Latest / Bloomberg Intelligence / A Look Ahead To Monterey Car Week

Transcript

A Look Ahead To Monterey Car Week · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. I want to get
• 0:21
  Speaker 1: right over to Dave Major's. He is chief executive officer
• 0:25
  Speaker 1: Mikam Auctions, and they've got uh uh, the Micham Montgomery
• 0:29
  Speaker 1: Auction coming up August twelve through in what is now
• 0:33
  Speaker 1: a record setting collector car market. Dave, thanks so much
• 0:37
  Speaker 1: for joining us. Greg Jarrett had a nineteen fifty seven
• 0:41
  Speaker 1: MG a hardtop racing coupe and blew out the freeze
• 0:45
  Speaker 1: plugs one morning doing a hundred forty miles per hour
• 0:48
  Speaker 1: when he saw a cop suddenly let off changing compression
• 0:52
  Speaker 1: blow them all out. Can we find him another one?
• 0:54
  Speaker 1: I'm sure that we probably can do that. We don't
• 0:57
  Speaker 1: I don't think we have one in the Monterey lineup.
• 0:59
  Speaker 1: We certainly have a lot of interesting replacements if he,
• 1:03
  Speaker 1: if he so chooses, So let's let's talk about some
• 1:06
  Speaker 1: of that lineup. What do you think is the hottest
• 1:09
  Speaker 1: car that's going to be auctioned off in a couple
• 1:11
  Speaker 1: of days here. Well, you know, Monterey is always a
• 1:14
  Speaker 1: pretty unique event for us, and it's uh, this will
• 1:16
  Speaker 1: be our seventeenth events since we went back to auction
• 1:19
  Speaker 1: in in June. We've seen a lot of beautiful cars,
• 1:23
  Speaker 1: but I don't think I've seen a collection like I
• 1:26
  Speaker 1: have coming up Monterrey for the next three days Thursday,
• 1:29
  Speaker 1: Friday Saturday next week. And there's it's such an eclectic mix.
• 1:33
  Speaker 1: It's kind of one of those that whatever you're looking for,
• 1:35
  Speaker 1: there's you know, just in my mind the cars that
• 1:39
  Speaker 1: I look at that will be there. There's a nineteen
• 1:41
  Speaker 1: twenty nine Dusenberg Model J which is and it's a convertible,
• 1:45
  Speaker 1: which makes it very unique. And those you know, everybody
• 1:48
  Speaker 1: knows dus and Birds were spectacular vehicles to begin with.
• 1:52
  Speaker 1: They were in their day back in the nineteen twenties
• 1:54
  Speaker 1: and thirties, and and they still are today. But then
• 1:57
  Speaker 1: there's a couple of other, um, what I think are
• 2:01
  Speaker 1: going to be very interesting cars. In the eighteen fifty
• 2:03
  Speaker 1: two Ferrari three forty that raced a Lama too. Yeah,
• 2:08
  Speaker 1: the blue Car race to a fifth place finish. Um,
• 2:11
  Speaker 1: you know again, kind of a one of one car.
• 2:13
  Speaker 1: That's I think it's going to attract a lot of attention.
• 2:16
  Speaker 1: And my personal favorite, if you've seen any of the
• 2:19
  Speaker 1: pictures online at at mecom dot com, is the thirty
• 2:21
  Speaker 1: six Delahy Type one thirty five tier drop. If you're
• 2:25
  Speaker 1: familiar with Dela Hayes, uh, they Delahayes to me are
• 2:29
  Speaker 1: the epitome of art beauty. That's like the Ralph Lauren car, right,
• 2:34
  Speaker 1: Ralph Laurens exactly. There's just absolutely every one of them,
• 2:37
  Speaker 1: regardless of what model or yeared is. Every one of
• 2:40
  Speaker 1: the Dela Hayes is absolutely beautiful. And I think this
• 2:42
  Speaker 1: is this is probably the best one I've seen in
• 2:45
  Speaker 1: my career. So I'm I'm just excited to get to
• 2:48
  Speaker 1: Monterey and get out on Delmonte Golf Course and see
• 2:51
  Speaker 1: six hundred beautiful cars and and get get things underway.
• 2:54
  Speaker 1: I love the Ferraris. The three forty is amazing. You've
• 2:57
  Speaker 1: got a seventy two UM three sixty five Daytona that
• 3:02
  Speaker 1: looks quite cool at sixty five super fast UM which
• 3:07
  Speaker 1: which Kayley and I both love, but we're more into muscle.
