romaine: from bloomberg world headquarters, i'm romaine bostick. joe: i am joe weisenthal. caroline hyde is off. romaine: let's look at where financial markets ended the day. the dow, s&p and nasdaq ended the day flat. joe: the question is, "what'd you miss?" romaine: ism gauge, a factor activity coming lighter than expectations. 60.7 reading. what does that mean for you? in april, down from a high of

64.7. despite the drop, the gate is showing an economy and strong expansion. the real fear, i can be found underneath the headline number. prices paid for materials jumping the highest since july 2008. factories stockpiles detracting since august. customer inventories dropping to a record low, adding to evidence that the biggest impediment to the v-shaped recovery is the l-shaped recovery in the global supply chain. a price to everything. all trending at or near record levels. manufacturing and but and i will show you a shortage. joe: did you come up with that l-shaped recovery on-the-fly? romaine: i did. joe: that is a really good one. i'm really into that. i might steal it. absolutely. the headlines are still there -- still great. earnings coming and strong. still after all of this straw -- all of this time a year into the recovery, analysts cannot catch up.

greater than 90% of s&p 500 companies beating estimates. that is the highest level ever. interesting there is that long trend. the point is that everyone seems to be underestimating both the pace of the corporate -- of the recovery and the pace of the proper recovery. romaine: yeah. joe: why can't they just get it right? why can't they see that companies -- >> are going to get me in trouble with that question. i feel like analysts are going to come to me. joe: it will come after me, not you. >> this has never happened before. especially when we are talking about supply chain shortages. you said this and you're in, this is about the underlying economy when it comes to the readthrough. we talked about this last week. caterpillar, apple, showing up in the economic data. supply chain shortages are things that have been pushing commodities higher, chips higher. they are not going away.

these are longer-term problems that have not been factored into the market. we have to see if the momentum stay -- will stay. romaine: we talked to a lot of people on the air. they seem to be struck -- to be shredding enough. you have seen the supply chain disruption. they see it as temporary. they say this is a symptom of a booming economy and it will all right side itself. why wouldn't that be the case? kriti: let's look at the time frame you are hearing from companies that are in the semiconductors space. let's put commodities sis -- commodities aside. 2022, 2023, they are talking about accommodating this by bringing the supply chain home. that is a lengthy process. for them to account for that in their underlying scenario, they are forecasting very long transition processes. to last longer. especially when you have the pent up demand. i think y today that the market is starting to be more aware of these issues is immediately on the ism data you

saw, you saw that material shortages, the supply chain issues attributed. immediately, the reaction was the big tech stocks, semiconductor stocks and automakers. those are going to be the three arenas most impacted. joe: let me ask you another question that has got nothing to do with all of this. does it feel like crypto has taken all of the speculative excitement out of the market? no one is talking about tesla, all i saw was people talking about ethereum and a few others. it feels like the market, all of the fun stuff that was happening in december and january is totally migrating. kriti: so in character to ask a big coin question -- bitcoin question. my love talking about bitcoin as a re-sentiment indicator. it is not working like that anymore, which is so weird. shout out to my colleague, david ingles in asia. he has a great chart about bitcoin volatility on a 10 year span being at record lows. that really tells you a lot

about the normalization of crypto. i think the fact that we are not able to gauge how much risk sentiment is out there by looking at bitcoin. but for some reason, ethereum is the new go to. it really tells you that there are so many levels to crypto that markets have not absorbed yet. romaine: it's funny, you talk about the volatility going down. and a lot of people would say ok, that would be a good thing. isn't that the legitimacy of bitcoin? something that is trackable and predictable and investable. i am curious as far as the sentiment goes, because there is a broader point about the market cycle, and how it might be disconnected from the economic cycle, and a lot of the gains that are tied to economic projections have been priced into this market. i'm curious whether you are hearing that from people, or whether they think there is more momentum left in the market. kriti: is a good question. i will bring it back to the ism data. you really saw it showing up in the manufacturing space.

manufacturing has been booming. it is the service as part of the economy that needed to catch up. that is where you saw the divergence. that is what spooked markets, to the point where you saw confusion in the markets. you saw commodities soar across the board. bond traders sending a different message, buying bonds. you saw that disconnected the market. when you mentioned how does the market interpret these economic changes? it is important because now you see the real economy catch up to what the market is pricing in. this is what a lot of market bulls, excuse me, stock market bears warned us about. the minute the economy, the real economy, the labor market, catches up to this massive reopening that the market has been pricing in, that is when you will see a downfall. you are starting to see more concern manifests not just in the stock market but across assets. romaine: kriti gupta, great catching up with you. breaking news. this is on bill gates. the cofounder of microsoft. he and his wife are said to be

ending their marriage, and little bit of gossip fodder. but bill gates is the fourth richest man in the world. this is going to be a relatively epic divorce on a financial basis. bill and melinda gates have been married for quite some time and say they are ending their marriage. joe: coming up, growth that u.s. manufacturers are pulling off. supply chain issues continue to weigh on output. the l-shaped recovery that romaine invented. we will discuss that next. this is bloomberg. ♪

