Latest / Bloomberg Intelligence / Trump Losing His Twitter Megaphone Would Be A Big Blow: SocialFlow CEO

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Trump Losing His Twitter Megaphone Would Be A Big Blow: SocialFlow CEO · Bloomberg Intelligence

• 0:01
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
• 0:04
  Speaker 1: with my co host of Bonnie Quinn. Every business day
• 0:06
  Speaker 1: we bring you interviews from ceo, market pros, and Bloomberg experts,
• 0:10
  Speaker 1: along with essential market moving news. Find the Bloomberg Markets
• 0:13
  Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
• 0:17
  Speaker 1: and on Bloomberg dot com. Well, yesterday was a busy
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  Speaker 1: day in Washington, to say the least, but it was
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  Speaker 1: also a busy day for social media platforms. Twitter suspended
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  Speaker 1: President Trump's Twitter feed for twelve hours, required deletion of
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  Speaker 1: the offending tweets, and then threatened a band. Facebook suspended
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  Speaker 1: the President's ability to post for twenty four hours, but
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  Speaker 1: said nothing about a permanent band. To get the latest
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  Speaker 1: on how the social media platforms are reacting to yesterday's news,
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  Speaker 1: we welcome to Jim Anderson, CEO of Social Flow. Jim,
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  Speaker 1: thanks so much for joining us here. So, you know,
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  Speaker 1: it's some pretty dramatic moves there by Facebook and Twitter.
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  Speaker 1: What do you make of it? Yeah, Paul, it is
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  Speaker 1: dramatic moves. I mean, in many ways we're unprecedented territory.
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  Speaker 1: I will say that a suspension is not yet a band.
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  Speaker 1: But there there's an air of inevitability to this that
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  Speaker 1: I haven't seen before, where you know, you've got a
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  Speaker 1: situation where the president was inciting violence. You know that
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  Speaker 1: that will be much discussed whether that was his intent
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  Speaker 1: or not, but certainly that was the outcome. And the
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  Speaker 1: social media platforms have always taken sort of refuge saying, hey,
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  Speaker 1: we we are not in a position to suppress the
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  Speaker 1: voice of a duly elected president. But now they you
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  Speaker 1: saw Twitter sort of move from one policy to another,
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  Speaker 1: say well, the threat of violence now has caused us
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  Speaker 1: to use this in a different light, and that's what
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  Speaker 1: led to the suspension. And so the real question in
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  Speaker 1: my mind is, you know, President Trump needs to sort
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  Speaker 1: of back down, and because Twitter said if you continue
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  Speaker 1: to do this, we may ban your account permanently. And
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  Speaker 1: when have we ever known President Sumps to back down
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  Speaker 1: from something? Yeah, I mean, is this something that is
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  Speaker 1: happening because he is the outgoing president at this point,
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  Speaker 1: so there is less at stake. Yeah, Bonny, without a doubt.
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  Speaker 1: I mean, he's got what thirteen twelve states left in office.
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  Speaker 1: And it's interesting, you know, outgoing presidents, or we'll call
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  Speaker 1: them former presidents traditionally in the United States have had
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  Speaker 1: sort of irrelevance. I mean, I don't mean that pejoratively.
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  Speaker 1: You know, that's sort of the nature. You retire, you
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  Speaker 1: become an elder statesman, You sort of after a while,
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  Speaker 1: write a book, you open a library, and that's about
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  Speaker 1: what you hear from former presidents. And I don't think
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  Speaker 1: anybody expects that from President Trump. You know, he's even
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  Speaker 1: you know, already teased the idea that he may run again.
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  Speaker 1: So he may be a former president and a future candidate,
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  Speaker 1: but once he is no longer president, and we're clearly
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  Speaker 1: coming up on the point where he is no longer president,
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  Speaker 1: you know, he's very clearly going to be treated with
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  Speaker 1: a different set of rules. And I think Twitter more
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  Speaker 1: specifically has been quite quite a bit more aggressive than
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  Speaker 1: Facebook and saying, look, we may just stand your entire account.
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  Speaker 1: So you know, I have a lot of folks on Twitter,
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  Speaker 1: on social media have been calling for Facebook and Twitter
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  Speaker 1: too permanently, been President Trump. And even Kara Swisher, one
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  Speaker 1: of the more of the New York Times, one of
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  Speaker 1: the more influential tech observers over the last couple of decades,
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  Speaker 1: has done the same here. What are the expectations post
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  Speaker 1: January twenty one or more of these social platforms might
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  Speaker 1: just in fact ben President Trump. Yeah, I think so.
