♪ caroline: bloomberg's world headquarters, i am caroline hyde. romaine: another roller coaster ride for equities, but the s&p manages to close at a record high. joe: the question is "what'd you miss?" caroline: we are back worrying about the raids, the rotation, stimulus trade made a comeback

this friday as president biden touted his 1.9 trillion dollar relief package. the 10-year yield sending tech shares into the red. the dow and the s&p 500 extending record highs as a single value stocks continue to rally, but equities not the only places for certain records. we saw digital arts, and the millions of dollars. nfp selling for eye-opening funds. these alternative assets, joe. before we get to the alternatives, let's stick with the main asset classes and the correlation with yields spiking higher, tech following. joe: it raises the big question, why pay $69 million for a jpeg when you could get a 1.9% return on a treasury. art does not buy you

continue where attack and treasuries are really starting to look like in verse, or particularly real yields. you see the chart of 10 year yields rising. the nasdaq, weak. this relationship is starting to get really strong. romaine: i am disappointed that we do not have an nfp index on the terminal yet. joe: non-fundable treasuries is what we do have. let's bring in cross asset reporter kriti gupta, and you are one of the first on here to point this out, watch of the inverse correlation emerging and it seems it is getting stronger. kriti: it solidifies the fact that tech was a haven. at the end of the day, it was not just people betting on the stay-at-home action to happen forever which i think was the original narrative. now we are saying that it a safety play. globally, you saw global investors flocked attack in

2020. it was that relationship working so well to the upside now reversing. caroline: reversing. i am interested, today we have this talk of a tree trillion dollar -- $3 trillion apple or tesla, and how much in the short-term term do we feel this pain, but people talking in the long term how big players can manage to push through any issues of inflation or global synchronized growth. kriti: that is the bull case for attack right now. it is the longer term investment, eventually, we will hit an era, we are in a growth environment so why not invest in growth stocks. tech is going to be your place as they invest in things like electric vehicles and streaming, and some things that will remain and accelerate as parts of our lives. something to keep in mind, this temporary valuation trade and i say temporary because that is textbook, post economic

cycle. in the last cycle, how long did it take for this valuation trade to reverse and favor tech. that is the moment people are waiting for. romaine: people are looking at china and they are looking at the pullback. they are looking at the slowdown in growth in commodity prices and wondering whether that is trouble ahead for u.s. assets. kriti: a great point. you look at the 2008, 2000 nine recession, part of the reason the world economy rebounded in 2009 was this idea that china was actually creating massive infrastructure plan. they had a massive bid for commodities. this time around, the u.s. is playing that role. you have to keep an i on the commodities because china is a much bigger user of commodities than the u.s.. joe: next week, said, last time

we are from powell come he did not -- powell, he did not say anything about pushing down the rate curve. is that the expectation? kriti: that is the expectation but a lot of eyes are on the slr, which i did not realize was coming up until today. joe: but now we are all in on it. kriti: this could be the catalyst for that extended bond selloff. we were talking about yields hitting technical levels, needing a push to get higher to really skyrocket. whatever this is that push -- and that is the catalyst once again that we were waiting for out of biden but it comes out of the fed instead. romaine: for our viewers, stick with us. we will talk about yields, the fed, and we will bring in eia alpha partners. this is bloomberg. ♪

♪ romaine: this week coming to an end, and next week, we get the fomc meeting. inflation will be the center of attention. joe: wednesday is what the latest reporting is indicating. everyone is talking about inflation. it is not clear why we have to talk about inflation, because as you have already pointed out, inflation is a myth. it does not exist. not doing anything new. it is gone now but not at some new pace. caroline: it is not doing anything with a chart that says 240% increase on it. relatively niche chart, but we

are not as worried about as the chart might show. joe: joining us with more insights, macro strategist at eia alpha strategist. why are we talking about inflation? >> good question. one thing that has definitely changed its for the first time in a long time, fiscal policy is becoming dominant in the policy structure, but more generally, why are we talking too much about inflation? perhaps, we could see rents start to peak, at pick up, and that could move the oer part of the cpi indicator, but it will take some time. unemployment is high. let's not get ahead of ourselves. romaine: we joke a lot about inflation not being there, of course it is there, but the impact it is having on economic growth, the impact that is having on the markets for now is relatively minimal.

