMMUNICATING THAT. AS WELL AS THE GROWTH OPPORTUNITY IN OUR COMPANY. THE IDEA THAT WE'RE GOING TO ADD 3000 RESTAURANTS MEANS YOU CAN GO FROM BEING A CREWMEMBER TO A MANAGER TO A MULTIPLE UNIT LEADER IN SHORT ORDER. THAT MEANS TREMENDOUS PROFESSIONAL GROWTH AND PERSONAL GROWTH. WE NEED TO MAKE SURE WE GET ACROSS THE GROWTH STORY FOR THEM AS MUCH AS THE GROWTH STORY FOR OUR COMPANY.
WE HAVE TO KEEP AN EYE ON WAGES AND THE BENEFITS WE PROVIDE. WE WANT TO BE A LEADER. WANT PEOPLE TO FEEL GREAT AND FULL OF PRIDE THAT THEY WORK AT CHIPOTLE. WE HAVE TO DELIVER THE TOTAL PACKAGE. WE ARE FORTUNATE THAT WE ARE COMPANY BASED ON THE SIMPLE PURPOSE OF FOOD WITH INTEGRITY. WE ARE ALSO FORTUNATE TO BE A COMPANY THAT HAS THE PRICING POWER AND THE BALANCE SHEET TO MOVE WAGES IF WE NEED TO AND HANDLE OTHER INPUT COSTS THAT MAY COME OUR WAY. ROMAINE:
ON THE LABOR ISSUE, WHERE YOU STAND WITH STAFFING? ARE YOU WHERE YOU NEED TO BE ACROSS THE STORES? >> WE ARE IN A PRETTY GOOD SPOT. THE BULK OF OUR RESTAURANTS, THE MAJORITY ARE STAFFED AND IN GREAT SHAPE. ALSO THE DIGITAL AND FRONTLINE BUSINESS. WE HAVE A COUPLE HUNDRED RESTAURANTS WHERE WE CONTINUE TO BE CHALLENGED WITH STAFFING AND THEY ARE SPRINKLED ACROSS THE COUNTRY. WE'RE WORKING CLOSELY WITH OUR TEAMS AND OUR LEADERS IN THOSE MARKETS TO GET THOSE RESTAURANTS STAFFED. IT TAKES DIFFERENT THINGS.
WE ARE DIGGING INTO IT AND MAKING SURE WE ARE PROVIDING THE RIGHT INCENTIVES TO GET PEOPLE TO JOIN THE BUSINESS WHERE WE ARE UNDERSTAFFED. THEN, RETAIN 100,000 EMPLOYEES THAT WE CURRENTLY HAVE. THAT IS EQUALLY AS IMPORTANT TO US TO DEVELOP AND RETAIN THE EMPLOYEES WE HAVE. TAYLOR: YOU PUT PLANT-BASED ITEMS ON THE MENU, ARE YOU GOING TO TAKE THEM OFF ARE YOU JUST TESTING OUT THE CONSUMER APPETITE? >> WE GOT TREMENDOUS INGREDIENTS AND I'M GLAD YOU LIKED THE CAULIFLOWER RICE. I WAS A FAN AS WELL.
THE PLANT-BASED CHORIZO IS GOING TO BE A LIMITED TIME OFFER AS WELL. IT IS FABULOUS. I HAD THE OPPORTUNITY TO GO TEST IT OUT IN A COUPLE MARKETS. I WILL GIVE YOU AN INSIDE TIP, THE CHORIZO WITH A LITTLE WHITE RICE AND SOME QUESO IN A BURRITO IS TOUGH TO BE. IT'S REALLY GOOD.
OUR GUYS DO A TERRIFIC JOB. WE WILL CONTINUE TO KEEP THE CURRENT INGREDIENTS DELICIOUS AND FIND WAYS TO BRING ON NEW INGREDIENTS WHERE IT MAKES SENSE. CAROLINE: WE WERE JUST DOWN AT THE PORT OF LONG BEACH YESTERDAY TALKING ABOUT EXTRAORDINARY THINGS GOING ON IN TERMS OF SUPPLY CHAIN. YOU TALKED ABOUT THE DIFFICULTY
NAVIGATING IT. WHAT ARE SOME OF THE MOST WHILE THINGS YOU ARE HAVING TO DO -- WILD THINGS YOU HAVE TO DO TO GET THINGS INTO YOUR RESTAURANTS IN THE U.S. OR ELSEWHERE? >> I CAN SEE THE PORT OF LONG BEACH FROM WHERE WE LIVE AND IT'S AMAZING TO SEE THE SHIPS SENDING OUT THERE WAITING TO GET IN. THE TEAM DID A GREAT JOB OF BUYING ADDITIONAL HVAC AND CHAIRS AND TABLES TO OPEN NEW RESTAURANTS SO WHEN WE REALIZED IT WAS GOING TO TAKE LONGER TO GET THESE GOODS, WE PRE-BOUGHT THEM SO WE COULD CONTINUE TO OPEN RESTAURANTS AT A GOOD CLIP. I HAVE TO HAND IT TO OUR SUPPLY CHAIN TEAM. OUR LEADER CARLOS HAS DONE FABLESS JOB WORKING WITH OUR PARTNERS TO BRING GREAT PRODUCTS BRISKET, BUT ALSO TO KEEP US IN STOCK WITH CHICKEN. WE ARE IN CONSTANT
COMMUNICATION WITH OUR KEY SUPPLIERS AND PARTNERS. KIND OF LIKE AN EVERYDAY EVERY WEEK THING TO HOW YOU CONTINUE TO KEEP THE SUPPLY FLOWING AND KEEPING OUR CUSTOMERS HAPPY AND KEEPING THE RESTAURANTS ROLLING. ROMAINE: GETTING CREATIVE. WE THANK YOU SO MUCH. THE CEO OF JUUL PUBLIC, STAY WELL. I AM MARK CRUMPTON. THIS IS BLOOMBERG. ♪ >> THE MOST CRUCIAL MOMENTS IN THE TRADING DAY.
