matt: good wednesday morning. i am matt miller in berlin. paul sweeney my coanchor and partner in crime in new york. this is a special simulcast on bloomberg radio and bloomberg television. we will be here all week, and we are very excited. a lot going on today. we had some richmond fed manufacturing data that i thought was pretty exciting. we had some covid data that was a little more depressing, but also some positive news in terms of less severity of disease. we had some great corporate news from apple, giving surprise bonuses which is nice this time of year, although they are

restricted stock bonuses, so you got to stay there. we've got another record high. if we close at this level, because we did drop yesterday almost five points in the end. if we close this level or more than that, we will have a 70th record high. paul: we've got eco-data out. pending home sales, they were off 2.2% month over month in november. the consensus was for plus 8%. that is a negative surprise. but i sold a house. you bought a house. we were active in the market place. so i am not sure what everyone else is doing. matt: i just went into contract about two weeks ago, if you must know, so i will not be in the november data for a couple of months. paul: the housing market has just been awesome throughout this pandemic. it has an amazing. low interest rates, plus the

mass migration out of the cities. matt: for the sellers has been pretty fantastic. the question is, does that turnaround at all into 2022? something we will definitely be covering throughout this hour. we have home sales rising 2.2% for the month over month figures are get in terms of the markets, as you just saw, we had some movement on the s&p 500. a little bit of a gain, just about 6, 7 points. in terms of the bonds right now, we are seeing the 10 year yield traded at 1.51 7%. yields rising as investors let go of those bonds. it's go to abigail doolittle. she has more on the markets. abigail: i think the key word is some movement because it is a relatively quiet day. not surprising in this holiday

week. the s&p 500 up just about 0.2%. as you have mentioned, heading to a record close if these gains hold. the nasdaq fluctuating dust around even. i will point out, volume down even more than yesterday, if that is 20 day moving average. a lot of traders not in it. apple, i am officially on apple's watch for $3 trillion today. let's see whether or not that happens. as for next year, because this is a time when we are looking in strategist forecasts for the following year, most of the estimates are suggesting we will see a fourth up year for the s&p 500. the low estimate at 4400, not so much.

the high, 50 330, a greater than 10% gain, so we could be looking at a fourth year of double-digit gains if that high estimate is correct. not sure what strategist that is. the average, 4950. whatever way you slice it, it does look like there could be gains ahead. thanks earlier had been higher come up -- banks earlier had been higher, but at this point we are looking at mixed markets. bank of america up fractionally, goldman and morgan stanley down more than 0.2%. i would

low-volume, smaller moves. paul: thank you so much. we appreciate that. abigail doolittle giving us a market view as we open up on this wednesday. let's take a look at 2022. 2021, heck of a year. what can we expect for next year? esty dwek, flowbank cio, joins us, i believe from geneva. give us your 30,000 foot view of how you are approaching 2022 after the big gains we have seen this year. esty: i think the gains are going to continue, probably not on the scale we have seen this year. it would be difficult to replicate 27%. but i do see further upside. we had these variants come in and delay reopening. that means prospects for 2022 are improving, and it looks like we will move quickly through the omicron variant. fundamentals are still pretty good. earnings are expected to be quite strong. it will probably be a little bumpier than 2021. matt: is fighting the fed going to be one of the big problems? esty: i think that is one of the big questions. the market is pricing in three rate hikes already, so in a way

it sets the fed up for a debit surprise. it would be difficult for the fed to be more hawkish than that. it will be very interesting to see how omicron can impact supply-chain disruptions, which we thought were at the peak in november, december, and improving in the first half of this year, with china's zero covid policy and the olympics coming up, those supply-chain disruptions could last a bit longer, and than the fed is going to have that balancing act. but i do not think they are going to make it to three hikes. paul: what are your thoughts about inflation here? for people filling up their gas tanks, going to the supermarket, inflation is very real, and i guess the question a lot of folks have is how long are we going to have to deal with this? how do you think about next year? esty: that is the big question. you can see that especially in the u.s., you have that reaction

from the consumer. in the grocery store, at the tank, those are things that people notice and feel in their wallets, so we have that reaction. we have started to see it is having a little bit of an impact on purchases. there is a time when prices become so high that consumers decide to wait or to hold off or to look for alternatives. the fed has moved away from that transitory word. i think it is more of a headache than anything for them to try to justify. but i do expect inflation to abate, though it could take a few months longer than expected. we have probably seen the worst of it, or close to that. matt: allow that has been caused by supply-chain disruptions due to the coronavirus. now we've got the omicron variant with more than one

million global infections. is this a real problem, this new wave, or is it more of a speed bump? esty: from a gross perspective, especially because it is happening end of 2021 and into the new year, it should not have that big of an impact on overall 2022 growth. i think where we have to be careful is it is a little bit less of a strain, so it does lead to hospitalizations, but the number of people who could be infected means those hospitalizations numbers could prove trickier than we think in the next month or so. but beyond january, when we look at south africa as an example, the numbers skyrocketed very quickly, but they did come down relatively quickly as well, so this code and hopefully will only be a question of the very beginning of the year, and should dissipate by the end of

the year and have more people with immunization. matt: thanks so much. esty dwek -- esty dwek joining us from flowbank. at the beginning of the session, tesla was up. it has fallen, but the company is still worth $1 trillion, even as the ceo continues to sell off his stake. this is bloomberg. ♪

>> into thousand six, 2007 -- in 2006, 2 thousand seven, we set up small investing teams in asia. a year into it, we shut it down. the laws may exist on a pisa paper and some of these emerging markets. they are really not followed in practice. we want to fix these businesses that get troubled. we're trying to do a lot more than just be pepper investors. your ability is really stymied, and as a result, when we look at

asia, we say for the most part, not really for us. >> do you think china will become a viable market for credit investors like yourself? >> there are some credit investors already in china. some of our peers have operations out of hong kong. they have significant investments in china. so we will just agree to disagree. we think over the next 10 years, it is not changing. you look at the headlines coming out of china every day, and the u.s. papers. if you are a u.s. investor and they are trying to re-structure companies and improve businesses. >> if you are -- why not raise

the private equity? >> in five years, will there come a time when we say should we raise our private equity fund? maybe. but 40% of what we fund, i would think 50% plus of what we do will be control oriented investing. >> but largely through debt. the reason i asked this question is because what you do for company is is what private equity firms, many of them, due to companies. improve, restructure, rehabilitate, consolidate, with the goal of building a more valuable company. the only difference is that you are buying from a lower valuation, they are buying at a higher valuation anaplan

leverage to get the same returns the -- valuation and applying leverage to get the same returns. >> we believe we took our equity stake at two times stabilized ebita. the businesses i'm describing today, the corporate businesses we are taking control of, are five times, six times ebitda. when you think about where the average merges multiple is 11, why would we be in such a hurry to go there? if we can keep buying at 5, 6, seven times, and there is low hanging fruit operationally because these businesses are troubled in some way, it sounds like a great way to invest. so we don't see ourselves in a hurry. we don't see ourselves in a hurry to go by at 11 times e

bitda. >> some in your industry are buying spac's. do you have any interest? >> why bother? [laughter] i think what you are hearing from me is we are not a supermarket. we are not like, this is the flavor. i've got one of those flavors for you.

♪ matt: welcome back to "bloomberg markets." this is a special edition simulcast with paul sweeney out of new york and me, matt miller come out of berlin. we are both on bloomberg radio and television. thank you for joining us on this wednesday. earlier today, i was on

"bloomberg surveillance," and we got to talk a little bit about tesla after elon musk sold another $1 billion worth of his shares overnight, with dan ives, star analyst and tesla bull from wedbush. >> if you look at demand in china, starting off this year it was rocky. now going into 2022, it is about a 50,000 per month run rate. it is a linchpin to the bull thesis, plus the supply piece that is really key because the profitability for cars they sell in china are incrementally higher than those they sell in the u.s. and europe, and that is why, in our opinion, this is a stock that continues to move higher on the china story. matt: dan has, i believe, a $1400 price target on tesla. it was moving up in the early

trade, even after the news that musk sold more of his stake. he wants to get 10% off the books to help them pay taxes. it is now moving down. let's get over to kriti gupta, looking at tesla for us today. kriti: it is fascinating to talk about just how much money he is making off of this. we are getting very close to that 10% stake threshold he tweeted about a couple of months ago. 15.6 million shares is how much he has offloaded. he needs 17 million to hit that threshold. but he is making $24 billion off of this so far, and the reason for that, to ask plane to our viewers who aren't familiar with what he is doing, he is exercising options he bought in 2012 when tesla was trading below $10 a share. it is now above $1000. he is buying has less shares at that value and selling them again at the current volume, and that is how he's making billions off of this trade, doing this so that not only does he pay taxes

on the options he required, but it is also a very profitable trade he is making right now. paul: the stock is up 50% year-to-date, despite the big sales by elon musk. dan ives was saying most of the street remains bullish on this. i think that is very interesting because in the last year, we have seen the world's automakers, gm, ford, volkswagen , the big players a huge commitment to the ev market. it is going to be a lot more competitive. kriti: and tesla has really set the tone for that trade. what is interesting to me is how tesla is really expanding. it is not just about getting the world to take on electric vehicles. they are also bringing a lot of the software, a lot of the engineering in-house. they are talking specifically about bringing lithium batteries, for example, as one of their major products they use in their lecture vehicles and in the ev revolution broadly, but the longer-term plan down the

road, when everyone has an electric vehicle, is to start investing in battery recycling facilities. this is a very long term plan. in the short term, to the point of dan ives, he is talking about expanding in china. he's also talking about building factories in germany, which we know is kind of building its own semiconductor supply chain that is a little bit more localized to europe. it is going to be something that really catches your eye because at the end of the day, electric vehicles need more chips, more semiconductors than your average car does, so getting that supply chain even closer is going to play into not only tesla's bottom line, but play into the stock price as well. that is going to be something to watch not just here in the states, but around the world. matt: of course, the other big thing that electric cars need is charging stations and infrastructure that hasn't really been built out globally, although it has to be said tesla has done an incredible job with its supercharger network. the other players like rivian

and general motors, ford and volkswagen, lucid, etc., they have a long way to go to catch up, although i guess reportedly, tesla will open up its supercharger network to competitors. this is a huge advantage elon musk has right now. kriti: the other advantage comes from what you are going to get from the federal government in the united states. tesla is the benefactor of a lot of tax credits because what they do is come at the end of today, sustainable. it is green energy, essentially. so a lot of those tax credits from the federal government have been helping with this expansion. on top of that, not only are we talking about tesla's charging network, but also talking about a national effort to create this kind of a ev infrastructure, and that is going to be something we really have to see how that pans out. it is part of that build back better infrastructure bill as well. the question is how long does it take, and how do you really price that into a stock when a

lot of drivers in the united states don't yet have an electric vehicle, and now they are going to be dealing with candidates from ford, from gm, from other trusted automakers that have had their business from years on end? paul: thank you so much. we appreciate that, as always. matt, you are the car geek. are you going electric? matt: well, my wife is really encouraging me to lean in that direction. i would like to, but one of the biggest problems is inventory. for example, i would love to pick up a ford f1 50 with the new power boost hybrid powertrain. there just aren't many out there , and they are having trouble building enough to keep up with demand. gm is coming out with its hummer , a big electric pickup truck. ford is coming out with the lightning. rivian is already selling cars. but the waiting lists are going to be one, maybe two or even

three years long. a lot of these companies just can't make them fast enough. paul: let's get your order in there because you are come back to the states. you've got to drive in from westchester into the city every day. can't be doing that in a hummer, so we are going to have to figure out something. very quiet trading here, as you would expect on a wednesday between christmas and new year's. we will have more coming up. this is bloomberg. ♪

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>> i think you put on a trade where you bought a lot of gold futures, and you are called by some a gold bug. gold is now $1700 announced or so. are you believing that gold is a good investment at this price? >> we do, and thank you for bringing that up. we believe that gold does very well in times of inflation, so what happens is if you own long-term treasury bonds that are yielding 2% and interest rates move up to 5%, those bonds fall materially in value. likewise, if you have cash sitting in a bank that you are earning 0% on, inflation is 4%, you are gradually eroding the value of your money. so as inflation picks up, people try to get out of fixed income. they try to get out of cash, and the logical place to go is gold, especially if it starts to rise in inflationary times. but because the amount of money trying to move out of cash and

fixed income towards the amount of investable gold at the supply and demand imbalance causes gold to rise, and the more it rises, it feeds on itself and has the potential to go parabolic. >> so today you are a big believer in gold as an investment now? >> we thought into thousand nine that with the fed doing quantitative easing, which is essentially printing money, that that would lead to inflation. but what happened was while the fed printed money, they at the same time raise to the capital and reserve requirements in banks, so the money sort of recycled when the fed bought treasuries and was redeposited at the fed. so the amount of excess reserves that the fed almost rose by the same amount they were printed, and the money supply was not inflationary. this time around, the money has

entered the money supply. the money supply was up something like 25% last year, and the best indicator of inflation is money supply. so i do think we have inflation coming will in excess of what the current expectations are. ♪ paul: welcome back to special coverage of "bloomberg markets," special because we are simulcasting radio and tv. we are doing it every day this week, keeping you up-to-date on market moves. we will take a look at what is going on in forecasts for 2022 and get you the latest on this pandemic and its impact on this economy. one of the issues coming to the fore once again with this omicron variant is vaccination hesitancy, and how that is driving caseloads into hospitals. we want to dig a little bit deeper and that with neetu abad,

thank you so much for joining us here. we are hearing from professionals that the vast majority of cases coming into the er from this variant are folks that are unvaccinated. just give us a sense of how this has evolved in this country, and what we can do to maybe try to improve those odds. neetu: thank you so much for having me. i think we have seen since the start of the pandemic people have questions around these vaccines. there are questions about the safety and efficacy and how they work. we have been doing our best to answer those questions and address those concerns. of course, we know that there are pockets of lower trust in the system, and we are working at cdc to address that, to

increase trust in the system that provides the vaccines. that is what you are seeing now. it is a longer process for some, but there is no wrong time to start vaccination, to get vaccinated. matt: paul and i, we got our first couple of shots and thought we are good to go. we don't have to wear a mask anymore. we are not going to get the virus. now you've got to wear a mask pretty much everywhere you go, and even vaccinated people are getting the virus pretty easily. neetu: yes, i think the complex nature of this virus and the changing science in what we are learning every day, it can be challenging to the public to let them know what we know as we know it. i think that process takes time. it also takes trust. we are in this stage where we are really building the support for what we are doing and trying

to get people to understand it and to translate that science into understandable pieces of information in real time. time after time, study after study has demonstrated that vaccinations, that boosters are the best way to protect yourself and your family from covid-19. matt: at the same time, you are a social psychologist. you are a behavioral scientist. how much of this is really strong political partisanship? i have noticed that the same people in my instagramming facebook feeds who are pro-trump , conservative republicans, for lack of a better term because i am not sure if pro-trump makes you a conservative republican, but those people who were vocal about that are also very vocally anti-vaccine. neetu: it is not really any one particular group. the foundation of questioning is

this lack of trust, and that is really what we are trying to build in all of the communities that we work in. we know that across the board, no matter which demographic, younger people are not as vaccinated as older people. we know the visuals living in rural areas, people who lack insurance, these, in the data we collect continuously, we are learning more and more about the folks we need to be really concerned about. all of our strategies that we are pursuing are about addressing that core trust issue. we know that some people really listen to their health care providers. they've got trusted providers in their life, where they go to the doctor's office and have that one-on-one conversation. that is a great way to get people to come around, to understand the process here. other people are listening to people in their church or people in their community circles, and yet other people can be reached by family and friends who are

sharing their stories about why they are getting vaccinated. so it is really an across-the-board effort that we are engaged in here at the cdc. paul: how effective are vaccine mandates? we have seen them from corporations, from local businesses. if you want to come into my tavern and have a burger and a beer, you have to be v axxed. how effective are they? neetu: they can be very effective. they have been historically used . they can be quite effective in increasing rates of vaccination. at the same time, that does not replace the core of what we need to do to communicate effectively about vaccines, address people's concerns, let them know that these vaccines are really safe, that they are effective area chair the data as we get it. it does not replace all of that real community engagement we have to do, but they are an effective policy tool that can be used. matt: is there a carrot to

dangle here? can we say after this next booster, everything can go back to normal, you won't have to wear a mask or keep getting shots? neetu: i think everybody would love to say that, but we are in real time learning about this virus and the tools that we have to fight it. so we want to make sure that we are communicating what we know, and also not overpromising, not letting people know things that we don't know for sure. we all want to get back to normal. i think everyone is incredibly tired of the pandemic, about of the mitigation measures we have to take. the opportunities we have missed out on. vaccines are the tool that can help us store normalcy. if everybody get vaccinated, we won't be overwhelming our hospital system. we can look to get back to that

life that we really miss. so i think that is the messaging that we are striving for, to get back to that normal. matt: you have a difficult job, that is for sure. neetu abad is the lead of the need for immunization team at the cdc. we see another one million, globally one million cases, the second day in a row we have seen that. when we come back, rachel lipson, founder of the harvard university project on workforce, joins us. this is bloomberg. ♪

>> let me ask you about the investment world today. many people are excited about cryptocurrencies. do you have a view on that? >> i think it will have profound effects. there are many different avenues that can go. there's stable coins, and fts, blockchain. people are using it for so many different things. i think clearly it is here to stay. i think clearly it is going to play some role. not clear what role it will play. for us it is important to dabble a little just so we make sure that we have relationships with people who are going to develop expertise, and we can leverage those to decide which way to go. it is not something we would invest a lot in at this point. it is a lot of volatility. there's a lot of risk, which is not something we are necessarily getting paid for right now. but for sure, we have the ability, because we are long-term investors, to explore new roads, soak up the currency is one of them. >> the inflation environment has

been changing a little bit. inflation has been low for 25 years. now people think inflation is coming back. how are you going to do with that? >> many of the tools we have historically used to battle inflation are no longer working the way they used to. i think people oftentimes thought of housing, retail and real estate as a way to hedge against inflation. less and less possible, the way we have invested in it. i think commodities similarly have been thought of as a way to hedge against inflation. there are challenges over the long-term. equities have been a hedge against the inflation. we will continue to build a diversified portfolio where there are many different opportunities that have the possibility of hedging against inflation because different types of inflation have to be hedged in different ways. so if it is a very quick increase in inflation as opposed to a slow rise in inflation, is it temporary, is it a long more

persistent type of inflation. for us, i never model myself as an economist that can bricked where inflation is going. so i need to build a diversified portfolio that can fight the different types of inflation. fundamentally, it is done through the equity markets. >> what about debt? the u.s. government has a lot of debt. it is adding about 3.5 trillion dollars a year. does that worry you? >> for a long time, i thought to myself, i was worried about the debt because of the potential impact on inflation and the value of the dollar, but i was not super worried about it until you have capacity constraints. we are starting to see capacity constraints which have a much larger impact on inflation. so as far as inflation goes, that is a mounting worry. but the issues around the dollar

and the sustainability of the united states and the reliability of it, whether other governments and other places and the markets trust the united states because the currency is just backed by the promise of the government, so they have to believe in the government, i think we continue to have a place in the world where people feel confident about us, but there are other powers rising every day, and there's other people looking around and trying to make sure that they also have a voice in the world, and we have to be conscious of that.