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  Speaker 1: The first thing we need to do is we need
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  Speaker 1: to separate Twitter from Facebook. They are obviously two different companies.
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  Speaker 1: We tend to talk about them to theay what Twitter doing,
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  Speaker 1: What's Facebook doing? But but remember, you know, Facebook is
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  Speaker 1: you know, sort of twenty times larger or so than
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  Speaker 1: Twitter in terms of market cap. I just checked this morning. Um,
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  Speaker 1: and Facebook has got a lot more to fear from
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  Speaker 1: regulation and antitrust and those kinds of things than than
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  Speaker 1: Twitter does, just sort of simply from from the size
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  Speaker 1: and scale of their operation. You know, they're both private companies,
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  Speaker 1: and there's a case to be made that they can,
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  Speaker 1: you know, sort of choose to operate the platforms in
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  Speaker 1: whatever manner they see fit because it's private, you know,
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  Speaker 1: it's a private platform and private speech. Um, but I
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  Speaker 1: think Twitter is definitely being more aggressive. You know, President
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  Speaker 1: Trump has eighty nine million followers on Twitter. But to
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  Speaker 1: the degree he's ever had a social media superpower, it's
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  Speaker 1: not his ability to tweet. It's a need to get
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  Speaker 1: the media to cover what he tweets, and so if
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  Speaker 1: you take that megaphone away from him, which Twitter may
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  Speaker 1: very well do, um, he's going to have a really
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  Speaker 1: deep hill decline. Certainly, he's got many supporters. Seventy plus
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  Speaker 1: million people voted for him. It's not that he will
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  Speaker 1: become you know, irrelevant, but but you know, losing that
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  Speaker 1: Twitter megaphone would be a very significant load to him.
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  Speaker 1: Facebook similarly, he's got a large audience there, but he's
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  Speaker 1: not nearly as prolific on Facebook, and that doesn't seem
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  Speaker 1: to be able to drive the media narrative nearly as
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  Speaker 1: much as what he's tweeted has been able to do.
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  Speaker 1: What happens under a Biden presidency is Twitter as used?
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  Speaker 1: Do people still gather there too, you know, incite each
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  Speaker 1: other if you like. Well, the Twitter certainly will be used,
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  Speaker 1: and people do and probably still will incite on on
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  Speaker 1: on Twitter and do other things what you won't see
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  Speaker 1: as President Biden, of course tweeting like President front then, right,
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  Speaker 1: I mean it's just a completely different, uh personality. President
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  Speaker 1: He will be a user of social media, I'm quite certain,
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  Speaker 1: or at least his staff will, but but in a
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  Speaker 1: much less provocative way. Right, It's different kind of politicians.
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  Speaker 1: So I don't suspect that we will be having many
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  Speaker 1: conversations about what President Biden tweeted this morning like we
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  Speaker 1: have with President Trump. And so it's it's just it's
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  Speaker 1: sort of going to be a much more normal or
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  Speaker 1: traditional lot. I guess i'll call it view of the
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  Speaker 1: presidency and how they conduct, you know, briefings of the public.
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  Speaker 1: All right, Jim, thank you so much. Jim Anderson's always
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  Speaker 1: a pleasure to speak with you. Jim Anderson's CEO of
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  Speaker 1: a Social Flow and of course Bloomberg Media and other
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  Speaker 1: parts of Bloomberg works with Social Flow. That's just a disclaimer, Yeah, Paul,
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  Speaker 1: I mean I've been pretty you know, ignorant of Twitter
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  Speaker 1: over the last few days. I haven't really wanted to
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  Speaker 1: see the back and forth. I mean some of them
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  Speaker 1: are pretty graphic and and pretty nasty. Yeah, it really was.
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  Speaker 1: And there is a call for regulation, but you bounce
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  Speaker 1: that against the censorship issues, uh, And that's kind d
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  Speaker 1: of the challenge out there in the marketplace and for
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  Speaker 1: the regulators as well. Well. This week, among other things,
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  Speaker 1: we had Impossible Foods deciding to cut the prices on
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  Speaker 1: their foe meat or fake meat products by fift percent.
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  Speaker 1: Of course, so Impossible makes burger is essentially from a
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  Speaker 1: magic ingredient that is essentially modified yeast. Time to bring
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  Speaker 1: in Dennis Woodside, president of Impossible Foods, and Dennis, thank
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  Speaker 1: you so much for joining. It's been a busy day.