we are not going to become the next zimbabwe or venezuela. i don't think anyone is predicting that. even if we get to meaningful inflation at or slightly above the fed's target, is that really a death note for risk assets? naufal: i don't think so. maybe some risk assets that are very long and cash flows that are being projected into high present values currently, but generally speaking, i am skeptical on that notion. the bigger picture is the growth picture. that is a big tide that lifts all boats type of situation. caroline: talk about the growth picture because we have the federal reserve next week and again and again, jay powell has said it is about the unemployment data and getting everyone to make the most of this recovery. what then is the alarm bell for you in terms of risk asset? what should people be pegging themselves? naufal: those are three quick

hits. one, growth picture. the vaccine deployment continues to outperform expectations. everyone should be getting jabbed a lot quicker than we expected. two, in terms of the inflation or rates picture, we could see some stuff that gets shaken out, especially the speculative parts of the market. three, what would change my mind about when this becomes bearish for a risk assets -- for broader risk assets, that is always that is -- that is a ways a way. joe: let's go back to certain parts of the stock markets, you mentioned that perhaps, we saw

inflation build up a little bit, we might get some selling and part of the implicitly higher direction of the equity market. test lows, stuff like that getting hit pretty hard and especially relative to what people call value, financial, energy, and so forth. although it has been big lately, you zoom out 10 years, could that continue for a long time in your view, that rotation? naufal: yeah. the child care tax ca -- childcare tax element in the biden package is a big, big deal. that leg probably move. i like year dichotomy between growth and cyclicals. i do not think it's going to hit faangs as much. as soon as we get clarity that can move the term premium to a more normalized space, i think

the faang could do better. it is ironic because the same folks who push some of these high speculative growth names are inflationistas, and inflation could be their undoings. romaine: with the rotation we have seen, out of some of those names and into some of the stocks that would benefit from our reopening weather infrastructure, services industry types of names, there is a general sense that if you want safety, some of those names provide it. do you buy into that? naufal: safety? it is tough. as a risk taker, it is tough for me to consider anything safe. there is some semblance of the notion that there is a right place, right time situation. the bigger picture about what this boils down to -- we will

see services output absolutely crushed it. does employment keep up? was covid a labor intensity shot? that will be the bigger question to me in the medium-term, but in the near term, we are crushing it. as long as that is the case, i expect this to persist. caroline: has a risk taker -- as of risk taker, where are you allocating to, what do you see is outside opportunities? naufal: i am not sure that i have a lot of use out of people are not understanding. here and now, i am in the levered growth proxies. i think a lot of the access demand will leak abroad, but it will stay here as well. kind of the same cyclical type of exposures. one thing i would mention on top of that as well is -- look.

i do not expect the fed -- i expect the fed to be pretty bullish in their sep's, but dovish at the same time. even though i think that the fed is not going to be hiking that quickly, the asymmetries remain on the downside when you get to 2014, 2015. joe: on the fed next week, and we have seen the big selloff over the last few weeks across the curve with a lot of the tension and the so-called belly. do you think roughly the fed and the market are more or less in the same page, or is there still an under appreciation on the part of the market for how long the fed is willing to wait to raise rates, given what they want to see on the employment side? naufal: i think there is a push back on the flexible average

inflation targeting the fed has been pushing. in my opinion, probably a little overpriced, but when you go out to 2014 or so, there is uncertainty. that uncertainty is being reflected in the term premium. once you get further out the curve, it is more about the distribution of outcomes. caroline: really smart stuff. eia alpha partners, we thank you. we switch gears and we talk risk and wine. friday treats for romaine, we discussed the wine and spirit markets. this is bloomberg. ♪

♪ caroline: this week, president

biden marked the one-year anniversary of the pandemic in the u.s. the world health organization as well. globally, we have all gone through a lot. joe, it is almost ridiculous to say, but many were driven to having the old glass of wine while stuck at home, and many decided it was time to invest in wine. joe: a lot of people did what they had to do to cope and there is nothing wrong with that and wine was one of the things that people may have consumed more at home. wine indexes, it has done well. romaine: this is not just about people drinking, there are people that have a lot of free -- appreciation for this, and the pandemic gave them more time to focus. joe: true. romaine: doing your research. joe: joining us to discuss, jimmy ritchie. we have been hearing about wine

