tv Bloomberg Surveillance Bloomberg May 13, 2021 8:00am-9:00am EDT
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>> i wouldn't leap to a judgment yet on the basis of one month data. >> there are inflation fears all over the place for investors. >> the question is which will investors continually pay for what feels like a fairly well-known story? >> one of the aspects of inflation that i think is driving the commodity move is in public policy. >> i just don't think it will lead to sustained higher inflation, so i am more with the fed thinking that it will be temporary. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.
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it is a simulcast asian wide, around this world, on radio, on television. it is not a boring may. it is fascinating. one of the fascinating things is there's a bit on the market. green on the screen. jonathan: got a lift on the nasdaq 100. the s&p now unchanged. in 30 minutes, we can talk about this labor market again. the estimate, 490,000. tom: we had inflation yesterday, a big deal. do you think business inflation this morning, ppi is a big deal? jonathan k: i do. -- jonathan: i do. can these companies continue to keep these big margins by doing just that? they did it in q1. for the economics profession, i think they did a wonderful job in the last 24 hours explaining way what was driving high prices. a lot of this came from reopening. the components central to that,
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thing about used cars. those prices are flying. hotels, lodging, all of the above. we get it, ok. but for the market, you have to reassess the balance of risks around your central view. i've repeated that through the last two hours. that's why you see a move in the market, in the price action. tom: that important meeting, we are getting there. i really want to emphasize before we go to retail sales tomorrow, the claims chart is exceptionally well behaved. from february 12, it is the claims data that indicates a better lower statistic. jonathan: i am going to leave this for mr. sweeney of credit suisse to explain in about 30 minutes, but economists have struggled by looking at claims, which have really improved, and allowing that to model what they think is going to happen with payrolls. something clearly went wrong last friday, so we need to get our teeth into that as well.
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james sweeney with us later of credit suisse. we will get his thoughts on inflation. before we get to the equity markets and the data check, we've got to talk about retail sales tomorrow. they will readjust gdp estimates off of that data. jonathan: you're worried about downsides prices to growth, tom? tom: no i'm not. what i observe and my family across the country is a boom economy. jonathan: i agree with you. month on month, the challenge is going to be pretty big for april versus march, given the stimulus checks. the numbers could be distorted by that. tom: maybe distorted by gasoline as well. we will see how that shapes up. our washington team following that story. on the data, red and green on the screen. the vix at 27 comes into 26 point 01. the german 10 year, we are both following it. jonathan: a creep back towards
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zero for the seventh straight day this morning. 10-year breached 1.70% on the u.s. 10 year. 1.6864%. i believe later we get some treasury supply, a 30 year debt, $27 billion worth. so a little bit more supply coming later from the treasury. tom: it will be interesting. on the equity markets, we are getting a huge amount of mail from you. i get the hate mail, ferro gets the love notes. that brings in same stove all of cfra -- same stove all -- sam stovall of cfra, chief investment strategist. you call it a digestion of gains. how's the digestion going? sam: it's going pretty well, tom. it is funny, but i describe declines as being noise from 0% to 5%, pullbacks 10%, declines,
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and bear market 20%. the s&p is off 4% from its all-time high, but interestingly , it is just kissing its 50 day moving average, as are nine of the 11 sectors. only consumer discretionary and tech are challenging the 200 moving day averages, but i see this is a pretty natural may decline following a very strong start to the year. tom: i look at where we are, and we've got some news coming out on mcdonald's here. this is well time, mcdonald's to raise hourly wages of restaurant staff. we will have much more on this. they are also critically going to hire 10,000 new employees because of the kind that i spent at the mcdonald's on 3rd avenue. jonathan: there's the headline, raising the average hourly wages
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by an average of 10% to bring entry-level salaries between $11 and $17 an hour, dependent on location. they go on to say that once the raises are completed, average hourly pay at restaurants will be more than $13 an hour. we are making an important adjustment here, especially in the context of what we have seen in this economy. lots of demand, not enough supply. does that move the dial? tom: we will have to see. clearly it is a theme jon and i have been beating on on a micro basis. we are seeing this across every part of society and every part of corporate america. sam stovall, what does this do to margins? we have been here before. if we see labor, that huge construct of cost of goods, does it squeeze margins down and damage a great bull market? sam: yes it does. even though right now, s&p
