caroline: i am caroline hyde. joe: i and joe weisenthal. romaine: let's get you to the day. bonds and stocks get bought. joe: "what'd you miss?" "what'd you miss?" caroline: a supercharge recovery driving those gains. u.s. retail sales and jobless claims outlining data that

surpassed forecast. a 10% increase in retail in march, the second largest gain going back to 1992. manufacturing coming back. the gauge improved to the strongest reading since 1973. thank you, philadelphia. meanwhile, there is a housing boom. soaring lumber prices. the market reaction, like everything rose. joe: s&p 500. 10 year treasuries rose. the yield was down. small caps. everything rallied. romaine: let's wonderful. joe: coinbase didn't rally. let's bring in our cross asset reported. the only thing weirder is treasuries. they rallied after a slew of data. what did your sources say? >> it was a weird day in bonds.

i have a few theories. this doesn't feel fundamental. the data told the same story. the first theory is we got data over not showing japanese buyers bought the most overseas bonds on a weekly basis since november. japan is the largest foreign holder of treasuries, so an important source of demand. the second theory is that there could be some short covering going on. one person from susquehanna was on the phone earlier and said the etf round, as well as the implied volatility, so that could be evidence there is a squeeze going on. if you look at short interest, it is close to the highs in four years. it was the consensus trade for months,. and that could be cracking now. caroline: china treasury

holdings hitting the highest since 2019, perhaps the japanese buying as well, so clearly demand. i'm interested in your perspective on the rotation trade. before every day it was energy, banks go higher in the market looks good in the economy is reopening, but today was the opposite. katie: whether this is a short covering squeeze or what is going on, that bond rally played out, tech and front leading everything higher, including the s&p 500. on a longer-term basis beyond today, it is still lacking on the year, but over the past month, that is your top performing sector. it is financials, energy, and that is interesting, because that is another consensus trade that goes alongside higher yields. you would expect to see the sectors do well. that is the story of the last month. it is the story up-to-date with

bank earnings that has not brought five back into the financials, not at all to jumpstart this rotation trade. there was some hope that maybe we get some strong earnings and we will see financials come back to life, but that is not happening. romaine: this is in the pit: space. there was a release that came out about an hour -- the bitcoin space. there was a release about another etf being brought in the changing its ticker to btc. we have had you on the show and talked about their ambitions to have a formal etf, something it does not have approval to do. what is going on? katie: it is interesting. grayscale said they are 100% committed to converting that into an etf when the time comes. to see him make this investment,

it caught a lot of people's attention. i talked to him, and they said it is part of their broader plan to bring etf's to the ecosystem, so it caught a lot of eyes, and it will be interesting to see what their plans are. romaine: something to watch. our cross asset reported over everything. coming up, signs of life in the u.s. retail economy, pre-pandemic levels, initial jobless claims, easy come the latest. this is bloomberg. ♪ ♪

romaine: welcome back. we are focused on the u.s. economic recovery. we talked about this earlier, the economic data today exceeded expectations. joe: economists have been underestimating this recovery since last june. we always talk about how robust it is. look at every number we got today. the fed, jobless claims, retail sales of the philadelphia fed, or better than expectations. caroline: going back to the 1970's since we have seen a number look as strong, but people are without a job. joe: absolutely right. still a lot of work to do. let's bring in our u.s. economy reported. there is still a lot of room to go until we are back to

precrisis levels of employment, but when you look at numbers like this, it looks like we are on a path back. olivia: these reports that the first in what everybody hopes are many. we hope jobless claims fall, yields rise, but the balance, the virus. romaine: we know the numbers on retail sales got a big boost from the stimulus. is there a general sense that the level of economic committee is either black or getting back fully to pre-pandemic levels? olivia: it seems like it. the big question is whether restaurant see a big rise. they were up significantly from february, but we had the winter weather, so it will take april, may, june to see that. romaine: there is a deli in new