matt: welcome back to "bloomberg markets." this is special coverage of the week between christmas and new year's, and which traditionally, nothing at all happens. so they said, matt and paul, would you like to simulcast on radio and tv for your eighth and

ninth hours of the day at work? and we said, why not? we would love to. have i mentioned the richmond fed manufacturing survey yet? paul: you have not, and i have been waiting for this commentary. matt: i am excited about that because as you know which of my biggest concerns is the supply chain snafus we have seen, holding back production, holding back inventory buildup. this richmond fed manufacturing survey came out better than it was last month, better than economists surveyed, the highest survey forecast was 13. we had shipping up to 12 from zero. i don't know what the numbers signify. [laughter] and we had finished product inventory at negative seven, but from -23. paul: i like the trend, up and

to the right. matt: sounds like it is going well. talk a little bit about return to work. this is another issue, obviously, due to the pandemic. so many people stayed home, still staying home. a lot of people have gone back to the office. i never stayed home, but you are back in the office now. maybe people are doing something hybrid, something new and different, something they have never tried before, which is exciting. we have a great guest here. rachel lipson is a founding project director of the harvard university project on workforce. i thought it would be great to talk to her about what we should expect in terms of the future of work. i guess we are never all going back to work the way we use to. it is never going to be like it was pre-march 2020, right? from now on, it is different. rachel: agree completely. it is pretty impossible to ask workers to just turn back the

clock and say all of a sudden it is march 2020 again. we have all experienced the past almost two years of changing patterns and changing lifestyles, and i think people have gotten used to the idea of having more flexibility in their life and thinking about different balances between the time they spend commuting, the time they spend in the office, the flex ability they have to spend time with their families, so for a lot of workers out there, there is no interest in going back, so as their preferences have changed, employers are going to have to think carefully about how much time is really required in the office and what types of roles are benefiting the most from that in person present, and what are the new modes of work that can accommodate these changing ways of working over the past almost two years now. paul: i spent most of my career on wall street, and i look back, what i take away from it really is the relationships. i wonder, and i worry, that some of the younger folks coming up

are not going to have that aspect of their career. how much of a concern is that? rachel: i think the skills that we have to be the most concerned about are these people are soft skills, the tasks that happen in a team setting. if you think about cooperation, innovation, working together, we just don't have a lot of research on this and we don't know how it happens online and how it might look different online then it doesn't person, so i agree with you that this is an area that we should really look the most closely at. the kind of things you can do by yourself in a self motivated, self timed way, those are the ones that i think are really easy to say let's replicate those in a home base setting or any way that can easily be done outside the office, but that in person interaction is really key , and an area where we should think carefully about how we maximize the types of things you can get in person or an online

setting, and the types of roles and times that we bring people back in. matt: is there always going to be a need for people to go into an office? i know now, we still see it as the social center. it is a great place to build relationships, for mentor-mentee education, etc. but as we move into this kind of surrogate world where we just plug ourselves in and live online, is that what the future looks like? rachel: the first thing i would say is we know there are a lot of american workers who don't work in an office, and for whom working from home is never going to be possible. using about the production lines in a manufacturing plant, that is not something you are ever going to be able to move into an apartment or a residence. if using about food service workers, hospitality, those types of roles, very unlikely to

ever be conducted remotely. but i do think we are going to continue to see changes. there are types of roles that people never thought were possible to do from home. using about call centers, during the pandemic, many of those workers wound up working from their living rooms and actually, if you see some of the survey data on this, many decided they could be more productive without all the background noise of other people on the phone at the same time. so i think there's a lot of innovation at this moment and rethinking, but we have to be cognizant as well that this isn't going to be possible for everyone. paul: i think one of the byproducts of perhaps a hybrid work or work from home is that it highlights the inequalities that are out there in our economy that maybe a lot of white-collar workers can work from home, but a lot of folks can't, and those are maybe some of the more blue-collar jobs comedy hospitality jobs that you mentioned, with some societal

issues as well. rachel: absolutely. if using about the great resignation right now, it does seem that there are significant shares of folks working in those types of roles who are looking at others who have that flex ability, and they want that for themselves. for some roles, it is not going to be possible, but can we thing about ways in terms of flex ability of scheduling, in terms of reducing commuter times, increasing availability of childcare, so that more people can benefit from some of those advantages of work from home? that is something that i think is going to be really important for employers to consider in the coming months. paul: rachel, thank you so much for joining us. rachel lipson, director of the harvard university project on workforce. i can tell you, the office here is pretty quiet today. matt: it makes sense. between christmas and new year's, i think as a society, we should just take the week off.

as rachel pointed out, there are jobs where that is not possible, and i get that. there are plenty of places at bloomberg we would need people to be weekend staff, for example, on the news desk. but you don't really need to watch us on tv or is in the radio. can i say that? i shouldn't say that. paul: i just think rachel's comment, the hybrid workforce, it seems like it is here to stay. it does not feel at this point that we will, or corporate america, will go back to the old ways. kind of feel like it might be kind of generational. we will see how this plays out. we will have more coming up. this is bloomberg. good morning. ing.

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matt: welcome back to "bloomberg markets." this is special coverage all week long. paul sweeney in new york, me, matt miller, in berlin. i rethought what i said earlier. you do need to be watching to us or listening to us. personally, i prefer to get my information from radio. but we look good on tv as well. that is not why, though. there's a lot going on. not only did we see a santa claus rally up until the last few hours of trading yesterday, but we got a ton of really interesting news. on the corporate side in terms of tesla and apple, on the economic side in terms of the richmond fed manufacturing surveys that i have been so excited about today, and on the covid side, you've got up arrow

and down arrow stories as well. we had unfortunately another one million plus infections yesterday, the second day in a row of a number that big globally. on the other hand, you are seeing more and more studies that say the disease from the omicron variant is not as severe as it is with delta and alpha. there are a lot of reasons to continue watching, especially if you have your money working in these markets. paul: there's a lot of crosscurrents out there as it relates to the pandemic. i know a lot of folks are fatigued and they want to move past this thing and stop focusing on the omicron variant, but the numbers tell you otherwise. i think one of the things people are looking for is is this a variant that will have a smaller, shorter duration then may the alpha and delta, since it is burning through the population so quickly? some of the data from south

africa suggests that is the case, so we will pay attention to that in the coming days and weeks. matt: let's go right now to kim caughey forrest from oka capital -- from bokeh capital, one of those people who does have money in these markets. it looks like we are about to finish a bang up year for equities. a third incredible year in a row . in fact come out of the last decade, we had seven years have double-digit gains on the s&p 500. can we do would again in 2022? kim: have me on your show at this time next year and i will tell you that we can. but he knows what is going on in markets. that is just the truth. but it looks like we are set up for at least the markets to keep going higher. and why is that? i strongly believe that once how

to handle covid is firmly cemented across the globe, we are going to have another leg up on growth, and it is because a lot of the growth has been not synchronized. so i think we still have room to grow. i also think, and this is kind of crazy, that businesses are going to actually deploy a lot of capital in making their current workforce more productive, and that is because the last few years have taught us that workforce is really important, and you really have to make the most of what you have. so i think productive kind of technology is going to be the thing that drives the markets higher next year. paul: i know your background is in technology. what are the tech sectors that you think are poised for some good growth over the next couple of years? kim: again, i listened to an ex

-ceo of a chip company this morning saying wait for the big fall because it always happens in semii. -- in a semis. for the next couple of years, we are positioned to go higher. the first trend, and it ultimately comes to productivity , any of the kind of consumer oriented tech is just icing on the cake, and it is unreliable because people switch so quickly. so businesses can build their business on productive technology. they stay there. anyhow, i think 5g for business, not necessarily for ordinary consumers, is going to be a big driver of semiconductor use. what i see is that businesses are going to be able to remotely monitor a whole lot of activities and allow for a remote workforce, and it is all going to be enabled through 5g.

so i am still very bullish on the 5g rollout, and even more bullish on products that will be built on top of it. matt: you covered technology i think through the big bubble, right? and then the bust. if i look forward right now, i say semiconductor demand is going to explode. we need to put more chips in things than ever before, and stuff you never would have even thought of. i talked to the ceo of ducati recently. they need a special trip just for the headlights. i know carmakers need a special trip just for the stop start button that saves a little bit of gas. it seems like there is unlimited demand, but it must have felt like that in 1999, too. kim: actually, i am going to say

no. that was my first year as an equity analyst. i moved from developing software my got an mba, and moved into covering software companies. a lot of them that people love to own didn't really have products. i just didn't get it. i did pick a handful of stocks that ultimately survived and even thrive through that time, but this time it really does feel different because i think a lot of wall street is overlooking business-to-business kind of technology, or productivity enhancing technology. you are right about all of these little weird uses of technology, at least in the consumer area, and i think that is only going to grow in the enterprise area. because you have a payback. if you can have a payback to put in a technology that gets you better productivity in a year or

less, it is a no-brainer. that is what i am looking at for things like this. paul: when i think about technology, one of the megatrends i hear a lot about is the cloud. i hear it on almost every conference call. talk to us about how you think about the cloud. what does it mean to you, and how should people think about investing in the cloud? kim: i am going to kind of myself as to how old i am. when i went to college in the 1980's, but we are seeing now is what my professors were talking about then. what we are going to see is a very connected world. the cloud allows us to connect. we used to do things on mainframes back even before my time. what the cloud has allowed us to do is integrate lots of different systems to be able to share information and then take action on them, or store that

information. the easiest acclamation of what the cloud is, it is somewhere where you don't care about, but you know it is there, and information gets stored and shared and processed there. how is that for a flyover? paul: i will go with that. so how should i thing about playing it as an investor? kim: actually, the cloud is an ephemeral idea, but made up of real computers. computers do two things. they create and access data, and the process. both of those things need chips, chips of different kinds. so the storage chips, you need a lot of those because we are creating unbelievable amounts of data, and 5g is just going to make that even greater. americans in particular don't like to throw things out, and that includes data, so once you've create data, it is pretty much there forever. so you need storage, and then

you need processing. the odd thing about the cloud, they are industrial sized computing machines, so you are developing a really big chunk at a time. so it can be lumpy. so think of that. it is not going to be a smooth continuum. paul: there's structured data, unstructured data, all kind of things. kim, thank you for joining us. talking technology stocks, big themes like 5g and the cloud. that is what gets tech investors up every day. they like some of these big growth stories. we will have more coming up and just moments. this is bloomberg. ♪

>> this is a kelp farm. it is a lot of area that you can't see. >> what began as a macroscopic seed in november, just seven months later -- >> these are average three feet long, and still growing. it is getting bigger every day. >> you grew up on the shore watching this washup on the beach. did you ever imagine as a child you would be farming this? > no, never. i never imagined i would be farming cap. i did imagine that i would be -- forming kelp. i did imagine that it would be on the water.

>> i kind of looked at him then, 15 years ago, and thought, i don't know. i don't know if this is going to go. and once we got into the process and built those first farms, and i saw his vision was, i was like, there is something here. >> the very first kelp farm in the united states was right there, here in maine. now there are more than 100 farms in maine alone. the industry is growing as fast as the kelp. the global commercial seaweed market is projected to surpass $85 billion by 2026. right now, 98% of the seaweed you buy in stores and from asia, where seaweed aquaculture dates back 1700 years. >> kelp farming is amazing. it requires no fresh water, no

fertilizer, no feed. at the same time it is growing, it is just setting up nutrients from the water. it is also cleaning the water. it photo synthesizes like a land plant, but it is like 20 times more efficient. this stuff is amazing. and then you end up with this superfood. >> so this is it. it is heavy. >> it is heavy, yeah. >> but not something people want to eat like this. >> this is really delicious. >> the key vitamins and minerals you're going to find in kelp are a and k. calcium, potassium, magnesium, zinc, and omega-3's. >> courtney and her partner launched four years ago with the goals of building a sustainable business, fighting climate change, and creating new food. >> so much of our soil today is depleted of vitamins and minerals because of the way that we are mono cropping, and we are

sucking that in with the kelp, putting it into a burger, and you are eating it. >> the patty is made with mushrooms, black beans, chickpea flour, and extra-virgin olive oil. but the main ingredient is kelp. it is not meant to mimic meet, but offer a satisfying alternative with a rich who mommy flavor -- rich umami flavor. during the pandemic, they raised $1 million through crowdfunding. this season it will buy out colleen's entire 30,000 pound crop. >> how does this compare to lobstering? >> this is so much easier on the back. [laughter] i have always wanted to come back to agriculture because of sustainability, and after seeing years ago what the potential was for kelp and the ways it really

positively impacts the environment, that makes me feel like it is a good business to start. plus, it is absolutely beautiful. look at that. >> every $5 million in revenue we are earning, we are pulling one million pounds of harmful carbon out of the sea. everyone says, how do we fight climate change? we plant trees. so we are basically planting a rain forest under the sea. >> a hidden rain forest quietly cleaning the ocean while growing a base of healthy new food.

♪ paul: welcome back to a special edition of "bloomberg markets." matt miller is in berlin. i am here in new york. we are simulcasting bloomberg radio and tv. having a lot of fun with that. we are looking at the markets in these last trading days of 2021, and looking forward to 2022.

recognize that the white house covid-19 briefing call is underway right now, and we are monitoring it for any headlines, and we will bring you those should they occur. right now, let's look forward to 2022. generally a constructive call out there as we talked to fund managers, but there's certainly a lot of crosswinds out there. want to bring in kristine aquino with bloomberg, based in london. bloomberg markets live it a survey recently highlighting there are a lot of risks out there. what are investors concerned about as we head into 2022? kristine: there's a lot of them, as you say, but the resounding concern for investors is very much inflation. it is something we have heard as well from external surveys. a lot of investors are very much concerned that inflation is going to be the big catalyst that brings on the bearish case, especially for stocks in 2022,

and something that central banks and policymakers may make mistakes in trying to contain. matt: we have heard from investors or analysts that they expect 8, 9, maybe even 10% earnings growth in 2022. is the idea that they are not considering inflation as a high enough for sustained enough level, and that we are actually going to see those margins being devoured? kristine: i think that is exactly right, very much a concern when it comes to margins for companies. the big driver for the bull case for the s&p 500 is that very healthy earnings outlook. it is still very positive heading into 2022, but as you say, it is really where the margins will make a difference whether we factor in inflation,

because the question we should be asking is how much are companies able to pass on to consumers in terms of the higher costs they are facing, and how willing will consumers be to pay for those higher costs? i think we have to consider at some point, there will be a pain threshold for consumers when they are buying these goods, and that could be something that very much eats into these profit margins that we are looking at for companies into 2022. paul: you spend a lot of time on your beat looking at currencies here. do i just buy the dollar here? i am not sure what to do with the currency market in 2022. what are you hearing from the traders and investors you talk to? kristine: i don't think you are alone in being really confused about what currencies are going to do in 2022. i think that is one of the biggest questions, particularly where the dollar is going to go. the dollar has been notoriously one of these currencies that

continually confounds strategists. a lot of them said it was going to be a down year for the dollar in 2021. that certainly was not the case. now they are expecting more gains in 2022, but i think the worry is that we might be seeing a lot of those gains already playing out, even as we head towards the end of this year, and there could potentially be a pullback. so weight is not as straightforward as a lot of strategists were hoping it would be. i think a lot of it depends on the fed and whether investors really buy into that idea that the fed will be able to deliver the three rate hikes they have set out to do in 2022. matt: i just had my mortgage loan officer asked if i want to lock in the rate now because he says just in little bit this morning, they are about to push the rates higher because of the moves in the bond market. so i am actually right now more concerned about what you see in

terms of rates. not to make it to personal. but are we going to see rates finally rise this coming year? kristine: i think that is the general consensus, that the direction is higher. the question is to what extent. i think there is very much still , structural factors going on in this bond market that would argue maybe we don't see, for instance, the treasury 10 year yields going much higher above 2% for various reasons. so yes, that is technically higher from the current levels we are seeing, but not that much of a rise, think about the velocity with which it gets there. but as far as your mortgage is concerned, you definitely have skin in this game, and i think it would be safe to say that higher yields in 2022 would be a safe assumption. paul: matt, lock in that rate. call your guy. i would love to get your

first 10 views of how are things in the city of london, canary wharf? how are things these days? kristine: from personal experience, i have been locked up in my home office for the last two weeks because of covid related concerns. i think a lot of people are in that same boat, especially over the holidays. you definitely saw that quiet holiday period even more exacerbated by the fact that people have been trying to isolate, trying to stay safe as they see their families for christmas. it is going to be really interesting when i make my return to the city next week for the first full week of trading. i will report back and see what the coffee lines look like next week. matt: yeah, tell us what it looks like. thank for joining us, kristine aquino, covers the markets for us out of london. i want to bring you some covid

related headlines we are getting out of atlanta. the cdc is saying the seven-day average of covid deaths fell 7% to about 1100. that is still a number that is far too high, obviously, but great to see it is coming down. covid deaths, seven-day average down 7% to 1100. we will talk more about that when we come back with graham cooke, imperial college london infectious disease professor. this is bloomberg. ♪

>> he always wondered to go slow. he wanted to move step by step. so sub-orbital, the edge of space, and bringing tourism there was going to be the first step. then they would get to orbit. then they would go to the moon. what happened was the hare came along. elon finances it with government capital and gets all the glory, and then bezos has a fair amount of, i don't know if jealousy is the right word, but curiosity that elon is getting paid by the government to launch and he is still funding blue origin every year. so we have seen bezos accelerate blue origin's timetable, ambition, and timelines, and seen a bit of dysfunction or the past few years. so far, there has not been a lot to show for it. ♪

>> over the past five years, an

expert in land and air management has been planting shrubs throughout the region in the hopes to slow down the acceleration of debt certification. with the roots finding to the soil they can withstand the desert. she says the shrubs have done their job, they have stopped the movement of the sand. the nearby village would've been in sand in a few years. they save the village. with its northern latitude, experts warned temperatures and russia are warming up twice the global average. despite the efforts, the sands have doubled in size in the past two years. for nearby towns it threatens the mainstays of their life. last year the region was expected to lose 80% of its livestock after a package from the regional government to supply feed to the animals, the number hovered around 25%. he says it was horrible to look at the cattle. they would look for grass but

there was not any at all. when you drove, you would see the corpses of cows and camels flying everywhere. you felt pity for the animal. policymakers have these areas in mind when it comes to talking about climate change. the deputy agricultural minister says efforts are directed at solving the consequences of climate related disasters. experts worry the game plan will never address the root of the problem. he says the problem of to certification is big because of the past couple of years that have been dry, overgrazing by cattle, and most importantly the pastors are not rejuvenating. while the russian government has a more aggressive decarbonization plan, the time may be late for the herders that make up the villages in the region. he says the main enemies are

sand and the wind and heat. there has always been heat. there is no escaping it. lately is getting hot in the summers and the winters are warmer. paul: welcome back to bloomberg markets. this is special simulcast coverage this entire week. paul sweeney in new york city, matt miller in berlin. we are both on bloomberg radio and bloomberg television. what we are seeing today is in s&p that has fallen back down below the zero line. the s&p is now losing two points . 4784. we are still near record highs.

we were only five points off the record highs yesterday. now we are down to 4783. the record high for the s&p we hit on monday at the close was 4791. we are only about eight points below that. the nasdaq is down more substantially, .3%, aztec stocks are leading the losses. the dow jones industrial average is still up over 36,000.

i think it is interesting to look at what is going on in rates. we are finally seeing gains. they are not immaterial. 1.5462 on the 10 year as investors feel comfortable enough to let go as -- let go of the perceived safety of u.s. treasuries. we got a positive headline on covid from the cdc. the seven day average of covid deaths fell 7% to 1100. any number is what we want to reduce, but it is good to be going in that direction. it is -- paul: it is. a lot of folks have been looking for the peak of the variant. we saw in south africa a sharp increase and a sharp decline following quickly. perhaps that is a big we can look forward to. we will certainly stay on top of that. there is white house covid response team press briefing going on right now. dr. fauci said patterns suggest lower hospitalization to case ratio, and that is what we have been hearing since the beginning of this variant. matt: a lot of talk about in terms of the virus. as usual.

we have a great guest to bring in right now. we will go to london, i believe come and talk to a professor, graham cooke from the imperial colleges. he is an infectious disease professor. the perfect person to give us his take. you are always wanting more data. from what you have right now, what is your assessment of the current coronavirus situation in this new omicron variant? graham: it is good to talk to you. you are right, we need more data . at the moment we are in interesting position where we are still seeing high numbers of cases in the community, record highs in many countries across europe and the world. at the same time we have not yet seen that reflected in the number of cases going into hospitals. dr. fauci has said in the u.s. we are seeing the ratio of case the hospitalizations changing,

that is similar to what we are seeing in the u.k. omicron established itself locally. we expect three or so weeks after that to start seeing a rise in hospitalizations. we are seeing a rise, but not to the extent we might have feared. it is still a case of watching closely where things go in the short term while the rising cases and immunitycommunity. paul: a fluid situation on a daily basis whether the cdc reducing the quarantine time from 10 days to five, assuming the person is a symptomatically, they need to wear a mask for an additional five days, how do you view that? graham: is a tough call. different countries are taking a different approach. 10 days is the standard. five days with a mask at the end is the recommendation.

all governments are trying to balance the need to get people tested against the duration of this. 10 days is a long time to isolate and that has a big impact on the economy. we are worried about that. i can understand the sentiment in trying to shorten it. five days without masking would be too short. with masking it is a different proposition. still a significant portion of people will be infectious after five days. in england we are using a slightly different approach for days six and seven. we use a rapid test and that is negative, then you can come out of isolation. it is seven days but only if you tested negative. matt: i think a lot of people

will not want to. if you're a stay-at-home dad, you have the kids to deal with, you have your parents, you may not want to, or a working father or mother, even worse, having to go back after five days of recovering from a fatal disease. it has to be emotionally challenging. you have to be concerned about the risk of the spread. we think omicron spreads faster than other variants. does that mean it has more of a chance of mutating, either in one direction or the other? graham: any circulation of the virus is likely to experience new variants. the year ago we anticipated there would be variants.

you cannot tell how they will behave. the same variate moving to different population might behave differently. all the viral -- all the while the virus is circulating there is the possibility we will get new variants and only when they emerge can we tell how they will behave. paul: thank you so much for joining us. appreciate you taking the time. graham cooke, purell college of london professor of infectious -- imperial college of london professor of infectious diseases. potential headlines out of the cdc. people trying to get a sense of when this will peak in the united states. this is bloomberg. ♪

>> goods can come and leave without ever touching human hands. it opened during covid. this is the first big test.

so far it looks like things are going well.