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capital iq consensus estimates are calling for a wide of profit -- a widening of profit margins, i think those numbers are going to be readjusted downward or it we reduced our recommended exposure to the consumer discretionary group this week because of the fact that increased costs in terms of transportation, wages, inputs and so forth will probably have a dampening effect on profit margin, so i think that right now, that is why we are seeing a gravitation to the more defensive areas. consumer staples and health care are the best performing sectors during the recent decline. jonathan: i just want to go through this press release. the company expected to reach $50 an hour by 2024. chipotle announced a boost to $15 an hour. is this a reflection of market forces, or rather just a reflection, a recognition of what this administration is trying to engineer at the
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moment, who also want a minimum wage of $15? do you thicket is politics here, or just the market driving this? sam: i think the politics has lifted the lid, giving permission for corporations to increase the salaries and not have their shareholders complain too much. so i think it is then the economics that step into say we need more people to come in and to be able to do the work. i would love to hear tom say do you want fries with that because that would give him an opportunity to go to mcdonald's as well. tom: what do you mean an opportunity? i was there last night. i had a beverage of my choice at mcdonald's. jonathan: how does this play into the conversation the fed is having with the whole of the market? sam: i think the transitory rise in inflation is really more of a readjustment to the trajectory upward. i think we are going to see an increase in inflation. the economists continue to move
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higher their forecasts for the coming quarters. i think it is going to last into the end of this year, but year on year in 2022, things will simmer down. tom: i want to know from the two of you, where do they get 10,000 workers? amazon once 10,000 workers. jon mentions chipotle wants workers, and on and on. are there 10,000 workers out there to be had? sam: i think there are. i think probably they will become a little bit more incentivized to start to look for work once the additional payments to unemployment and so forth run out by the end of the third quarter, so i would tend to say that we are going to be getting a trickling effect and people taking advantage of these opportunities. jonathan: does $11 to $17 get it done? tom: that is the question, jon. jonathan: is that the price that gets it done? sam: prior to the pandemic, it
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certainly did get it done. now the question is will it get it done after the pandemic. certainly, higher prices are likely to lure new workers to these jobs. jonathan: thank you for the conversation. the headline is crossing the bloomberg that mcdonald's is looking to raise the average wage by about 10 sent -- by about 10%, bringing it to within a starting wage of $13 to $17 an hour. this is the trend. we keep going back to it. you saw that job openings figure in america this week. it is riproaring to a record high, and beneath that, supply needs to respond. christ needs to act. rice is reacting. just don't know if that is the price that gets it done. tom: one of our fans called me up and said i need a beverage, so we were at mcdonald's on 3rd avenue, milkshake and all that,
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and right outside mcdonald's is an amazon truck unloading a gil lion boxes. that is the worker tension you have. one of the going to pay up to $20 an hour? where are the workers for these jobs? jonathan: the unemployment insurance keeps on going if your governor allows it. some of the republican governors have stopped it. we will keep going until september. i wonder how long it is going to take to play out, or if this is just the beginning. if you have a one-off bonus, that is very different to getting a persistently higher wage. let's be clear about that. in the conversation with the federal reserve, things got more interesting this week. tom: things got a lot more interesting, and it comes down to the participation rate. we are nowhere near that, but how quickly do we get there? you're going to get there when you sit at a mcdonald's and look out the window at the amazon truck unloading. jonathan: coming up, julie
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norman. do you like how i am not biting? i just don't believe you. tom: abramowicz would bite. it's the one around the corner, across from wells fargo. [laughter] jonathan: i know it is. julie norman, university college of london professor, is joining us. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. there's optimism today that fuel shortages in several southeastern states will soon come to an end. the largest gasoline pipeline in the u.s. is returning to service five days after it was shut down by hackers. it is unclear how long it will take for things to get back to normal. in parts of the south, three out of every forecast asians have no fuel yesterday. -- of every four gas stations