jersey going pretty well. joe: there is the extraordinary statistic about one deli. what about the checks, the stimulus, not just people out of work, but people who had something to spend. how much can this continue to be a boost to the economy? olivia: that is the question that remains, whether job growth will be enough in the coming months to supplement this demise checks. for people unemployed spending this money, will they get jobs in the coming months? it seems like based on the last jobs report that may be possible, but were waiting to see the data. joe: the question is, why do economists not recognize how fast this is? we hear this at least once a week, the data came in way ahead , so shouldn't economist realized this at some point? olivia: it seems like this has

been a pattern since last may, when basalt it would be hugely negative, and -- they saw it would be hugely negative, and then it was positive. romaine: for an outcome of this gets us to the stage where everyone looks at the fed and says at what point does the economic data move the fed. it would take a lot on the particular with the labor situation. i saw statistics saying we still need to create a .4 million jobs to get us back to something resembling the full employment target -- 8.4 million jobs to get us back to something resembling the full employment target. what about would give us this idea? olivia: it will have to be jobs. you're right about that statistic, 8.4 million jobs. when we get to the april jobs report, to get a .4 million jobs in one month is not likely to

happen. romaine: that just takes us back to the pre-pandemic. that is not even the full employment the fed is looking for. olivia: exactly. they're also looking at racial and gender data as well. caroline: they are, and economist as well. what is the likelihood of this as they look at new data, whether breaking down unemployment on racial levels, are they getting up to speed without, understanding where the federal reserve is focus? olivia: a handful of wall street banks are adding this to the things they look at, however, it is not widespread yet. we expect it might become that way because of jerome powell's comments. joe: we had the great move today that went down. it seems like the story is that despite as fast as the economy

is growing now, it feels like people got the message the the fed will not move for a long time. olivia: right. jerome powell will want to see reports like this for months at a time before he makes any moves. caroline: we want to thank you, olivia. everything, the numbers, thanks. meanwhile, we would look at lumber prices. they are on fire. more than 60% this year. we break down the price surge in shortages behind it all. that is next. stick with us. this is bloomberg. ♪

caroline: we are focused on the

u.s. recovery today. housing has seen a steady boom throughout the pandemic. joe, there are a few other factors driving it. lumbering prices are at staggering heights. joe: if you look at lumber futures every day, they go up day after day after day after day, limit up, limit up. you would think we are looking at bitcoin. romaine: this is the real asset class. we are focused on other speculative areas, but when we talk about inflation and the concerns, a lot of people pointing to lumber as a harbinger of things to come. joe: this is what you should be hoarding in your apartment, not gold. joining us with more insight is the ceo of deakins lumber company. thank you for joining us. help us understand the lumber trading ecosystem. what is your role, how do you play in the space?

>> in the supply chain, i am a trader. i provide liquidity to buyers and sellers. market futures on the cash market is not liquid, so i stand in between and try to buy low and sell on the price of lumber. caroline: how much harder is your job making liquidity when everyone wants to buy? >> it is tough. sourcing product, it is not about the price. the price is a byproduct of what is happening fundamentally. if you get your hands on it, you will buy it no matter what the number is. the numbers are getting higher and higher. features have a daily limit. in the cash market where by trade, there is no limit in prices are going up significantly in a way no one

has seen before, certainly from just the price, but also the daily jumps, and what is happening is builders and their suppliers, i think, waited for a dip because of the $1000 lumber is ridiculous, and they waited, waited, and i will buy the dip. meanwhile, they were selling and committing themselves to deliver lumber. they waited long enough, the mills were able to hold out, and now they have to cover those commitments to builders. builders have to cover their commitments to homebuyers, so they have no choice but to buy the lumber right now. they do have a choice. they could either not by the lumber in default on their commitment and lose the customer or pay whatever it takes to get this one covered and try again next time. romaine: go back and talk about the idea that some people are waiting. we heard this several months ago when this started with regards