>> particulate in certain roles like housekeeping on the culinary areas. while we have seen some easing of that over the last few months, we still a ways to go. it is something we are working very hard on. it is a complicated issue. throughout this there been health concerns, people do not want to go to places where other people are congregating. significant issues on childcare, particular when schools were not open, people had no one to take care of their children.

there been government policies that compensated people that were unemployed in ways that provided some disincentives. then there are some people that have been reevaluating life and what they want to do and some of those folks have said i would rather go work in a warehouse rather than clean rooms and other things. it is a complex equation that will take a significant amount of time to work through. we are a lot better off than we were three months ago. when we wake up over the next year we will be able to get labor back to do what we did. one of the biggest concerns the industry has is people like me of got used to using zoom. instead of traveling across the country i can zoom. is that a big concern people will say the zoom experience is good and i do not need to travel? >> it is not a big concern for

me. i think the world is figuring this out. a year ago i think people were saying this is so efficient, maybe i do not need to do the things i was doing. i think a year later everyone i am talk to is realizing there are real limits. it is great technology. we use it and it has facilitated our ability to continue to communicate during this crisis. there is an unstoppable force that exists with humans, which is humans want to interact with humans. that is not just for a vacation. humans want to interact on business to build partnerships, to innovate, to build culture. they want to congregate. they want to network. they want to grow their business, to build relationships. i have no real worries. every time, if you look at the minute people start to feel like

we are through the crisis, the demand for meetings and events skyrockets. people are dying to get out.

matt: welcome back to bloomberg markets. this is special coverage on bloomberg radio and on bloomberg television. we have seen the markets turn around. this is been an up-and-down day in terms of the s&p 500. we have seen them up, we have

seen them down. we are now looking at 4786. let's say we are four points away from a record high. if we close above 4791, almost 4792, then we will see a 70th closing record on the s&p 500. the dow is up 57 points. the nasdaq is down as tech stocks are lagging. paul: i want to get to one of the top read stories we have on the bloomberg terminal. credit suisse is said to be initiating a pro into its chairman's recent breach of swiss quarantine rules. i've been following the story. i'm not sure what a big deal it is. michael moore, bloomberg's head of u.s. finance has been following the story.

is this the swiss just being anal or is there something there? michael: you have not seen this in a variety of jurisdictions. this question of do top executives get exemptions from quarantine rules? we saw in hong kong. you have a combination of things. you have the swiss have strict rules and they were changing around this time that this happened last month. then you also have a new chairman preaching personal responsibility and accountability in his efforts to turnaround the bank, and then some local press reported he asked to get an exemption from those rules, to get the exemption and left the country early anyway. that is why it has ruffled some

feathers locally and why the bank would be looking into it. matt: from an american perspective, this is just weird. spade -- spain is less than 500 miles away from switzerland. if you had to quarantine before going from new york to eastern pennsylvania, right? it is not a huge distance. are there significantly different roles between spain and switzerland? michael: some of it has been differences in the national approaches, especially around the time with the emergence of omicron. you did have some rules changing , different quarantines changing. we have seen that throughout the pandemic, trying to limit

international arrivals, and in this case departures. paul: thanks for joining us and giving us the latest update on another not such a good news story for our friends at credit suisse. michael moore from bloomberg news. this week we've been focusing on outlooks for 2022. let's look at the commodity space and how that space is looking forward next year. we do that with goldman sachs head of energy research. thanks for joining us. i want to start with crude oil. wti crude oil just under $76 a barrel. that is a nice pop off of the low of a couple of months ago, but still below the high of $85 we saw in october. what is your call on crude oil going forward? damien: we think oil prices go

higher. we just have to sustain high-level now to get supplied to ramp up. that is the key shift in view from 2021 to 2022. you have lockdowns, travel restrictions, not fully, but demand recovered to pre-covid highs. demand will recover in 2022 and the key issue will be we are not seeing that incremental investment in supply. shale has picked up but producers of not guiding to anything sufficient next year. the key call is to sustain the highest prices we have seen since 2014 to get that supply response. big factors which will add to volatility this year, i ran, any potential other variant. what we learn from 2020 one is demand did recover but supply lagged.

that needs to change in 2022. paul: in terms of natural gas, we have seen a lot more volatility than we have it in oil, especially in europe. the u.s. has been more stable. what is your outlook for natural gas prices in 2022 in both regions? damian: the u.s. is probably the easiest. production there is short cycle. in the end after the wave in 2022 the market will be violence -- will be balanced. most of the move has already happened. europe is at a critical point. through december we have rallied 100%. until we erase that we have resolved nothing. we are running at record low inventories for this time of year at this rate. we have fewer risks of running out of gas if the weather turns cold in the first quarter.

volatility will remain high. from here, especially after the move lower we would argue the near-term risk as to the upside. we are price to increase energy imports to make up for lack of russian imports. russian imports have not picked up. you are not incentivizing that anymore. as it turns colder as the weather forecast is starting to suggest, you are back to having to rally significantly. that is the core risk. as the weather warms -- i want to emphasize it has been a spectacular rally but it has not resolved anything yet. the same risks apply for next winter. supply growth has also slowed there.

that risk of industrial activity, gas activity, all are still real risks for next winter in europe. paul: it was too short and i hope we can get you back on again soon. damian is the head of energy research at goldman sachs talking to us about oil and natural gas. we are looking at an s&p 500 that is going nowhere right now. looking at 4785, 4786. down a little. it has been up a little bit more throughout the day. it is looking a little bit more difficult to get to the 70th record close for 2021. paul sweeney. i matt miller. this is bloomberg. ♪

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paul: we are back with extended

bloomberg markets coverage. we are doing the simulcast thing , bloomberg radio and tv. romaine bostick and paul sweeney in new york. matt miller had me on this 47 92 watch on the s&p 500. that would give us another record high for the s&p, but we are flat at 4785. romaine: a lot of nothing today. that has been the story despite the record high on monday. when you look at volumes across the board you wonder if anybody is trading this market. i am sure things will pick up next week. as far as what we saw yesterday and what we will see over the next couple of days, there may be stasis. we are still camped out around the record high. i do not know if matt told you this. the dow jones industrial average trading at a record high. paul: jon ferro does not pay attention to it. let's check in with abigail doolittle and get a complete market check. abigail: i think that is a

pretty recap you just provided in terms of the s&p 500 fluctuating around all-time highs, perhaps set 70th record close if it can eke out the green close. the dow possibly the first record close since november 8, up six days in a row. that is longest daily winning streak for the dow jones industrial average since march. as for apple, i am on official $3 trillion market cap watch for apple. we are not seeing it. it is like watching a boiling pot of water. we are not getting that $3 trillion mark. tesla down 1.4% after elon musk is done selling his shares. the 10 year yield above 1.50. many analysts think we will see 2% in 2022. romaine: we have to go back to

apple and the slow boil. it is within striking distance of that and all of the confetti threading the $3 trillion mark. we look at the price targets into next year and the next 12 months, the majority are pretty bullish. abigail: it is interesting because i'm doing some work on apple for the 3 trillion darlie mark -- for the $3 trillion mark in history does suggest we will climb above three choi dollars and then perhaps come down. outside of inlets being bullish, if you look at the growth estimate, it is not so bullish. fiscal year 2022, their year ends in september, looking at growth after 72% growth in the past year and 33% growth on the top line. it'll be interesting to see where that shows up. typically it does before when there that first revenue drop.

we saw in 2012 over another fundamental issue. i do not know how that bullish forecast will work out for analysts, at least quarter by quarter. by the end of the year it may be fine but there is some reason to think there could be bumpy action ahead. romaine: abigail doolittle helping us kick off the latest leg of the simulcast for our bloomberg tv and radio audience. we will keep this conversation going and bring enderle croft, wells fargo wealth and investment management ceo. we are using this as an excuse to look back at 2021 and to look ahead at 2022. when you look ahead into the next year, what is your general outlook? >> happy new year romaine and paul and abigail. we have s&p target of 5200 with a range of 5100 to 5300 this time next year.

what people forget, everybody is worried about the latest covid variant, the fed, inflation. the s&p tends to peak at the end of a tightening cycle, not the beginning. we are most assuredly at the beginning. i think you have to stay bullish into next year but 2021 has been a unique year. paul: one of the concerns i have is an old-time equity research analyst is profit margins in 2022. that goes to the inflation call. if you think inflation will be around for a while that puts pressure on profit margins that on those s&p earnings estimate we see on the street. how do you think about that? darrell: it is a great point and one everybody is focused on. will margins deteriorate? i think what is important, and people are missing this, is the fourth quarter will be not only the best-performing quarter, it will be the best-performing quarter for economic growth in

the entire calendar year. if i have my eyes on four things to read the tea leaves for 2022, it is around revenue, not operating margins. operating margins will come as the sales for top line revenue comes. i am watching the u.s. dollar and spreads in the yield curve will stop those are the four things that will determine how equity markets do or do not do well in 2022. romaine: when you talk about what the fed is about to do or what we anticipate they are about to do, you also have to factor in the fiscal policy for the attempts at providing additional money, whether it is stimulus or whatever the biden administration is marketing it as. i wondered you worry any additional money coming down the pipeline could distort or make the fed job harder when it comes to fighting inflation? darrell: it is a great point.

it is going to be harder. let's not kid ourselves. the biggest correlation to inflation has been m2 money growth, which today is still growing at double digits notwithstanding a fed tapering and trying to tighten policy. is it down from earlier in the year? yes, but we are still growing, the last figure was 13% year-over-year. that will continue to put pressure and it will keep policy easy. the other thing around fiscal is 90 days ago we were talking about increasing capital gains tax, increasing corporate tax rates and increasing the upper income tax brackets for the wealthiest individuals. all of that has been shoved aside on the fiscal side and we are now talking with anybody with less than $10 million of adjusted gross income will not see a tax increase in 2022. with the child tax credit and salt, fiscal could be more of a tail wind next year than people believe it is. paul: it has been a long time

since this market has had to perform in the face of rising interest rates. that is what the fed is telegraphing. how much of the concern is that for you? darrell: it is always a concern. we think the 10 year treasury this time next year is around 2.25, lower two. certainly the fed tapering has been distorting the yield curve in our opinion. that has been well documented. we think you have to get in the upper two before rates become a material headwind to earnings growth. demand is stronger than people realize, both in the economic growth and earnings growth standpoint. my biggest concern is as investors step up into 2022 they are a tough question, should i be at eight risk or pulling risk out of my portfolios? we think it is more the former or the latter today. romaine: i want to get your

thoughts on what we are seeing in the commodity space and how much of a read through we haven't economic conditions and people's perceptions of economic conditions considering the rise we saw in oil, even a lot of the industrial metals and to a smaller degree some of the soft commodities. darrell: look at simple things like soybeans putting their best month together of the year in december. we think commodities will continue to do well. we went overweight commodities and portfolio in june 2020, basically eight months ago. we are continue to hold that into 2022. keep in mind commodities have rallied, notwithstanding a much stronger dollar throughout the year, which is not usually the case. history teaches us commodities go in long cycles. we think we are in the early stages of a super bowl in commodity cycles and supply constraints take hold. most investors are underweight commodities in the portfolios because of the decade of

underperformance. we would have them change that. if they have not done so already they should be doing so. paul: let's get a little bit out there. what do you tell your clients about crypto? how do you tell them to approach that space? darrell: it is the second most frequently asked question, only behind where is inflation going? we like it, but we like direct exposure to crypto. we are not as much of a fan of the futures-based etf. we would like to see regulators come forward with more liquid structures that can have direct investing. the technology is game changing. i have likened it to the apple iphone in 2007, being that transformational. we will see new industries and businesses and sectors spun off from this when we roll the clock forward five to 10 years from now. romaine: with regards to other

alternative investments that folks have gravitated towards that we have seen in fixed incomes and the high valuations we've seen in equities, what are people asking you about. darrell: 2022 will be a unique year in the alternative space. we are seeing more new funds being raised in sizable funds being raised in we have seen at least a decade. there is tons of capital, a lot of capital chasing a finite or limited amount of ideas and investments. we do think that will pressure irr's for those structures, but we like them opportunistically. we think you have to be selective in 2022. i would not blindly allocate two alternatives. i would start to dial in on where those opportunities are most idiosyncratic or benefit the portfolio most. paul: thank you so much for joining us. appreciate you taking the time. we appreciate your perspectives and your outlook on the markets.

darrell cronk, wells fargo investment management. coming up, we will get a d.c. round up. lots going on even though most of the congressmen are out of d.c. lots going on. this is bloomberg. ♪

paul: welcome back to an extended bloomberg markets. we are simulcasting radio and tv , having some fun with that technology. we bring the latest on what is going on in the markets. a couple of trading days left in the year. quiet trading. as well as looking forward to 2022. that is where the focus is on

the when people get back to work. i am looking at the markets. red and green. no direction. that is what you would expect. romaine: volumes 40% below where they were and below where they were on the average basis over the course of the year. the last two days, monday and tuesday, where the two lysed volume days we have had all year long. it looks like today will be lighter. paul: there is news. we have a lot of stuff coming out of washington. there is lot on the plate for lawmakers when they get back. let's get the latest on what is going on. we do that with marty schenker, our man in all things washington, d.c. for bloomberg news. thanks for joining us. i want to start with president biden. we are getting headlines president biden will speak with vladimir putin about "upcoming diplomatic engagement."

i think it is good news when these folks are speaking. how do you read it? marty: it is clearly good news. the cnn report says it was vladimir putin who requested the call. as you know, putin and biden were scheduled to have engagement on january 10 and this is in advance of that. since the russians asked for it and biden believes it is important for him to speak directly to vladimir putin. romaine: how important is it on the biden agenda. we are coming up on the one-year mark of his inauguration and he has been focused on domestic issues. i am curious as to whether there has been a shift in this administration to the loose ends that have been out there. marty: you are right. he has concentrated on domestic issues and covid. to a certain extent he has been criticized for his lack of foreign policy coordination on

issues like china and russia. to the extent he can diffuse the situation with ukraine and vladimir putin, it would be a win for him. paul: after the prior administration, one of the selling points of this administration is we would bring calmness back into governing, including dealing with foreign policy. what is the goal for president biden as he begins or intensifies his dealings with vladimir putin? marty: he certainly wants to do no harm. we remember that controversial issue with the australians and the submarines that ticked off the french so much and that was not a good step forward for him and his state department. anything he can do to diffuse the situation, to confront energy issues that are vexing europe, that would be a win for

him. marty: i want to go one step down from the president to the vice president. one of our bloomberg news reporter had a great story about kamala harris and it could be characterized as are seeking advice from corporate leaders as to how to grapple with some of the issues she has been dealing with. she has not have the spotlight in a way past vice presidents have had. marty: the spotlight, to the extent she has gotten it, has not been a good one. she has made a number of missteps. there are reports that she denies and her staff denies of inviting with other members of the white house. this is an important step for her to define her role. it is always a difficult issue for vice presidents to figure out where they can make their mark. this is the place i think she thinks she can make a difference. paul: this week we have been spending a lot of time taking a

look ahead at 2022 for markets. i want to do that for politics as well. 2022 midterm elections, critically important for both parties. what is the feeling within d.c. of how this might play out? we have 11 months to go. critical time. marty: totally. if you were to measure the electorate right now, i think it would be tremendously challenging for the democrats to hold on to both majorities in the house and senate during midterms coming up. conventional wisdom, you can throw it out the window these days. it is what is going to happen this summer leading into november that is going to determine what happens in the midterms, and who knows where we will be then. romaine: let's look back on 2021 and someone who was instrumental in congress for a few years, harry reid, the former senate

leader who passed away. maybe you can give us some context into how consequential he was in congress during his terms? marty: anybody who recalls harry reid knows he was not the most charismatic leader. romaine: no. marty: he was soft-spoken and stood in the background, but by all reports he was a master manipulator and powerbroker in the senate. he alone delivered the victory in the senate for obamacare when it looked like it was going to go down into failure. he is a prickly important person in the obama legislative agenda and while he was outgoing and seemingly quiet, he was a tough fighter. he was a boxer in his background. romaine: former utah state grad as well passing away at 82 years of age according to pancreatic

cancer. marty schenker giving is the update on everything going on right now in the space in washington. we will go to the crypto space. paul: why not. romaine: matt miller is gone but crypto is here to stay. bitcoin flat on the date. it has been in the doldrums towards the end of the year. still well above where it was when we started. we will talk about that next. you are listening and you are watching bloomberg tv and radio. ♪

romaine: this is special markets coverage, formal siebel cast on bloomberg television and radio -- a global simulcast on bloomberg television and radio counting you down everything that happened in the year and looking ahead to 2022. romaine bostick europe alongside paul sweeney. one of the biggest stories has

to be the direct listing of coinbase, which for a lot of people added a certain degree of legitimacy to what had already been a well embraced phenomenon. paul: crypto emerged in 2021 as certainly an asset class for a lot of investors, a lot of parts of this market. there is still a lot of skepticism about crypto in general, bitcoin in particular. we are seeing more and more embrace of this asset class. romaine: just yesterday we had a great conversation on bloomberg tv and radio with the ceo of coin list, new platform where you can buy all of the various points. it is well beyond bitcoin. unicorn status of around $.5 billion. graham jenkin is the ceo of coring list. here is what -- of coin list. here's what he had to say. graham: the arc of history as

long. bitcoin was not doing so great and increased nicely. a lot of what is happening in the world. i think over time bitcoin ends up being an asset to invest in. romaine: this is a world that goes beyond bitcoin itself. when you talk about all of the various use cases for it beyond a speculative asset, how far along are we in that process with regards to the way people utilize it rather than just invest in it? graham: what is not that clear to the world at large, to the mainstream, is what is happening with bitcoin, with this bucket of technologies, blockchain and cryptocurrency, is it is a revolution in software development. blockchain technology represents a new way to build, distribute,

and run software, potentially running it indefinitely. all the software for articles built over the last 20 to 30 years, whether it is e-commerce, social, all of those verticals are being attacked by blockchain, cryptocurrency applications. we will see that continue, not just through 2022 beyond. >> talk to us about how you market to an individual still concerned about volatility. you can make gains, but you can use them too. new investors are not necessarily looking at stocks, they are looking at cryptocurrency. how do you market to someone who might be the polar opposite of that? graham: that is a tough one. part of the way to talk about it might be in terms of talking about the price of the u.s. dollar and how that has changed over the time. a lot of people focus on bitcoin price.