THIS IS "BLOOMBERG MARKETS: THE CLOSE," WITH CAROLINE HYDE, ROMAINE BOSTICK, AND TAYLOR RIGGS. CAROLINE: LIVE FROM HOLLYWOOD AND THE ACADEMY MUSEUM OF MOTION PICTURES, TO BE PRECISE, THIS IS A SPECIAL EDITION OF "BLOOMBERG MARKETS: THE CLOSE." ENTERTAINMENT EDGE. I'M CAROLINE HYDE. ROMAINE: YOU CAN SEE HOLLYWOOD IN THE HILLS, IN THE BACKGROUND. WE ARE OVERLOOKING WILTSHIRE BOULEVARD ATOP THE MUSEUM.
WE HAVE HALF AN HOUR BACK IN THE TRADING DAY AND WE WILL GET BACK TO OUR CONVERSATION IN LOS ANGELES, BUT I WANT TO JUMP OVER TO NEW YORK, ALSO BEAUTIFUL, TAYLOR KEEPING AN EYE ON THE MARKETS. TAYLOR: WE ARE TRYING TO HOLD ONTO SOME OF THE RECORDS WITHIN THE S&P YESTERDAY. THERE IS A LITTLE MORE GREEN ON THE SCREEN THAN RED, BUT TECHNOLOGY IS ON THE BOTTOM AND DRAGGING EVERYTHING DOWN WITH IT. REAL ESTATE, UTILITIES, YOU NAME IT, ALL IN THE GREEN.
BONDS ARE CLIMBING, WHICH MEANS YIELDS ARE FALLING. I MENTION TO TECHNOLOGY, AND WOW, 100% ON THE DAY. SINCE IT LAUNCHED, 1128. $91 A SHARE.
GREW 1300%-SOMETHING IN SEVEN DAYS. LET'S TAKE A LOOK AT IT UPON MEET -- BEYOND MEAT. GETTING A REDUCED DEMAND ON SOME OF THEIR ORDERS WITH SUPPLY CHAIN ISSUES. NAVIGATING THE SUPPLY ISSUES PRETTY WELL. CAROLINE: LOVE THE INFORMATION. LET'S TALK ABOUT CALIFORNIA.
LARGEST STATE ECONOMY IN THE UNITED STATES. OUR GUEST KNOW SOMETHING ABOUT CAPITAL IN LOS ANGELES AND LOOKING FOR OPPORTUNITY ON TECH. SHE IS NATALIE PORTMAN'S BUSINESS PARTNER AND COFOUNDER OF THE FIRST MAJORITY WOMAN-OWNED SPORTS LEAGUE IN THE UNITED STATES. SHE IS ALSO SOMEONE VERY FOCUSED ON DIVERSITY. LET'S TALK FIRST AND FOREMOST ABOUT WOMEN-LED SPORT. IT IS TOTALLY CHANGING THE GAME HERE, AND I LOVE IT.
>> WELL, WE TOOK A LOOK AROUND AND STARTED OUT AS FANS, AND I WENT TO THE 2015 WOMEN'S WORLD CUP IN VANCOUVER AND TRIED TO BUY A BUNCH OF JERSEYS FOR MY DAUGHTERS -- I HAVE THREE DAUGHTERS, AS WELL AS WATCH CONTENT ONLINE. I COULDN'T FIND ANY OF IT. I AM ON A MULTIYEAR JOURNEY TO FIGURE OUT WHY AND I AM HAPPY TO TELL YOU MORE ABOUT THAT. ONE DAY NATALIE PORTMAN TEXTED ME AND SAID WHY DON'T WE START A TEAM, WHY DON'T WE BUY A TEAM? ANNALEE AND I HAD JUST GOTTEN TO KNOW EACH OTHER BY SUPPORTING THE PAY EQUITY -- NATALIE AND I HAD JUST GOTTEN TO KNOW WHICH OTHER BY SUPPORTING PAY EQUITY FIGHT. NATALIE BROUGHT HER ACTRESS FRIENDS BECAUSE THEY HAVE BIG INSTAGRAM FOLLOWINGS AND THE LIKE. IT STARTED AS PURE ACTIVISM
ENTERED INTO A BUTTERFLY EFFECT THAT TURNED INTO MORE WOMEN OWNERS COMING IN AND THE BUSINESS SIDE TAKING OFF. IT STARTED WITH FRIENDSHIP AND FANSHIP, AS PLAYERS LIKE TO CALL IT. ROMAINE: WHAT IS THE REACTION FROM THE FAN SIDE? KARA: IT IS ABSOLUTELY MIND BLOWING. I PINCH MYSELF EVERY TIME I WALK INTO LAX STADIUM. WE HAVE SOLD 11,000 SEASON TICKETS CAN WHICH IS MORE THAN SEVERAL OTHER PROFESSIONAL TEAMS IN LOS ANGELES. WE SOLD OUT PREMIUM SEATS IN THREE DAYS.
IT IS OUR COMMUNITY THAT MAKES THAT HAPPEN. WE SAW THEM IN THE STANDS WITH THE SIGN "BRING THE WOMEN TO L.A." AND THEY MADE IT ALL POSSIBLE. CAROLINE: IT NEEDS FANS BECAUSE THAT IS WHERE THE MONEY COMES IN. THE CONTENT HAS TO SELL TO BE ABLE TO REACH -- THAT HAS ALWAYS BEEN THE ARGUMENT, HASN'T IT, WHY WOMEN DON'T MAKE SO MUCH IN TENNIS. WHY WOMEN AREN'T MAKING THE SAME IN ALL SPORTS. THE ARGUMENT IS YOU NEED THE RIGHT SORT OF VIEWERS.
WHAT KIND OF ECONOMICS TELL YOU THIS IS WHY WE SHOULD HAVE EQUITY? KARA: SPORTS REALLY COMES TO THREE PRIMARY REVENUE STREAMS, WHICH YOU PROBABLY KNOW. SPONSORSHIP, TICKETING, MEDIA REVENUE. FOR YEARS, I WAS RUNNING AROUND SAYING WE DO BETTER IN ALL THREE OF THOSE AREAS AND PEOPLE SAID NO, NO, NO, PEOPLE DON'T WANT TO WATCH. ULTIMATELY WE JUST STARTED -- WE JUST HAVE TO BELIEVE THEY ARE WRONG. THE STAT I LEANED INTO WHEN I STARTED THE TEAM WITH NATALIE PORTMAN IS ONLY 4% OF SPORTS COVERAGE GOES TO WOMEN'S SPORTS.