to homebuilders. a lot of people are waiting for the market to right side. the idea some shortages are due to covid and are transitory issues. after all, there is no shortage of trees. it is a matter of cutting them down and getting them to the mills. do you anticipate a rightsizing of the market soon? stinson: there are a few things. in the weeds in lumber, you have to focus on the canadian forests. there is not an abundance of trees they are the government is willing to cut. most of the land is owned by the government, and they reduce the allowable cut, because they saw the pace was not sustainable for the health of the forest. homes from phoenix to charlotte are built with canadian lumber behind the drywall, so it is a

structural problem with a shortage of trees or logs. this is like covid fast tracked a lot of trends in our economy. one trend was reduced basket in canada. the mills had a tough year in 2019. if you look at lumber prices, they were depressed, so low prices, a mediocre housing market, and a 23% tariff, so a bunch of mills permanently set them -- and down in 2019. now here we are. -- shut down in 2019. here we are. it would be nice if we could have some mills back. by and large, stepping back, the issue is the supply in canada, which is why they have invested in pine mills in the u.s., but

again, this is getting into the weeds, but pine is not the same lumber. they are not as interchangeable as you think, so there is a bigger structural problem. until then, the futures curve will tell you the answer. we are in a place with the front months are trading at an extreme premium to deferred months, and a lot of people say down the line, futures, prices will be cheaper. in fact, it is the ops appeared that is the most bullish structure you have. until the curve normalizes, i don't see a correction. joe: what would normalize it? there has to be some law of economic gravity. markets can't keep going limit

up. a slowdown in buying, a slowdown in capacity, swapping, builders opting for less lumber or different material for building question what is your view will make it balance up -- building? what in your view will balance it out? stinson: it is a demand-side problem. supply-side cannot fix it. once we start hearing from homebuilders that we can't pass these costs along, then you will see the price crashing. i think, and a lot of us in the industry think, bumper has been underpriced for a while. -- lumber has been underpriced for a while. it was priced at one level, then one company increase the price of a home, and i'm thinking that's not much over 30 years. now, the new data, the new price

is 24,000 was so at some point, the big builders are the ones that matter. single-family homes, not apartments, drive the price of lumber, and until they say i cannot pass these costs along, we will be higher for longer. i think there will be innovation , how we use lumber more effectively in building plans, frame packages, but as far as a new, disruptive technology, there is not much on the horizon to help this acute shortage we have going on. caroline: have people been hedged? have people been making a lot of money? who is winning out of the situation? stinson: well, the one selling are not necessarily winning, depending on where the risk is. if they are committed at a fixed price and buying the are getting

squeezed, vendors, homebuilders. i think homebuilders who do not have a price locked in with the customer and then build, they are doing fine, and the sawmills are doing great, and after that, when you are in this market, unless you are a producer, if you are making money, you are lucky. the swings are so big, we could fall 50%, 50%, and still be higher than we have been in 60 years of lumber futures. joe: wow. stinson: i hedged aggressively because i have massive downsid e risk, so i'm still making modest gains, but lumber is notoriously full of cowboys that don't manage risk aggressively. if you can source the lumber,

you are making a bunch of money right now, because the price is not the issue. it is the scarcity. getting your hands on the product. caroline: follow this man. fascinating. thank you. is this your 4:00 a.m. look at? joe: i wake up and i look at lumber, obviously. it only goes up. romaine: the storage costs are high. joe: never mind. caroline: his apartment is massive. he can store lumber. we will go with gold. joe: maybe i should sell them. that is the answer. caroline: i am amazed.

that does it. joe: bloomberg technology is next. romaine: have a great evening. this is bloomberg. ♪

now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's release from golo. it naturally helps reverse insulin resistance, stops sugar cravings, and releases stubborn fat, all while controlling stress and emotional eating. at last, a diet pill that actually works. go to golo.com to get yours.

david: from bloomberg world headquarters in new york and worldwide, this is a special edition of "bloomberg wall street week." . president biden is giving remarks now about the sanctions imposed today in russia, coming out of the hacking. if you want to follow that, you can follow it on your bloomberg terminal. right now, the man of the hour, chairman and ceo of bank of america, brian moynihan. thank you for