• 3:10
  Speaker 1: You know. Kaylee's dad has a G t O. Yeah,
• 3:14
  Speaker 1: and oh yeah, God blas him. I'm looking at, you know,
• 3:17
  Speaker 1: the riviera. I like, big Al has a riviera. He's
• 3:21
  Speaker 1: got a sixty eight in polya convertible. Um that that
• 3:24
  Speaker 1: looks really nice. Who is big Al? I'm looking at
• 3:27
  Speaker 1: big Al's collection. He's got a lot of cars for sale. Yeah.
• 3:30
  Speaker 1: Actually I can't disclose that. I can tell you he
• 3:33
  Speaker 1: is from the Northwest, I see, and that's about us.
• 3:37
  Speaker 1: That's about as far as I can say. That's that's
• 3:40
  Speaker 1: why it's listed as the big Al collection. Well he's
• 3:43
  Speaker 1: got even though that's a pretty eclectic group of cars too,
• 3:46
  Speaker 1: because I think it, you know, as you mentioned, like
• 3:48
  Speaker 1: a riviera, but there's a law ferrari. Yes, so it's
• 3:52
  Speaker 1: you know, that's that's kind of one extreme to the other.
• 3:54
  Speaker 1: But well, for me, a riviera means you've got taste,
• 3:57
  Speaker 1: and a law ferrari means you have money. So we
• 4:00
  Speaker 1: just we just came from from our auction in Orlando,
• 4:04
  Speaker 1: Florida last weekend, and there was a collection of I
• 4:06
  Speaker 1: believe thirteen rivieras in that in that auction from one
• 4:11
  Speaker 1: collector and all of them meticulously restored, beautiful cars. So
• 4:15
  Speaker 1: how much are these going for him? I remember um
• 4:18
  Speaker 1: watching mikam auctions one morning, probably a decade ago, and
• 4:23
  Speaker 1: UM seeing a Barracuda go for like three point four
• 4:26
  Speaker 1: million bucks, and I was like, oh my god, unbelievable.
• 4:31
  Speaker 1: So so so what are we talking about for American
• 4:34
  Speaker 1: muscle It just seems amazing to me to see them
• 4:37
  Speaker 1: going for ferrari prices. Yeah, you know, it really depends
• 4:41
  Speaker 1: um and and certain models are hot at certain periods
• 4:44
  Speaker 1: of time. Corvettes are particularly hot right now. Depends on
• 4:48
  Speaker 1: the model, depends on the make, depends on the restoration.
• 4:51
  Speaker 1: But American muscle cars, you know, there are those that
• 4:55
  Speaker 1: you know, I might call beginner cars that from the
• 4:57
  Speaker 1: sixties and seventies that you know, you I be able
• 5:00
  Speaker 1: to get into for twenty dollars or less. And then
• 5:03
  Speaker 1: there are some that are in the millions of dollars
• 5:06
  Speaker 1: depending on what they are. And you know, the Hemi Kudas,
• 5:09
  Speaker 1: the Daytona coups Um, the super Birds. Those cars attract
• 5:14
  Speaker 1: a lot of attention and obviously attract a lot of
• 5:17
  Speaker 1: dollars as well. You know, here in New York the
• 5:19
  Speaker 1: Auto Show they just canceled yesterday because of concerns around
• 5:22
  Speaker 1: the delta variant. Do you expect any disruptions not just
• 5:24
  Speaker 1: at Monterey but in your events and auctions throughout the fall, Well,
• 5:27
  Speaker 1: that just means more bitters online. Well, we, as I said,
• 5:31
  Speaker 1: we came back to live auctions in June with a
• 5:36
  Speaker 1: revised eleven page safety protocol and a completely different business
• 5:40
  Speaker 1: model for for live auction events for live attended events,
• 5:45
  Speaker 1: and we we've become very good at executing on that model.
• 5:50
  Speaker 1: So we're prepared as Mikam Auctions, as we have been
• 5:54
  Speaker 1: for the last sixteen months, to to take whatever comes
• 5:57
  Speaker 1: our way. But we do see because of the delta
• 6:00
  Speaker 1: variant um going back, for instance, to the Orlando auction
• 6:03
  Speaker 1: last weekend, in the middle of that auction, the Mayor
• 6:06
  Speaker 1: of Orlando issued an indoor mass order, so we were
• 6:09
  Speaker 1: ready to comply with that. I don't think since Monterey
• 6:13
  Speaker 1: is an outdoor auction on the golf course, I'm not
• 6:15
  Speaker 1: really expecting much to change between now and then, But
• 6:19
  Speaker 1: certainly as we look forward to the rest of our
• 6:23
  Speaker 1: schedule and even into two with places like Dallas and
• 6:26
  Speaker 1: Chicago and Las Vegas. I think we're probably going to
• 6:29
  Speaker 1: see a little tightening of the of the restrictions. All right, Dave,
• 6:33
  Speaker 1: thanks so much for joining us. Always a pleasure to
• 6:35
  Speaker 1: talk to. Dave Major, chief executive at Mikam Auctions on Monterey.