there are not as many people who focus on the price of the u.s. dollar. at one point u.s. dollar bought 100 bitcoin. now one buys .0002 bitcoins. it continues to decrease in value. that is part of the way you tell the story, especially with respect to bitcoin, talking about an asset that is somewhat inflation resistant, at least over the long-term. that is a good way to talk about it. paul: that was graham jenkin, coin list ceo. coming up, we will get the latest development in the pandemic. we go to the smart folks. trinity health chief medical officer to get the latest data. it is a fluid situation. this is bloomberg. ♪

paul: paul sweeney here with romaine bostick. we have special coverage, the simulcasting between bloomberg radio and television, all week, as we stay on top of markets. since last trading week of the year as we look ahead to 2022, and as you would expect here, red and green on the screen and no real direction, knocking to make too much out of that. romaine: that will probably be the story for the remainder of the week. we had the rally with the s&p notching record high over the weekend. we see volume light today as we did monday and tuesday. the dow jones industrial average could potentially had a record high today. paul: and 47.92 would be the high on the -- 4792 would be the high on the s&p 500. what we do here i bloomberg is get the experts here. the pandemic does have an

economic impact on the markets and we will continue to do that with dr. tammy lungs from, chief medical officer. thank you for joining us here. i guess my question is we have this omicron variant, how long do you think this is going to be a continued driver? how much longer do you think we continue to deal with this omicron variant? >> thanks for having me. hopefully we will see the same pattern we saw in south africa which is a few weeks to a month of an increase of cases and then a rapid fall off of cases. but every country has been experiencing at the little differently, so that is what we are hoping for. romaine: we talk about the folks that have gotten infected here. what have we seen in terms of severity, hospitalization,

deaths? has that been shown to be manageable? dr. lundstrom: it is still early, but encouraging data from the u.k. and scotland came out a few days ago showing the rate of hospitalizations for cases is lower, so that is really good news, but obviously if more people get infected, that can still result in more hospitalizations. we are keeping an eye on things. i think the biggest issue that we are seeing along with every other health system is when community rates of new infections arise, so do infections in health care workers because of the communities we live in. so mitigating that and making sure we have enough staff to care for patients is always a major concern during a surge. paul: you are in michigan. how are things there? dr. lundstrom: still we have high rates of hospitalization,

high rates of community transmission still. although the positivity rate is down a little bit, it is still very high. so we have facilities in trinity health in 25 states, so we are seeing surges in multiple areas of the country, and again, really keeping our eye on staffing and supplies, always two of the things in short supply when there is a surge. romaine: has there been any major disruptions with regards to non-covid-related related treatments at your hospital? dr. lundstrom: we have several of our regions who have had to reduce or delay nonurgent surgeries and procedures to try to accommodate the increase in hospitalizations. that has been something that has been happening throughout the pandemic in the various surges. we are managing through that and it is very local and regional.

paul: doctor, one of the arguments i have heard a little more frequently as we are dealing with this omicron variant that once we get through this omicron variant, there will be two types of people out there , let's focus on the united states. those vaccinated, boosted, that good stuff, and those that have been infected. that is kind of the world we will be in. is that how you envision it? dr. lundstrom: definitely we feel coronavirus will be with us for some time. we are hoping to get to the point where it is seasonal and we can be protected through either natural infection or combination, best of all seems to be vaccinations with a booster. and i continue to recommend that everybody get a booster that is eligible as quickly as possible, everyone get vaccinated as

quickly as possible, but we do know, at least some of the earlier data, that omicron infections protect a little bit against delta, so that is very early news but very encouraging. the other thing we need to keep in mind is as long as there are lots of new cases circulating, the propensity for this virus to mutate to yet another variant exists, so as fast as we can bring cases down through vaccination and boosters, we need to do so to prevent future variants. romaine: is this the cycle we will be in when this crisis -- when this crisis for started, when we first got the vaccination rolled out, there would be a question, will this need to be an annual shot similar to a flu vaccine? a lot of people are starting to feel that way with the booster being pushed. in your general view now, do we need to start to prepare

ourselves psychologically that each year periodically we will need a shot? dr. lundstrom: we may. i think it is a little too early to still -- to tell. there is a study in israel going on potential protection of a fourth does but i would say, if we can get to a place where we need periodic boosters like we do with flu, which also changes variants rapidly, as long as the vaccine protects against severe illness and death, even if it does not completely mitigate infection, we will be in a much better place. paul: the cdc reduce the quarantine timeframe from 10 days to five days but what do you think about that? dr. lundstrom: i think with some of the latest information coming out on omicron is that you tend to get infected and feel the symptoms much sooner, so

generally, that means the viral load is peaking and hopefully that means you taper off with symptoms. i also think there is an argument that we really need to keep health care and keep police fire ems working because those are the essential workers that will help save lives. so it is also a bit of a trade-off from what does the most harm. even people out of work who are needed to save lives or mitigate that with some period of isolation followed by mask wiring. i think that is the kind of balance we are in currently. romaine: and a lot of companies are trying to figure out that balance. we have been talking about how so many corporations when we come back into the new year will require a good portion if not theajority -- vast majority of the workers to be back in

office. a lot of them are taking precautions, requiring vaccines or masks indoors inside of those office buildings. i am wondering how much we could function as a society whether it is going to work, going to play, movie theaters, stadiums, tetra, given the protocols we have now and feel safe and comfortable. dr. lundstrom: i think the best way to feel comfortable is the layered protection we are talking out, vaccinations with mrna booster and wearing masks in public. and staying home when url. we know that if you have -- when you are ill. we know that if you have symptoms, you are my likely -- more likely to spread the virus whether flu or covid. staying home when ill is always a good thing and the layered protections are the best we have to keep everybody safe during the holiday season coming up and also throughout the rest of the

winter. romaine: certainly a challenging time i think for all of us as human beings on what has unfolded over the last couple years. we will all try to stay safe and we wish you safe travels as well. dr. tammy lundstrom, chief medical officer at trinity health. we have more coming up on the show. paul sweeney and romaine bostick your doing our sino cast on bloomberg radio and tv -- our simulcast on bloomberg radio and tv. 2022, a big driver for what happens in the market. john will be joining the program in a moment. this is bloomberg. ♪ s bloomberg. ♪

♪ paul: we are back with your

"bloomberg markets" special edition. we are simulcast bloomberg radio and television. paul sweeney and romaine bostick in new york city. kind of a wishy-washy day in the market, not a lot of direction. that is ok. light volume, a little move up in the dow. 10 year treasury are moving up, finally giving a lift up five basis points to 1.53%. it has been steady on rates he much the last four to six months. romaine: and a little repositioning going on here. a slight selloff on the longer end of the curve. kind of the story that has been dominating this market really for the last couple weeks, that is the story today, just with lighter volume. paul: let's head to washington, d.c. congress is out of session and will be coming back soon but there is a lot going on down there and a lot of things that will happen in d.c. will have an impact on markets in 2022. that's get a handle on those. we do that with eurasia managing director for the united states.

john is out in california today. thank you for joining us here. i want to start with build back at her. that seems like, i'm not sure if it's correct, a failure on the part of this biden administration to get this done. is that too harsh of a view? is there a chance to resurrect build back better? >> there is a chance. i would say the odds are under 50%. i think the real failure was overpromising. in a 50-50 senate, one of the smallest majorities in the house in american history, and they put forward incredibly ambitious plan to remake parts of the social safety net with a majority that was not there to support it. i think failure was earlier when they put out these big ambitious plays and past the american rescue plan and now we have this inflation and they do not have democrats behind it. romaine: kinda expand on that a little bit more here. the general theory on why they went so big so early seemed to

be rooted in the idea that they knew they were necessarily going to hold onto congress in november of next year. i'm curious when you look at the tea leaves as well as historical trends with regards to what happens after the leader of one party gets elected party, what happens to his party in the first midterm election. what should we expect out of ships of congress? >> i would expect republicans have -- who knows what will happen over the in months but the republicans have strong odds of taking at least the house and probably the senate as well. the house, they only need four to five seats depending on redistricting and that will be a loss in recent years for a president in his first midterm election. biden on historical trends is said to lose somewhere between 20 and 30 seat with redistricting. he could lose even more. you have backlash against his policies that will make it

harder to hold onto majorities. for me, will the democrats hold their losses to 15 to 20 seats or would we see a historical wave election where republicans are picking up 40 to 50 seats in a way that will be hard for democrats to call back from -- crawl back from in the next five to 10 years. paul: i want to look at the omicron variant from a political lens. this administration came into office saying the adults are back in charge and we will get a handle on this pandemic, trust us to get this done. it seemed to be the number one issue on this administration's to do list. then the omicron variant came along and set that back. how much of a political liability has this been for this president and administration? jon: i think massive. before omicron, delta shipped away the narrative that this is a competent group of adults that would fix the problems.

biden declared a mission accomplished moment before the fourth of july holiday when he said americans could have their lives return to normal. in the summer, the cdc came back out with recommendations people wear masks again indoors and coming into the winter surge, you see more cases on a daily basis in america then we have ever seen before. he will learn to live with the virus, the biden administration is pushing the vaccine mandate which gets a lot of pushback politically. if you look at biden's approval rating and on handling the coronavirus, it has been a steadily downward march as his approval ratings have sunk down. the virus will not go away. i think one of the challenges is he does not have a lot of tools in the tool kit. you cannot force a lockdown at a federal level and cannot force people to wear masks. you may not even be able to force the mandate for large employers if it gets overturning core. it is not much you can do and i think this will be a problem for his presidency until the virus goes away. romaine: he acknowledged that in

recent statements saying it is up to the governors to start making the hard decisions. we have already seen the political divide in this nation at the state level and local level. we know that is not going away soon here. how do we navigate this. from an investment perspective, people looking at what is happening, how do you navigate this if the federal government is new to a certain extent and it is pretty much a country that is governed by the governors? jon: a lot of our clients are looking to the disease, how deadly will it be, what will hospitalizations and case counts and deaths look like? they are not really looking toward the policy response. expectations is the policy response will be at the local level, cities, in some cases counties, maybe blue states. you might sedro kony and measures like capacity restrictions or indoor mask mandates or something like that coming back. you are starting to see some of

that around the country. i do not think anybody expect widespread disruptions to the omicron variant yet. i think it will be politically hard -- policy wise, it is difficult for a president to force anything. politically, i think it will be hard for even a governor like the governor of michigan to put in strict measures. people are dying -- people are tired of dealing with the disease. romaine: some of us are tired of the consequences. john lieber giving us great perspective. a lot more coming up on the simulcast, romaine bostick alongside paul sweeney. we will talk foreign policy deeper and particularly what is going on with china, there are economy and the chinese response. that will be right here on bloomberg. ♪

romaine: this is a special edition of "bloomberg markets," simulcast on bloomberg television and radio. romaine bostick alongside paul sweeney. keep an eye on china. a lot of data coming in toward the end of the year. interesting allow assists -- interesting analysis by the folks at bloomberg. a lot of eyes on the second largest economy in the world and how it will perform in 2022. carl riccadonna joining us now

to talk more. what is the general expectation based on models we have? carl: the general expectation is china, as they mean to manage the deceleration, not necessarily rev up economic growth as we head into 2022, they have critical pillars of their economic engine if you will, things like exports, and domestically it has always been fiscally driven growth and especially construction and housing. there are problems on that front as we look forward. the well advertised evergrande situation raises significant questions on the housing and construction sector and one has to wonder if we are moving into a slower growth regime in the u.s., but that will not mean muted demand for imports from china as well. we all know the story of the container ships waiting off of long beach in california but

u.s. growth is expending at a much slower pace next year, meaning that should mean a somewhat softer demand profile for those exports out of china as well. does not mean it will reverse but that will be less of a crunch for their economy. paul: how do you think the u.s., china trade balance or activity will look over the next couple years. we were talking tariffs and we had all of these tariffs on a lot of different goods across the economy, things got pretty bumpy. they have not gotten better. how do you think about that as you are forecasting gdp growth going forward for the u.s.. carl: it seems the sentiment around trade tensions and tariffs and whatnot has not alleviated as much as optimists anticipated at the beginning of the biden administration. there seems to be a taller tariffs that remain in place. one of the big tests going forward will be solar tariffs,

one of the first tariffs in place under then president trump. then it will be the first to expire, a q1 story in 2022, and we have not heard much in terms of a willingness to roll back the solar tariffs. i think that will set the tone going forward, not necessarily that trade tensions are intensifying but they are not moving in the other direction either. we have to expect some of that imported inflation to be in the u.s. profile as we think about the pricing profile going forward. china had been a big exporter of disinflation and deflation from the 1990's through the early 2000's. that very much ended with the trade tensions and war and i do not think we expect that to improve very much at all going forward. romaine: and real quick, only about 30 seconds, is there any other country that could fill that void? carl: there is no single player that could do that but there is

kind of a broader panel league of countries that can step into some degree to re-up in terms of higher and produced goods, vietnam and cambodia stepping in for lower end, lower quality goods like speakers and apparel and kind of less sophisticated products. there are countries that can step in to fill the void but there is certainly no single entity that can come close. paul: thank you much. we always appreciate your time there. carl riccadonna, he is the economist due to bloomberg intelligence. he is one of our go to folks as we chat about economic outlooks. we will check in with citigroup global head of foreign exchange. is there a fair case for the u.s. dollar? this is bloomberg. ♪

romaine: this is "bloomberg markets," special coverage on bloomberg tv, radio, and youtube. romaine bostick alongside paul sweeney. a low-volume day. the dow jones industrial average is squeaking toward a record high. a modest one at best but we should point out volumes are light and trading ranges are tight. paul: absolutely. i think you and i both deserve points for showing up. romaine: we have to show up tomorrow too? paul: we do. and new year's eve. the markets will open and that means we will be here. not looking for a lot of movement but a lot to talk about as they close out this year i had to 2022. romaine: we know just how wild 2021 was. there are so many sends that have to be tied up before 2022 that will potentially drive this market. let's bring in our first guest for this hour to help kick off the discussion, ebrahim rahbari,

citigroup global markets head of fx analysis. thank you for joining us. i think we are all kind of skittish about 2022, given how phenomenal this year was for pretty much most asset classes and how unlikely some of those gains probably were in the face of covid and the rest of the challenges we saw in the global economy here. how optimistic are you now for 2022? ebrahim: great to be with you. we are in fact moderately optimistic, particularly for the beginning of the year, as you said it is unlikely we will have risk assets continue the sharp appreciation. the big difference other than that valuation to reach extreme their highs is we are looking at it as section four monetary policy with the fed set to raise rates for the first time but also because central-bank global asset purchases are mostly going to come to an end over the

course of 2022. that being said, we think growth will be ok over the course of 2022 globally and these changes in monetary policy are not exactly unknown from the perspective of global investors. the class for the time being -- the glass for the time being is half-full. paul: is they air bear case for the u.s. dollar -- is there a bear case for the u.s. dollar? i don't see it. what do you think? ebrahim: we think the u.s. dollar will continue to appreciate, particularly the early part of next year and further. if we want to construct the bear case, the case would be for the global economy, the challenges and we will see something similar to 2017 or some version of a more secret knives to global recovery at a point where maybe the fed's

tightening efforts are mostly priced in by markets. we have a couple of parallels of 2017, so we would not dismiss that scenario entirely, particularly coming out of q1. romaine: give us some idea of the correlations or linkages when we talk about the economic recovery, monetary policy, how it ties together, and the idea that you have some countries going in one direction as regard to monetary policies and others going in the other direction and then the whole jumbled mass of our global economy supply chains, whatever you want to call it, linkages and breakdowns in linkages. how does that feed into the fx market next year? ebrahim: when it comes to the dollar in particular, growth is still the most important thing as a driver. global growth, generally when the global economy is strong,

the u.s. dollar tends to depreciate, but also the differential between the u.s. and others. 2022, global will be ok but u.s. will be most robust. that is why we think the growth outlook of the u.s., reinforced by fed monetary tightening, reinforced by policy diversions that will push the policy. rates and monetary policy are supporting in that regard. it is that hierarchy we tend to follow when we carry out our analysis of foreign-exchange models. paul: what is the bullish call for the euro? is there one out there? i do not hear it discussed often. ebrahim: we are skeptical too on the euro but it merits to a large degree the bear case where the u.s. dollar. it would have to be anchored in some version of a global

recovery or eurozone recovery, hopefully fueled by an end to the chinese slowdown but also perhaps the arrival of more economic sentiment in the u.s. itself, more fiscal stimulus out of germany, but as the supply chain constrains ease, global building takes off and manufacturing goes around again. as i mentioned before, in 2017, we saw just the pathing of the french election was an important inflection point for risk appetite of global investments. so we could see a couple of pieces of the puzzle come together in favor of europe appreciation but for us once more, this is the risk case, not the central expectation. but it should be seen in the context of generally fairly depressed at investor interest, so valuations are relatively more attractive in the euro zone

allocations relatively low. so the bar for the euro to do well is lower than say for the dollar. romaine: there has been a lot of talk this year at least about the idea a lot of central banks may have to start if not embracing pay more attention to cryptocurrency, stable coin, and that space here, in order not just to participate but to preserve the value or perception of value for their own fiat currencies here. does that appear at all as a risk to you in your forecast? ebrahim: to us, that is not a central topic. cryptocurrencies are interesting and for many other reasons, we have some of our own writing that there is a correlation between market price of inflation and the price of cryptocurrencies and bitcoin in particular. that is somewhat similar to the gold price historically, but when it comes to the setting of

monetary policy, i think mandates are quite separate. i think the monetary policy remains firmly focused on the observation and inflation reached levels they can no longer ignore. there are other powers in particular, supervisors, housing the same institutions paying a lot more attention to cryptocurrencies. central banks are supposed to become much more of a focal point over the course of this year but some of the projects make alive in the next couple months. paul: i'm willing and ready to take risk in 2022. do i go to emerging market currencies? what are your thoughts? ebrahim: we are skeptical. you could call it on emfx for the time being and it is the combination of the two major drivers with regard to the asset class as a whole. we expect tightening monetary

policies, interest rates to rise moderately, and we still think global growth will be ok because china, for the time being, drives rather than support. that is not an environment for emfx to do well and it ties up with our positive fore on the u.s. dollar. if we see us getting past the first red hike and signs of stabilization in china, that may be the time to get into emfx. from our perspective, it is too early. romaine: have you factored into moves -- factored in moves in commodity into that call? ebrahim: yes. from our strategy group we will see energy prices in particular decline over the course of the year rather than continue their dissent. if you like the commodity case for emfx, and our view, it is

the best mix as well. as a driver more broadly, we do not see that much outside in 2022 for commodity and fx. romaine: great stuff here. wishing you a wonderful new year and we will catch up with you hopefully on the other side. ebrahim rahbari, citigroup head of fx analysis. he gave a really great assessment from the fx space. i was reading something earlier on the bloomberg terminal that katie wright felt wrote about the s&p 500 and the bear case. we know a lot of people are bullish on what the s&p 500 could do next year but the idea is in the story we heard a lot about, inflation start to -- starts to take a bite out of corporate earnings and market valuations. paul: as you go into 2022, there is cautious optimism like we hear from a lot of people, a lot of strategists and fund managers

before there were a lot of headwinds you could put into your wall of worry if you will. rising interest rates, it has been a long time since this had to perform in the face of rising interest rates. we have the pandemic and uncertainty associated with that and you have slowing growth as carl riccadonna said. slowing growth. then you bring up a good weight simply about corporate profits which have been so strong over the last several quarters and have really supported this market. romaine: and we should point out the strategists we talk to here in the big surveys we do periodically, they are still looking at 49 to 50 on average for next year, which is not much higher than where we are right now but even highest estimates get into the 5300 level. they were light last year on some of those estimates when we had the survey about a year ago on this day. you want to talk tesla? paul: sure. romaine: that's all everyone

talked about. remember back in november when elon musk was tweeting, should i sell my shares? let's have a poll. then he started selling shares and everyone said did he take a poll or what was going on? [laughter] paul: and all to pay taxes apparently. romaine: you set a target about selling 10% of his stake and it seems he almost reached about that number, about $1 billion based on public filings. we will talk about tesla and elon musk after the break. romaine and paul sweeney, this is bloomberg. ♪