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  Speaker 1: I know that we just had news breaking that you
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  Speaker 1: now have an interim CFO as your previous gentleman went
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  Speaker 1: to app Harvest to head up a harvests. So I'm
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  Speaker 1: sure it's been a very busy few days for you.
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  Speaker 1: But talk to us about why you decided to reduce
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  Speaker 1: the price of your products by fiftcent at a time
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  Speaker 1: when it must be difficult to do that. Yeah, thanks
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  Speaker 1: for having me. So the price reduction is part of
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  Speaker 1: an ongoing strategy to get down ultimately to the price
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  Speaker 1: of of ground beef. So you have you have at
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  Speaker 1: the very high end products like wandboo beef and like
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  Speaker 1: nine bucks a pound. We're currently priced with this reduction,
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  Speaker 1: closer to what you would pay for grass fed. But
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  Speaker 1: ultimately we need to compete with the mass of the market,
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  Speaker 1: which is which is buying what's called ground beef, and
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  Speaker 1: that's even lower than where we are now. Uh, so
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  Speaker 1: you you should expect continuing price reductions from us over
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  Speaker 1: time as we get scale, and we can pass the
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  Speaker 1: benefits of that that scale onto our restaurant partners and
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  Speaker 1: onto consumers ultimately. Uh, Dennis, what's the elasticity there on
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  Speaker 1: the price cuts for you? It seems in this market
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  Speaker 1: that you've had pretty strong unit sales, perhaps strong enough
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  Speaker 1: that you don't need to cut prices. Give us a
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  Speaker 1: sense of how that dynamiccause working for you, guys. Yeah, yeah,
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  Speaker 1: you know the market isn't The elasticity is incredibly high.
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  Speaker 1: The vast, vast majority of of consumers purchase beef in
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  Speaker 1: the three to six dollar range, and we're we're just
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  Speaker 1: outside that now. Uh. We expect, as I said, to
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  Speaker 1: get down there over time as we continue to scale
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  Speaker 1: our production. Uh. If you think about the economies of scale,
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  Speaker 1: you know, you you build a plan or you stand
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  Speaker 1: up a supply chain. The more you put through that plant,
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  Speaker 1: the more lines you can run, the more ships you
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  Speaker 1: can run. Uh. You know, your fixed costs are just
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  Speaker 1: amortized over over a larger revenue base. And and so
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  Speaker 1: we've been able to as our as our productionist scale,
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  Speaker 1: as our volume scale, We've been able to get those
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  Speaker 1: economies over the last year. But we don't see that stopping.
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  Speaker 1: We just see our footwork continue to continue to expand
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  Speaker 1: and continue to pass that benefit onto onto our partners
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  Speaker 1: and consumers. Now, you said just at the end of
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  Speaker 1: last year that you're going to be doubling your R
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  Speaker 1: and D team over the next twelve months. Important to
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  Speaker 1: get into the Chinese market as well, to grow your
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  Speaker 1: base and also keep competitors at bay, like beyond meat
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  Speaker 1: and you know meat makers and other countries in the world.
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  Speaker 1: You've also had seven fundraising rounds. Where are you in
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  Speaker 1: terms of capital needs? We're we're actually quite quite good
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  Speaker 1: right now. We raised a couple hundred million uh in
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  Speaker 1: in May time frame, and then several million prior to
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  Speaker 1: that um. But look, you know, the market that we're
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  Speaker 1: going after is enormous. Our our mission is to replace
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  Speaker 1: all animal based protein products and that is a literally
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  Speaker 1: a one trillion pound market roughly four to over four
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  Speaker 1: trillion dollars globally, and and we're competing now in a
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  Speaker 1: relatively small part of it, which is primarily ground beef.
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  Speaker 1: We have a sausage product as well, but primarily ground beef.
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  Speaker 1: But we see opportunity in many other meat products. Um
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  Speaker 1: and you know it's not it's not a surprise that uh,
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  Speaker 1: ground steak, chicken, fish, all these are interesting to us
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  Speaker 1: over time. For us to be competitive in those those markets,
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  Speaker 1: we need to invest in R and D and create
• 9:52
  Speaker 1: the same kind of wow product that we did when
• 9:55
  Speaker 1: we launched The Impossible Burgher. Dennis talked to us about
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  Speaker 1: kind of your distribution directed tumor versus restaurants. Where are
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  Speaker 1: you now? You know, where do you want to be?
