caroline: from bloomberg world headquarters in new york, i'm caroline hyde. joe: i'm joe weisenthal. romaine: i'm romaine bostick. let's look at where financial markets ended. the s&p, nasdaq and the coin ended in red. joe: the question is, "what'd you miss?" caroline: before we dig into joe's new crypto, bottlenecks in the supply chain over and over and over again. as the economy makes its recovery, we are seeing

shortages, rising prices from chips to lumber to even mattresses. we saw that in the u.s. housing data released today. global supply chain struggling to ramp up. shortages are higher as companies and customers are running out of supplies. we hear from the walmart ceo and macy's speak to the supply chain issue. before we dig into that, the market is interesting in the nosedive we software the end of trade. joe: absolutely. another interesting volatile day. more bread on the screen. it is also interesting to see what is going on between the market and the dollar. kind of a lot of attention starting to get paid to this. look at this two-month correlation with the s&p 500, inverse correlation with the dollar. that is the main story here in terms of the drivers of what is going on. what does that say about the current regime that we are in? romaine: we did see the bloomberg dollar spot index get down to the lows in three years. it did rebound. joe: very interesting.

for more, want to bring in cross asset reporter carita guida. what does that tell us? i think the dollar weakness has crept up on us. what is that telling us? ritika: shadow to curtis because i did not see it appear that we were done with that area where we saw the dollar weakness were dollar strength impacted stocks. back in 2020, this used to be the thing that incentivized overseas buyers to hop into not just u.s. stocks, but tech is in particular. . to see stocks and the dollar drop on the same day while you have the strong correlation, i think it tells you the power of the dollar should be moving stocks higher. as you have it an inverse coalition of 0.6, significant. yet you see both of them drop. it tells you there is conviction to the selling. romaine: it makes you wonder why it is dropping and why people think it is dropping. maybe that is why. i'm curious about the retail earnings we got.

which were good. by any reasonable measure. particularly macy's. not only did you have strong revenue growth, you had growth margin expanding, it drop in inventory, you also had higher than what they were expecting. people looking at it and saying, we are not buying it. i'm curious as to what investors are looking at when they don't feel like these numbers are sustainable. kriti: i can't to speak to a macy's investors in particular but you are seeing this as a broad trend among retailers. massive earning beats are met with sal. i think this speaks to the idea where this is this moment where the real economy is cashing into what the market are priced. even though we have looked at this as this massive beacon, or this idea that people are spending, using their stimulus check, look at the retail sales number. still extremely elevated. yet people are saying hold on,? when does this momentum slow that is the conversation we use to have around big tech. now you are having them broadly

across the market. when does the selling or spending i should say turn into selling? caroline: it feels like most people think it will happen when the fed moves, and brings up interest rates to cramp down on inflation. we heard rich clarida once again stick to the line that you will not be seeing any talk of tapering, until well into the job numbers any better. you saw him interested in where to go there for now. if you are going to think ok, the fed, i believe it, yes inflation will run hot. what asset classes will outperform now? kriti: great question. what is interesting, this is the line of thought i heard today from our own lisa abramowicz. talking about what if the fed is what is moving markets, what if it is the government spending? if you have this idea where we are in an environment where the market is in some ways addicted to the fed's support and the strong -- support and i know that is a strong word.

at what point does the range gets shifted to the infrastructure package, geopolitical tensions? you saw him make comments about competing with china. when does not come back into the forefront? when you have those other fundamental narratives that are beyond the fed, i think that is when you will start to see a more cross asset picture where you start to see the dollar stock correlation we were talking about become a much bigger story and a much bigger relationship, not just in the dollar but things like commodities and stocks, bonds and stocks. right now we are not there. joe: the flipside of dollar weakness is euro strength. they started picking up. people have been talking about vaccinations, opening tourism. is that an underappreciated story? that is obviously the biggest dollar pair. the idea that they will be catching up more in this quarter the summer. kriti: can i view, it is the ultimate cyclical value rotation, except in the currency world. you have so many different variations. you have emerging markets that

trade to the dollar, but this idea that they are riskier bets. you have the euro, commodity exposed currency like the aussie dollar. i think the euro falls into that, not just because they are the opposite in the scenario of the dollar being this haven global reserve currency, also because they are so exposed to the travel picture. when you look at the correlations, you can see that energy, airlines, other cyclical names trade in line with euro. caroline: love a cross asset picture. we love it when you read the narrative together with us. kriti group dow with us. we will be reading the narrative on what is happening in housing. supply chain issues, starting to see that impact the supply chain constraints and material costs. we are going to get the value with air -- with our chief economist. this is bloomberg. ♪ berg. ♪

romaine: u.s. housing stocks, disappointing in april suggesting supply chain constraints. costs may be holding builders back. let's bring in u.s. economy reporter olivia rockman for more on what is going on. is this a supply chain issue? olivia: the data in april shows while it increased, the backlogs continue to mount in april. there were significant -- significant worse than economists were expecting. joe: this is what struck me, the backlogs. the gap between the number of