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had no fuel yesterday. in israel, border police were called out to reinforce police in mixed arab/jewish towns. mcdonald's will raise hourly wages to help it hire and retain workers. in an increasingly tight u.s. labor market, the races will average about 10%. that brings entry-level salaries to between $11 and $17 an hour. in china, alibaba posted quarterly revenue that beat estimates, but the e-commerce giant still had a net loss after aging imposed a fine for monopolistic behavior. it marks the end of an investigation, but the threat of future actions will likely cast a shadow over alibaba's business for some time. the biggest funder of fossil fuel companies, jp morgan, is pledging a 35% cut in carbon emissions for its oil and gas portfolio. the deadline for that is the end of the decade. last year, jp morgan agreed to
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there's anything about tax increases and it is dealing with infrastructure, that we start with the concept, what is the definition, and we are able to make reforms so you can build the roads not decades away. tom: the gentle man from california, mr. mccarthy, on an eventful week wrapped around the issues of infrastructure, and suddenly there's a foreign policy issue as well. we welcome you on a to multiple stay -- on a tumultuous day. 12 minutes away from jobless claims, which will be really fascinating. we do this with markets moving red and green on the screen. right now, julie norman is with us with the university college of london. she is a political science professor, and she is so competent she has a set of wheel houses, and one of them is the levant and the challenges of israel and all of the region.
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good morning. can you say 2021 alludes to periods of conflict? julie: good morning. obviously what we are seeing now is the highest level of violence and escalation we have seen in a number of years. with that said, it mirrors the gaza wars that we saw in pretty recent memory, 2008, 2009, 2012, 2014, when we saw this kind of perfect storm of events coming together that quickly escalated into rockets coming into israel and airstrikes going back to gaza, and unfortunately, the civilian casualty rates going up very quickly today. tom: i don't want to look at the rocket trajectory. we can study that your you will have -- study that. we can have experts tell us about that. but i am fascinated about the distance from gaza to the old city and the mosque under question, one of the great sites of islam. what is the distance for the people of gaza to what they
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venerate in the old city of jerusalem? julie: i think what is so important to underscore here is that jerusalem and that mosque in particular are very important to palestinians, definitely palestinian muslims, no matter where they are located. they have been linking much of their politics and campaigns to what was going on in jerusalem and linking the palestinian cause to what is happening in jerusalem. it is not too far, but due to the way the restrictions are set up right now, people from gaza have not been able to go to jerusalem for years now, but still very much revenant in terms of what it means to people. tom: it is shocking, the fragility of democracy in israel. i have been told by some reports of the election transfer being within minutes literally before this war came on.
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how do you link the netanyahu transfer of power to this conflict? are they truly linked, or are they separate and unimaginably close issues? julie: well, everything is unwinding in a certain way right now. i think the tinderbox that has erupted in the last few weeks was due to a number of causes come about we had seen -- all of -- number of causes, but we have seen politicians on both sides exploiting the moment. for netanyahu, coming out of this fourth attempt to try to form a government, he's now trying to frame his response to this is showing why he should stay in power. as opponents and critics are saying this is the reason why it is time for him to step aside. on the palestinian side, we see a lot of jockeying between the authority and hamas between who
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is in charge of resistance. tom: they have evolved over the years. americans have a memory of a most occult beirut and ash a most difficult beirut and the rest -- and a most difficult beirut and the rest. give us a view of hamas now. julie: hamas has held control of the gaza strip for the last 15 years. that was after they were successful in the 2006 legislative elections in palestine. that was a real shift for hamas and a quasi-normalization for being solely a resistance military group to a political group as well. now they kind of operate with both of those things, the political group governing in a way in gaza whereas their militant wing is carrying out these rocket attacks primarily. they still in some ways have popular support in terms of being a voice of resistance, but a lot of disillusionment in palestine also with hamas
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because of their lack of ability to govern properly. tom: julie norman, thank you so much on the conflict we see in gaza, many people saying it edges toward all-out war. i really felt like we had to do that digression to go to the immediacy of it. it is amazing the rapidity of what has happened in 48 hours. jonathan: i couldn't agree more. it is the first big point of tension on the foreign policy front for this administration. i don't want to be too u.s. centric, but we have been talking about it almost exclusively from the domestic perspective area quite clearly there is a test now for this administration. tom: and i guess an envoy is in order. it goes back to 1948 and what i have in my clearest memory of 1967, and then you ask, does it rebound over to the arab countries, over the suez as we saw x number of weeks ago to oil?