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  Speaker 1: Where's the real growth? Talk us about, you know, kind
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  Speaker 1: of your revenue story. Yeah, we're in over thirty thousand
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  Speaker 1: restaurants in the US. We're in over seventeen thousand retail
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  Speaker 1: doors and and that's up from like two hundred a
• 10:18
  Speaker 1: year ago. So we made a big move into retail
• 10:20
  Speaker 1: over the last year. But at the same time, we
• 10:22
  Speaker 1: have a limited products that we have to retail products
• 10:25
  Speaker 1: now most if you if you look at beef products,
• 10:28
  Speaker 1: you know, anybody's selling beefs to to a to a
• 10:31
  Speaker 1: retailer probably has ten to fifteen different skews. And we're
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  Speaker 1: in the process of building a much broader portfolio to
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  Speaker 1: go to to expand that retail presence. So it's still
• 10:41
  Speaker 1: even though we're we've we've got good presences, still pretty
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  Speaker 1: early days. There's well over three thousand restaurants in the US,
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  Speaker 1: and that's just the U S which is less than
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  Speaker 1: fiftent of all beef consumption. So it's very early days
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  Speaker 1: for the industry. You know, most of our consumers are
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  Speaker 1: are the vast majority, like of them are uh meat eaters.
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  Speaker 1: Uh and and they're shifting a small portion today of
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  Speaker 1: their meat um meat meat eating into plant based Over time,
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  Speaker 1: that share is just going to grow and grow as
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  Speaker 1: they see the benefits, the health benefits as well as
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  Speaker 1: the environmental benefits of moving to a plant more of
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  Speaker 1: a plant based meat UH diet Dennis and announcing this
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  Speaker 1: price reduction, Yours Books person said that now the lowest
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  Speaker 1: price for your burger product is six dollars and eight
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  Speaker 1: cents per pound. How much of that is pure profit
• 11:29
  Speaker 1: and much of what people are buying is basically, you know,
• 11:35
  Speaker 1: helped by private equity funding. Uh So the economic unit
• 11:41
  Speaker 1: economics of the business are quite good actually, and it's
• 11:44
  Speaker 1: not the kind of the case where this is you know,
• 11:46
  Speaker 1: we're selling at a loss. Um and like I said,
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  Speaker 1: at the the the growth of the business has has
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  Speaker 1: enabled us to get the scale uh in order to
• 11:56
  Speaker 1: in order to sell product at a at a reasonable margin,
• 11:59
  Speaker 1: but also reduced our prices. And you think about the
• 12:02
  Speaker 1: you know, the inputs that we we have to the
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  Speaker 1: product are our plants, and those plants are much lower
• 12:08
  Speaker 1: cost than than the animal because you don't have the
• 12:13
  Speaker 1: all of the um labor that goes into rating cows,
• 12:16
  Speaker 1: you don't have the transportation and so forth. So the
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  Speaker 1: unit economics are actually quite good, especially as you start
• 12:21
  Speaker 1: to get the scale. Hey, Dennis, thanks so much for
• 12:24
  Speaker 1: joining us. Really appreciate the update. Dennis Woodside, president of
• 12:27
  Speaker 1: Impossible Foods, based in Menlo Park, California, continuing to grow
• 12:33
  Speaker 1: that plant based food business. Well, there are many questions
• 12:39
  Speaker 1: that will need to be answered about what occurred in Washington,
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  Speaker 1: d C. Yesterday. Chief among them is security or lack
• 12:46
  Speaker 1: thereof that allowed the whole event to take place to
• 12:50
  Speaker 1: the scale at which it did, and we can maybe
• 12:52
  Speaker 1: begin to start answering some of the asking some of
• 12:54
  Speaker 1: those questions right now at Jordan Strauss, Managing director of
• 12:57
  Speaker 1: Business Intelligence and Operations for Cruell, which is a vision
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  Speaker 1: of Duff and Phelps based in Philadelphia, Jordan. Thanks so
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  Speaker 1: much for joining us here. The images we saw of
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  Speaker 1: the inability of the Capitol Police and the and the
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  Speaker 1: d C Police UH to secure the Capital grounds, and
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  Speaker 1: in fact it seemed at times some of the videos
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  Speaker 1: suggest that they were letting them in and not even
• 13:18
  Speaker 1: trying to stop the folks that were coming into the Capitol.
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  Speaker 1: What do you make of all that? Thanks Paul and
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  Speaker 1: happy to be here. Look what we saw yesterday was
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  Speaker 1: one of the darkest days in American history. This was predictable,
• 13:31
  Speaker 1: it was preventable, and it represents an almost total lack
• 13:34
  Speaker 1: of preparation. We should expect to see investigations about this
• 13:38
  Speaker 1: for probably generations to come, and changes in the near future.