as an asset class for quite a while. people have been coming on. how much of what we are seeing now among all of these collectibles, sneakers, digital art, trading cards -- how much is wine catching a bid from that same wave? jimmy: wine's always been invested in for a long time. it is consumable, so there is a temptation to drink it. we think about half of what we sell worldwide and half is kept for future investment. people generally bite too much wine when it is available and you want choice and access. what we have seen in the spirit world is huge growth in that area and a few years back, it was 2% of our sales and now it has risen to roughly 20% of our sales. we have seen spirits driven by whiskey. caroline: let's talk about the under 40's right now,

millennials, and gen z, they were plowing through the wine on the evenings while it was dark and staying home for yet another evening, but they are buying as an investment. how much are you seeing the younger breed of investor? jamie: it is pretty significant. the younger buyers are coming into the marketplace. we have 48% of our new buyers were under 40. 75% under 50. it is very favorably, and we see that happening not just in europe, but we see it happening in asia and the americas. global phenomenon and people are interested in tasting these bottles and having experiences and sharing with friends. romaine: you mentioned whiskey, and there seems to be a broadening of interest and not space, something we had not seen at least relative to what we had

seen with wine for so many years. a lot of that is focused on traditional whiskeys from scotland and ireland, but we have also seen this expand other spirits as well. jamie: we sure have. it is led by scotch whiskey and closely followed by japanese whiskey for us. we have been selling out of our hong kong office, so the chinese buy the spirits, and that has been a significant part of our markets. we will be expanding back and sales in london pretty soon. selling some rum, so the market first. so overall across the globe has been interesting. joe: i am under the impression that what is trendy and art changes, and sometimes people like the old stuff and then they like the new stuff, and then the medium stuff. what causes trends to change in the wine world? what is hot right now? jamie: it is interesting because

bordeaux used to be about six to percent to 70% of our sales. we are about to publish our market report next week and that has come down to 26% from last year. risen from 18% to 20%, and spirits have risen from 0% to 20%. there is a movement towards elegance, balance, purity, and that is the epitome of that in the wine world is burgundy. the production levels are smaller so you have limited supply, so you have price increases in burgundy. bordeaux, super reliable and consistent, the price is relatively flat. in terms of spirits, there is a rarity factor. you get more per bottle, and you can drink it over several weeks and with several different people. you have this interest and

engagement around the world. i equate the taste, darker, heavier roast the light and more elegant roast and coffee, the same with wine. caroline: as a dunkin' coffee drinker, you are speaking joe's language. i remember a couple of years ago, the celebration that gen z do not particularly enjoy drinking as much, or did not seem to. perhaps into cbd, but not going into the highs that are linked with alcohol or the lows. is that something you are seeing or overtime as they grow older, they will want to invest even if they are not consuming? jamie: you have to have an interest and passion to invest

in wine. we do see a few people who do not touch it to invest in it, but i think it comes from the enjoyment of opening bottles and sharing them with friends. i am not sure about that aspect. there has been a criminalization of everything and that continues. we see people drinking, and they may drink less, but they drink better quality. the world of fine wine, even in the medium tears are pretty solid. at the bottom level of the wine markets, the less expensive end, your nonalcoholic drinkers, the cbd, there is lots of competition at that end, but as you graduate up to the finer wines, the market will remain strong. romaine: great stuff. what are you drinking tonight? jamie: [laughter] i am going to be drinking some ocalan because we are selling

this tomorrow at 9:00 a.m.. this is a bottle of mcallen, and it comes from the artist to they have collaborated with, and this is coming out to sell at 9:00 a.m. tomorrow morning. not this bottle, but i will be drinking the kind. joe: they won't know. thank you, jamie ritchie. what are you going to be dragging tonight, romaine? romaine: i have a nice little rye that i picked up a couple of weeks ago. wife is going out, i get the house to myself. caroline: wow, romaine and a rye. joe, what coffee will you be grinding up? joe: dunkin' beans that i bought around the corner. romaine: a man of the people. subscribe to our weekly podcast. you will find all of our best content, all the people that we

interviewed, a bunch of people -- listen to it wherever podcasts are available. caroline: that does it for "what'd you miss?" joe: bloomberg technology is up next with taylor. romaine: this is bloomberg. ♪

taylor: i'm taylor riggs into emily chang. microsoft and google trading punches at a congressional hearing. google saying microsoft assertions are diversions from