• 6:39
  Speaker 1: Coming up, let's get over to Nick Freeling Highs and
• 6:44
  Speaker 1: right now bring it back to markets. He's managing director
• 6:47
  Speaker 1: at Shelton Trust. He's a portfolio manager of equities there
• 6:50
  Speaker 1: and Nick, you know, we we were talking with Brent
• 6:53
  Speaker 1: Shooty a little bit earlier, and he was pretty bullish
• 6:56
  Speaker 1: on UM, on the cyclical and also on you know,
• 7:02
  Speaker 1: smaller cap stocks as well as European equities, saying that
• 7:05
  Speaker 1: he thinks some of the money is going to come
• 7:07
  Speaker 1: back in from the bond market and from these super
• 7:10
  Speaker 1: growthy mega tech megacap tech stocks. What do you think
• 7:14
  Speaker 1: about that? Yeah, I mean I think that's first of all,
• 7:18
  Speaker 1: it's nice to be with you guys today, and thanks
• 7:19
  Speaker 1: for having me on UM. You know, I think that
• 7:22
  Speaker 1: that's perfectly possible if in fact we get a sharp
• 7:25
  Speaker 1: move higher and raps um, because I think that sort
• 7:28
  Speaker 1: of growth quarter to date has basically been dominating value
• 7:33
  Speaker 1: right by about three fifty basis points because I think
• 7:36
  Speaker 1: the concern more recently is sort of peak Garnians growth,
• 7:39
  Speaker 1: peak GDP growth peak, you know, easy bet, easy money policies,
• 7:43
  Speaker 1: and I think there has been sort of a return
• 7:45
  Speaker 1: to a focus on quality and sort of durable growth,
• 7:49
  Speaker 1: which is actually as a sort of a investment philosophy
• 7:52
  Speaker 1: is where children trust sort of focuses. But I think
• 7:55
  Speaker 1: that's perfectly possible. I mean, look, we're we're reasonably constructive
• 7:59
  Speaker 1: broadly in stocks, and you know, we have a lot
• 8:02
  Speaker 1: of clients asked as constantly sort are we in an
• 8:04
  Speaker 1: equity bubble? And um, I just think that, you know,
• 8:08
  Speaker 1: the liquidity backdrop here is it's really pretty extraordinary. It's
• 8:12
  Speaker 1: it's unlike you know, anything we've seen in a long time.
• 8:14
  Speaker 1: You've got corporate balance sheet sitting on over to trillion,
• 8:17
  Speaker 1: you've got consumer sitting on three trillion and nextss savings.
• 8:21
  Speaker 1: And then this morning the Journal found it interesting to
• 8:24
  Speaker 1: note that both JP Morgan and Bank America are talking
• 8:26
  Speaker 1: about sitting on one trillion and unused corporate credit. So,
• 8:30
  Speaker 1: I mean, I think that all bodes quite well for
• 8:33
  Speaker 1: people buying pullbacks in this market, but also for a
• 8:36
  Speaker 1: sort of an imminent capex cycle that could be coming.
• 8:40
  Speaker 1: So obviously there's a lot of money splashing around in
• 8:42
  Speaker 1: the system. Where do you think that money is going
• 8:46
  Speaker 1: to be going Not just obviously equities broadly is what
• 8:49
  Speaker 1: you think. But but where in the equity market do
• 8:51
  Speaker 1: you think is going to see the like the highest
• 8:53
  Speaker 1: returns going forward? Yeah, I mean, our focus really is
• 8:58
  Speaker 1: on durable growth and we like to owned businesses where
• 9:01
  Speaker 1: we don't feel like we need to rely upon sick lotality. UM.
• 9:05
  Speaker 1: So you know, I think that, um, it'll really sort
• 9:09
  Speaker 1: of depend on sort of the inflationary picture going into
• 9:12
  Speaker 1: next year. We sort of have a view that what
• 9:13
  Speaker 1: we're seeing currently in in inflation isn't sort of something
• 9:16
  Speaker 1: that's structural and going to be persistent. We actually think
• 9:19
  Speaker 1: a lot of the inflation is concentrated in sort of
• 9:22
  Speaker 1: a select group of goods. And I think if if
• 9:26
  Speaker 1: growth slows into two thousand twenty two, I think people
• 9:30
  Speaker 1: are actually going to return to a focus on quality
• 9:32
  Speaker 1: and growth. Um. And that's really sort of where our
• 9:35
  Speaker 1: bread and butter is and where we focus our investments
• 9:37
  Speaker 1: as a firm. What are you expecting in terms of
• 9:41
  Speaker 1: the jobs number on Friday and and really in terms
• 9:44
  Speaker 1: of jobs coming back throughout the rest of the year.