• 13:43
  Speaker 1: I will tell you talking to our clients all over
• 13:44
  Speaker 1: the world about contingency planning in the last twenty four hours.
• 13:47
  Speaker 1: The big takeaway here is that there just didn't seem
• 13:49
  Speaker 1: to be any well what it's changed. Who's protecting the
• 13:52
  Speaker 1: capital today? So, Nnie, the Capitol Police are a very small,
• 13:58
  Speaker 1: but very elite unit that's a little bit unusual in
• 14:01
  Speaker 1: the American law enforcement inventory. Like the Supreme Court Police.
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  Speaker 1: They're one of the only two law enforcement organizations that
• 14:07
  Speaker 1: don't that aren't part of the executive branch. They work
• 14:10
  Speaker 1: for the Congress. So in order to get extra help,
• 14:14
  Speaker 1: in order to plus up, they need to get additional
• 14:17
  Speaker 1: resources from executive branch agencies. So another branch of the government. Similarly,
• 14:22
  Speaker 1: the Metropolitan Police Department in Washington doesn't really have jurisdiction
• 14:26
  Speaker 1: on the capital grounds because it's it's part of the
• 14:27
  Speaker 1: federal the federal sovereign. So what's so frustrating about this?
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  Speaker 1: And this was work I used to do along with
• 14:35
  Speaker 1: many many others in government that we do now for clients.
• 14:40
  Speaker 1: You know, the capital is a space that's very easy
• 14:43
  Speaker 1: to protect in the sense that we do it at
• 14:45
  Speaker 1: least every year for the State of the Union. And
• 14:47
  Speaker 1: there are these very complex, very well thought out plans
• 14:51
  Speaker 1: that the Federal Interagency puts together towards things that are
• 14:54
  Speaker 1: called national Security Special Events and s s s the
• 14:57
  Speaker 1: highest tier of of of the stick security events, so
• 15:01
  Speaker 1: things like the UN General Assembly, a presidential inauguration, the
• 15:04
  Speaker 1: State of the Union, sometimes the Super Bowl. Right, there's
• 15:07
  Speaker 1: a plan on the book that gets revisited every time
• 15:11
  Speaker 1: there's a new one. And I know that there's been
• 15:13
  Speaker 1: expensive planning going on for President of like Biden's inauguration
• 15:16
  Speaker 1: for at least the last couple of weeks. This is
• 15:18
  Speaker 1: something we should be good at, we should be well
• 15:21
  Speaker 1: practiced at, and we should be able to do in layers.
• 15:24
  Speaker 1: And given the threat environment that existed, the known threat
• 15:28
  Speaker 1: environment that existed going into yesterday, the fact that that
• 15:32
  Speaker 1: didn't happen is just beyond a belief. Jordan, Can I
• 15:34
  Speaker 1: just jump in and ask who gives that command? Because
• 15:38
  Speaker 1: right now we just learned the Chad Wolf is no
• 15:40
  Speaker 1: longer in position. He has resigned. He was the acting
• 15:42
  Speaker 1: Homeland Security director. Who who gives the orders and who
• 15:47
  Speaker 1: who will do it now in his absence? Sure, Vonny,
• 15:50
  Speaker 1: that that's a great question. So for things like national
• 15:53
  Speaker 1: security special events, which this was not, the Department of
• 15:56
  Speaker 1: Homeland Security through the Secret Service, is the lead coordinating agency.
• 16:00
  Speaker 1: So you know, for a planned, coordinated deployment of people,
• 16:04
  Speaker 1: like for the inauguration, it's usually going to be the
• 16:06
  Speaker 1: Secret Service coordinating a lot of local law enforcement in
• 16:09
  Speaker 1: the district Maryland, Virginia area, uh, and the entire sort
• 16:13
  Speaker 1: of arsenal a federal law enforcement I understand that the
• 16:16
  Speaker 1: FBI and the hostage rescue team got there relatively quickly
• 16:20
  Speaker 1: that the Metropolitan Police Department around the perimeters of the
• 16:23
  Speaker 1: capital is able to use what's called an iMac and
• 16:25
  Speaker 1: Emergency Management Assistance Compact to get two hundred troops from Virginia.
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  Speaker 1: As to who does this now, there has to be
• 16:32
  Speaker 1: a cognisant official, be it the Attorney General, the FBI director,
• 16:36
  Speaker 1: the Secret Service director, or others that agrees to send
• 16:40
  Speaker 1: their people in, or a National Guard deployment, which, although
• 16:42
  Speaker 1: it was delayed for reasons which I suspect, will be
• 16:45
  Speaker 1: investigated and will become clear uh in the coming weeks.