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romaine: welcome back to "bloomberg markets," special market coverage all week long, simulcast radio and tv. a main bostick alongside paul sweeney. keep an eye on risko. you either look at it and you are inspired or you look at it and you are a very depressed -- paul: just to see where i stack

up. romaine: elon musk stacks up well, his network halted -- vaulted to the upper echelons. he had to sell some shares, or at least he said he had to, and apparently he is almost on doing that. kristi noem will join us now to talk more about this. christine, musk came out a month ago roughly and basically said he needs to sell about 10%. he didn't say he needed to but he wanted to take a poll but he said he pretty much needed to do that based on filings so far. he has for you much met that goal, hasn't he? >> that's right. he sold an additional are proximately $1 billion worth of shares, bringing him close to meeting the 10% goal that he put on twitter in november and he asked his twitter followers if he should sell 10% of his stakes and the vote was yes. i think the question is whether he would have regardless. romaine: like if they voted no, would it not happen? >> exactly. some people said he needed to do

this for tax purposes but he is close to being finished now with this additional $1 billion share sale and it is interesting because the stoxx does not seem to know how to react. shares were up remarket, down for much of the regular session today, and now they are virtually unchanged. the assumption is this will remove an overhang from the shares once he is finished but as long as he is still selling, it seems to be putting pressure on the stoxx here and there. romaine: it is up about 54% -- paul: it is up 54% here today. it is trading around its high, 52-week high. so a little bit of weakness. do we have any idea on whether this is it, a 10% and then we are done or the could there be more -- or could there be more? kristine: as far as we know, this is it. he twitted -- tweeted the other day saying he is almost done sharing cells, -- almost done selling shares, at least for

now. there might be another one to come but this should be for the time being. he could -- he could change his mind in an hour. but the stoxx is still a 54% year today. it is off of its november high but it has still been doing well . prior to yesterday, the shares had gained four years in a row and that was the strongest four-day rally since march. tesla sort of has a mind of its own, the shares. almost regardless of the shares sales and other actual corporate happenings. we had a story recently saying its addition to the s&p rather than making the s&p fight -- rather than making tesla more of a normal, comstock, the s&p has become more volatile. on average, it's shares tend to swing four times more than the s&p on an average day. so it is not like the stock has calmed down and i think it is

safe to assume that will continue into 2022. paul: it is calm today, kind of unchanged on the day. kristine owram, thank you for bringing us the tesla story. let's go for one -- from one highly volatile security to crypto, maybe even more volatile. our next guest joins us talking crypto. it has been a hard month for crypto. what is going on there? >> it has been a tough month for bitcoin in particular having a choppy month. right now, it is on pace to have it's worst month since may. an interesting happening is over the last couple months, bitcoin has been trading in tandem with how the s&p 500 has been trading, so when we have an update for stocks, typically bitcoin was also up at the same time. that relationship has diverged right now. we have the s&p 500 on pace for

5% gain or so for the month of december. we have bitcoin down around 16 to 17%, so a lot of analysts are grappling with what is going on and what is behind some of this volatility, but it is not having a good month. romaine: talk to me about the correlations because a big selling point, at least in some of the early and mid stages here of the lifecycle of bitcoin and other cryptocurrencies is the idea it was basically the ultimate hedge. it was uncorrelated with everything and you could use it and invest in it how you want it. if those correlations pick up, does that diminish its appeal or increase it? vildana: ask any bitcoin trader different day and the answer might be something different, just depending on how it is moving. that was a big argument for owning bitcoin for so long. we heard a lot of hedge fund managers saying over the past year they were getting into the

cryptocurrencies specifically because they offer a hedge against inflation, for instance. a lot of other people who, when you speak to them, have done long-term studies say it has yet to prove it is a hedge against inflation, bitcoin is to volatile from day today. we will have to see if that plays out but it is not happening right now. romaine: thank you so much ash paul: thank you so much. we appreciate that. vildana hajric giving us the latest on bitcoin. a tough month for bitcoin and crypto in general. romaine: how much you have in your bitcoin wallet right now? paul: most bitcoin investors are certainly used to the volatility and willing to buy the depths. romaine: they are. in all seriousness, there is a lot of talk. we focus on bitcoin but we forget about the magnificent run-up we have seen in ether and some of the other particular

coins that the use case may actually be found in some other coins rather than bitcoin itself. definitely a big story to look at. paul: i fall back on the analysis from bloomberg intelligence. mike mcglone made a pretty compelling bouquet story which is simply limit supply and zoomable he ever increasing use cases and that supply demand pushes that commodity higher. that is how he use that. coming up, we try to get a little smarter on this pandemic on the vaccines. wake forest school of medicine demon deacon joins us.

tell us, it is the eighth or

ninth fundamental breakthrough technological transformation happening. we take it seriously because of that. david: it is just that the whole technology underlying bitcoin will transform the world? marc: bitcoin is an internet computer. it is spread out across hundreds of thousands of computers all over the world. if the transaction processing system without a central location. it processes transactions. out of that comes the ability to exchange money. out of that comes this token, the bitcoin token that the representation of value of the underlying system. it's a new kind of financial system. david: when people invent something, they might say i did something nice. the inventor has not surface publicly. marc: most people when they

invent something, they don't realize how important it is. whoever this person or ai, government agency, whoever invented, they knew the importance from the very beginning. ♪ paul: we are here in new york. special edition of "bloomberg markets." we are simulcasting radio and tv as we stay on top of markets in the waning days of 2021 and look ahead to 2022. a story came across the terminal i found very interesting about this pandemic. virus deaths in the u.s. are declining even as covid-19 cases rise, according to federal health officials. searching that the omicron

variant may cause less deaths. cases jumped 60% this week. deaths fell 7% with an average of about 1100 a day. interesting how this variant is behaving vis-a-vis delta and alpha. romaine: there has been a lot of anecdotal evidence that this was going to be milder than what we saw with delta or beta. it remains to be seen against how long this persists. i guess it does provide a sliver of hope if you're looking for optimism. paul: absolutely. what we try to do on bloomberg radio and television is give you the best information we have for the most informed people we can find, including our next guest, dr. katherine poehling from the workforce school of medicine -- wake forest school of medicine. what do you make of that data i just mentioned about cases? yes, they are rising with this omicron variant but deaths are

declining. dr. poehling: i think it shows the success of vaccination. we do know that vaccinations are great at preventing deaths and severe disease and hospitalizations. it does give us some hope. it will be important to follow with what is coming and we need to be cautious. romaine: we do need to be cautious. we have all seen statistics, somewhat grim statistics comparing the severity of this disease, this infection in unvaccinated people versus vaccinated people. what do we know? dr. poehling: there is a huge difference. the vast geordie of people dying are unvaccinated. the best way to protect yourself is to get vaccinated, and if you are eligible, get the booster. paul: you are a professor of pediatrics.

what do we know about this pandemic, this virus and kids/ -- kids? dr. poehling: children are definitely getting this virus. often the symptoms are like a cold and tend to be mild in children. it can cause much more severe disease. randomly and some people it does cause more severe disease. we also know about four weeks after the peak we start to see multiple inflammatory syndrome of childhood. that is what we need to watch and see how much we see after the peak. romaine: there has been a shift in focus among the administration in the u.s., not necessarily away from vaccination but more focused on testing. there seems to be an imbalance. maybe they are trying to catch up with it. can you put into context how

important the tandem is now between not just being vaccinated but having more tests and accessible test for those who want it? dr. poehling: testing is important. one of the things we learned through south africa and now in the united states is you can get breakthrough disease. access to testing so you can isolate if you are positive is important for both yourself and your family and your friends. paul: the interesting thing is the omicron variant seems to be ripping for the unvaccinated community particularly hard. are we going to get to a period where you will either be in the camp of have vaccinated and fully boosted or i have been affected and that's it? dr. poehling: we do have a sliver of hope. if we look at south africa, it

had a sharp peak and then started to decline. i do think in 2022 we will be seeing a decline. when it occurs is not clear. romaine: some of the more harsher measures in fighting this now, and i'm referring to quarantine protocols, lockdowns in some instances and in smaller instances bans on travel for certain folks. based on what we know about the science of covid and its variants, are those measures writ large still necessary? dr. poehling: i think we have the benefit of the vaccinations and have learned so much from that. a fair number of people have had the vaccine. we can take different measures at this time. paul: the cdc recently reduced the quarantine timeframe from 10 days down to five days, assuming

you are a symptom attic and you will need to wear a mask for an additional five days. does that seem reasonable to you or do they jump the gun? i think we may have lost our professor from wake forest university. romaine, did the cdc go too far? we are learning to live with the various variants of this pandemic. romaine: i will not travel to deep into that. i'm curious about the public perception now of the virus and how we deal with it. there are a lot of people who have taken precautions and are doing their thing. amongst those people there is a certain weariness that after two years we are not quite seeing the light at the end of the tunnel. a lot of us want to get back on

planes and do what we did in 2019 and prior. a lot of us are scared and worried. i'm not sure what more can be done by the government, if the messaging needs to change or what. paul: we have dr. katherine poehling back. is this something we have to learn to live with? are we at that stage know if this pandemic? dr. poehling: we are moving to that stage of the pandemic. i do think it's important for us to think about how to get to the other side. what i do impacts my family and my community. worldwide, we need to see higher vaccinations to get to the other side. otherwise we will continue to have variants. romaine: are you hopeful for that? when you look at the data at of the non-developed nations, the vaccination rates are appalling. dr. poehling: they are appalling.

we have been doing this for a year. this is what we have been -- what we have accomplished in one year. if we work together, we could be a much better place in the near future. this is a reminder of why it matters to everybody around the world. romaine: well said. dr. katherine poehling, professor of pediatrics. we will keep our eye on omicron and the covid variants. we have an eye on the markets. the market basically trading sideways now coming off the record high on the s&p 500 on monday. does not look like we will get there again today barring late stage rallies. the dow jones industrial average near record high. this is a market i feel like packed up and left for the week. paul: absolutely. we had a little bit of a lift earlier in the week and now it is sideways. the focus for next year for a

lot of investors is there are some bricks in the wall of worry, whether it is interest rates, omicron, slowing growth. there is a lot of reasons for the market to go higher. romaine: we will talk to an expert on that kind of stuff. gina martin adams. we will talk to her and just moments. that's coming up on this bloomberg markets. we are simulcasting radio and tv. we are back in just moments. this is bloomberg. ♪

♪ [speaking non-english language]

>> while bali has reopened its borders, they are still not coming in. many international airlines are yet to reinstate flights to the island. people here really hope they can see more people from australia, china and europe next year. ♪

david: the hardest thing in life is to be happy. you seem like a very happy person. >> it is like nature. nothing stops so you can be super happy one minute and then something happens. it is just living. it is the joy of life. david: for any young woman watching this, what would you recommend? diane: the most important thing in life is a relationship you have with yourself. once you have a good relationship with yourself, any other relationship is a plus and not a must. the second advice is to be as true to yourself as you possibly can. it is not easy. you have to accept things you may not like, but the more you can be you, the happier you will

be. ♪

♪ romaine: this is "bloomberg market", special markets coverage. welcome to our audiences across all of our platforms. romaine bostick and paul sweeney here. stocks pretty much moving sideways. a big look ahead to 2022. let's bring in gina martin

adams, chief equities strategist. we have talked a lot about the bull case into 2022. there is a bear case as well. gina: there are two sides to every story. i think the predominant view is relatively constructive towards earnings going higher. even in the face of tighter policies from the fed and the physical body -- fiscal body, as long as the economy improves, earnings are likely to continue to grow. that's a pretty supportive backdrop for stocks. i think 2022 will be rockier than 2021 because of the policy dynamics we spoke of. also because of the inflationary pressures hanging rougher for longer than many anticipated. if you're going to get earnings

growth, you usually keep a pretty constructive outlook towards equities. paul: you have always been good in your research and consistent to say let's focus on margins, on profitability. as you just mentioned, that is clearly a key driver of these markets. with the inflation out there, you can make an argument it will be a risk here. gina: in particular, margins forecasted increase has slowed down. the 12-month for the bottom of consensus dropped about 10 basis points. that is pretty rare. that usually does to a period of rocking us. it may have led to the rocky nest week -- rockiness we saw in the fourth quarter. if we see margin pressures, he

could lead to rockier markets. one component we went to watch her carefully in the margins forecasted is not necessarily supply chain, which we have been pretty on top of this year. it's what happens with wage growth. we are hearing the fed talk about tight labor markets, for tighter than expected labor markets. we are seeing signs of wage pressure emerge. consumers are being very selective in the kind of jobs they will accept, demanding more wages. that gets embedded in expectations and i expect that to be the next level down in operating margin forecasts. it remains to be seen. we are in for an interesting fourth-quarter season in january. romaine: most companies have managed to whether that. the wage side will continue to be a pressure. go back to the supply chain issues and some of the costs a

lot of companies have dealt with. some companies it clear they are willing to eat some of those costs in the interest of keeping price levels for customers at those levels. others said we can't do that. we have to pass this on to the consumer. gina: yeah. you are seeing operating margins forecast coming down fast for the segments most -- supply chain and wage pressures. that's the consumer stuff and consumer staples and discretionary companies. also industrial companies and materials companies have been talking about the pressures they are seeing underneath the top line. it is not every company in the s&p 500 experiencing margin pressure. on the other end, the energy space and real estate space and financials are actually spirit think upward momentum in their

operating margin at 50. there are offsets in the indexes. they are moving slightly lower as of october but sideways so far. we want to watch for some directional shift either up or down in that measure to get a sense for where the market at large is headed. romaine: what factors do you think will be front and center for this market into 2022? gina: beyond policy, earnings and margins, watch the bond market carefully for direction in 2022. we have been through an interesting ride over 2021 where the yield curve started out at one level, flattened and the second half the year ended up about where it started. that is pretty consequential within the s&p 500. most forecasters into a bit of a bear flattening in the yield

curve. as long as we get that flattening, that is usually conducive to continued equity market gains. it's actually a better condition than the bull flattening of the last few months. that could be a good general backdrop for the bond market, the equity market. any sort of escalation in volatility does usually have a follow-through negative effect to the equity markets at large. we want to watch that carefully. watch currency. if you're a global manager with a global portfolio, currency could have fascinating impacts on the market at large. if the dollar continues to breakout, that is supportive of the u.s. if that peters out early in the new year in anticipation of policy changes in the world, we want to be on guard for other markets together momentum. romaine: the conditions that led to that rise in the dollar,

something like 5% measured by the main spot index, do you see those conditioning continuing? some of those seem to be almost tied to the idea other nations were not necessarily dealing with the pandemic as well as the u.s. it economically speaking. gina: right. mostly what was priced into the dollar in the latter half of the year was about policy shift anticipation of fed increasing policy rates and ultimately tapering the balance sheet, potentially some anticipation of qe. you do have that quality aspect that tessa bennett -- tends to benefit u.s. assets at large. the u.s. economy continues to roll forward and leads growth rates in the world.

that can contribute to dull the strength and market equity strength relative to other markets. from the policy perspective we have been pretty well priced. history suggest the currency does priced tightening in advance of fed tightening. when the fed to start to tighten, it falls off. economic conditions. your guess is as good as mine as to when the next variant will pop up in impact the economy. paul: thank you so much once again for joining us and giving your thoughts as we look ahead to 2022. s&p 500 year-to-date, let's call it up about 27%. very tough. more coming up. this is bloomberg. ♪

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romaine: about 2:00 p.m. in new york. "bloomberg market" special market coverage simulcast on bloomberg radio, tv and youtube. we welcome our audiences across all platforms. romaine bostick alongside kriti gupta and tim stenovec. s&p 500 basically unchanged. now starting to take into the green. the dow jones industrial average, if you're looking for a bright spot, that's for you will find it. it would be a record high if it closes at that level. the two-year yield drifting slightly lower but still camped out at around 75 basis points. bitcoin, you can call it flat on the day as measured by bloomberg

pricing. relatively unchanged on the day. only three days left in the year for trading. let's go straight to the first guest. we want to bring in rc peck from fearless wealth corp.. great to have you. we have been saying all week long -- trying to extrapolate how investors should feel about 2022. coming out these phenomenal gains. gains that were kind of unlikely. i wonder how optimistic you are about the next year. rc: from a stockmarket point of view i am very optimistic. the market sees what the fed is doing and digesting it quite fast. i love the nasdaq 100.

it's a little under the s&p 500 this year but i think 2022 will be a great year and probably put off a lot of people because it will be such a good year. tim: you think the nasdaq 100 will outperform the s&p 500? rc: i do. tim: what will drive those gains? rc: one thing i look at is what happens to the s&p 500 and the nasdaq 100 when the fed keeps their balance sheet flat or slightly down. the clear winner is actually the nasdaq 100. it loves when the fed keeps its balance sheet flat. we can only go with what has happened. i could be wrong, but i'm going with what index loves a flat balance sheet. kriti: let's talk about was in the index. majority tech. what kind of role is tech playing? perhaps it is a value play and a key piece of someone's portfolio. rc: that's a fair question to

ask. it is 44% of the nasdaq 100. 25% of the s&p is tech. it is leading the world. the largest tables company, amazon. the largest giving occasions company, google. we have to think of a new way to think about what tech is. it is eating the world. if you're in the united states, most of these major companies are in and based in the u.s. i think you will continue happening, especially with the pandemic. it accelerated the reach of technology companies. romaine: talk a little bit about how you structure a portfolio in this environment. we talk about how you could have written the coattails -- riden the coattails of tech. you used to be able to buy bonds

and that would give you a return but that's not happening anymore, on a real basis. i'm curious as to as folks look at the portfolio if there is a strategy where they can participate in whatever run-up we do get in riskier assets but find a way to protect themselves when that eventually falters. rc: there are probably two ways to go about that. one would be there is one bond doing well. they are doing well. they are basically the only type of bond doing well right now. if someone wanted a nonequity, lower volatile asset, looking at the tips is a fair symbol into that type of asset to add to the portfolio. the other is, and i don't know how heretical this sounds, but the one that's been winning for 15 to 20 years, the nasdaq 100,

but place some stop losses on it. maybe you cut out of a quarter be position if it closes down 20% from peak high to low. he was still get the upside but you can start to lower the volatility by having some circuit breakers. tim: when it comes to equities one company you are bullish on is paypal, despite the fact it is down nearly 40% from its peak a few month ago over the summer. what makes you so bullish on the company? rc: i don't think it is going anywhere. over $200 billion. it had a double top if you look at the price chart. it's in a correction phase. down 43% intraday from the top to bottom. it is adopting crypto and moving in that direction. it has venmo which is moving faster in that direction. it has taken a hit along with other growth/crypto leaning

equities. i don't think it is a close your eyes and dive but if it breaks and stays above $200, putting 3% to 4% of your money into it is a good upside, managed downside individual stock. kriti: let's talk about what's going on outside the stock market. that brings me to commodities. i want to go to another currency, gold. gold needs to kind of responded what's going on on the inflation front on the fed front. why is it not doing anything? rc: i agree. for 16 months it has been trending down. there are a couple of reasons. maybe if you are over 60, you still believe gold is the hedge for inflation for money printing and balance sheet changes. if you are under 50, you are not looking at gold the same way anymore. i think gold has lost a lot of its buyers and those buyers have

moved to other assets. that's one of the biggest things. if it starts moving up, let's buy it. but if there was ever in environment for gold to move higher, it would have been the last 16 months and it hasn't. romaine: now you're staring down at potentially some degree of normalization that could take some of that -- they have turned to cryptocurrencies. 20 say the folks -- what do you say to folks who ask him as they should allocate? rc: how much volatility they can handle in a 5% to 10% of their portfolio. if someone has $1 million have a 10% into crypto, it will probably be in one of the big five cryptos. expect this to either be cut in half and have to bring it back up to 10%, four don't be surprised if it doubles or triples and after year we rebalance back down. to answer your questions, and

annual rebalancing will allow that bug a volatility to be turned into a feature and that is something that's not only survivable but can help your portfolio. tim: rc peck, thank you for joining us. thank you for taking the time. romaine: if you roam gold, you are under 50. tim: i was going to say -- i don't own gold. i do. i have been looking up at the tv. have you been there all day with paul sweeney? romaine: i survived two hours with paul sweeney. now with tim stenovec and kriti gupta. this is hour three. tim: we will talk about the virus coming up next. in the united states, deaths are declining even as cases

continue to rise. what exact week is going on? officials suggest the omicron variant may cause less suffering than other strains. we will chat about the virus in just a few minutes. you are watching -- go ahead. romaine: we talked about the decline in some of those severe cases. that has to be encouraging, right? that's what a lot of people said. tim: dr. amos adalja said we will all get this omicron variant. romaine: we are here all day. this is bloomberg. ♪

david: your book is an

interesting book that he came from a series of lectures he gave named after somebody who was an ideological opponent of some of your views, justice scalia. where you are friend of his even though you had ideological differences? justice breyer: we would debate those differences and i thought we had a wonderful debate. in lubbock, texas, they had never seen a supreme court justice. we talked about our differences. i say if i had your theory, don't you think george washington knew about the internet for free speech? scalia would say, i knew that. good point. then he would say am not theory is perfect. he would say, the two hunters that are hunting bears.