• 9:49
  Speaker 1: I mean, I think the print is sort of the
• 9:51
  Speaker 1: expectation as anything short of a million would be a disappointment. UM,
• 9:55
  Speaker 1: but you know, I think the return of labor is
• 9:57
  Speaker 1: a critical component, uh, to sort of putting some of
• 10:00
  Speaker 1: the inflation fears to rest, because I feel like UM
• 10:03
  Speaker 1: as a firm, we're sort of focused on this issue
• 10:06
  Speaker 1: that you know, consumers really never went through a recession
• 10:10
  Speaker 1: in two thousand and twenty. The sort of extraordinary thing
• 10:13
  Speaker 1: about it was, you know, disposable personal income was actually
• 10:17
  Speaker 1: up six percent, but then on the other side you
• 10:19
  Speaker 1: had sort of massive supply chain bottlenecks that were a
• 10:23
  Speaker 1: result of manufacturing and production really ramping down. Thinking that
• 10:27
  Speaker 1: it would be several years before we got back to
• 10:29
  Speaker 1: two thousand nineteen levels. Really, you know, the hope is
• 10:34
  Speaker 1: that we're going to see a lot of job growth,
• 10:35
  Speaker 1: you know, particularly in things like manufacturing and logistics, UM,
• 10:39
  Speaker 1: but as well in things like food service and what
• 10:42
  Speaker 1: hospitality and leisure, because I think that's a critical component
• 10:45
  Speaker 1: of sort of quieting this issue that we have with
• 10:47
  Speaker 1: sort of you know, inflation and availability of labor. Yeah,
• 10:52
  Speaker 1: so we know, the FED is watching the labor market
• 10:54
  Speaker 1: story and the inflation side of the story. And even
• 10:56
  Speaker 1: if inflation is transitory, a lot of companies are raising
• 10:59
  Speaker 1: prices is their face with higher input costs and they're
• 11:01
  Speaker 1: passing that right onto the consumer. Do you expect that
• 11:03
  Speaker 1: to remain the case in margins to hold in. Yeah,
• 11:07
  Speaker 1: So that's the big concern in the second quarter. I mean, look,
• 11:10
  Speaker 1: the second quarter earnings, corporate earnings have been fantastic. If
• 11:13
  Speaker 1: we are assigning classroom grades, I think it would be
• 11:15
  Speaker 1: a straight a. The concern is the ability to pass
• 11:19
  Speaker 1: on input costs inflation. So you know you're seeing sort
• 11:23
  Speaker 1: of in a in a case like floor rox this week,
• 11:26
  Speaker 1: you're seeing sort of that becoming a very big issue.
• 11:30
  Speaker 1: I would sort of contract that with you know, one
• 11:32
  Speaker 1: of our largest holdings of Sherwin Williams, where of their
• 11:36
  Speaker 1: of their costs of good sould is impacted by the
• 11:39
  Speaker 1: moodity inflation. Well they passed about seven ten to eleven
• 11:42
  Speaker 1: of that on in price because they can without an
• 11:45
  Speaker 1: impact on demand. So I think if you're investing, it's
• 11:49
  Speaker 1: critical to sort of be focused on on businesses that
• 11:52
  Speaker 1: have pricing power that can raise prices without a big
• 11:55
  Speaker 1: impact in terms of elasticity of demand. UM. But I
• 11:59
  Speaker 1: think look in the sex in half of this year,
• 12:01
  Speaker 1: comparisons are going to become more challenging. And I think
• 12:04
  Speaker 1: for the next three to four months the CPI readings
• 12:07
  Speaker 1: are going to be hot. So this is an issue
• 12:09
  Speaker 1: that will continue to be with us, and I think
• 12:11
  Speaker 1: the bestor is going to be focused on it. Nick.
• 12:13
  Speaker 1: Great to get some time with you. Really appreciate your insights.
• 12:16
  Speaker 1: Nick frielinghis in there is a managing director at Child
• 12:18
  Speaker 1: and Trust, where he's also a portfolio manager of equities.
• 12:24
  Speaker 1: Now we've been getting increasing headlines about the delay to
• 12:30
  Speaker 1: the return to work. Janet Elkin joins us right now, President,
• 12:32
  Speaker 1: chief executive officer Icon Medical Network out of Dallas, Texas.