IF YOU DON'T KNOW IT EXISTS, YOU DON'T KNOW TO BUY A TICKET CAN YOU DON'T GET THE SPONSORSHIP DOLLARS. IT IS EITHER A VICIOUS CYCLE OR A VIRTUOUS CYCLE. IN OUR INITIAL CASE WE SET AT LEAST A THOUSAND TICKETS. -- 8000 TICKETS. WE GET SPONSORSHIPS AT A
CERTAIN LEVEL. AND THAT WOULD MAKE THESE TEAMS WITH HUNDREDS OF MILLIONS OF DOLLARS. I AM HAPPY TO GO THROUGH OUR NUMBERS.
WE HAVE SHOWN THAT IN A COUPLE OF THE REVENUE STREAMS THAT HAVE -- AS HAVE OTHERS IN THE LEAG UE. CAROLINE: WE WERE TALKING TO BYRON ALLEN, WHO IS PERHAPS USING A MORE AGGRESSIVE STANCE TO PUSH FOR MORE ADVERTISING DOLLARS TO GO TO BLACK-OWNED MEDIA. HOW DO YOU SEE ADVERTISING DOLLARS AND SPONSORSHIP GOING TO WOMEN-OWNED MEDIA, BRANDS, ENTREPRENEURS? ARE WE STILL TALKING ABOUT TSUNAMI THAT IS YEARS AWAY? KARA: FROM A BUSINESS STANDPOINT IT IS FASCINATING, BECAUSE YOU HAVE TRADITIONAL SPONSORS THAT HAVE COME INTO SPORTS AND WE ARE FORTUNATE TO HAVE MANY OF THEM -- HEINEKEN, GATORADE, ETC. DOORDASH IS IRA JERSEY SPONSOR. IT IS AN 8-FIGURE DEAL, THE
LARGEST IN WOMEN'S SPORTS, AS BIG OR BIGGER THAN MANY ON THE MEN'S SIDE OF THE LEAK. WHAT WE ARE SEEING IS A WHOLE NEW WAVE OF SPONSORS COME IN. WE HAVE PEOPLE LIKE RITUAL AND COMPANIES LIKE THAT THAT HAVE NEVER COME IN AND SPONSORED SPORTS FOR, WOMEN'S FRIENDS. AND WE KNOW WOMEN'S CONSUMPTION IS MUCH HIGHER THAN MEN'S. WE ARE SEEING THAT CHANGE AND WE ARE SEEING AT ACROSS THE TECH LANDSCAPE AS WELL MORE ODDLY. ONE -- MORE BROADLY.
WE HAVE TRIED TO SHOW THAT IT GOES HAND-IN-HAND WITH CAPITALISM AND CREATES A VIRTUOUS CYCLE BIT FOR EVERYONE OF OUR SPONSORS WE DONATE 10% TO LOCAL COMMUNITY CAUSES. WITH DOORDASH WE ARE SOLVING FOR FOOD INSECURITY AND WE DELIVER 50,000 MEALS BY THE END OF THE YEAR AND IN OTHER PLACES WE ARE CREATING PATHWAYS FOR WOMAN PLAYERS TO GO INTO THE BUSINESS SIDE OF THE OPERATION. ANYWAY, YOU ARE SEEING DOLLARS GO INTO WOMEN'S SPORTS IN A WAY YOU HAVE NEVER SEEN IT HAPPEN BEFORE. ROMAINE: YOU'RE OBVIOUSLY A BIG PART OF THAT. KARA, REALLY GREAT TO SEE YOU.
UNTIL CITY COFOUNDER AND UPFRONT VENTURES MINUTE -- ANGEL CITY COFOUNDER AND UPFRONT VENTURES MANAGING PARTNER. CAN YOU GO DOWN TO THE CLOSING BELL IN NEW YORK. DON'T GO ANYWHERE. YOU ARE WATCHING BLOOMBERG. ROMAINE: THIS IS "BLOOMBERG MARKETS: THE CLOSE." WE ARE COUNTING YOU DOWN TO THE CLOSING BELL LIVE FROM LOS ANGELES, TOP OF THE ACADEMY MUSEUM OF MOTION PICTURES. CAROLINE: WE ARE TALKING ABOUT CONTENT, THAT BEING KING, LABOR ISSUES NOT JUST THE WORLD OF CONTENT, BUT RESTAURANT GROWTH, AND WHAT THE SUPPLY ISSUES MEAN FOR THE WORLD OF INVESTMENT. ROMAINE:
LET'S TALK ABOUT WHAT IS HAPPENING IN THE MARKETS AND GET PERSPECTIVE. A PORTFOLIO MANAGER JOINING US NOW, ALSO EDITOR OF "THE PRUDENT SPECULATOR." WE HAVE BEEN TALKING ABOUT THE ONE THING THAT IS ON EVERYONE'S MINDS IF YOU ARE AN INVESTOR, THAT IS INFLATION, NOT JUST WHETHER IT IS TRANSITORY, BUT WHETHER IT WILL HAVE A MATERIAL IMPACT ON PEOPLE ALLOCATING CLOSING >> THE INTERESTING THING IS IF YOU LOOK AT THE DATA, WHICH WE DO, WE ARE STUDENTS OF MARKET HISTORY, YOU SEE THAT HIGHER INFLATION RATES IS NOT A BAD THING FOR THE EQUITY MARKETS ON AVERAGE. THERE IS ALWAYS DIVERGENCE IN THE MAX AND MIN RETURNS. STOCKS HAVE DONE WELL WITH
HIGHER INFLATION RATES AND HIGHER INTEREST RATES. INTEREST RATES ARE EXTRAORDINARILY LOW TODAY. WHEN I MEAN HIGHER INTEREST RATES, WE ARE NOT TALKING 5%, 6%, 7% 10-YEAR TREASURY. INTEREST RATES ARE
EXTRAORDINARILY ATTRACTIVE AT THIS LEVEL AND MAKE STOCKS APPEALING. CAROLINE: WE ARE NOT GETTING CUTE, TO TURN OF PHRASE. TRYING TO PICK INDUSTRY WINNERS WITHIN THIS INFLATIONARY PRESSURE, BECAUSE YOU DON'T KNOW WHICH PART IS GOING TO POP NEXT. DO YOU AGREE WITH THAT? ARE PEOPLE NOT TRYING TO LOSE OUT IN ENERGY OR FOOD? JOHN: WE HAVE A BROADLY DIVERSIFIED PORTFOLIO TO BEGIN WITH, SO WE ARE NOT MAKING MAJOR SHIFTS IN OUR ALLOCATION BECAUSE OF INFLATION. ENERGY STOCKS HAVE GONE WELL
AND COMMODITY-EXPOSED STOCKS HAVE DONE WELL. IF YOU ARE INTERESTED IN GOLD, WHICH HAS NOT HAD A MASSIVE MOVE UP -- PEOPLE ARE WORRIED ABOUT INFLATION, BUT HE MIGHT THINK GOLD WOULD POP A LITTLE BIT FURTHER. THESE DAYS AGO CURRENCIES A-- CRYPTOCURRENCIES ARE A WAY CAN EXPRESS CONCERN. ROMAINE: DEFINITELY GOT TO GET YOUR
THOUGHTS ON CRYPTO. THAT IS MUSIC TO OUR EARS. A CONVERSATION WITH JOHN BUCKINGHAM, PORTFOLIO MANAGER FOR KOVITZ. ALMOST 1:00 P.M. IN LOS ANGELES AND 4:00 P.M. IN NEW YORK. CLOSING DOLLARS ARE UPON US. COUNTING YOU DOWN TO THE CLOSE FROM LOS ANGELES, NEW YORK, TO OUR VIEWERS WORLDWIDE, THIS IS BLOOMBERG.