what is putting on his tennis shoes. where you going? the bear is coming. you cannot outrun the bear. yeah, but i can outrun you. that was his view of my way of deciding cases. we -- i never, and i still, 28 years now, never heard a voice raised in anger in the conference room. never heard one justice say anything mean or snide. what good would that do? i tried to find that the students. you get excited and all that happens is people disagree with you and you think, you know, he must be wrong. that is so true. we get on well personally. we are friends personally. we disagree on some things. not as many as you think, but some.

david: that has not always been the case. there was a supreme court justice who refused to be in the presence of justice brandeis because he was jewish. justice breyer: mcreynolds. david: since you have been on the court people do not yell and scream. justice breyer: they don't insult each other in are not rude to each other. it is a professional job and you do your best professionally. if you want people to listen to you, the best you can do is to think through this problem, listen to where the other person is coming from, and see what you can contribute to that thought. david: sometimes the dissents -- the person that wrote the majority, no one take that personally? justice breyer: i get that question a lot. i used to get more when scalia was on the court. somebody would ask that question. i tried to answer because i did

not want him to. look, i know you not aiming that questioned me. you are aiming it at nino. what you don't understand is some people suffer from a disease. it is called good writers disease. if a good writer finds a felicitous phrase, he will not give it up. let him destroy himself, the world come to an end. it is like a good comedian. you cannot give up that joke. that is nino. he's a very good writer. we all know that and we don't take it personally. david: do you have a lot of unanimous decisions these days or do they not get a lot of attention? is that where the court has its arguments, the 5-4 decisions? justice breyer: not necessarily. you read about the once the press thinks the public will be interested in.

we have the political or a social comment. i don't know. one of the most important decisions i wrote this last year was google versus a workable. -- oracle. it took me a year to write that. it was about copyright and something called interface programs. i was told that was very important. well, for me it was like learning latvian. ♪

almost 120 east come here every day. they drop off coffee, chocolate, coffee crisps made by nestle. it will come through here and get sorted by machines who loaded onto a monorail -- load it onto a monorail. cranes then load all the chocolate, the storage, all the goods into big warehouses. it can hold up to 100,000 crates. after it has been sorted and stored, sometimes her months, it will end up over here where they will take it out to the supermarkets up and down the country. the entire process is done with the people. goods come and leave without ever touching human hands. it is one of the largest

automated centers in the u.k. this was its first big test and it looks like things are going well. ♪ tim: welcome back to special markets coverage simulcast on bloomberg radio, tv and youtube. earlier we learned virus cases

jumped 60% from the prior week. deaths fell 7%. perhaps a little bit of encouraging news that the omicron strain is less purulent. for the latest on the pandemic, joining us is angelica peebles. is this good news or is it too early to say is good news? how are you reading into it. angelica: it is still too early to know what exactly is causing this. hospitalizations and deaths tend to lag a few weeks. they are cautioning against getting too excited. anthony fauci said it's pointing to milder. kriti: what are you starting to look at in terms of of the trend might look like? what timeframe are we looking at? weeks or months dealing with this variant? angelica: it's hard to know

exactly how the things will track in other countries. we have seen hospitalizations on the rise. in the u.s., they are increasing but i think people are looking to see over the next few weeks if they start to jump at the rate we are seeing cases jumped. so far health experts that are publicly talking are saying it appears to be much less of a peak than previous waves. that's encouraging. we have to keep our eye on it in the next few weeks. romaine: are we talking globally or the u.s.? high vaccination areas or overall? angelica: in the u.s., the cases of possible his asian are not -- hospitalization are not at the same levels. that could vary across the country when you think about places that are more vaccinated than others. one thing we did not hear today from anthony fauci was what role vaccination does flight into

this. is it really just a variant itself causing less severe illness, or is the vaccination? tim: what about when it comes to hospitalizations? as we have learned in the last 22 months, when hospitals are overrun the standard of care goes down. they not only can help people with a virus but people who come in for other ailments. however hospitals doing -- how are hospitals doing? angelica: that's one thing officials reiterated. even if omicron produces less severe illness, there is a risk hospitals could become overrun if there are so many people now becoming infected that even if fewer are getting sick, the sheer volume of people could stress the already exhausted u.s. health care system. romaine: looking for any slivers of hope out there. angelica peebles, the news of the day is potentially the omicron variant may not be as

severe when it comes to hospitalization and death. there has been a lot of disruptions from the covid crisis, including to the supply chain. if you have tried to buy videogame, car, refrigerator, there were no chips to put in them. ian king, have things gotten better and of 2022? ian:. we are watching news from samsung about what's happening in china as we have seen more lockdowns related to the spread of covid. they have a major plant that produces flash memory and they are talking about possible disruption to supply for that plant based on taking measures to comply with local regulations. kriti: on the retail front, they

are evaluating their supply chains. a lot have chosen to move the supply chains closer, moving operations to mexico or straight into the u.s. is that something you can see becoming a global phenomenon? the chip business moves into say germany. they were calling it silicon -- building a chip sector in germany. ian: it's already happening. i have been writing about this for a while about efforts to raise government money and offer subsidies to manufacturing back to europe and the united states where it has been on the decline. the effort is happening. it takes time. we are not talking about any timeframe that means anything with the current shortages. even if you started digging a

hole at the ground last year you have two years before those plants are producing anything. tim: back to the news from samsung. can you explain why this to begin news for micron even though it has facilities in -- ian: samsung is the largest producer of flash memory that creates the storage in your iphone, your computer. twice as many sales and market share is anybody. the next biggest is a spinoff of toshiba with a joint venture. they are almost as big. they are the next largest producer of that particular product. if samsung has disruptions, these guys step in and the prices go up. tim: ian king, thank you so much

for joining us on this. before we go, let's look at shares of biogen. up about 10% higher now. the economic daily reports samsung group is in talks to buy the company. what do you make of this? romaine: interesting move. biogen has been approaching samsung. this is bloomberg. ♪ ♪

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>> if you have ever smashed the screen out her iphone, you know getting it repaired is not only

a pain in an, it could be expensive. apple is introducing a program called self-service repair that will let you repair your device at home with arts bought from apple and a manual provided by apple. it's a response to the right to repair movement. whereas it used to be straightforward to repair electronic devices 30 years ago, as they have become more complex and proprietary, it has gotten harder. now we are seeing a wave of legislation in the works. in the european union, there is likely to be proposals that not only standardize the spare parts for each phone but also ensures the pricing is reasonable. that is where apple comes in. they seem to be getting ahead of the legislation with their own proposal. the double will be in the details of what apple's solution looks like, how expensive the parts can be, and also how easy it will actually be to do this yourself. there are plenty of videos

online to explain how it is done but most customers, we estimate only 5% of customers in the market would actually repair their own device. 95% would go to a professional. if you are going to get it wrong, it is quite costly. in many ways, devices have become easier to repair and more intuitive, i would say. there are also many risks involved in terms of one little bit of damage to the logic board or one tear of a flex cable could render significant parts of the device damaged entirely. >> like now to get an iphone screen fixed by apple, it will cost you about $280. a battery to be replaced, $70 if you do it with apple. how many can do but home will be a really important data point. apple said that it oppose

repairs being done by anyone who is not licensed or anyone doing it at home, saying it was dangerous, wrist the smartphone. this is a huge turn that does quite a lot to burnish their credentials. ♪ romaine: this is bloomberg markets. special coverage in addition all week long. welcome to our audiences across our platforms. bloomberg tv, radio, youtube. romaine bostick, tim stenovec, kriti gupta. nymex futures coming in above $76 a barrel. a 3.5 million barrel drop in u.s. inventories. that is providing a little bit of a boost. also seeing a boost at gasoline futures. keep an eye cotton.

pressure on the supply-side and demand-side as well. that continues to underpin a phenomenal year for copper -- cotton futures. i want to bring your attention to the third line, coffee futures. right around 228, up 1.5% on the day. we are now up about 78%, so that surpasses the run we had in 2010. that is setting us up for what could be the biggest annual gain that we have seen arabica beans going back to 1994. new reporting showing that world production may slide in 2022, which could underpin prices further. basically, everything in the commodities space is higher. eggs even going up, i'm told. i hope wine doesn't go up. tim: joining us right now is

alex ryan, chairman and president of duckhorn wine. they produce luxury wines and spirits. thanks for joining us. you went public earlier this year, shares are up 50% since going public. give us an update on how holiday sales were. are they strong? alex: really strong, thank you. we've been working to get the supply chain set up. our partners were prepared for some of our new innovations, the traditional mix. people love luxury wine for a lot of reasons. it is very traditional. coming out of the pandemic, celebrating a challenging year. sales were excellent into the holidays. kriti: let's talk about supply chain issues. have you had any, and are you dealing with them? alex: we have not seen a significant impact.

i know it is a hot topic right now. on the incoming supply, we are able to get wonderful grapes out of california and washington, where we are centered. we have been able to get what we need. the supply chain been managed well. i'm confident that we will continue to have enough luxury wine to sell into the future. on the distribution side, we have a very diversified platform with really good partners. that has allowed to stew make sure that all the wines that people want hit the market when they want, especially during this critical fall period. very few disruptions, and that is due to the diligence of the staff that i have. romaine: talk about the quality of the great you are getting. there was some concern in 2019, a certain extent this year, from the wildfires and the smoke, and how that may have affected the crops coming out of the napa region. with the latest vintages, how

much assurance do you have that what you have, for lack of a better phrase, taste good? alex: we are really good at what we do. the 2021 harvest was not fire affected, we had a great growing season. we are very fortunate in that respect. again, diversification is the name of the story of what we do to preserve the customer's best interest. through that diversification, we were able to get the styles and quality we need to keep making great wine. i will assure you that the 2021 vintage will hit the mark and then some this year. tim: you said you been able to navigate supply chain challenges, but you will have to pay more for shipping if gasoline continues to go higher. we all know what is happening with wages. price increases for 2022, are

you going to have to make them? alex: we are a luxury, premium product. traditional and planned price increases are kinda built into our long-term plan, we are thinking long-term, that is what the business is about. but people have scheduled price increases accordingly, but we will not be reacting to the market. we will be measured and how we approach that. we do have price increases, as you would expect, over the next few years, built into the plan. but we will not be doing anything reactionary. kriti: wine is a luxury product, and 2021 has been a fantastic year and it comes to luxury sales. i wonder how much of that will continue into 2022? do you see this momentum sustaining into the new year? alex: i do. that is the best question of the day.

we have been taking share down for the last couple of years, starting to pay wonderful dividends. people are getting excited about our brand. i think wine is a celebratory lifestyle, if you will. people not only want that but need that. i think the interest in wine, especially domestic west coast united states wine will continue. the share we have taken in market gains over the last few years are starting to pay off. i think people want to celebrate with friends and family, and they want wine to be a part of that process. we think that trend will continue into the new year and beyond. romaine: great stuff, alex. appreciate you catching up with us. alex ryan, chairman and ceo of the duckhorn wine company. we have to talk about what we've been seeing with regards to asset classes, particularly in the bond market.

if you were buying treasuries at the start of the year, you lost money. corporate bonds, you lost money, at least in aggregate. high-yield bonds, what did you get? kriti: this is where the risk pays off. in the junk bond market, 100%, it is worth paying off. tim: i thought you were going talk about five bottles of wine. romaine: i am well stocked there. this is bloomberg. ♪

>> when you came along, you are not a man and you were not white. was there a lot of discrimination against you that you felt at the time, or was it very subtle? >> that is a difficult question to answer. i say that because i don't know what it feels like to be a white man. i don't know how people were treating ointment at the time, i just know how i have always been treated. i was raised clearly by my parents to be a person who did not look at things as obstacles but things decline. when anyone treated me in a way that was not 100% respectful, i was was their problem, i need to move forward. i am sure i experienced a lot of things that were probably not

what others experienced. i just chose not to be defeated by them or even bothered. some of them i probably not even bothered to notice. >> today, given how prominent you are in the entertainment world, do you feel any discrimination now? >> there is an insularity with being in a certain position in hollywood but that doesn't change the fact that if somebody doesn't know who you are, they see you as just another person of color. the racism in this country is the racism in this country, unfortunately >> the events that led to the murder of george floyd obviously affected our country dramatically, african-american community particularly. how did you respond to that? you are a prominent african-american figure in the country. did you feel like you had to speak out, do more, how would you say to changed your life?

>> i think the entire george floyd situation did a couple of things. like anybody else, i felt nothing but rage and frustration. but i also felt real dismay that a lot of people used that event to finally discover that racism existed. that was disturbing to me that it took something that horrific for people to go -- wait, there is inequality? that was a little upsetting for me. i don't know if i had a particular obligation to do anything more than any other person did. a lot of people were marching, protesting. the beauty of what happened with george floyd is how many average citizens stood up and did something that is the power of that moment, and hopefully that

will continue to be the power of that moment. i also feel like whenever i am asked this question, i never quite know how to walk the line of saying, here is important, because i feel like it may let people off the hook a little bit because it suggests that racism is a problem of people of color. i always want to say, it is not what i did to work on racism. racism is a white people's problem. what are white people doing to solve it? to me, that is the big question.

romaine: this is bloomberg markets. a special simulcast for our bloomberg tv, radio, and youtube audiences. romaine bostick alongside tim stenovec and kriti gupta. getting ready to count you down to the close of trading. let's get right to abigail doolittle, who has been taking a

look at the lack of action. abigail: we have the s&p 500 slipping between small gains and losses, the same is true for the nasdaq. the s&p 500 is slightly higher, so perhaps the 75th record close of the year. the nasdaq fractionally higher. i would argue that the bigger trading action today happening in bonds. the 10-year yield backing up six basis points. one point54 --1.54%. commodities are climbing, as romaine pointed out, but it is the light volume. not a lot happening. volume is more than 40% below the 20-day moving average. staples doing pretty well on inflation fears helping consumer prices. kriti: let's talk about the

dollar. you are seeing a weaker dollar today, down .2%. how much of that factors into the equity returns going into next year? abigail: i don't think that has much to do with anything regarding next year. the bigger story is the fact that on the year that dollar index is up nearly 7%, the best year since 2015. hedge fund positioning for 2022 is pretty bullish. the expectation is the dollar should climb in 2022. the question you are getting at, does a rising dollar help stocks? if the economy is doing well, it does help stocks, but if a strong dollar is not accompanied by a stronger economy, it could be a headwind. it will be interesting to see whether or not that happens in 2022. if the dollar does rise, it suggests we could see a rising rate environment. most strategists think the 10-year yield get back about 2%.

romaine: interesting insights as we get closer to the closing bell. looking ahead to 2022, you have to talk about expectations for this market. strategists surveys are still pretty bullish. a 50 average target right now for the s&p 500. only three strategists that have a price target that is actually below where we are today, but there is a bare case out there being made for stocks. i'm not sure that i buy it, but people are saying things. tim: the case laid out earlier today has to do with those little things called profit margins, and the rising cost for inputs that companies are paying , the durability of the american consumer to pay those rising costs. the question is what kind of pricing power do these companies have going into 2022? will the american consumer have patience for that? kriti: as you talk about a time

when that fiscal stimulus, we thought would roll off of balance sheets, you can see it is still having that positive effect. that will be a trend that wears off in 2022. romaine: this is a good opportunity for me to bring up the stock. shares are down david they came out with an interesting forecast, and it was all about their higher input costs. more importantly, the idea of how you pass on those costs to the consumer, whether you can, and there are some that can. if apple decided to raise the price of its iphone x percent, it would still sell. if the price of your eggs went up 10%, you would probably look for another brand. tim: we just spoke to alex ryan, and i asked about price increases. even though they are facing higher costs, not necessarily from grapes but from fuel in

wages, they are not planning to raise prices. this is a different category, we are talking $80 bottles of wine, but one-size-fits-all that does not fit all 42022. i don't want to call them junk bonds, because i know taylor could be watching, but we are having a rally at the end of the year, beating most other parts of the fixed income market. let's bring in olivia to see what is happening and if this rally will continue. live, for lack of a better terms, our junk bonds having a moment? olivia: the bloomberg high-yield bond index is up almost 2%. it is on track for the best monthly performance in more than a year. the driver for that has been limited activity in the new issue market. that slow down in new bond sales is driving investors who are looking to add more risk to their portfolios into the

secondary market to buy bonds. kriti: in high-yield bonds, how much of that outperformance has been driven by those ccc energy bonds, in line with what you are seeing in the commodity market? olivia: ccc and energy has had a strong year, one of the best-performing asset classes. ccc has also done quite well for the environment. the low borrowing costs creates a favorable environment for selling bonds. romaine: let's go down that road. what i look at the performance we have had this year, i think we had pretty good performance in 2020 and 19. you cannot discount the boost that a lot of these issues had because of rock-bottom interest rates by the fed. they have signaled they are coming off the floor two or three times next year. when does that actually start to

feed into these new issues and maybe derail them? olivia: i definitely think rising rates are a risk factor that the market will need to have a close eye on next year. the credit quality within the high-yield index is actually very strong right now, which is making it more sensitive to rate hikes that it would have been historically in the past. as the fed looks to raise interest rates, that could put a dent in issue sales. romaine: olivia raimonde. i am sure taylor riggs is listening from the slopes. you know what else is high? biogen shares. there has been speculation, based on a report out of korea, citing unnamed sources that biogen approached samsung about a potential takeover. samsung group, we should point

out. i think we have a response from biogen. kriti: up just shy of 10%. this is coming on the back of a pretty steep hit. putting all their eggs in the basket of that controversial all cymer's treatment that was rejected in japan and europe. romaine: biogen is saying the company does not comment on market rumors and speculation. this is just based on one report citing unnamed sources. biogen not willing to touch this at least publicly. nonetheless, shares are up about 9% on the day. the stock has underperformed pretty significantly over the last several months. you are listening to a global simulcast on bloomberg tv, radio, and youtube.

romaine: this is bloomberg markets. special coverage all week long, global simulcast of bloomberg tv, radio, and youtube. we welcome our out inches across all plot forms. basically a sideways day for the s&p 500. the dad trading at a record high as far as individual movers. apple is slightly higher on the day but not getting a lot of juice. tesla shares also higher by .4%. one of the big decliners, the companies that make these technologies for self driving trucks. abc slightly higher. kriti, when you look at this market and talk about how phenomenal of the trading year we have had, and then you look at the tamp down this final week of the year, anything we can

read into that into 2022? kriti: the investor base took the santa rally for granted, thinking we would be in cruise control last week, but we are seeing some hurdles. markets have been under pressure. tim: and her pressure and relatively small moves, compared to what we see for much of the year, what we have seen on monday and last week. if you look at the s&p 500, on you decide you have big stocks making moves. home depot, procter & gamble. laggards in -- include nvidia. romaine: pop quiz, what is the best-performing s&p stock? tim: home depot? romaine: i will give abigail doolittle the floor. >> investors trading water in

this final week of trading. volume is 40% below the 20-day moving average, so a lot of folks not at their desk, at home or at the office. the nasdaq is underperforming. amazon, google, meta are lower. the reason week seem to be having a pop, biogen is up 10% on the korean report that samsung could possibly do a a takeover. definitely giving life to the nasdaq. right now flipping between small gains and losses. the s&p 500 being helped to a 70 at close potentially. kriti: what is holding the market back? we saw the record high on monday, why are we not hitting record highs since then? abigail: when the s&p is up 28% already year to date, up for a third year in a row, the seventh

double-digit in the last 10 years, the fact that you have a small pullback from that record high on monday is not that big of a deal. not a lot of folks at their desk right now. tech, even though it is weak today, it has been up 35% on the year. one reason for the earnings growth, fourth quarter expected to be strong around 27%. not many problems that investors are looking at right now, just a fact that people may not be in their seats. romaine: we are here, we are not going anywhere. 4793 on the s&p 500. joining us right now is paul christopher, head of global market strategies for wells fargo. let's look ahead to 2022. we have done all of these surveys, banks have done surveys , and the biggest risk right now is a fed policy error of some sort. does that worry you?