• 12:37
  Speaker 1: And Janet, is this getting worse? You know? As we speak,
• 12:42
  Speaker 1: it seemed like, for example, for vaccinated people, UM, this
• 12:46
  Speaker 1: pandemic was kind of over. But now a lot more
• 12:49
  Speaker 1: breakthrough cases are scaring employers. There are, and of course
• 12:55
  Speaker 1: although in most cases breakthrough cases are not are not
• 12:59
  Speaker 1: here if they're not going to send anyone to the hospital. Still, overall,
• 13:04
  Speaker 1: we've got a lot more people that are getting sick
• 13:06
  Speaker 1: that are unvaccinated and the hesitancy is obviously causing issues.
• 13:11
  Speaker 1: And then people are also concerned I think about going
• 13:14
  Speaker 1: back to the office if they have younger children at
• 13:17
  Speaker 1: home as well. So let's talk about what the environment
• 13:19
  Speaker 1: is like in hospitals. I saw a story earlier this
• 13:22
  Speaker 1: week about the rising number of hospitals in Florida where
• 13:25
  Speaker 1: they're having serious staffing shortages. Something like thirteen percent of
• 13:28
  Speaker 1: facilities say they are short on vital personnel. Um is
• 13:32
  Speaker 1: this a situation that's going to get worse in terms
• 13:35
  Speaker 1: of the people who are caring for those who are sick.
• 13:38
  Speaker 1: I am concerned about it. You've got, as we also
• 13:41
  Speaker 1: burn out, right, so many different kinds of healthcare workers
• 13:44
  Speaker 1: that either took early retirement or just left because the
• 13:48
  Speaker 1: burden was too difficult for them, I think emotionally as
• 13:50
  Speaker 1: well as physically. But also realize that you've got so
• 13:54
  Speaker 1: many more patients. They're coming back in for things like
• 13:58
  Speaker 1: collective surgeries, so it would have been a busy time anyway,
• 14:02
  Speaker 1: people that postpone things, and then also the long callers,
• 14:05
  Speaker 1: So you've got all that going on along with the
• 14:07
  Speaker 1: rose the delta variant, and it's sadly a perfect dorm.
• 14:11
  Speaker 1: How much do we know about long haul covid um
• 14:15
  Speaker 1: It seems like one of those real concerns like chronic
• 14:19
  Speaker 1: lime disease that's just so hard to put your finger on. Well,
• 14:23
  Speaker 1: you're right, and and actually we don't there's a lot
• 14:25
  Speaker 1: we don't know, right. But I will tell you this
• 14:28
  Speaker 1: that the rise in demand that we've had for say,
• 14:32
  Speaker 1: pulmonary physicians or cardiology because of what we're seeing in
• 14:37
  Speaker 1: some patients with heart and lung is really causing that
• 14:41
  Speaker 1: kind of increase in demand um for us to be
• 14:44
  Speaker 1: able to provide physicians. Can we talk about we don't
• 14:47
  Speaker 1: know yet. Yeah, there's the return to office on on
• 14:51
  Speaker 1: one hand, and then there's what people have to do
• 14:53
  Speaker 1: in order to return the office. And a lot of
• 14:55
  Speaker 1: companies are mandating that their employees must be vaccinated in
• 14:59
  Speaker 1: order to do so. And we've seen mandates like that
• 15:01
  Speaker 1: put in for health care workers as well here in
• 15:03
  Speaker 1: New York State, where Matt and I are frontline medical
• 15:05
  Speaker 1: workers that work for state hospitals have to do that.
• 15:08
  Speaker 1: Is that the right policy? Well, I think it's a
• 15:13
  Speaker 1: question of do you want people to be safe and
• 15:16
  Speaker 1: what can we do to mitigate this? And so if
• 15:19
  Speaker 1: you've got the idea of healthcare workers, the people that
• 15:22
  Speaker 1: are there to protect and take care of patients, if
• 15:26
  Speaker 1: they have it, then it's a situation that you think,
• 15:28
  Speaker 1: how are we ever going to get out of this?
• 15:30
  Speaker 1: And I think that I think in most cases, the
• 15:33
  Speaker 1: majority of the healthcare workers that we deal with they
• 15:35
  Speaker 1: understand that. But you're right, it's accelerating across the country.
• 15:39
  Speaker 1: Literally every day, I'm getting more emails from clients to say,
• 15:43
  Speaker 1: all right now we're making a mandatory. Your physicians cannot
• 15:47
  Speaker 1: your nurses cannot come back to work unless they're vaccinated.
• 15:50
  Speaker 1: By the way, Janet, is I uh notice a resident
• 15:54
  Speaker 1: of uh sorry, a native of New York City, Right,
• 15:57
  Speaker 1: you're an Orange Man, and but you live in Dallas.