CAROLINE: THIS IS THE COUNTDOWN TO THE COAST LIVE FROM THE ACADEMY MUSEUM OF OCEAN PICTURES. --MOTION PICTURES. BEAUTIFUL DAY IN HOLLYWOOD. I AM CAROLINE HYDE. ROMAINE: I AM ROMAINE BOSTICK MARKETS UNCHANGED ACROSS THE BOARD, TAYLOR. TAYLOR: I THINK ON THE S&P 500, TYPICALLY -- I JUST WANTED TO SHOW A WEEKLY CHART, ESPECIALLY THE BIG LOSSES WITHIN TECHNOLOGY. DOWN ABOUT ONE TO 1.5%. STILL UP FOR THE WEEK ACROSS ALL THE MAJOR AVERAGES FOR THE SECOND STRAIGHT WEEK. WE ARE POSTING BACK TO MY
GAINS, ROMAINE BOSTICK--BACK-TO-BACK GAINS, ROMAINE. ROMAINE: SO WHAT IS HIS PORTFOLIO MANAGER FOR --STILL WITH US IS PORTFOLIO MANAGER FOR KOVITZ. YOU IS TOUCHED ON CRYPTOCURRENCIES. THERE WAS A BROADER CONVERSATION ABOUT RISK-TAKING IN AN ENVIRONMENT WHERE MONETARY POLICY IS DISTORTED, FOR LACK OF A BETTER WORD, EVEN FISCAL POLICY TO AN EXTENT. JOHN: I'M STILL PARTIAL TO EQUITIES IN HIS ENVIRONMENT. THE FEDERAL RESERVE HAS BEEN SUPPORTIVE OF THE FINANCIAL MARKETS, OF COURSE, AND INTEREST RATES ARE STILL LIKELY TO REMAIN LOW, EVEN IF RATES DO MOVE UP SOMEONE. I'M NOT MAKING BIG SHIFTS OR
ANYTHING LIKE THAT. I THINK THAT STOCKS ARE ATTRACTIVELY PRICED WHEN YOU THINK OF THINGS FROM A DIVIDEND PERSPECTIVE. OUR PORTFOLIOS ARE YIELDING 2 TO 2.5%. THINK OF WHAT YOU ARE GETTING ON A BOND PORTFOLIO OR "SUPERSAFE" 10-YEAR TREASURY. STOCKS ARE ATTRACTIVE FROM AN INCOME PERSPECTIVE. CAROLINE: HOW TO YOU HEDGE THAT RISK? THE IMF IS TALKING ABOUT BOUTS OF VOLATILITY. JOHN: THAT IS PART OF THE PROCESS.
VOLATILITY IS NORMAL. 5% DECLINE HAPPEN THREE TIMES A YEAR AND 10% KLEINS HAPPEN EVERY 11 MONTHS. WHAT WE FOCUS ON IS GETTING THE ALLOCATION RIGHT IN THE FIRST PLACE AND ASSURING LONG-TERM INVESTORS ARE INVESTED PROPERLY. STOCKS RELATED TO THE MULTI-YEAR TIME HORIZON ARE GOING TO DO JUST FINE HERE, NOT WITHOUT SOME UPS AND DOWNS OF COURSE. NO REASON TO DUMP A STOCKS AND
BY SOME OTHER ASSET CLASSES. WHERE ARE YOU GOING TO GO THESE DAYS WITH YIELDS SO LOW? ROMAINE: I'M SURE YOU HAVE TO HAVE YOUR EYE ON THE BROADER MACROECONOMIC PICTURE, AND A LOT OF PEOPLE ARE TRYING TO GUESS WHERE WE ARE IN THIS ECONOMIC CYCLE, AND THAT FEEDS INTO THE MARKET CYCLE HERE. THE ECONOMY AS IT STANDS NOW DEFIED A LOT OF EXPECTATIONS WITHIN THE PANDEMIC AND EVEN COMING OUT. JOHN: EXACTLY, AND THAT IS THE POINT WE WOULD MAKE, PEOPLE ARE FRIGHTENED ABOUT ECONOMIC GROWTH, FOR-PROFITS, THE ELECTION A YEAR AGO AT THIS TIME WAS GOING TO BE THE END OF THE WORLD IF A DEMOCRAT WON IN A DEMOCRATICALLY-CONTROLLED CONGRESS. OBVIOUSLY, THAT HASN'T BEEN THE
CASE EVEN THOUGH THAT OCCURRED. STOCKS HAVE DONE JUST FINE. I THINK EQUITIES ARE A GREAT PLACE FOR LONG-TERM MONEY. SHORT-TERM, WHO KNOWS WHAT WILL HAPPEN IN THE NEAR TERM? SEPTEMBER WAS A DISMAL ONE. THE S&P 500 HAD ONE OF THOSE 5%
DECLINES. NOW WE ARE AT ALMOST AN ALL-TIME HIGH, CLOSE TO THE 30,000 NUMBER THE JAMES GLASSMAN PONTIFICATED IN 1999. CAROLINE: AND NOW WE ARE ABOUT TO HIT IT.