• 16:48
  Speaker 1: UM work closely with again the very elite but clearly
• 16:52
  Speaker 1: overmatched and overwhelmed officer and Capital police in a situation
• 16:56
  Speaker 1: like this, Jordan, what do you say to the argument
• 16:58
  Speaker 1: that perhaps a the less forceful defense of the Capitol
• 17:04
  Speaker 1: yesterday resulted in relatively fewer casualties than there might have
• 17:08
  Speaker 1: been had they taken a much stronger stance than in
• 17:11
  Speaker 1: fact it was. You know, I think there are four fatalities,
• 17:14
  Speaker 1: but it could have been so much worse. Is that
• 17:16
  Speaker 1: a reasonable argument to make? I don't understand why the
• 17:20
  Speaker 1: capital was not locked down? Uh? You know, a forceful
• 17:23
  Speaker 1: response doesn't have to look like shooting people. It doesn't
• 17:27
  Speaker 1: have to look like mass arrests. If you think about
• 17:29
  Speaker 1: these sorts of things in advance, it might look like
• 17:32
  Speaker 1: just making sure that the Capitol building is well secured,
• 17:35
  Speaker 1: and it should be well secured, because there were a
• 17:37
  Speaker 1: ton of upgrades after the September eleventh attacks, after the
• 17:39
  Speaker 1: first Capitol Hill shooting, uh, and after the tragic shooting
• 17:43
  Speaker 1: representatives police at a softball game making it harder to
• 17:47
  Speaker 1: penetrate and then pushing layers of security out. It's not
• 17:51
  Speaker 1: clear why those layers of security failed and why they
• 17:54
  Speaker 1: weren't stop leading into the capital. Yeah. I mean, we're
• 17:58
  Speaker 1: gonna have to fill some of these open positions, or
• 18:00
  Speaker 1: at least designate somebody to take on their responsibilities for
• 18:04
  Speaker 1: the next two weeks. Jordan's thank you so much for
• 18:07
  Speaker 1: giving us those explanations. It is very important to understand
• 18:10
  Speaker 1: the ins and outs of what actually happens. Jordan, of course,
• 18:13
  Speaker 1: managing director at a crull, former White House and a
• 18:16
  Speaker 1: Sea official and director of Preparedness in response for the
• 18:19
  Speaker 1: National Security Division of the U s d O j
• 18:21
  Speaker 1: and Jordan's strouss in Philly which also is you know,
• 18:24
  Speaker 1: very very divided right now Philadelphia, Pennsylvania, I should say,
• 18:27
  Speaker 1: with the final hurdle in counting electoral College votes last evening,
• 18:32
  Speaker 1: I do want to mention as well that the incoming
• 18:35
  Speaker 1: majority leader, Chuck Schumer has now called for the removal
• 18:38
  Speaker 1: of President Trump. Well, it is time to look cross
• 18:43
  Speaker 1: asset because as the NASTAG rises above at two percent,
• 18:46
  Speaker 1: we also have the tenure yield almost at one point
• 18:49
  Speaker 1: zero eight percent, we have a muted VIX and a
• 18:52
  Speaker 1: Donar index that's again approaching in ninety. It is time
• 18:54
  Speaker 1: to bring in Sarah Ponzac Crocess, that reporter here at Bloomberg. Sarah,
• 18:58
  Speaker 1: what catches your eye most day as an expression of
• 19:01
  Speaker 1: what's been happening in the country overnight, Well, it really
• 19:04
  Speaker 1: is remarkable, and it feels like you're in two different worlds.
• 19:08
  Speaker 1: Yesterday with the images of what we were seeing on
• 19:11
  Speaker 1: Capitol Hill, and then you look at what was happening
• 19:14
  Speaker 1: in markets before four pm, and yes, we saw some
• 19:16
  Speaker 1: pairing of gains in equity markets, but nothing too remarkable.