• 16:00
  Speaker 1: So I wonder if you're struck by you know, here
• 16:03
  Speaker 1: in New York everyone is vaccinated and no one's really
• 16:07
  Speaker 1: fighting back against it or or hesitant. And I would
• 16:10
  Speaker 1: gather that in states like Florida and Texas, um, you
• 16:14
  Speaker 1: have a lot more hesitancy. It's really incredible. On a
• 16:18
  Speaker 1: personal note, my dad, who was a New York resident,
• 16:21
  Speaker 1: died of the virus, and he would have been the
• 16:22
  Speaker 1: first in line had they had the vaccine um that
• 16:26
  Speaker 1: early on. But yes, In fact, it's interesting because two
• 16:29
  Speaker 1: of the three largest healthcare systems in the Dallas for
• 16:31
  Speaker 1: Warth area have put in mandatory vaccine requirements. The other one,
• 16:35
  Speaker 1: you too, Southwestern can't. Why can't they because the governor
• 16:39
  Speaker 1: of Overset state has said you cannot mandate it, and
• 16:42
  Speaker 1: they are a public entity. So it's interesting times here
• 16:45
  Speaker 1: on the governor of Florida has refused to declare a
• 16:48
  Speaker 1: state of emergency, and as a result, they're having difficulty
• 16:52
  Speaker 1: getting oxygen to the right places. There is enough oxygen there,
• 16:57
  Speaker 1: they just don't have the licensed drivers who are equipped
• 17:00
  Speaker 1: to carry oxygen. And uh, do you think that we
• 17:04
  Speaker 1: need more federal action here, Janet? I think we're going
• 17:09
  Speaker 1: to have to. I think that it's the only way
• 17:11
  Speaker 1: because think about when heartbreaking when you talk about oxygen, right,
• 17:15
  Speaker 1: but imagine in especially in rural areas where hospitals have
• 17:19
  Speaker 1: closed to begin with, it could take someone forty minutes
• 17:22
  Speaker 1: to drive to a hospital. You've got to be able
• 17:24
  Speaker 1: to have access for people. And I don't know if
• 17:27
  Speaker 1: we don't have more action, what's going to be able
• 17:29
  Speaker 1: to have. We can also hope that at the end
• 17:32
  Speaker 1: of the month, I believe that the FDA will finally
• 17:35
  Speaker 1: make this not emergency authorization anymore for the vaccine that
• 17:38
  Speaker 1: may help us as well with vaccine hasidency quick. We
• 17:42
  Speaker 1: just got twenty seconds here. Our healthcare workers paid enough
• 17:45
  Speaker 1: in the US. I'm normally in Germany and they are
• 17:47
  Speaker 1: definitely not there. I think in some cases, I think
• 17:52
  Speaker 1: that we are for physicians, for nurses. Overall, in we're
• 17:57
  Speaker 1: definitely in better shape than in some countries, but in
• 18:00
  Speaker 1: some very high demand areas like medical assistance to still
• 18:03
  Speaker 1: paying them not much more than minimum wage. That's going
• 18:06
  Speaker 1: to change, has to I guess if you want to
• 18:08
  Speaker 1: get them in in the door. Janet, thanks so much,
• 18:11
  Speaker 1: UM for your time. Really sorry for your loss, and Um,
• 18:16
  Speaker 1: I think we all appreciate what you're doing to help
• 18:18
  Speaker 1: the rest of us in this pandemic. Jan Elkin is
• 18:20
  Speaker 1: chief executive officer of Icon Medical Network. Let's get over
• 18:28
  Speaker 1: to Brent Shooty right now. Brent overseas more than two
• 18:31
  Speaker 1: billion dollars in retail assets, joins us on the phone
• 18:35
  Speaker 1: from Milwaukee. And you know, before we get to the
• 18:39
  Speaker 1: finer points of finance, you know the FED policy issues
• 18:43
  Speaker 1: rates inflation. Et cetera. I just gotta ask about, you know,
• 18:47
  Speaker 1: Robin Hood and Meme stocks. What's your take on all
• 18:50
  Speaker 1: this because we saw that um, you know, disappointing I
• 18:53
  Speaker 1: p O and then it doubled in the last two days. Yeah,
• 18:57
  Speaker 1: I think people focus too much on it. So it's
• 18:59
  Speaker 1: kind of interesting that it occurs. And certainly there's some
• 19:01
  Speaker 1: retail investors who are probably piling into these things and
• 19:04
  Speaker 1: pushing them back and forth. But hopefully from majority of
• 19:06
  Speaker 1: people listening to this call or on your radio station,
• 19:09
  Speaker 1: they'll focus on those finer points of finance that you
• 19:12
  Speaker 1: mentioned before, which I think are going to drive their
• 19:13
  Speaker 1: perfectly a longer term. So I do think at some
• 19:16
  Speaker 1: point some of these stocks are going to come back
• 19:18
  Speaker 1: to earth. Uh. And the question is when, probably not if,
• 19:22
  Speaker 1: And to me, if you have too much in those
• 19:24
  Speaker 1: you're going to probably not enjoy having that much of
• 19:27
  Speaker 1: them at some point in the future. We probably could
• 19:29
  Speaker 1: say a lot of that retail treading action is a
• 19:31
  Speaker 1: bit disconnected from the fundamentals. So let's talk about some
• 19:35
  Speaker 1: of those fundamentals when it comes to the FED. Obviously,
• 19:37
  Speaker 1: we have the jobs report tomorrow, and I'm wondering if
• 19:40
  Speaker 1: a strong jobs report is actually a bad thing for