MAYBE YOU COULD MAKE AN HNFT. I'M CURIOUS HOW YOU CONVINCED YOUR CLIENTS TO REMAIN INVESTED. IS ANYONE WANTING TO GET INTO CASH? IS ANYONE NERVOUS? JOHN: EVERYONE IS NERVOUS ALL THE TIME, BUT THE WAY YOU TRY TO PROVIDE CALM IS PROVIDE DATA.
WE ARE OF MARKET HISTORY. RISING INTEREST RATES ARE BAD FOR STOCKS -- THAT SOUNDS GOOD FROM A TEXT PERSPECTIVE -- EXPERT PERSPECTIVE, MAY BE GOOD EQUITIES HAVE RISEN DESPITE -- CAROLINE: AREN'T WE IN UNPRECEDENTED TIMES? JOHN: WE ARE ALWAYS IN UNPRECEDENTED TIMES. YOU NEVER STEP IN THE SAME STREAM TWICE F HISTORY IS A GUIDE, NOT THE GOSPEL. TAPERING, THAT IS A BOGEYMAN FOR PEOPLE, BUT IF YOU GO BACK TO 2013, 2014, WE HAD A THREAT OF TAPERING, AND JANET YELLEN'S FED DID TO TAPER, AND THE RUSSELL 2000 VALUE INDEX MADE 50% FOR THE TWO-YEAR TIME SPAN. ALSO THINGS WILL SCARE INVESTORS, BUT TRY TO TAKE -- LOTS OF THINGS WILL SCARE INVESTORS, BUT TRY TO TAKE A CALM VIEW OF THINGS. WE WILL GET TO DOW 50000 AND SEVEN YEARS EVERY HAVE A NORMAL RETURN FROM WHERE WE ARE TODAY. NOT EXCESSIVE RETURN FROM JUST
NORMAL. ROMAINE: WHAT ABOUT OVERALL ALLOCATIONS? WE HAVE A LOT OF CONVERSATIONS ABOUT THE TRADITIONAL 60-40 PORTFOLIO. A A LOT OF PEOPLE SAY THEY ARE STILL STICKING BY IT. MAYBE THE DURATION ON THE 40 IS A LITTLE BIT SHORTER, BUT THE ACTUAL ALLOCATION ON THE PERCENT BASIS REMAINS THE SAME. JOHN:
WE LOOK AT IT AND SAY YOU WANT TO DO 120 MINUS YOUR AGE FOR YOUR ALLOCATION RATHER THAN 100 MINUS YOUR AGE. PEOPLE ARE LIVING LONGER, PEOPLE NEED INCOME FROM YOUR PORTFOLIO. LET'S SAY OK, I WANT TO GET OUT OF EQUITIES AND INTO FIXED INCOME TODAY. YES, BONDS ARE SAFER, BUT INTEREST RATES ARE LIKELY TO RISE, THAT IS GOING TO HURT THE PRICE OF THOSE BONDS. OBVIOUSLY, HOLD THEM TO MATURITY, BUT YOU CAN'T HAVE A VERY LOUSY REAL RETURN BECAUSE OF THE INFLATION THAT WE ARE SEEING. EQUITIES ARE GOING TO ALLOW YOU
TO KEEP UP WITH INFLATION. MOST INVESTORS, THEY SHOULD BE THE LION'S SHARE OF THEIR LONG-TERM ALLOCATION. SHORT-TERM, CASH AND SAFER THINGS, BUT LONG-TERM, EQUITIES ARE THE PLACE TO BE. CAROLINE: LOCAL LONG-TERM PERSPECTIVE. JOHN BUCKINGHAM. TAYLOR, ALL ABOUT THAT 60-40. WHAT ARE YOU WATCHING IN TERMS OF THE WORLD OF ASSETS? TAYLOR: WE ARE LOOKING AT BREAKING NEWS WE HAVE HERE. PISTOL BIOSCRIP HAS EXPRESSED INTEREST IN ART -- BRISTOL-MYERS SQUIBB HAS EXPRESSED INTEREST IN ACQUIRING A RIVAL BIOPHARMACEUTICAL FROM.
WE HAVE NO INDICATION ON THE PRICE, BUT THE COMPANY SPECIALIZES IN THERAPIES FOR SEVERE AUTOIMMUNE DISEASES. THIS IS ACCORDING TO THEIR WEBSITE. LOOKING AT ACQUIRING THIS FIRM BUT REALLY TRYING TO FIGURE OUT EXACTLY WHAT THE PRICE WOULD BE IF ANY. IT IS A BLOOMBERG SCOOP.
VERY WELL DONE BY A BLOOMBERG TEAM. LET'S LOOK AT OTHER MOVERS WE ARE FOLLOWING THAT HAVE BEEN TALKING ABOUT THIS STOCK. BEYOND MEAT, IT HIGHLIGHTS SUPPLY CHAIN. THEY SAW A DECREASE IN REGIONAL ORDERS A LONGER THAN EXPECTED BECAUSE THEY HAVE A DISTRIBUTOR THAT DID NOT MATCH UP TO THE LABOR NEEDS. THAT IS A LABOR SHORTAGE UNDERWAY. THEY ARE DROPPING 11.5%. WHY? INFLATION.