paul: it does. the market and the fed are looking at three or four rate hikes. we think that is likely. we expect more or to, as we think inflation will moderate as the year progresses, and that will let the fed off the hook for those rate hikes. but a policy mistake can never be eliminated as a potential market mover, market disruptor. we are also worried about covid and how that will upset the change in economic growth, spending for the first half of the year. tim: let's start with inflation you say it will moderate in 2022. give us some numbers. when will inflation peaked, how much will it moderate? 3%, 2%? paul: with the omicron variant now starting to dominate, and china still locked into an approach to covid that says lock everything down, our concern is

that you will see more restraints on the supply side that will mean more in balance between supply and demand that could fuel further inflation pressures. you could see a seven handle on cpi inflation the next couple of months. after that, there is already evidence from the pmi's that you are starting to see inventories build an order growth starting to slack off a little bit. maybe some company stopping their tendency to over order. as those trends continue, you'll see inventories build, supply catch up with demand. you could even see some excess inventory by year end. that could be disinflationary. maybe seven plus in the first quarter of the year, heading down into the mid- 5's, maybe 5.3 by the end of the year, and investors will take note of that.

kriti: the idea that the economy is recovering from a recession, therefore that will trickle into the smallest companies. but that has not been the outperformer this year, it's been large in mid-caps. how much of the trade continues into 2022? paul: we don't think that trade continues. it did well for a couple of months but we had to close it out. frankly, just not strong enough growth. because of the supply and demand imbalance i mentioned, there has been an elongation. we will have growth on average for longer but will not hit those high level double-digit economic growth that will help small caps. it is more in that five, 6% range that is good for large caps but does not do enough to lift the boats in the small-cap universe. we got out of that earlier this year. romaine: any investor these days

, certainly understandable why you would be allocated heavily, if not entirely, to the equity market. rates are starting to go back up. do we get to a stage soon when bond start to get attractive? paul: probably not. we are looking at a 10 year around 2.25 by the end of 2022. if we sorry tire around 3%, just below 3%, that could be more interesting and more risky for stocks. we just don't think you'll get that kind of move because there is so much concern still about covid, there will be concerned about inflation as that comes down, we will see that rolloff. that will help bonds. even if the fed tapers, it will still have a $9 trillion balance sheet. that will help bonds as well, to keep some bid under the price. it is a good environment for

tech stocks. that continues into 2022, not so much for bonds. tim: paul christopher, head of global market strategy for wells fargo institute, thank you. paul: happy new year. tim: what do you make about the call for inflation moderating? by the end of 2022, he said down to about 5%. kriti: not that surprising. decelerating growth is already baked into 2022 markets, the idea that you are not going to get the same post-pandemic boom that you had in 2021. the question is, does the fed tweak their approach as we see inflation potentially peak? romaine: you are already seeing it come down even when you look at short-term breakevens. you are around 2.8%. let's say we get a 7% print on january 12. right now, we are tracking something like 6.8% based on economist surveys.

the general expectation is that will snap back pretty quickly in 2022. are you not sold on that? tim: just because of the virus and so much of the inflation is based on supply chain hiccups. look at what we learned overnight from samsung electronics. if they are closing chip factories because of lockdowns in china, we know china has an aggressive stance when it comes to the virus. if more things close, more supply chain hiccups. we are talking about alibaba, going right to china. they are weighing a potential deal involving their stake in weibo. we will be talking about that in just a few minutes. this is bloomberg. ♪

>> that anything is possible. i believe that. even though i was born and raised in new york, i believe that. i believe the united states is an amazing place to be. >> according to the new american economy, immigrants make up one in every five entrepreneurs in the country. out of that, latino start one in four businesses in the u.s., making them a critical source of business in the economy. the owner of a salon in new jersey is one of them. >> we are different because we

really focus on the people that walk into our doors. i have been here 20 years. for me, this was my home. i am grateful for you, every day. i am american born, first-generation. my mom and father are both from the dominican republic, born and raised there. my mom owned many hair salons in the states when she came to the united states, and i basically grew up in a hair salon. there was no playground, none of that. my mom had to work, she has to do what she had to do, and she did it. i kind of fell in love with that, and here we are. it is usually worn back. >> she took out a small business loan to purchase the salon for years ago. a recent study found only 51% of latino business owners received

funding when they applied for national banks, compared with 77% of white business owners. >> we cannot help but wonder, are we not good enough? what are these people that are in control of the money thinking? how can we change the narrative on that? we push harder because it is that much harder for us. >> the study also found latino owned businesses contributed to about $700 billion in sales to the economy annually. >> i think a lot of the immigrants that come to the states have this entrepreneur spirit. when you come here, you come with a hope, dream of a better life. not only for yourself but for your children, loved ones, parents, whoever you are taking care of. going back to march, we were thriving, hustle and bustle. some thursdays and fridays we were seeing over 100 people a day. then we got the news that there was going to be a shutdown. i was angry, i was nervous, i

was scared. every five seconds it was a different emotion. then we reopened. we had to come out strong, because the revenue loss, it was about 30%. a huge hit. we got the ppp loan, and it was not the full amount, but it was very necessary and important. >> 3% of latin owned businesses received partial ppp loans i'm aware 70% of their white counterparts got one. >> we are here, only 7% down. the way that i project, we will be right on track. my advice is, you can do it. find the resources, they are out there. pick up the phone and call me, i will help you. we should be rooting for each other.

if it was not for my family, me sitting down and having a heart-to-heart with the bank in my family -- how am i going to do this, i want it. there is always a way.

>> when you think space, you probably think one space agency that travels under the radar. which is surprising considering what the european space agency has achieved for how vital it has been to the global space industry. >> we have collaborated with

pretty much everybody involved in space exploration. >> esa wants to be a leading force in furthering humanity's mission into space. >> do you copy? >> if we want to have a successful human mission to mars, we are going to have to learn to live and work in a different way. the place where we are going to learn to do that is on the moon. >> can esa help humanity take its next giant leap? tim: welcome back to special markets coverage on bloomberg tv, bloomberg radio, and youtube. i am tim stenovec with kriti gupta and romaine bostick. for more, let's bring in justin bluhm.

the story that you edited, it mentions some names, namely thyssenkrupp ceo, microsoft president, people that vice president harris has been talking to. what is she looking to hear from them? >> she has been talking about a range of issues. she is talking to executives to serve as informal advisors, policy allies, political boosters, while she tries to deal with a sprawling portfolio of assignments that president biden has given her. among them, she has spoken to executives about issues involving migration from central america, and she is continuing to engage on them with topics including the coronavirus, supply chain constraints, and semiconductor storages -- shortages. she held a series of conversations with executives

earlier this year about raising money, to try to provide money for job training, other things to get people to stay in central america, to reduce the amount of migration into the u.s. those talks resulted in $1.2 billion in corporate commitments to help address the surge of migration, which harris touts as one of her biggest first-year triumphs. romaine: a lot of people will say she has not really have the spotlight in the way that some thought she would have, at least in the first year of the administration. there is a lot of speculation about what her future may be given joe biden's age. i'm curious if this is about the current policies being pushed by joe biden, for more about her own political ambitions? >> good question. she has been holding these talks while trying to carve out her

role at the white house and trying to turn media attention away from negative coverage that highlighted gaffes, misstatements from her staff. this could help her in her political career, if she decides to run for president again. but she also runs the risk of alienating progressive democrats who may not like the idea of her consulting with the leaders of big corporations. tim: certainly the more progressive side. justin, thank you so much for joining us for the story. from the u.s. to china, alibaba is weighing a potential deal involving its stake in weibo. our bloomberg correspondent joins us now. give us an idea of what the sale is all about. why divest its stake in weibo? >> thank you for having me.

the contract and background, there have been many reports about how beijing is taking a closer look at all of the chinese tech giants, in particular, wanting to curb their influence in the media industry. this seems like the latest move. according to people familiar, alibaba right now is in discussion with a state owned conglomerate about potentially selling stakes to weibo. for people that don't know about weibo, it is like the twitter app for china, one of the larger platforms, super influential among chinese. alibaba has about a 30% ownership here. it also has a broad media

portfolio including a newspaper, tv production, advertising business. that is what caught the regulator's attention. kriti: you have a 61% decline in the nasdaq golden dragon index, which holds names like weibo and alibaba. what will this to to the stock price of those companies? >> i would say today's news, the sentiment around regulatory scrutiny from beijing are not helping alibaba shares, also not helpful to the overall golden dragon index. adr shares are down as much as 4%, almost 4% today on the news. overall, the golden dragon index is falling for the fifth day. year to date, it has lost close

to 47%, almost half of the value wiped out over the regulatory pressures. romaine: a lot going on with alibaba and the rest of those big chinese tech companies. thank you for helping break it down for us. we are not only looking at the company themselves but the leaders of those companies, many of whom, at one point, where the richest men in the world. their wealth has dropped pretty significantly, about $80 billion, combined wealth from the 10 richest tycoons, that is what they have lost due to these crackdowns. kriti: what is important to talk about, how much of that wealth accumulated not just in china but from that elite class is coming from foreign investors that want that china exposure. now you have that regulatory

risk. tim: jack ma saw his well cut by about $13 billion just this year alone. romaine: we are not going to shed a tear, they are still phenomenally rich. there is even speculation that with the crackdown they are having their, the companies have room to rebound once the dust settles. the dust has not settled here in the u.s. counting you down to the trade occluding here in new york. 4796 the s&p 500. in the green. that would be a record high. this is bloomberg. ♪

♪ >> have you changed anything in your lifestyle, because against climate change? >> indeed i have. i have a solar system for my home. i drive an electric car now. i still have one internal combustion engine vehicle which is being traded for an electric car and we are making conscious decisions about our use of energy within the house. i am a flagrant light switch

chaser, whenever i walk through a room or building. yes, i think there is a new consciousness. am i doing everything i could be? now, but i'm super conscious of the need to try to all of us do what we can to. make the contribution here. . the biggest thing i'm doing in my lifestyle is traveling the world, trying to do diplomacy and help make a larger decision in the context of glasgow that could reduce a lot of the anxiety about where we are headed. ♪ >> people on earth are wondering why we are investing in space. let's talk about how you believe it will help benefit. >> we are building infrastructure. we are building a road to space so future generations can build a future. we live on this beautiful planet, the most beautiful planet by far in the solar system. ♪

♪ romaine: this is bloomberg markets on bloomberg tv, radio, and youtube special coverage. so special we could not just speak to tim. romaine bostick, kriti gupta, and tim stenovec. we got economic data on retail inventory, wholesale inventory. they were higher. i remember that was a bad thing in the old days but maybe that doesn't mean the same today as in the past. joining us, to talk more, vincent cignarella of bloomberg.

vince, i look at these numbers and i don't know. 10 years ago, you have seen an increase in inventories and been freaked out. i feel like the disruptions we have had with supply chains says that is not the case. vincent: i think it is the timing. rising inventories in itself is not really a bad thing. it attributes to gdp on the plus side. if the inventories remain too long, on the downside, they are not really off the shelves and sales are slowing. it is a double-edged sword. it is a good thing they arrived. sellers, retails, and wholesalers expecting the product to move. it can have about affect if they remain on the shelves because consumers are no longer interested in the products. with supply chain issues, it has made it difficult for wholesalers and retailers to plan inventories. romaine:romaine: you mentioned supply chain, inextricably bound

-- the concern is we have pulled forward from the first quarter. we talk about supply chain issues. a lot of people believe -- a majority -- or and are encouraged if you see something you want, go get it because it will not be there next week necessarily. we may have pulled in the income first quarter. that remains to be seen. next month, if the inventories stay high, that is what is happening. kriti: let's talk, about the markets broadly have a price this in. to what extent will the markets

right off all the supply issues in 2022? that is the virus. vincent: think outside of the semi conductor space. we caught up a little bit. there are things bogged down at the ports and in the ports and in disease and stuff like that. when i look at these inventory numbers, it looks to meet we are in a position where there will not be the shortage is we have experienced a couple of months ago. what is going to be key -- and this is what the market -- for the machines appear to be pricing in -- is that the omicron virus and the variant will fade to the middle of january. by the end of january, it will have burned itself out. the air will clear and people will go on the streets again. that may be happen in january but the question is how long it lasts. we thought we beat it when delta waned and of course we are dealing with two variants at once.

tim: i certainly hope not. big thank you to bloomberg vincent cignarella for joining us. let's talk more on the markets. people will enjoy bubbly and a couple of days when it comes to new year's eve. we will see a record close on the s&p today. bubbly is a question investors have when it comes to tech. let's bring in emily groep thao. what is -- are investors -- are investors concerned about a tech bubble and should we party like it is 1999? emily: you look at microsoft, up 56% year to date. ok, maybe we should be nervous. one of the stocks going to come down? the bulk is the earnings are really strong still. there are many cap tech companies that have been resilient from the pandemic. they have strong cash flow.

that typically is a good thing. bloomberg intelligence noted that the valuations of these have come down from key levels. perhaps that speaks to we are not really in that dark, era bubble - that .com era terrritory. romaine: people can look at this bubble and look at the push we were given by retail investors into a lot of these names, whether it was big cap tech names or meme stocks. our retail investors still out there? how they are going back to work? emily: it is true that a lot of the day traders have gone back to work. people are back in the office and don't have extra stimulus cash that they did last year. i would say anecdotally, from talking to retail investors, they have pared back the crazy daytrading options every day, in and out, type of trading that

led to the gamestop surge and bloomberg intelligence also noted the volume of retail trading seems to have pete's in the first quarter but it remains elevated. next year, we have to see what happens but i don't think we will see crazy movement. i don't think people who started investing during the pandemic have pulled back. i think a lot of people have learned about investing and are in it for the long run. romaine: emily graffeo. utah desk called this a bubble. if the s&p 500 right around 4800. we are counting you down to the closing bell with 22 minutes to go and another record high on the s&p 500 and a record high for the dow jones industrial average. tim: it brings us to the point of what emily was talking about. maybe we are in a bubble but maybe not. that was based on skyhigh valuations which are coming down due to blockbuster earnings.

romaine: is this like 1999? will you make sure to reset your computer and turn it off before the new year? remember y2k? tim: i remember y2k. it came in handy during the pandemic. i'm going over there for the next pandemic. romaine: we have a lot to cover as we move around the day on this wednesday afternoon in new york. our global audience on bloomberg tv, radio, and youtube. romaine bostick with kriti gupta and tim stenovec. s&p 500 at 4800, up .3%. dow jones up .4%. this is bloomberg. ♪

♪ romaine: this is bloomberg markets special coverage of a global simulcast across our audiences. romaine bostick alongside tim stenovec and kriti group., counting down to the closing bell, a little more than 11 minutes away.

we started off and everything was in the red on the day but closer to the closing bell, everything is flipped into the green. we should point out the dow is at a record high and so is the s&p and the nasdaq is in the green. for our tv audiences, those are some of the indices. the materials up .6%, bank stocks up .3%, as measured by the bank index. homebuilders getting a nice bid, up 1%. that will be energy. kriti: with energy, you see big tech falling on a sector basis. communications will be your key laggard on a sector basis. with energy, waiting to see energy and tech at the bottom. it tends to mean a broad decline but that is not what you see today. you see a broad rally with the exception of those sectors. tim: it is notable that s&p is struggling for direction for much of the day. a little higher toward the end.

romaine: you said that altogether, tim. tim: you don't believe in santa claus? of course i do. i can hear the bells and the polar express. romaine: i want to believe. tim: let's see if our next guest believes, are managing director and portfolio manager. let's start with the year that was. there a lot of games baked into this market. games a lot of people don't anticipate and even more bullish people. there is a question as to how far that can extend into the new year. david: certainly is is great. 2021. breathless, bett er than in 2020. you went the entire year without that once-a-year correction of 10%, while outperforming the bond market, slanting negative. one thing i know about a single

calendar year, romaine, is the rule of thumb for the last 75 years is 15% or better or 5% or less. we have had three straight years of 15% or better for the last three years. that s&p 500 has returned better than 15% at least the last three calendar years. romaine: why don't you think that we have gotten that correction, a troll pullback and reset? it seems every time we go down two to 4%, that triggers enough people to come in and buy the dip and people say that represents some function in the market and others say the market has changed. david: i think fundamentally, companies, on a micro basis, when i look at them individually and how they report quarterly earnings, their guidance, this has been a robust year where guidance has continuously been raised throughout the year and

will more in 2022i think. we have had this incredible monetary and fiscal stimulus for 18 months. that is why you haven't had a 10% correction since march 2020. tim: we have had a stretch of corrections of no 10% or more but also a strong amount of record highs. how much of that global growth story becomes a story for 2022 when you have these diverging policy paths in united states versus europe versus china? david: what do you do for an encore in 2022? do you give bruce springsteen's encore? what do we have? four consecutive years of above average growth? we haven't seen it since the late 1990's, even back to world

war ii. i think 2022, with the proverbial hard to get single calendar year, will be five to 6% return for the s&p. that does not mean you cannot have good games from an individual stock. you see a greater separation of winners and losers next year. i think you have a good backdrop where the micro is telling me there are plenty good buying opportunities that i can see individual names up better than 10% next year on average when the s&p 500 may return five to 6%. kriti: that is interesting you bring that up. on a micro level, it may be a different message. that is something we started seeing big names like facebook, apple, hitting those corrections even though you didn't see it on the s&p. talk about where you see those major moves of 10% and higher in the micro level. what areas are those concentrated in? david: in the second half of

this year, we saw the small caps lag but now that we have gotten the more debilitating talk of higher taxes off the table, for now, when taxes go up, the last four times, small caps have lied. now that they will not go higher, they have set the table for small caps in an environment where gdp will grow better than 4%. corporate profits grow between 10 to 12% and valuations on small cap relative to large-cap siblings are much more attractive. i can build individual portfolios where the yield is better than 5% and that compares well to a 10 year treasury of 1.5%. dare i say it will be a good environment for the active stock manager but i do think we are setting it for the tailwinds to be better next year. romaine: managing director and portfolio manager at ancora advisors.

we will come back to you in a few minutes. relatively small moves for markets. let's bring in abigail doolittle. what stands out to you when you look at what is going on today? abigail: small moves. we are in the final stage of the year in this is the week everybody should kate -- take off everybody says. tim: this company included. abigail: we are extremely happy you're talking about markets. the santa claus rally we have talked about is still on. the s&p 500 up 1.6%, but that is a solid start to the santa claus rally that ends next tuesday, relative to today, the standout move, bonds. the yield is up five to six basis points. this spread up seven basis points. that is something that stands out. romaine: i want to bring you back in here to get your thoughts on asset allocation and how you think about 2022.