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i would suggest we are not there yet. jonathan: i don't think the administration so far has done a tremendous job of bringing allies on board on a few issues. we saw that around suspending ip protection on covid-19 vaccines. they made that announcement before they spoke to their allies, and i think some people worried about that, including ian bremmer of eurasia group. something wasn't quite right about that. i wonder if they can do some thing a little better on the foreign policy front this time around. tom: brent crude really not near the 70 level. we've got some smart conversations with people looking for $75 a barrel. goldman sachs energy research yesterday was brilliant. with six minutes to go, we need to turn to claims. the chart is beyond elegant. the trend is your friend towards the better job claims statistics. jonathan: i wonder how things shape up and the political influence of how that plays out in the weeks to come. we have talked about several handfuls of republican governors
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making the decision to end the additional unemployment insurance. what that means for labor markets going forward from here is going to be a state-by-state issue. mcdonald's making their announcement this morning, getting the average wage hopefully by 2024 to $15. that is a big story for the united states labor market. how much higher does that need to go to attract workers back into the labor market? tom: when do we go to $16? jonathan: $18, $20? tom: $15 is this big emotional line of rhetoric. jonathan: and at the margins for corporate america, who can take this? julian emanuel of btig has made the point that he thinks he likes staples for that reason. morgan stored me -- i've heard morgan stanley say something similar. people are already talking about where the margins are, who's got the margins to tolerate the higher prices. tom: i don't have any wisdom.
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jonathan: the sector level call has been shaped by this. not quite yet on margins. we need to get some more calls on margins as the year progresses. from new york this morning, good morning. your claims data up next. alongside tom keene, i'm jonathan ferro. with green on the screen, this is bloomberg. ♪
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jonathan: claims data in america seconds away. from new york city, good morning. alongside tom i'm jonathan ferro. equity futures turning higher. 8:30 with your data, here is michael mckee. michael: we are watching jobless claims. 473,000. that is down from 498,000 the prior month. that is the unrevised number the prior month. we are continuing to see a decline in initial jobless claims. that is what people would consider good news. let me take a quick look at the continuing claims numbers. the total number of people receiving benefits april 24 because continuing claims are delayed is 16,855,000. that is higher than the april 17
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number the week before, probably because people are moving off of the initial 26 weeks into the extended benefits. it does show you there are still a lot of people who are out of the labor force even though you have to look at claims not just people. the other number, ppi up .6%. that is double the forecast. it pushes the annual rate to 6.2% for final demand. the core rate is up .7% in the month. that pushes the annual core rate to 4.1% for the ppi. the ppi is not necessarily something that feeds directly into the overall numbers. it does suggest we do have some inflation pressures in the pipeline. jonathan: tk? tom: i want to jump in.
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it is important to do a history lesson. you and i remember when the world stopped for ppi, this is 20 or 30 years ago when we really focused on ppi. are we back to that? michael: we are back to looking at numbers we had not looked at in a long time but not focused on. ppi does not feed directly into the cpi numbers. tom: you're not fixated by intermediate ppi? michael: i am in this sense. i know two guys who just talking about margins they were concerned about margins. if you look at the headline number for final demand, it was up .6%. intermediate demand, which is for the goods that make goods was up 1.6%. there is a difference between what they're paying and what they are charging. they are absorbing that at this point. if we see the positive final goods rise significantly, then you will see margin compression. tom: did you see how he did
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that? jonathan: just go guys talking about margins. -- two guys talking about margins. "i can tell you what it meant is consumer demand faster than the economy can resupply the short-term. that is a good thing for corporate profits." what we are seeing -- is what we are seeing a good thing for corporate profits? does that echo what you just said? michael: it does in the sense we are seeing prices rise for final goods. these are wholesale prices. it also sews input prices are high. they are having trouble getting the goods that will make the final goods they are selling. we know that is true for semiconductors and other things, and partly because we are restarting the economy. it takes longer to do that then shut it down. tom: how big is retail sales tomorrow? michael: it is ok. tom: you're supposed to say it is huge so people watch and listen. jonathan: that is the promo for 8:30.