WE ARE TALKING FIVE-YEAR AND A 10-YEAR INFLATION AND THE BREAKEVEN EXPECTATIONS. 16-YEAR HIGH ACROSS THE CURVE. THIS HIGHLIGHTS THE PRESSURE WE CONTINUE TO SEE NOT ONLY ON THE SUPPLY CHAIN, BUT THE INPUT COSTS AS WE GET EARNINGS THAT TRICKLE WE ARE MOVING CLOSER TO THE CLOSING BELL. FULL MARKET COVERAGE HAPPENING RIGHT HERE ON BLOOMBERG. WE TAKE YOU TO THE BELL AND BEYOND. ♪ >> "BEYOND THE BELL," BLOOMBERG'S COMPREHENSIVE CLASS PLATFORM COVERAGE OF THE U.S. MARKET CLOSE, STARTS RIGHT NOW.
ROMAINE: RIGHT NOW WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK, CAROLINE HYDE IN LOS ANGELES, TAYLOR RIGGS IN NEW YORK COUNTY YOU DOWN TO THE CLOSING BELL. OUR GLOBAL SIMULCAST IS JOINED BY CAROL MASSAR AND TIM STENOVEC, BRINGING TOGETHER OUR AUDIENCE ACROSS RADIO, TELEVISION, YOUTUBE, AND BEYOND. CAROL: YES INDEED. I'M WATCHING THE FINANCIALS, BEST-PERFORMING MAJOR INDUSTRY GROUP IN THE S&P 500. THANK YOU, AMERICAN EXPRESS, BECAUSE THAT SUCK HITTING AN ALL-TIME RECORD. PEOPLE ARE SPENT--BECAUSE THAT STOCK HITTING AN ALL-TIME RECORD. PEOPLE ARE SPENDING AT RECORDS.
THAT HAS PUSHED THE FINANCIALS FIRE TODAY. TIM: THE FLIPSIDE IS WHAT IS HAPPENING ON THE NASDAQ. TECH STOPS, SNAP'S UNDERPERFORMANCE DRAGGING DOWN TECH AND SOCIAL MEDIA COMPANIES. GOOGLE'S INTEL DRAGGING DOWN THE NASDAQ RIGHT NOW. FACEBOOK AND AMAZON, TAYLOR. TAYLOR: IT IS INTERESTING YOU TALK ABOUT THAT BECAUSE TECHNOLOGY HAS BEEN THE UNDERPERFORMER TODAY. IT ACCELERATED WITH SOME OF THE FED COMMENTS WE GOT THIS MORNING OUT OF JAY POWELL.
WE HAD A GREAT CONVERSATION BETWEEN HIM AND FRANCINE LACQUA AND HE REITERATED THAT WE ARE ON FOR A TAPER, BUT NOTING THE INFLATIONARY EXPECTATIONS AND BOTTLENECKS ARE PRICED TO THE UPSIDE. YIELDS RALLIED ON THAT NEWS, BUT THEN TECH UNDERPERFORMED. CAROLINE: A LITTLE BIT WORRY ABOUT THE REACTION FUNCTION OF THE FED. ALSO, WE HAD THE SAN FRANCISCO FED SAYING THAT THIS INTEREST RATE ENVIRONMENT IS NOT READY FOR US YET. YOU CAN SEE THE BOARD FOR OUR TELEVISION AUDIENCE. NOT QUITE 36,000, BUT UP ON THE DAY. 74 POINTS.
S&P 500 IN THE RED. DOWN FIVE POINTS. COMING OFF THE RECORD HIGH. NASDAQ LOWER. DOWN 125 POINTS. WE ARE WATCHING THE RUSSELL 2000. WE CAN GO TO THAT. WE TALKED ABOUT THE POTENTIAL
OUTPERFORMANCE OF THAT CYCLICAL SECTOR. YOU LOOK AT THE RUSSELL 2000, WHILE. -- WOW. YES. CAROLINE: BRISTOL-MYERS SET TO TAKE A
TAKEOVER APPROACH. CAROL: THAT'S DOCTORS SHOT UP ALMOST 27%. WHAT THAT IS ONE OF THE OUTPERFORMANCE.
M&A ON TRACK FOR RECORD YEAR. WE SEE THOSE DEALS COMING IN. TAYLOR: YES. AMEX. WE LOOK AT THE SECTOR WINNERS AND LOSERS. YOU ARE RIGHT. DIVIDENDS AND BANKS. DESPITE YIELDS FALLING, THOSE TWO SECTORS ARE THE BEST PERFORMERS, UP 1.5%. MAY BE SOME OF THE BENEFITS
FROM THE PLATINUM CARD HELPING THAT COMPANY. DOWN TO THE DOWNSIDE. MEDIA IN SEMICONDUCTORS. VERY THIN. INTEL AND SNAP. CAROL: WHAT IS THAT AMERICAN EXPRESS PLATINUM CARD, $675 A YEAR? DIGITAL WORLD ACQUISITION CORP..
SOARING FOR A SECOND DAY, IT HAS SKYROCKETED 1225% SINCE AN ANNOUNCEMENT IT WILL MERGE WITH TRUMP MEDIA AND TECHNOLOGY GROUP. 107% TODAY. WE SAW MORE THAN A DOZEN TRADING HALTS AS A RESULT. ALSO, A HOT DOG AND HAMBURGER RESTAURANT MADE ITS TRADING DEBUT, UP ALMOST 29%. HAVING A MUCH BETTER FIRST DAY OF TRADING THAN YESTERDAY. MATTEL AS WELL. UP .6%. ALMOST 8% IN TODAY'S SESSION, THIRD-QUARTER QUARTER RESULTS EXCEEDING EXPECTATIONS. WORKING THROUGH BOTTLE TEX.
BRAZING -- BOTTLENECKS. RAISING GUIDANCE. WE WILL CATCH UP RIGHT HERE. TIM: I HAVE THE DECLINERS. SNAP. TAKING A TUMBLE TODAY. CHIP SHARES RECORD ONE-DAY DECLINE, DOWN CLOSE TO 27% FROM A 26.59%.
THE COMPANY WARNING APPLE DATA COLLECTION RULES ON SUPPLY CHAIN ISSUES ARE WEIGHING ON SPENDING. COMPANIES WILL CUT DOWN ON ADVERTISING IF THEY'RE HAVING TROUBLES GETTING TO CONSUMERS AS A RESULT OF HIGHER CAUSE. FACEBOOK LOWER. TWITTER LOWER. WE WILL GET EARNINGS NEXT WEEK. MORE DETAILS. INTEL SAYING PROFITABILITY WILL TAKE A HIT DUE TO INCREASED SPENDING ON MANUFACTURING TO KNOLOGY. THE COMPANY DOWN MORE THAN 11.6%.