• 19:43
  Speaker 1: this market. In that may that may mean a more
• 19:45
  Speaker 1: hawkish FED possibly, but I think, you know, maybe that'll
• 19:50
  Speaker 1: be the reaction tomorrow initially, but I think people will
• 19:53
  Speaker 1: get their heads and see that it actually means that
• 19:55
  Speaker 1: stronger economic growth on the way and more wages are occurring,
• 19:57
  Speaker 1: and the economy is pushing forward, and so that will
• 20:00
  Speaker 1: be certainly a reaction post FED. And I suppose that
• 20:02
  Speaker 1: if it's really strong, it could be that reaction, because
• 20:04
  Speaker 1: it could be the more hawky FED. But in general
• 20:06
  Speaker 1: I wouldn't trade that too much. I would think more
• 20:09
  Speaker 1: about what that means for the intermediate term, which is
• 20:12
  Speaker 1: stronger economic growth. Uh. And I do believe that inflation
• 20:15
  Speaker 1: will fall back, which I think clear is one of
• 20:16
  Speaker 1: the fears about the FED. Nonetheless, we still see rates
• 20:20
  Speaker 1: at well the tenure at one nineteen right now. If
• 20:24
  Speaker 1: I take a look at the real yield, as I've
• 20:27
  Speaker 1: been doing a lot more lately, I'm looking at negative
• 20:31
  Speaker 1: hundred and thirteen, but we worked out at negative one
• 20:33
  Speaker 1: two yesterday. Why, um, with your degrees in finance and
• 20:40
  Speaker 1: business and your cf A, why why do we see
• 20:43
  Speaker 1: rates this low? Well, I mean, I think you still
• 20:47
  Speaker 1: have central banks around the world still buying a lot
• 20:50
  Speaker 1: of bonds, which obviously puts downward pressure on yields in
• 20:52
  Speaker 1: many cases. I think you also have a lot of
• 20:54
  Speaker 1: fears in the market. And so if you think about
• 20:56
  Speaker 1: it in the way we've thought about it over the
• 20:57
  Speaker 1: past few months, is that we got to June and
• 20:59
  Speaker 1: we know where we're we thought we might be, and
• 21:01
  Speaker 1: everything was pushing that direction. So COVID cases were coming down,
• 21:04
  Speaker 1: economic growth was finally here, and then we got there
• 21:07
  Speaker 1: and people said what's next. And so you have a
• 21:09
  Speaker 1: cross current of fears that I think are out there.
• 21:11
  Speaker 1: You have too much crowd who's worried about inflation and
• 21:13
  Speaker 1: thinks that may cause the Fed to do something. You
• 21:16
  Speaker 1: have the two little crowd who's worried about the delta
• 21:18
  Speaker 1: Iron was worried about China rolling over, was worried about
• 21:20
  Speaker 1: peak economic growth. And last, but not least, you have
• 21:22
  Speaker 1: the too expensive crowd, who thinks that stocks are too
• 21:25
  Speaker 1: expensive and therefore there are for a fall. And I
• 21:27
  Speaker 1: think the meeting place of all those three cross currents
• 21:31
  Speaker 1: was in the ten year Treasure, because that is still
• 21:33
  Speaker 1: the safety place for markets. And when you combine that
• 21:36
  Speaker 1: with what the bet is doing. I think that put
• 21:37
  Speaker 1: the downward pressure on. I do think that will alleviate
• 21:40
  Speaker 1: as you move towards the end of the year, and
• 21:43
  Speaker 1: some of those fears prove out to be um not
• 21:45
  Speaker 1: so scary as what people imagine they may be. Eventually,
• 21:48
  Speaker 1: I think we push higher in the stock market, which
• 21:50
  Speaker 1: probably takes some money back out of the bond market
• 21:52
  Speaker 1: towards the stock market. But within the stock market, I
• 21:54
  Speaker 1: feel like you're seeing those growth fears show up as
• 21:56
  Speaker 1: well in that Now the NASDAC one hundred is up
• 21:59
  Speaker 1: on the year to date basis, and the small caps
• 22:01
  Speaker 1: are lagging. They're only up twelve percent. And I know
• 22:03
  Speaker 1: you like the small caps. Why do you think that
• 22:06
  Speaker 1: play is going to come back into favor. Yeah, I mean,
• 22:09
  Speaker 1: I think that's also what's interesting is it used to
• 22:12
  Speaker 1: be when the when people will worry about growth, it
• 22:14
  Speaker 1: was stocks versus bonds in some way, shape or form
• 22:16
  Speaker 1: more aggressively. Think about last year. Now I just think
• 22:19
  Speaker 1: we're at it's it's reopening trade versus not reopening trade,
• 22:23
  Speaker 1: or peak growth trade versus more growth trade. To me,
• 22:25
  Speaker 1: I think economic growth remains strong. I don't think we're
• 22:28
  Speaker 1: at a peak, I think we're at a plateau. If
• 22:31
  Speaker 1: I take you back to the I s M this week,
• 22:33
  Speaker 1: think about this. You have a ton of new orders
• 22:35
  Speaker 1: coming in, you have huge backlocks of order. You have
• 22:37
  Speaker 1: to chew through those before growth slows, and even then
• 22:40
  Speaker 1: you still have an inventory rebuilt because customer inventories are
• 22:43
  Speaker 1: at all time lows. Do you think about the one
• 22:45
  Speaker 1: point six trillion the next US savings upon consumer balance sheets?