• 19:20
  Speaker 1: We didn't even see a loss of more than one
• 19:22
  Speaker 1: percent in to day. And it can seem cold, and
• 19:25
  Speaker 1: this is also almost an extension of what we've been
• 19:27
  Speaker 1: talking about for almost a year now with the real
• 19:31
  Speaker 1: economy with COVID nineteen and the stark differential when it
• 19:35
  Speaker 1: comes to financial markets. But when you speak with investors
• 19:39
  Speaker 1: on why we see this disconnect, why we're not seeing
• 19:43
  Speaker 1: these images really affecting investors moods is Peter Bookvar, he's
• 19:48
  Speaker 1: over ablicely advisory. I'll read you what he said this morning,
• 19:50
  Speaker 1: and he said it very plainly. He said, there should
• 19:52
  Speaker 1: be no mystery as to why the markets didn't care
• 19:54
  Speaker 1: about what happened in the capitol yesterday. However disturbing, disgraceful,
• 19:58
  Speaker 1: and embarrassing it was. It's because it is no bearing
• 20:00
  Speaker 1: on the direction of the economy, earnings, an in trace
• 20:03
  Speaker 1: interest rates. It's that simple. And like you mentioned, you
• 20:05
  Speaker 1: look at the tenure this morning, just continuing it's climb higher.
• 20:09
  Speaker 1: The tenure yield this morning is still up another more
• 20:12
  Speaker 1: than four basis points. Yeah, we're seeing the yield curve steping.
• 20:15
  Speaker 1: Easy point out, Sarah, and that's caused a couple of
• 20:17
  Speaker 1: strategists want a Glomo Sax and dud and Um Jonathan
• 20:22
  Speaker 1: Golubt credit Swiss to kind of upgrade their view of
• 20:26
  Speaker 1: the big banks right, and Jonathan Golove's view. He also
• 20:30
  Speaker 1: upgraded his view and his year in target for the
• 20:32
  Speaker 1: SMP five hundred from forty two hundred. And it was
• 20:36
  Speaker 1: an interesting take because he has been talking about how
• 20:39
  Speaker 1: this rotation from growth to value was possibly over. That
• 20:43
  Speaker 1: we had seen value out performance on a couple of
• 20:46
  Speaker 1: solid days, that those being the days in which we
• 20:49
  Speaker 1: got positive vaccine news when Janet Yellen was nominated to
• 20:52
  Speaker 1: be Treasury secretary. Whoever, today he's overweighting cyclical assets. Like
• 20:56
  Speaker 1: you mentioned, we see financials flying higher yet again and
• 21:00
  Speaker 1: today up more than two percent. But we do see
• 21:03
  Speaker 1: this interesting change today because you don't see this clear
• 21:06
  Speaker 1: cut cyclical defensive tilt. Yes, we do see defensive equities
• 21:12
  Speaker 1: under performing utilities pretty much flat on the day's staples,
• 21:15
  Speaker 1: your second worst performing sector, however, still higher at the
• 21:18
  Speaker 1: top of the pack, though you have tech and consumer
• 21:20
  Speaker 1: discretionary mixed in with financials. So after seeing tech under
• 21:24
  Speaker 1: performance yesterday, there are many reasons floated, especially with that
• 21:28
  Speaker 1: we want to call it a blue ripple. The expectations
• 21:31
  Speaker 1: from that, whether that be the possibility of higher capital
• 21:34
  Speaker 1: gains and corporate taxes, not that that's expected because the
• 21:37
  Speaker 1: Democrats did take the Senate by such a such a slim,
• 21:39
  Speaker 1: narrow margin, but also just the expectations for higher rates
• 21:43
  Speaker 1: since low rates have been such a boon for growth docks.
• 21:46
  Speaker 1: But today we see tech coming back in a pretty
• 21:47
  Speaker 1: big way. The NASDAC up more than two percent as
• 21:49
  Speaker 1: we speak. Yeah, and we also have plenty of movement
• 21:53
  Speaker 1: in credit markets. We have data coming in constantly showing improvement,
• 21:58
  Speaker 1: not so much payroll of data, though, we still have
• 22:00
  Speaker 1: you know, more than seven hundred thousand people making first
• 22:03
  Speaker 1: time claims. Sarah right, it's a reality check. And yes,
• 22:07
  Speaker 1: we did see initial jobless claims decline from a week earlier,
• 22:11
  Speaker 1: but that's still a very large number, seven hundred eight
• 22:15
  Speaker 1: seven thousand, it's it's extremely large. We saw a negative
• 22:18
  Speaker 1: ADP print tomorrow. Of course, we will get that non
• 22:21
  Speaker 1: Farm Perils report the first Friday of the new year,
• 22:24
  Speaker 1: the first payrolls report of the new year. At some
• 22:27
  Speaker 1: of those estimates have been downgraded brought lower after that
• 22:31
  Speaker 1: a DP print that we did get, but this also
• 22:35
  Speaker 1: is expected. Right now, we're seeing rising COVID cases. At
• 22:38
  Speaker 1: least now we have seen a stimulus package past and
• 22:41
  Speaker 1: and the expectation is for more stimulus down the pipeline
• 22:45
  Speaker 1: by a matter of one trillion in total. Possibly. But
• 22:48
  Speaker 1: where we stand now is this was expected. The data
• 22:52
  Speaker 1: is expected to get worse. It's going to be hard
• 22:54
  Speaker 1: to watch. But again, I know we've discussed it so
• 22:56
  Speaker 1: many times and we hear it again and again from investors.