THE CEO SAYING HE ONCE TO MAXIMIZE THE LONG-RANGE OF THE BUSINESS. BEYOND MEAT TAKING A HIT, SHARES DOWN MORE THAN 11%. THEY WERE DOWN AS MUCH AS 16% AFTER THEY REDUCED REVENUE GUIDANCE FOR THE THIRD QUARTER, CITING A DECLINE IN RETAIL ORDERS, OPERATIONAL CHALLENGES, ONGOING IMPACTS OF COVID-19. RETAIL IS IMPORTANT FOR THE COMPANY. THE TASTE FOR BEYOND, THE DEMAND IS NOT AS MUCH AS IT WAS A YEAR AGO. I KNEW YOU WOULD NOT LIKE THAT. >> WE WOULD DO TEX NEXT, YIELDS FIRST, TESLA ALMOST AS BIG AS FACEBOOK, DIGEST THAT FROM A MARKET CAP PERSPECTIVE, TAKE A LOOK AT WE ARE ON THE YIELDS, AND WHAT IS CRAZY, THIS IS TOTALLY HYPED THE ACTION, WHERE YOU DON'T AND MAYBE YOU DON'T REMEMBER AND TUESDAY, WEDNESDAY, THURSDAY, YIELDS, AND A BIG RALLY, SO IT LOOKS LIKE ON THE WEEK YOU ARE STILL DOWN OR UP SIX BASIS POINTS OR SO, BUT THIS HIDE SOME OF THE VOLATILITY WE GOT. WE WERE WORRIED ABOUT
INFLATION, BUT THEY SAY PERHAPS LOOKING AT IT. YOU GOT BONDS CAPTURING A BID. ROMAINE: YES. THAT IS SOMETHING TO WATCH. NEXT WEEK, WE WILL WATCH EARNINGS. THE BUSIEST WEEK OF THE SEASON. AT LEAST FOR LARGE-CAP COMPANIES. IT IS A LOT OF BIG TECH COMPANIES.
MAYBE WE SHOULD STAY IN CALIFORNIA FOR ANOTHER WEEK? CAROL: YOU ARE NEVER COMING BACK. WHAT A DAY TO BE HERE. TAYLOR: LOS ANGELES, THE MOVE, THE RECORD MOVE SNAP, YOU WOULD JUST CLEARLY, THE MANEUVER AND THE IMPACT OF APPLE, WE WILL SEE THAT HIT THE LIKES OF FACEBOOK, TWITTER. $150 BILLION WIPED OFF? RAMIFICATIONS ACROSS THE AD BUSINESS FOR ALL COMPANIES BY ONE COMPANY. TIM: THIS IS SOMETHING FACEBOOK HAD TALKED ABOUT FOR QUITE A WHILE, AND INITIATIVE. BUT MAYBE YOU MADE A GOOD POINT THAT SNAPS ADVERTISERS ARE BIG COMPANIES, WHERE AS A COMPANY LIKE HIS BOOK RELIES ON SMALL BUSINESSES FOR ADVERTISING, OR PERHAPS COULD NOT SEE IT AS BIG OF A HIT WHEN IT COMES TO SUPPLY CHAIN CHALLENGES THAT SNAP REFERRED TO BECAUSE OF THOSE SMALLER BUSINESSES ARE NOT SEEING THE SAME SUPPLY CHAIN CHALLENGES.
>> CAN WE TALK ABOUT THAT. A HUGE REPORT WAS PUT OUT, SAYING THEY WERE TALKING A LOT ABOUT FACEBOOK'S IMPACT FROM THE APPLE IOS SPACE, AND YES, WARNING PEOPLE, YES, WORRIED, AND SAYING SNAP IS CONSISTENTLY DOWNPLAYED THIS. THEY WERE PRAISING APPLE FOR THE CHANGES, THEN YOU GET THE NEWS LIKE YESTERDAY AND EVERYBODY'S LIKE, WHAT, YOU TOLD US THIS WAS NOT A PROBLEM? >> IT PLAYS INTO THIS BIGGER PICTURE. WE KNOW THAT CAROLINE AND ROMAINE YOU HAVE BEEN ON THE WEST COAST AND YOU SEE THE PORT PROBLEMS, DEMAND IS STRONG, WE SOUGHT IN THE AMEX NUMBERS, WE SEE THE CONSUMERS ARE BUYING, IT IS JUST THE SUPPLY CHAIN IS PREVENTING THAT DEMAND FROM BEING MAPPED, AND THAT IS WHAT IS GOING ON, AND LEADS TO SNAP, WHY WOULD YOU ADVERTISE IF YOU CANNOT MEET DEMAND, SO IT IS AN INTERESTING CONUNDRUM THAT THE ECONOMY IS DOING OK, DEMAND, CONSUMER SHOPPING, BALANCE SHEETS STRONGER THAN EVER, BUT DEMAND CAN'T BE MET. ROMAINE:
YEAH, ONE THING WE LEARNED YESTERDAY WAS ALL THE DISRUPTIONS WE TALKED ABOUT AT THE PORT, THEY ARE STILL ON PACE FOR RECORD YEAR. THEY ARE NOT HURTING IN THAT REGARD. CAROLINE: PERHAPS THEY WANT TO BE GOING OUT AND TRYING OUT NEW MODES OF COMMUNICATION WITH YOUR BUYERS. YES, YOU MIGHT STICK TO YOUR INSTAGRAM AND FACEBOOK, BUT WILL YOU GO THE NEW AVENUES, TO TALK, SNAP, WIN YOU'RE GOING TO RUN OUT OF GOODS, AND YOU'RE COMMITTED TO THE AMOUNT OF VOLUME YOU CAN TO BE ABLE TO PUT ON THE SHELVES. >> WHAT ARE YOU LEARNING IN LOS ANGELES, SUPPLY CHAIN, NETFLIX? CAROLINE: THAT THE TRAFFIC IS TERRIBLE. ROMAINE: EVERYONE KNOWS, THIS IS ON THE GROUND SHOE LEATHER REPORTING WE HAVE BEEN DOING OUT HERE IN LOS ANGELES ALL WEEK. WE ARE GETTING A NICE READ, NOT
ONLY ON THE ECONOMY, BUT REALLY ON THE IDEA OF WHAT THE NEXT STEP IS AND HOW PEOPLE ARE INVESTING. IS THAT SERIOUS ENOUGH? TIM: I HAVE SEEN YOUR INSTAGRAM. IT LOOKS LIKE YOU'RE HAVING FUN. >> HAS EVERYBODY HAD THE AAA BRISKET? >> NO. WE HAVE BEEN EATING MORE HIGH LEVEL.