permits for the number of units that have been authorized versus the numbers that have started. right. those numbers were at the highest since the late 1970's. that is even worse than the great financial crisis. we have to assume that it is lumber prices, supply chain issues, and kind of this mismatch between how many people want to buy versus how much they can produce at a time. caroline: today for once, the last seven days, we got a daily update. prices are coming down. are builders feeling more optimistic that these can be ironed out? olivia: builders continue to be confident that they will be able to meet supply. as he said, lumber prices, lumber futures have fallen for july. the hope is that this backlog will be cleared by the summer. it remains to be seen how quickly that will happen. joe: great stuff. our thanks to -- our thanks to olivia rockman. for more on housing, i want to

bring in chief economist ali wolf. you heard the discussion about the data, the backlog. where in your view is the key constraint, and why many data points these days are economists having a hard time getting the number right? ali: could to talk to you guys again. i'm surprised people were not surprised that housing prices were coming in the way they were. we were looking at the data as we talked last time, there was this massive tug-of-war between what is happening on the supply side and on the demand side. right now, we are in the thick of it. we track lot supply. we look at vacant developed lots. these are lots that could be turned into something tomorrow. that is at the lowest level it has ever been. as far as we have been tracking it, we have never seen inventory for ready to build lots low. you should not be surprised that stocks are not keeping pace with the demand. then it goes back to the other headaches we have talked about.

romaine: that goes into this idea of affordability. i would think they would go ahead and start building those things if they thought that they could pass on some of the cost to the end buyer. is that not the case? ali: it is. when we talk to builders, we say what are the biggest issues you are facing? number one is the building material cost. number two is the building material availability. sometimes, homes will be built and they cannot get windows and they have to wait on the home because they are not able to get all of the supplies. that is frustrating and that messes up the building process as you are going through it. every three his new home affordability. we are hearing builders start to pivot their talk on affordability. starting to get nervous about how high prices have gone up and how quickly. caroline: are they sensing peak demand? i mean, are they not able to shift some of what they are currently building because the prices have gotten too high? ali: for now, they have not seen

demand. a lot of builders feel confident that in the future, they will continue to see a lot of demand. because another part of that lot picture are lots under development. these are lots that have equipment on site or they are going through excavation. dirt is moving. builders bought a lot of land over the last year. it takes time to get it ready. the builders believe that if they are able to bring those lots to market, then all of a sudden, they will beat -- there will be buyers that are ready for it, because of the massive supply in demand balance. let me give you a stat i heard today that blew my mind. if you look at a market like phoenix, the third biggest for overall housing starts, it is one of the markets that will have almost every public builder active in it, the entry-level price point in one year time moved up from $250,000 to $350,000. that is what makes builders nervous. joe: explain this further. i'm having a hard time wrapping

my head around it. on the one hand, as we talked about with olivia, there is a huge gap between lots that have been -- sorry, authorized for building of houses, but where there is no actual start. what you are saying is we see actually that there are not many spots immediately ready for building. i'm trying to understand what the difference between the two data points is to reconcile those. ali: yep. when some of the homes that are becoming started, those are going to face their labor issues. joe: right. ali: i know we have talked about lumber and windows and other building supplies. 20 have seen is home sales are up 40% year-over-year, at the same time that construction employment is up 20% year-over-year. if you are going to be saying ok, we want to start these homes and bring them to the market, not only are we facing these building supply issues, but you have to get your framers to come on-site and get all of the other contractors and subcontractors

to get on site. that is becoming one of the issues. the second point -- romaine: go ahead, i'm sorry. ali: the second point you mentioned is those vacant developed lots. those have been absorbed very quickly. that would mean developers had brought that to a finish lot, you can build on it, builders would have bought those and they are working through those starts right now. but to backfill those, that is one of the biggest issues right now. romaine: i was curious here, going back a little bit about labor costs. and what the builders are reporting on that level. ali: yeah. it is twofold. you are finding that with all of the different things. when you talk building materials, it is cost and availability. when you talk labor, it is cost and availability. you are seeing that they are asking for more money, you are seeing there is upward pressure on wages from the corporate side all the way down to the actual building of the home as well. it is also how are you finding enough skilled laborers to be

able to match all of the demand we are seeing. caroline: geographical breakdown, any areas that people are moving from or moving to in terms of the labor? where they shift -- or are they shifting around to find the highs price? ali: the craziest markets to look at is if you look at starts and starts compared to what we have seen let's say last cycle. last cycle, the peak was so high. those are crazy numbers to compare it to. you actually have a few markets across the country where single-family housing starts are above the levels of the mid to thousands. that would be areas like nashville, austin, texas is one of those big markets as well. just the style states. florida, tablet, jacksonville, even orlando have done really, really well. if you are looking for construction work, you can go to those markets. again, if you are talking about, in jacksonville for example, sales are up over 60% year-over-year.