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michael: the stimulus checks went out in march. we may see lower gains. tom: michael mckee, senior vice president of promotion. jonathan: marketing. future still positive. a little dip off the back of those numbers. very brief. raised it quickly. yields unchanged. 1.6864. this is an important interview. let me put it in context. james sweeney state his career three or four years ago by saying europe, get over it. there will not be disinflation, you are wrong. the credit suisse chief economist joins us now. the tables have been turned towards worry of rising inflation. james sweeney, should we fear a redux of the 1960's? james: no. we should be open mind to that risk but what we are really talking about on the upside is
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core inflation running 3% for a year. something like that. that is not our forecast. his little bit higher than our forecast. the evidence is mounting that kind about, could happen. if that happens, that is not the end of the world. maybe it is 1966 to 1968 before inflation got out of hand at the end of the 1960's and the 1970's. the fed will handle that in a different way than they did in the 1960's. it is not the end of the world. it is a big change for financial markets and thinking about what happens to monetary policy if we get that outcome is important. jonathan: how are you expecting consumer inflation expectations to shape up given the experience they are having right now in this country? james: i do not know what consumer inflation expectations are. these are strange surveys.
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most people i know do not have a clear sense of what they are answering when they answer that question. usually those surveys people are saying what happens to gasoline prices. the questions are the survey staple. in my view when inflation expectations increase it leads to inflation, what that really means is not that a bunch of surveys jump, it means people have started buying more stuff because they think the stuff will be more extensive -- more expensive. the expectations will have to be embedded in the demand behavior to get a problematic inflation spiral. the risk of that is rising. we are not there right now. we are in a period where we are reopening and there are vaccinations. there are supply chain issues. the risk of it is rising but we should be careful about jumping to extreme conclusions. jonathan: that is the point i'm
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trying to get to. we can have this intelligent conversation, you can go through all the parts of the inflation basket driving inflation higher. it is the experience of everyday people with prices that will set the town. i'm trying to understand how you will know those expectations for higher prices become embedded in prices and become higher prices and this becomes a virtuous cycle? james: two things. i want to see a demand acceleration. right now it'll be hard for retail sales to continue to accelerate. maybe tomorrow will be up, but we are probably near a longer-term peak in retail sales because we have had so much income. on the services side, it is different. we all want to rush out of our houses and consume in person services, recreation services. those are labor-intensive business because they will hire a lot of people. we'll be looking at demand, but
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also at how much weight pressure are we seeing. i think it will take a while before we have good information on wages. average hourly earnings are not good information on wages. the anecdotes are deftly mounting this is at least in its early stages. tom: you are writing my script. that is where i wanted to go. what is glorious about your notes is you have microeconomics. you emphasized supply and demand and inventories really matter. with that, how do you digest the mcdonald's headline we saw an hour ago. all of a sudden we have four or five companies going up to 10,000 employees near $15. how's that filter into supply and demand? james: that is your wage issue. this of the labor market supply demand issue. the question is, so mcdonald's
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is facing trouble hiring workers. they need to raise wages. we understand. that eats into their margins. are they going to raise prices on their foods as a result? they might not. they might just eat into the margin increase. we do not know. the commodity price increase is a symptom. there are symptoms. we need the nerds in the data -- the nerds in the data need to see sufficient breadth across pricing speeds to be confident we will have a real issue unlike anything in the past 30 years. for now, you're looking at inflation overshooting from base effect, potentially coming lower after that, but will it settle back down at 2.5% or lower or will it be 3% or higher? from a market perspective, that