romaine: welcome back. bill gates, one of the richest men in the world, says his

marriage with his wife, melinda gates, will be ending. bill gates is the cofounder of microsoft. melinda gates worked at microsoft for some time. together, they run the gates foundation. they say they are ending their marriage after 27 years. they will continue to work together at the foundation, which has become one of the biggest charitable organizations out there. let's pivot from that to the u.s. factory growth. easing in april. this after the highest reading since 1983. manufacturers battling higher manufacturing prices, along with supply shortages which have been boosting the backlogs. that has been all of the talk. joe: if you look at the year of data that came out, the u.s. data that came out, supply challenges at historic levels. basically all of the readings show whether it is backorder or prices paid, however you want to mention it, but we keep talking about anecdotally and what more companies are saying, showing up in the data, really surging across the board. backlogs, all of that.

pretty big issue for manufacturers. joining us for more, u.s. economy reporter reade pickert. i guess the question is, we have been talking about this for a while. are there any indications that it is easing or is it getting worse? reade: thank you for having me. i think we are getting closer to that end. it is not clear when that will be in terms of supply chain challenges. in terms of today's number, it missed estimates. but the fact remains that it remains really strong. it is pulling back from the highest level in decades. what we are seeing is that we have a robust manufacturing sector that is getting limited by supply chain issues. once the supply issues can be worked out, whenever that may be, whether that is in a couple months, the back end of the

year, or whatever that looks like, the inventories we keep talking about will suddenly be a vehicle for growth as producers can start replenishing the inventories. romaine: that is the hope. that depends on how long this lasts. in addition to the data, we have from companies this earnings season, microsoft, sony, qualcomm, tesla, you name it, steve madden, all talking about supply chain issues. it is more about the raw commodities or the chips or whatever the inputs are. it is about shipping containers. some company said they could not find a shipping container to put their stuff on from vietnam, china, to get them back over here. i'm wondering if that persists, at what point does the inflationary pressures from that becomes so real and so persistent and so lasting that the fed has to do something? reade: i'm not sure about that. what we do see are that prices for these materials are surging. we are seeing the factory wait times for materials are the

longest on record. but i would say we are seeing demand snapped back. we have that demand there. as soon as we can get supply chain issues worked out, factories will be able to increase their capacity, increase their production, and work through the backlogs and increase those inventories. what that means for the fed, i think the fed has made it very clear that they view all of these price pressures, whether they last a couple of months, or frankly even a couple of quarters, they view them as transitory. i don't think, assuming the supply chain challenges last even through the end of the year, i don't know how much that would impact the fed's plan of holding rates near zero. joe: there was something interesting when i was reading through the european numbers, and they were talking about factories making more orders

because they are worried there is going to be shortages in the future. so they are like ok, we will make more orders now and that exacerbates shortages. i'm curious if there is some sort of compounding effect here where shortages beget fears of shortages, which lead to more orders, which lead to more shortages, making it hard for the system overall to equilibrium and find balance. reade: that is a super interesting thought. i think if you talk to these factions, another big problem that they mention is they are having a really hard time finding qualified labor to fill jobs. there was a huge portion of firms on the ism panel who mentioned these challenges phot -- of filling jobs. if you are talking about these shortages, even if you are producing at capacity, if you cannot fill the positions you need to be able to produce those goods, that could play into that

dynamic you are talking about as well. romaine: always great stuff. reade pickert, who covers economics for us at bloomberg news. we have more to talk about including joe has not noticed the new set we are on. . one thing joe -- joe: i have noticed, i mentioned it. romaine: one thing he has noticed is the chip shortage. he has talked about this a lot on his podcast. we will talk about it on this show. jessica caldwell coming up on "what'd you miss?" executive director of insights. this is bloomberg. ♪ ♪

romaine: the talk of today and the talk of the past few weeks has been the supply chain shortages, particularly in the manufacturing sector. the chip shortages we have been talking about which have slashed vehicle production, disrupting the market for used cars.

if you're trying to buy a used car, you've got to pay up. joe: supply and demand. supply is going down, demand has been going up. the two lines that are intersecting and you see the price. absolutely soaring. we remember they soared last year. they keep rocketing higher. romaine: sell your car. joe: i should. romaine: and just walk. joe: let's bring in executive editor, jessica caldwell. when is this going to abate? how long until people look at their cars and say you know what, i can make a lot of money selling, i will walk to work and sell my car now? jessica: for those people who are not going into an office or maybe not going to an office until 2022, check to see how much your car is worth. if you don't need a car for the next six months, sell it, make a profit, and wait until the market is not so constricted. romaine: just explain how we got to this point. i know you have supply chain

issues disrupted with regards to the new car manufacturing. what was this all because of the supply chain issues or was this more because of the fallout from the pandemic? there had to be other forces that brought us to the chart that joe just showed. jessica: definitely follow from the pandemic. what we have had is a rate that has been lowered. by means fewer trade-ins. people wanting to hold on to their cars. maybe they don't want to trade them in or thinking, i'm going to ride the pandemic out and not make any big purchases. there's a lack of supply. also there is no off rentals. the rental car companies are starving for vehicles. that is a big interdiction -- introduction to the inventory situation. i think with that and leeson stec -- lease extensions, and a lot of people decided to extend their lease, and now especially is a good time to extend your lease. inventory is low. all of that contributes to fewer used cars.