• 22:59
  Speaker 1: And shotage is that the market is forward looking. It's
• 23:02
  Speaker 1: looking past this, and it's looking at a time when
• 23:05
  Speaker 1: the vaccine rollout really gets going, and the vaccine is
• 23:09
  Speaker 1: a majority deployed, and you have a very high savings right,
• 23:11
  Speaker 1: and all of a sudden, you have all this pent
• 23:13
  Speaker 1: up demand that starts being filtered through the economy. Yeah,
• 23:17
  Speaker 1: you wonder when you know, we see some of this, uh,
• 23:20
  Speaker 1: you know, economic data, whether it's the job's claims or
• 23:24
  Speaker 1: consumer spending start to cause some economists maybe to read
• 23:27
  Speaker 1: look at some other economic forecast, I know, the bloombrick economics.
• 23:31
  Speaker 1: Folks are looking for a slight contraction uh in the
• 23:34
  Speaker 1: first quarter. Um, I won there's any building concern about
• 23:37
  Speaker 1: downside risk? Is some of these economic forecasts well as
• 23:40
  Speaker 1: of right now, an aggregate, I would say, looking through
• 23:42
  Speaker 1: research notes, this morning from multiple different cell side research
• 23:46
  Speaker 1: shops and and reading notes from economists, they're not really
• 23:50
  Speaker 1: so focused. I mean, of course they put out their
• 23:52
  Speaker 1: forecasts for a near term economic data, but when they
• 23:55
  Speaker 1: look at GDP forecast for the year, everyone's revising their
• 23:58
  Speaker 1: GDP forecast higher. That due to the expectations of more
• 24:01
  Speaker 1: physical stimulus, more stimulus checks coming down the pipeline in
• 24:04
  Speaker 1: addition to the six D it will likely add up
• 24:06
  Speaker 1: to two thousand. Now that's the expectation and what that
• 24:09
  Speaker 1: means for growth, what that means for savings, and what
• 24:11
  Speaker 1: that means for the deployment of capital down the road
• 24:13
  Speaker 1: and spending. So right now, if you look at aggregate
• 24:16
  Speaker 1: for the year of one, and that's what markets are
• 24:19
  Speaker 1: looking at two, we're seeing growth expectations just revised higher
• 24:22
  Speaker 1: and higher. Yeah, it's really interesting here I'm looking at
• 24:25
  Speaker 1: the real GDP forecast on the economic forecast three point
• 24:29
  Speaker 1: nine percent one. Uh So, that's interesting how the economists
• 24:33
  Speaker 1: are still looking for growth. Hey, Sarah, thanks so much
• 24:36
  Speaker 1: for joining us. We appreciate that. As always, Sarah Pons
• 24:39
  Speaker 1: that cross asset reporter for Bloomberg News. As the markets Fannie,
• 24:43
  Speaker 1: despite everything we see in the world. They continue to
• 24:46
  Speaker 1: move higher, don't they. Yeah. I mean, as I say,
• 24:48
  Speaker 1: you can have all the political chaos that you want,
• 24:50
  Speaker 1: but if you have leadership, or at least the promise
• 24:52
  Speaker 1: of leaderships, there isn't that much to worry about for
• 24:54
  Speaker 1: the market. Son in a sense, if there's more stimulus coming,
• 24:57
  Speaker 1: which is the general consensus, if it's going to be
• 24:59
  Speaker 1: a buy Harris administration, then you know, at least in
• 25:02
  Speaker 1: the short term, that should be good for markets and
• 25:05
  Speaker 1: corporate America. Absolutely, and I think that's kind of what
• 25:07
  Speaker 1: we're seeing in the markets and what we've seen really
• 25:10
  Speaker 1: since O's marchalows. Thanks for listening to Boomberg Markets podcast.
• 25:14
  Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
• 25:18
  Speaker 1: or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm
• 25:21
  Speaker 1: on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm
• 25:24
  Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
• 25:27
  Speaker 1: always catch us worldwide at Bloomberg Radio.