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is absolute critical. from the fed perspective, they will say it is temporary. who cares if it is temporary. what we care about is when will they hike, is this going to change the schedule, how's is the market going to react. is this a regime shift we need to get inflation? not long ago a lot of people thought you cannot. tom: very quickly, the brethren in zurich emailed and asked about can you ask a question about the german 10 year. what is the symbolism when germany 10 year goes positive like swiss 20 year did ages ago. james: european yields are rising and there is an expectation european growth a few months out could start accelerating relative to the u.s. because we had our massive stimulus push in the spring and it turns out they are vaccinating at a reasonable pace across europe. rates are rising. going back to the inflation part, it is hard to see much of
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that inflation in europe. they tend to be correlated across major economies. right now the inflation outlook in europe will have a base effect, like the u.s., but the big picture is you are still looking at sluggish inflation below 2% for the for siebel future in the euro zone. jonathan: smart as always. james sweeney, credit suisse chief economist. responding to some of the news. an upside surprise on ppi. claims in better-than-expected. a smart downside surprise on claims in america. the news mcdonald's is looking to raise the average wage by 10% to bring the hourly entry-level salaries to a range of $11 to $17. manager starting at $15 to $20. do we need to do more? a lot of people say we do. tom: a lot of companies will follow on pure how long until we start adding up the number of workers they are modeling on three months and six months, including the juggernaut from
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the faang. it is not out of the goodness of their hearts. tom: under 5% unemployment rate. jonathan: this is about demand exploding. is that the price that gets it done? we will have that conversation with michael fredericks. tom: you want have mcdonald's for lunch? jonathan: you want to do that? i prefer breakfast. tom: you have another property, excuse me. jonathan: you do. radio, 9:00 to 10:00. tom: they just prop me in the chair. jonathan: i assume mr. sweeney does that for you. i will be on tv, tom will be on radio. tom: i love watching you on tv when i'm on radio. jonathan: i know. you email me. from new york, this is bloomberg. ritika: with the first word news, i am ritika gupta. the largest gasoline pipeline is returning to service.
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claudia pipeline begin to resume fuel shipments five days after cyberattack left prices surging. the biden administration temporarily lifted shipping requirements to allow foreign tankers to transport fuel to hard-hit areas. the vaccine spree by wealthy nations could stir worldwide suffering from the pandemic that could last year's according to the special envoy to the world health organization backed effort on the coronavirus set up last year. he tells bloomberg suppressing the virus depends on persuading rich donors to share excess vaccines and close a funding gap. amazon is keeping its ties with all of the companies on a six-year deal that will integrate the super deluxe sector into the entertainment system of f-150 trucks. alexa will roll out to about 700,000 ford vehicles this year. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more
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everything rally, when some doubt serpas, very small doubts have surfaced, nothing wager -- nothing major, market selloff across the board. there is nowhere to hide. that is what the fed is afraid of. you have a marketplace there is nowhere to hide. when there is nowhere to hide we start doing silly things. tom: mohamed el-erian of queens college cambridge. i urge you on global wall street to check this out. we will get it out on bloomberg digital. jon and i will fly get on social media in a moment. really good discussion, particularly on the ex post nature of the federal reserve system. mitchell roschelle joins us. we are thrilled he can stop by to tell you why i cannot afford any real estate anywhere. we looked at wyoming yesterday because of liz cheney. i cannot afford one square foot in wyoming, it has boomed so
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much. i want to go to the behavior of the moment and what you witnessed in real estate. let's go suburban. the strangest thing about opening up schools. what will that do to our real estate dynamic? mitchell: right now the uncertainty, and in urban areas roughly 40% of urban areas still have not laid claim to whether or not the schools will be open and in what form, that has parents in cities panicked about the fall school year and they're racing to the suburbs, whether they be in california or suburban new york and trying to gobble up anything so they can get their kids into school. i've been talking to realtors across the country and asking them what is the number one question you're getting from homebuyers? they want to know exactly what the status of school openings are in that community and if they plan to reopen. tom: years of pwc.