>> OK. >> ALL RIGHT GUYS. >> HAVE FUN. >> SAFE TRAVELS.
>> WE LOOK FORWARD TO HAVING YOU BACK. THAT WOULD DO IT FROM BEYOND THE BIG, CROSS-PLATFORM COVERAGE. WE WILL SEE YOU AGAIN AND BE BACK ON THE EAST COAST ON MONDAY. >> MORE MARKETS COVERAGE IS COMING UP. CAROLINE AND ROMAINE WILL SIT DOWN WITH THE DIRECTOR AND PRESIDENT OF THE ACADEMY MUSEUM OF MOTION PICTURES AFTER A SUCCESSFUL LAUNCH TO THE PUBLIC IN SEPTEMBER. THIS IS BLOOMBERG.
♪ >> THIS IS A SPECIAL EDITION OF BLOOMBERG MARKETS THE CLOSE, LIVE IN LOS ANGELES. WE ARE AT THE LARGEST MUSEUM IN THE U.S. DEVOTED TO THE ARTS, SCIENTISTS, AND ARTISTS OF FILMMAKING. IT FINALLY OPENED ITS DOORS TO THE PUBLIC ON SEPTEMBER 30.
JOINING US NOW IS THE MAN BEHIND THE MUSEUM FROM A DIRECTOR AND PRESIDENT, BILL KRAMER. THANK YOU FOR HAVING US. >> THANK YOU FOR BEING HERE. ROMAINE: I ASSUME IT HAD TO BE A CHALLENGE GIVEN THE PANDEMIC TO OPEN. HOW WAS IT? BILL: THE PANDEMIC FORCED US TO MOVE THE OPENING A FEW TIMES, BUT WE KEPT CONSTRUCTION GOING THROUGHOUT THE PANDEMIC THANKFULLY, AND WE OPENED ON SEPTEMBER 30 AT 50% CAPACITY, WITH COVID PROTOCOLS IN PLACE, AND WE HAVE BEEN SOLD OUT EVERY DAY.
PEOPLE HAVE BEEN WAITING FOR THIS MUSEUM FOR 92 YEARS, SO THEY ARE READY. THEY ARE COMING. CAROLINE: DEMAND IS THERE. WHAT ABOUT THE PHILANTHROPIC GIVING IN THE WAY THIS CAME TO BE, HAVE PEOPLE BEEN WANTING TO DO THAT TO HELP IN THE ECONOMY, WILLING TO SUPPORT THE INSTITUTION? BILL: ABSOLUTELY. WE CLOSED OUR 388 MILLION DOLLARS CAPITAL CAMPAIGN LAST NOVEMBER IN THE MIDDLE OF THE PANDEMIC. WE HAVE HAD INCREDIBLE SUPPORT FROM THE INDUSTRY, BLOOMBERG, MANY OTHER PLACES, SO PEOPLE KNOW THERE IS VALUE IN A CULTURAL INSTITUTION DEVOTED TO MOVIEMAKING.
LOS ANGELES HAS WANTED THIS FOR A LONG TIME. ROMAINE: MOVIEMAKING HAS CHANGED A LOT FROM THE DAYS WHEN WE WERE KIDS AND WENT TO A PHYSICAL THEATER, OR MAYBE AN ART MOVIE. NOW PEOPLE HAVE THE OPTION OF PULLING UP NETFLIX, HULU AND WATCHING THE SAME THING THAT WOULD NORMALLY BE IN THE THEATER . HOW HAS THAT CHANGED THE INDUSTRY? GO: BOTH ARE IMPORTANT. THE MUSEUM BELIEVES DEEPLY IN THE THEATRICAL EXPERIENCE. WE ARE SITTING ON TOP OF THE 1000-C THEATER AND HAVE ANOTHER 288-C THEATER, SO WE HAVE SCREENINGS OF FILMS TIED TO OUR EXHIBITION SERIES, PROGRAMS, GENRES, BUT TED SORRENTO'S AS THE CHAIR OF OUR BOARD. WE KNOW THAT WE LIVE IN A WORLD
NOW WHERE STREAMING OFFERS AN INCREDIBLE AMOUNT OF VIEWING OPPORTUNITIES, EMERGING ARTIST CAN HAVE THEIR FILM SEEN BY SO MANY MORE PEOPLE AROUND THE WORLD MORE QUICKLY, BUT WE KNOW THE NATURAL EXPERIENCE WON'T GO AWAY, AND IT IS IMPORTANT TO SEE FILMS IN THE SETTING IN WHICH THEY WERE DESIGNED TO BE SHOWN. CAROLINE: WHAT ABOUT THE SUPPORT SYSTEM FOR THE ECOSYSTEM, WHETHER THE LABOR IN PARTICULAR AT THE MOMENT, AND INDEED, THERE IS CONTROVERSY ABOUT MOVIEMAKING , LACK OF DIVERSITY, WHETHER IT BE SUPPORT FROM A WAGE POINT OF VIEW, BUT ALSO A HEALTH-CARE POINT OF VIEW FOR THOSE HELPING TO MAKE THE FILMS BE ON THE CAMERA AND STARS. HOW DO YOU FEEL IT IS IN LOS ANGELES NOW IN THE INDUSTRY? BILL: ONE GOAL IS TO TELL BE DIVERSE, INCLUSIVE, EQUITABLE STORIES OF OUR HISTORY, LEGACY, THE ARTS, ARTISTS, AND IN ALL OF THAT, WE ARE CREATING A SAFE SPACE TO TALK ABOUT THESE ISSUES . THE INDUSTRY HAS SOMETIMES BEEN LESS THAN
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