you need the workers to help build those homes at what -- as well. joe: ok. we are seeing this throttling of demand. there is still plenty of demand from actual people who want to live in a home. for various reasons, supply constraints, labor constraints, so forth, is just slowing down. is this eventually demand that will come back on and it is going to get essentially elongated over the coming quarters and years, but eventually it will materialize? ali: i think it is a great point. what they know is 91% of builders are intentionally slowing their sales. meaning that they could sell 25 homes per month, per community. they are choosing to sell five. that goes back to the cost. they want to be able to control their cost, and appreciation. they don't want to sell that home, now that i will go up in value $30,000 while they are building it. they want to be able to capitalize on some of the

outside as well. that is the builders landscape. romaine: this is pretty much nationwide or are there regional differences? ali: it still is nationwide, yeah. as we look at that in then to go to the demand question, i think it is a really important one. we are now at the peak age of the largest living generation, millennials, who are ready to buy homes. millennials on average are 30 to 31 years old, they get married at 32, and they are ready to buy homes at the same time. when we are looking at those trends, we have a lot of millennials that bought this year, but there is millennials that are not competitive in today's market. they are losing out. they are moving out to investors. they are losing out to 55 plus buyers. what i have found in my research, we have surveyed millennials every year for the past five years. what they had said is we want to buy a home. but the lack of inventory is holding us back, we are afraid the market is going to drop, that is holding us back.

and also the inability to come up with a down payment and be competitive today. romaine: allie wolf, a lot of great data. ali wolfali wolf love talking to you. , chief economist, talking about the big mess we had today with regards to residential housing starts. even though you have the big miss, you have backlogs, applications to build, supply chain constraints. we will be back in a moment. this is bloomberg. ♪ ♪

romaine: time for a look at her business flash headlines. bank of america is going to raise its minimum-wage to $25 an hour to make it easier to attract and retain employees.

bank of america's current minimum is $20. the $25 wage will kick and by 2025. the bank will require its u.s. vendors to play employees dedicated to the bank $15 an hour. interesting factoid. fidelity looking to attract the next generation of investors. the firm's unveiling a new type of account aimed at 13 to 17-year-olds that will allow them to save, spend and invest their money. teenagers will be able to take their own trades on the mobile app with zero account fees. they would have to have a parent or guardian who also invests with the firm. bitcoin, another major cryptocurrency, falling today. word out of china that the central bank reiterated that digital tokens cannot be used as a form of payment. no one is using bitcoin. bitcoin down more than 5%. that continues the long slide, spark by elon musk and his back and for comments about what is going on in the crypto space. those are your business flash headlines. i'm told it something else big

happened in the crypto space. caroline: nato's of the day. i don't think it gets bigger than this in the world of crypto. it is something that was called and is called the stallworth coin. someone has made you your own mean coin. joe: i just want to be crystal clear, it is not my coin. i have nothing to do with it. i own none of it. i don't recommend it. you almost certainly will lose money if you tried to buy it. i'm curious about how easy it is to create coins these days. and to prove it, someone on twitter made and listed a coin called the stalwart token, named after my twitter handle. and got it listed within 45 minutes. on a network called pancake slop. romaine: there was not a lot of due diligence. joe: not a lot of due diligence. i can't offer security. it has no use. it has no value. at one point, and again, all of these numbers are made up, completely ridiculous, i think

at one point, it was worth $100,000. romaine: i do have a serious question, because we see these new coins get created every day. i wonder about the people behind the creation of these, and what is in it for them. for some of this, this is not just a joke. joe: i have been trying to dm with them throughout the day. i should have been doing this for longer. romaine: are you now part of a international cryptocurrency? joe: they invited me into their telegram chat rooms. people just do this and try to pump coins and make coins and try to find coins that some other more foolish person than them is going to buy. it is a big thing. caroline: into a 14, you actually tried to legitimately start. joe: i did. caroline: what did you want to solve through your crypto? joe: we had an idea for crypto where if people owned it, they got to go to dinner with me and my friend who made the coin. the stupidest mistake we made

was trying to give it real value. but you had to do mining in setting up a wallet and finding an exchange to listed on. these days, you change lines into code and it takes 45 minutes. the kids who are making coins these days, they have it super easy. i'm really jealous of them. caroline: building a digital business. just too easy nowadays. joe: it is too easy. it really is. i wrote about it on the new blog. you can check out the whole story there about -- caroline: can you pay real money for that? except crypto for that? joe: you cannot pay for the blog with meme coins. you've got to pay good old fashion usd, taxes. that i do endorse. romaine:/an old man. -- such an old man. caroline: that is it for "what'd you miss?" joe: "bloomberg technology" is up next. romaine: have a great evening. this is bloomberg. ♪ this is bloomberg. ♪

>> 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 in the next hour, president biden takes a tour of electric vehicle manufacturing at a ford plant. central to both u.s. infrastructure