therefore, just skyrocketing prices. joe: what is your sense of when we start to get meaningful news supply again? in terms of new cars. and when some of their production pressure will start to ease? jessica: i think that is the million-dollar question that everyone wants to know. i say most forecasts are saying around 2, 3, this will be tied for the next six months. but it seems like it is a fluid story. people coming out of the woodwork's from various companies saying things that are not quite making sense together. but i say you are probably in a better position in q4 two by then you are at this moment or you will be in the summertime. romaine: regards to new cars, if you look at new cars, there is really the premium on them which is outrageous. to used car almost costs as much as a new car. i'm curious when you look at the trend line, i remember before their pet -- the pandemic, there was a talk of the age of cars on

the road. you can figure out the future demand. now that we are coming out of the pandemic, how does the trendline look? are people going to be forced to pay for these cars because their old ones are basically falling apart? jessica: i think that is definitely the case. there has been a lot of quality improvements to autos in the past decade. that definitely helps with the situation. . i think there are people in the position that they are just having to pay higher prices. it is not so much that people did not need a car or their car is falling apart. but a lot of people want to. they have been in their homes for the past 12 months. people getting the vaccinations are they want to go on road trips, go places, return to college or wherever they may be going. part of that is buying a car. a lot of people are thinking that they are going to suck it up and do it. joe: one of the themes we have been talking about is the move to the suburbs. people moving out of the cities. and moving out of cities, a lot of people realizing they need a car for the first time.

do you expect the structurally higher level of car ownership when things normalize, so to speak, such that there is a new population of people that need to own one? jessica: i think that is a really interesting thought. i'm not sure that the push to the suburbs is going to be a lasting one. maybe in 20 years time, post the pandemic, beyond that, that necessarily won't be the case. because the mall before this was the idea of shared transportation, mobility, all of those things. i would not say they are out of the question, i probably put on hold. people are going to be weary of that type of technology for a few years. i think we will get to a point where hopefully this is in the rearview mirror. romaine: when we talk about the general idea of electric vehicles, all of that coming down the pipeline, there was this transition that was taking place, or at least it was

starting to take place here. do you see that trend continuing? i have seen some statistics showing that now that we are coming out of the pandemic, people are looking at the type of vehicles more differently than they would have in the past. jessica: i think in terms of what we see in the long term, electrification, autonomous technology, that is all going to have it. it feels different and very disruptive right now. with what we have gone through in the past 12 months, we have seen things like pickup trucks and large suvs doing well. people want the larger vehicles that can accomplish a lot of different things. so i say that has definitely been a direct result of the pandemic. but i do think things will settle down eventually. automakers are committed to those technologies. i think they will happen. joe: what is your tip for someone looking to get a car and not willing to pay out the nose? are there any pockets of the market that are less crazy, or any approaches where someone could find a car in this market?

jessica: first of all, act quickly. i think right now is the best chance you were going to get. the longer you wait, people like to wait for fourth of july, memorial day, those events. probably not going to happen. do it asap. if you are interested in passenger cars, there has been less demand of those vehicles versus trucks and suvs. then there are some automakers who are faring better. automakers like the hyundai group, chipmakers are in south korea, hyundai is a massive conglomerate, having more influence in that area. the inventory looks better than their competitors. i think keeping an open mind, shopping soon, and looking at all of the different options and looking at cars that may not be in your local area. you may have to travel further. romaine: interesting times here. always great to get your thoughts. jessica caldwell, executive director of insights.

i know you are in the market of a ford f1 50. joe: absolutely. for the base model. exactly right. romaine: you want to get it jacked up and. . put your flag on the back joe: you have seen me come into the office. romaine: very practical car. joe: exactly. what are you going to be watching tonight? romaine: normally caroline asks me that. i think what is really big here is you have to start looking at the way this economic data has come in. the expectations have been going up. i don't know if you saw, the rays and expectations for that friday jobs number has been going through the roof. jeffries predicting 2.1 million jobs created. joe: i didn't see that. romaine: another economist at 1.5 million. joe: i missed that. i knew there were some that were over one million. romaine: "what'd you miss?" joe: i'm going to look at that on the terminal after this. romaine: that does it for "what'd you miss?"

joe: "bloomberg technology" is up next. have a great evening. this is bloomberg. ♪ this is bloomberg. ♪

we know how much you count on us... ...and that's why we're here 24/7... ...and on the road maintaining a fast and reliable network. we're always working to ensure the internet meets your needs... ...by making access easier for all... ...with comcast lift zones and our internet essentials program. we're invested in making our apps easy... ...to give you personalized assistance around the clock. and we're committed to keeping our team and customers safe by working from home... ...and using precautions in store. see what we're up to at xfinity.com/commitment so many people are overweight 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.

>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." with emily chang. emily: i'm emily chang in san francisco. this is "bloomberg technology." coming up over the next hour, it is the main event as epic games takes on apple in a major antitrust trial. teams sweeney takes a