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if we get beyond this and we get a better pandemic, midtown manhattan and from sea to shining sea, they improve. what do suburban newlyweds do? do they go back to the city? mitchell: i don't think so. if you look at history, the american dream of white picket fence and the two point whatever cars and kids. i think that has been around for generations. we were seeing the trend of young professionals moving to the suburbs. all this did was accelerate that trend. i do not think they turned around and sell their houses in the suburbs and run back to the city. i think they are here to stay. tom: what dynamic you see in florida at the many florida's of america? a place where people are choosing to go to, sun, taxes, and the rest of it. mitchell: right now is taxes, the weather, the weather may
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change when we start naming storms, and that may scare potential buyers. it is the killing field down there. you're trying to buy a home there are bidders across the country putting bids in. waiving inspection contingencies. it is brutal. we are seeing 30% price increases year-over-year. i am looking in florida. i think i reported with you from florida months ago. it is brutal. what is happening is they are emboldening sellers to make ridiculous requests because they are getting them. there is a bid for an ask and an ask for a bid. unless stated local production gets brought back or limitation gets cut back, we will see that trend continue. tom: in pay aurea, area code 61 683, we talk about these elite places. i am looking at five bedrooms, 2.5 baths, 2600 square feet for
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75,000 in pay aurea -- in peoria , and it has white picket fence. what does this mean for the peorias of america? mitchell: the interesting phenomenon as there is so little supply of homes. i do not care if it is peoria or when chester county. if you're a seller you will get your price. the problem is there not enough sellers because sellers are panicked if they put their home on the market they cannot find one to buy. from pay aurea -- from peoria to pittsburgh -- looking for alliteration -- this housing market is like nothing i've seen before. tom: what does it mean for business? this is serious stuff. everyone is moving from l.a. you named the three cities where
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they are moving businesses and small businesses from l.a. and san francisco to hear, or miami to here. good morning in illinois. to the peorias win? does the business go with them to the many cities? mitchell: if we were having this conversation in 2019 i would say jobs chase people, not the other way around. i think there will be a time when that happens again. labor force dynamics will dictate. there will be some element of remote work. i do not know what percent of working office jobs will be remote, but i do think we will see a migration of businesses around the country. having said that, i do think there's something compelling about urban areas. when the dust settles come every year there is a new crop of kids graduating from college. they want to live in the cities. the labor force is in cities because kids want to live there.
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jobs will chase those people. tom: we digress on bloomberg radio and bloomberg television for the observation of the week. mitchell roschelle, i have not read on this too much, but selected mayoral candidates about a selected big city were asked what a mansion cost in brooklyn, new york. our our elites -- are our elites that clueless about how everything has gone up? mitchell: yes. [laughter] based upon the q&a and the numbers thrown out, summer time to walk those things back. i think they were missing a comma or a zero on some of the answers we got. making the rent payment, finding a down payment, making the mortgage payment, all of those pedestrian things, i think some of our election -- some of our elected officials are clueless. tom: we have to do this again.
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let's talk from peoria. you talk about remote in rome, in milan, jonathan and i will do a remote from peoria. mitchell: i will be right there with you. tom: thanks a much mitchell roschelle on the state of the real estate economy. this is a data check into what ferro will tell you. paul sweeney joining me on the radio. red and green on the screen. that is a lift. the number of days this week cratered in the stock market. i love saying that, it is so untrue. vix out to 27. a better market. 25.42 on the vix. in the yield space, there is the guilt moving out. i sound like ronald reagan. there you go. there you go on the yield. getting near the 1.70 level, 1.74. you need to stay with us through
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jonathan: no one said reopening would be cheap. i love that line from wells fargo and sarah house. good morning. this is "the countdown to the open." we begin with the big issue. market scrambling with volatile data. >> this is a new paradigm. >> a lot of distortion in the data. >> so much uncertainty. >> this is uncertain data. >> a huge number. >> the highest print i have seen in my career. you're looking at post-pandemic era. >> the big method of the huge data miss -- friday or yesterday. >> there will not be enough clarity. >>
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