• 22:48
  Speaker 1: I don't think that peak growth yet. And so if
• 22:50
  Speaker 1: you're not a peak growth, if real inter negative as
• 22:53
  Speaker 1: was mentioned earlier by Matt, if valuations are cheaper, and
• 22:56
  Speaker 1: if people are over invested in tech stocks and memestock,
• 23:00
  Speaker 1: I think there's a transition that has to go back
• 23:02
  Speaker 1: to cychnicals, value and small caps, which typically are beneficial
• 23:06
  Speaker 1: in that type of environment that I just laid out.
• 23:08
  Speaker 1: And I think that's going to be the trade towards
• 23:09
  Speaker 1: the end of the year of some of these years.
• 23:10
  Speaker 1: Uh kind of Ebb, it's very bullish, brent Um. You
• 23:14
  Speaker 1: know the the major index, right, what do you think
• 23:18
  Speaker 1: for the SMP year end? Well, I think the SMP
• 23:21
  Speaker 1: probably does the least of all the U S Indussies,
• 23:24
  Speaker 1: and I think there's actually an opportunity in the Eurozone,
• 23:26
  Speaker 1: and so you know, I think we're past the easiest
• 23:29
  Speaker 1: stage of a lot of the trades that we talked
• 23:30
  Speaker 1: talked about. Um, certainly those were trades that we've put
• 23:33
  Speaker 1: on for over a year. And just for reference, we
• 23:35
  Speaker 1: did take our equity ratio down a bit in June
• 23:37
  Speaker 1: to reflect the fact that a lot of the games
• 23:39
  Speaker 1: have made. But we're still overweight equities and we still
• 23:42
  Speaker 1: think there's opportunities, but I think returns more moved towards
• 23:45
  Speaker 1: the you know, the eight to ten return range, or
• 23:47
  Speaker 1: maybe even a bit lower on the larger indices. Was
• 23:50
  Speaker 1: still some opportunities in value small cap and even probably
• 23:53
  Speaker 1: more so in the Eurozone, whether they're just emerging from
• 23:56
  Speaker 1: delta um where their earnings are growing rapidly. In fact,
• 23:59
  Speaker 1: this may surprise some. Well, they're finally gonna overtake their
• 24:01
  Speaker 1: two thousand and seven pre h GFC high, so let's
• 24:05
  Speaker 1: take them that long. Um, that was a cheap market
• 24:07
  Speaker 1: that you did, the catalyst, and I think it has
• 24:08
  Speaker 1: it right now, all right, Brent, great to get some
• 24:11
  Speaker 1: time with you. Thanks very much for your insight. Brent
• 24:12
  Speaker 1: Shooty there, Chief investment Strategist, at Northwestern Mutual Wealth Management.
• 24:17
  Speaker 1: Brent overseas two and twenty billion dollars in assets, and
• 24:21
  Speaker 1: he is bullish stocks, but as he said, more the
• 24:24
  Speaker 1: small caps, cyclicals and what's going on in Europe. Thanks
• 24:29
  Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
• 24:32
  Speaker 1: and listen to interviews at Apple Podcasts or whatever podcast
• 24:36
  Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
• 24:40
  Speaker 1: Matt Miller three. On Fall Sweeney, I'm on Twitter at
• 24:44
  Speaker 1: pt Sweeney Before the podcast. You can always catch us
• 24:46
  Speaker 1: worldwide at Bloomberg Radiat