his next year finally the year for global equities? david: probably not. i live in detroit. i am aligns fan. -- a lions fans. they haven't won in 50 years in the playoffs. one day, this will happen but i'm not sure it will be 2022. stocks are up 30% in 2021. developed international up 12%. the last 40 years, domestic u.s. stocks have compounded 11.5%. developed international 7.5%. it is because the growth rates are less. free cash flow morgan -- margin is less. you don't get the diversification you think you will get by adding international. the valuations are not so discounted as they are so very compelling. yet time and again, i see

pension funds that say i'm starting with the global benchmark -- benchmark 60% u.s. stocks, 40% non-us, so by default, i need to own non-us stocks. i think that is for thinking. it will be another year for domestics outperforming the way they have been so consistently the last 40 years. romaine: you think about the global footprint of s&p 500 companies. they do business throughout the entire world. asset allocation, what are you thinking for 2022? where are you bullish with equities? david: despite a more temperate view on u.s. stocks, i think the greater risk is in the bond market, particularly treasuries. for the time being, u.s. stocks are still your best hedge against inflation. when you tilt in and stock portfolios, it is tilted domestic. leave a little bit into valuation being more compelling and the small cap arena.

if you want to think about the inflation hedge, it will be in commodites where you see good growth rates in that sector. that can be the inflation hedge and the diversifier in the portfolio if you just do not find compelling reasons to be buying bonds. romaine: i should point out a few months ago, i sat down with my financial advisor and i was 99% allocated to equities and i was furious to find out i had 1% allocation to bonds. david: well said, remain. there is risk and not taking rest in when you take away inflation and you look at if there is taxes a component, it is hard to get excited about the bond market, unless your finding opportunity. romaine: conversation with david sowerby, managing director and lines fan -- lions fan.

we will get back to david in a moment. we need to check in on these markets here. look, there will be a lot of hay made on numbers and milestones. you're looking at the s&p 500 around 4800, 4796, a record high. kriti, if your accounting, that would be saddening. kriti: this is 70, the record high and it goes back to the trend you saw in 2017. when you see global growth rebound from a post-recessionary reveler, this behavior is normal. when does a comeback to that normal trend of having corrections? davey that time will be 2022. tim: we have to go back to 1995 to get to 70. the '90s -- kriti: tim just wants to party like it is 1999. tim: we are going to score dow points. we are up 97 points. the dow lasted a record high on november 80 are.

it is a laggard. maybe not laggard. kind of moving sideways for a little bit but it has parked up in december and will close today. it will be a record high for the dow jones industrial average. the dow jones is closing at a record high around 36,489, up .2%. the s&p 500, let me double check but i believe 4792, a record high but i want to check that for all of our viewers and listeners. we are getting 4793 in changed so that is a record high for the s&p, up .1%. the nasdaq composite in the red, close .1%. the russell 2000 higher .1%. >> trading volume is right and perhaps that is because people are not working this week. on the s&p, trading volume is

down 40%. interestingly, nasdaq trading volume down 15%. kriti: what tends to happen the next day is pullback in the market with record closes even on a light volume date which catches my eye, what is happening on the sector basis because let's start from the bottom. laggards are energy and big tech, telecom holding facebook up and social media companies. those are your laggards and like i mentioned, when you see those two lagging, it means a broader decline for the rest of the market and that is the exact opposite of what you see because every other sector is higher, leading with yielding sectors. take a look at it. at the top of the leaderboard, you have consumer discretionary and durables and household products, the idea staples on a micro basis --perhaps that is where you get yields on a sector basis. that is fascinating that is still the trade we are ending our year with. tim: let's look at the individual equities that made notable news. let's start with biogen.

shares jumping after sources that -- said it approached samsung with talks to sell. a representative said the company does not comment on market rumors and speculation. biogen finishes hired 9.5%. western digital finishing higher 5.2%. samsung said it is making adjustments at its chip production line in xian, china due to the spread of the virus. we saw shares of competitors western digital and micron higher in response to that. nvidia shares down another day, finishing down yesterday by 2%. finishing today down more than 1%. your today, higher than -- by close to 130%. reuters reported china is planning to not raise capital or issue new stock as it moves for

delisting from the stock exchange. romaine: we should point out volume is very light. we have 7.7 billion shares traded on this day, well below longer-term averages. yields not going anywhere, still camped out around 75 basis points. your 10 year yield right now at 155, a little bit steep on the major yield curve, your 210 and 530. david sowerby still with us, sitting by patiently. i want to go back to the chip stocks that tim mentioned --nvidia, micron. this has been a big winner on the year. we don't talk much about the philadelphia some conductor index, which has hit record highs by the numbers, rivaling what we see on the s&p this year. when you look at those chip names, are there any that jump out to you as still being attractive given the current valuations? david: absolutely. they mutual fund i comanage,

there are already for stocks and you have to cite -- fight for shelf space. the chips in their are broadcom, which has moved into the software component, but they are what i like to see. the valuation is compelling. . their growing the dividend at 15%, generating a significant amount of pre-cash flow and broadcom is a larger tech physician. texas instruments is also in the portfolio on a semi conductor side. i think even though semi's have had a great run, don't fall in love with him forever. you have more opportunity based on the valuation, particularly for a name like broadcom. romaine: i'm curious about other names you are bullish on in your portfolio. why pick discover over some competitors, including visa and amex? david: it has done better, for one. it outperformed american

express, which is a good feature as well. almost 20% of my portfolio is financials. the household balance sheet is strong. consumer cash flow. the average discover card member has had an income of $100,000. their credit is strong as well. wanting to not own the gang -- banks, discover has a bias to what i'm seeing in the health of u.s. households and consumers. kriti: i really want to ask you about the travel sector. one of the main pieces of 2021 is the recovery train with airlines, cruise lines, and hotels -- we are ending with rotation out of the trade that was so popular in the first half of the year. do you see any good place in the travel sector into 2022?

david: i do and a year ago, when the vaccine was being introduced, we wanted quick travel and thought lodging was the best place. add window partners, 70% leisure. you drive to a hotel -- wyndum property, the price point is more competitive. compare that with marriott. wyndham is the best play. they have doubled their dividend back to 2019 levels and reduced their debt. you're still going to see, even in the face of higher cases of covid, people want to travel and i think the lodging makes the most sense compared to a cruise ship. romaine: we certainly have seen elements of that pent-up demand in the summer in the fall and we will see if it picks up again next year. what about stay-at-home stocks

we all favor? i know caroline hyde is a big peloton user. she is not using it anymore. everyone is tired of the zoom hangouts. i wonder how those stocks pulled up, even if covid lingers longer than expected. david: i'm coming up on my 500th telik -- peloton i'm a big user. stocks are up because there is competition in people are going back to the gems. i'm not a peloton investor because the valuation is still stretched for a stock that was priced at one point for perfection and the 70% drop off, the 52-week height ratified that, transcending zuma, gamestop, spacs that are publicly traded. we learned in 2021 that valuation mattered. it will matter next year as well. romaine: question i have asked

about 2022 is in the absence of a pole in 2021, is there opportunity for your clients to get into the market at a cheaper lever -- level? will there be a selloff or pullback? david: the rule of thumb is in a calendar year, the inter-year selloff -- intrayear selloff is 13 to 14%. we didn't get it this year and we will certainly get it next year. i am not smart enough to tell you when it will happen. when it happens, you will see many good companies trading 20%. you will need to get in there in by over the long-term over the next three to five years. stocks will still you be your best bet. romaine: managing director and portfolio manager at ancora advisors, thank you for joining us.

your last comment reminds me about what you said earlier about corrections and starts you have seen but not that being reflected in major indices. kriti: we had this conversation earlier about the idea of valuations bleeding into the market is something that was looked over when it came to tech and now you see some of those valuations decreased. we will see what happens next year. romaine: a little bit of divergence we need to talk about. tim: we heard david talk about playing lodging and a few minutes, we will speak to chip rogers, american hotel and lodging association president and ceo. you're listening to bloomberg radio and watching bloomberg tv and our simulcast on youtube. tim stenovec, kriti group and romaine bostick. this is blue main desk bloomberg. -- this is bloomberg. ♪ ♪

♪ romaine: bloomberg markets, special markets coverage, global simulcast on tv, radio, and youtube as well. we got the closing bells. the 70th record high for the s&p 500 this year, second-most on record, the most going back to your favorite era, the 1990's.

the dow jones closing on the day at a record high. philadelphia semi conductor index getting a bid. the nasdaq composite down slightly on the date. i want to talk about this divergence. flip up the board because when we talk about what is leading the market, the importance of big cap tech companies, you look at online. one minus the nasdaq 100. the percentage of members of that index above their 200 a moving average, 70%. the smallest company in that index has an $11 billion market cap. go to the composite where 2500 members of market caps below $1 billion. the percentage of companies in that index above their 200 day moving average, 37%. there is a big divergence here between small caps and large caps about what has been brought. this has been the trend we have seen for the last few months and something to keep an eye on as we move into 2022. flip up the board to other asset

classes. you get weakness on the day for a dollar and in crypto. oil getting a modest bid on the day. the vix camped out around 17. one of the vague movers is biogen. romaine: shares closing higher after is in talks to sell itself to samsung purportedly. let's bring in mike, who joins us. we should know biogen says it does not comment on speculation. mike, with the caveat this is reported by one source, what do we know about a potential deal like this? mike: in context, it would be a large deal. currently, it would top the second largest deal of the year, a healthcare company. that will put it past its market cap of $38 billion. in 2021, the discovery-one or

deal. kriti: there is something happening in health care. i wonder how much this has to do does do with pandemic -- has to do with pandemic. talk to us about what this might mean for samsung group or by a that front. mike: without going into my expertise on the overlap between help -- healthcare and tech, like everything else, health care is becoming more tech and vice versa. there's a lot of overlap. certainly the type of i.t. power needed to run and develop pharmaceuticals as a researcher is becoming more into play as

well. i think that might be something involved in this case. romaine: keep an eye on biogen with a phenomenal day. something like the six or fifth biggest laggard in the s&p over the past six months. a lot else going on in bonds and we have a seven year treasury option. what better time? let's talk to alex harris, who covers everything. we don't just talk to you -- thi s is the last bond option of the year and everyone wants to know what the treasury will put out in what the appetite will be by investors. how do they deal with this today? >> the auction came tighter from where it had traded pre-auction. on a day like this, it is normal. we are in the end of the year. we are 50% of our normal trading volume today.

it was not to worry some. it t mar was anticipatin results like this. . the question is the fed is stepping back and asset purchases are scaled-back very quickly. now, you have to wonder with these auctions still large, what will happen with this demand? that's the question mark in 2022. we will have to see how things shape up with investor appetite. tim: what will you look at to understand investor appetite and for 2022 to understand today's holdups? alex: you have to look at the option metrics, positioning data, primary dealer data, and these other important things as we had into the new year, you know? from my perspective, looking at the short end, we will look at repo levels and how those

individuals --securities paid t --trade and they did repo markets because there are dynamics into play. those are a few things to watch but the auctions we get, the tens and 30's will be the first bids we will get in the new year. those will be watched with interest, especially with the fed coming back to resume asset purchases, albeit smaller ones, january 3. kriti: how much of what we can see in the seven years auction today? we have 30 seconds. alex: you know, i wouldn't make too much of it, you know? again, it is the end of the year, the last trading week of the year. things just get a little illiquid. it is totally normal and not reason to panic. i wouldn't worry and i think you can see some of this reversal

when we come back at the beginning of the year and see where things lie and where we are politically -- geopolitically. that is news to me. yyou --you know, the three-month, six-month, and 12 month, they have until june 20, 2023. we have a little bit of time. tim: we will have to leave it there. we are talking travel. this is bloomberg. you're watching us on bloomberg tv, listen on bloomberg radio, and watching us on youtube. ♪

>> do you think cryptocurrencies are a plus for the global economy or is it too early to tell? >> cryptos are not currencies. cryptos are highly speculative assets. i think we have to distinguish between cryptos that are highly speculative and high intensity in terms of energy consumption

assets, but they are not a currency. on the other hand, you have stablecoins that are beginning to proliferate, which some big techs are trying to promote and push along the way, which are a different animal and need to be regulated or there has to be oversight that corresponds to the business that they are conducting irrespective of how they named themselves. in all that, you have the central banks, who are prompted by demand of customers to produce something that will make the central bank and central-bank currencies fit for the sentry we are in, which is why we are not all looking at central-bank digital currencies, so instead of having banks give us cash in our pockets, we can have the same thing but in our

-- but in a digital form. we are working to push the issue on our addenda because i believe that we have to stand ready for that. >> this is special markets coverage on bloomberg tv, bloomberg radio, and youtube. late last week, a new york city mayor announced that the celebration in times square would be pared back as a result of the omicron variant. since then, the virus has continued to spread, cases have gone up around the country and the world. how is this affecting travel plans for the new year and beyond in 2022? joining us is chip rogers.

the organization is the largest hotel owners organization in the world -- in the united states, it counts among the biggest hotel and modern providers among its numbers. thank you for joining us. give us some data, what are you hearing from your members about how the omicron variant is affecting travel plans? chip: thank you for having me. leisure travel is holding up and that has been the bright spot throughout the pandemic. people still want to visit their in-laws, their friends, they want to go on vacations and that is holding up. we have not seen a lot of cancellations of large events yet in that is good news because we think omicron, if you follow what happened in south africa, it went up rapidly but went down rapidly. all those urban center office buildings that were scheduled to open up after the new year, will they open up? that is an enormous impact on what we would term white collar business travel.

if those offices start closing or delaying re-opening, there may be some challenges ahead. romaine: let's talk about that because we have been focused on that, particularly in new york city with the wall street banks and other big employers, basically promising to bring back workers at the start of january. with regards to travel and the bookings, if the leisure holds up but you don't necessarily get the business travelers pulling their part, what does that mean for the bottom line for a lot of hotel chains? chip: pre-pandemic, 53% of all hotel revenue was generated from non-leisure travel. while leisure travel has been fantastic, there is no way this industry can sustain itself at pre-pandemic levels only on leisure travel. you have to have the three legs, the leisure travel, the large meetings, coverages,

conventions, and you have to have the business travel. we have two of those three but the question is, that urban cities send their -- city center , white collar business travel. also people, truckers, that is doing well but it is the urban city center that we are concerned about. kriti: talk to us about occupancy rates, especially ahead of the new year's celebrations at the end of the week. any numbers would be great. chip: throughout the pandemic, the one amazing thing is the rates have held steady. occupancy dripped dramatically to low levels in 2020, started coming back in 2021, but if you look at where we are now, last week compared to the same week in 2019, occupancy levels and rates levels were about the same. we have not seen a significant dip because of omicron, we are hoping we don't. if we can get past this, people begin to normalize that there will be waves, there will be

things we have to deal with, but that does not mean travel these to stop. tim: what about supply chain disruption? they are affecting the operations of eight in 10 surveyed hotels according to your data. we understand the business story but what about the supply chain is affecting hotels and is that a more -- is that more of a story than labor? chip: no but it is close. the three big challenges, number one is labor, number two is supply chain, and number three is the virus. labor is incredible a difficult and when you layered on top of that and inability to get the supplies that are necessary to clean rooms, that means a certain hotels that could be at full occupancy are having to shut down rooms or block rooms because they don't have the labor or the materials to clean those rooms. that is hurting the industry and is something we need to get past. romaine: to get past that, if

you look at other industries, the solution has been pay more, higher benefits, flexible work times, something that might be hard for some of the companies under your umbrella. we spoke with a hotel owner yesterday who owns the dream hotel chains, he says they have raised prices significantly and customers have been willing to pay it. are you hearing the same thing? chip: absolutely and those are leisure travelers because they want to get out and see their friends and family. if you look at the numbers for housekeepers alone, wages have gone up 25% in some markets, like new york or miami or dallas, it is going to be higher than that. across the board, the percent to 25% increase in wages for housekeepers, that is a significant jump. kriti: we will talk about the safety measures that you have to accommodate for when you are running any hospitality business. talk to us about how you are

dealing with that in the face of this latest variant. chip: we started early on, in may of 2020, with a program called the safe state, it laid out what all hotels should be doing to keep the guests and workers safe. a lot has to do with spacing. at the beginning, a lot had to do with cleaning. we are more fergus now on air quality -- more focused now on air quality, vaccinations. all of that comes together to create that safe environment. we have held up strong throughout the pandemic. hotels have not been the place with a virus is spreading and we are proud of that. romaine: really appreciate you taking the time to be with us. a lot of us focused on the travel industry. chip rogers, head of the american hotel & lodging association. breaking news on didi global, they put out earnings. they are reader rating their plans to move ahead with that

listing in hong kong, delisting from the u.s. exchange and moving to hong kong, one of the most interesting moves we have seen with regards to a public listing in the united states. as far as earnings, they had about $6 billion in revenue the most recent quarter and $4 billion loss. tim: the company announcing board changes saying didi global's daniel zhang has resigned. after hours, the stock moving significantly. romaine: we are going to go back and cover what is happening here with regards to the office market. a lot of folks not in the office. we are in the office. this is "bloomberg markets." ♪

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tim: welcome back to special markets coverage on bloomberg tv, bloomberg radio, and youtube. it has been about two years since the pandemic sent everyone home from work. the question, is working from home the new normal?

great you happy with us. i thought tech company campuses where the best places to work. you get free gourmet food, free dry cleaning, luxury shuttles that take you to and from work. are these going to be a relic of the past if people are working from home? >> i think a lot of people will say, where have these people been? that has already been a relic of the past. we are two years in at this point, almost, once markets will be -- once march hits will be officially two years. two years since shelter-in-place orders went into effect. for a lot of people, the workday is going to begin the same way it did this year, on your couch, at your dining table. those who had enough foresight to see this would not be a couple months or year long thing probably already have desks but the rest of us are suffering

from carpal tunnel now with external keyboards. two years and, it stops feeling like there is going to be this deadline to go back to the office. when companies set deadlines to go back to the office at this point, in the tech industry, for a lot of people, it is going to be years in. lyft said workers can work from home next year, not worrying about coming back to the office. that means a whole year additional of working from home. it is no longer temporary. kriti: i met up with a friend last week who told me that she has moved to the cayman islands and is able to work for a new york-based company remotely. how much have those plans to return to office become a forever story? you are going to be working from home perhaps forever? priya: so many companies told employees there is a deadline, then they push the deadline back every time. folks are trying to figure out where they want to live, whether

they should move. some companies have given a lot of advance notice saying, do what you want, live where you want next year, so people can figure out, do i want to move? others have moved to places like hawaii, you can be online and work in the tech industry, location does not seem to be a factor anymore. what this means for san francisco is unclear. you can tell downtown is still not back to where it was before, only a fraction of people are showing up in office buildings. the streets are still pretty empty. go somewhere around dinnertime, it is much easier to get in and get a reservation than it used to be. romaine: priya giving us an update on what is still a trend, everyone working from home. we are going to continue this

conversation because while a lot of folks are camped out at home, a lot of companies are making bets on the idea that you are going to return to the office at some point. a lot of new developments in new york city, a companies like facebook and others making a bet that they are going to get those workers back. let's begin our next guest. let's start off with the new york market. there has been a number of big projects including one by facebook, across from penn station. john: they arranged for that deal, 700 sunday five thousand square feet -- 775,000 square feet. they are still remodeling and supposed to move in within a year. it takes a long time to get these spaces ready for occupation. if you are a company like

facebook, you have to plan on growing, even though it is easy to work remotely. they need places for people to get together, to learn how to adopt the facebook culture. to do that, you have to make an attractive environment to get people out of the cayman islands or hawaii or wherever. there is a war for talent right now. talent is not just about what you acquire them at, you have to train them, you have to inculcate your corporate culture. this facebook office in new york is an effort by the company to create a space to attract people and turn them into facebookers. tim: what do we know about what they are doing to that office space to attract people back to the office, dr. new york city from places like hawaii and the cayman islands?

what does this look like on the others the pandemic and how that is different from what this looks like before the pandemic? john: is very much a place divided up into meeting spaces, and casual as well as more formal meeting spaces. there's all kinds of tables to sit around, there are areas together outside for more celebratory events, and within the building, there are all kinds of alcoves, there are balconies so you can wash what is going on. they are eating areas so you never really have to leave if you don't want to. it is kind of like what it is like working at 731 lexington for bloomberg. romaine: we had cheesecake today, you are missing out. john: i missing out here in l.a., we don't have that kind of stuff. i still think working from home

-- there has to be a reason to go to work. that is the kind of spaces that companies like facebook and google is spending billions on a new york office building that has trees all over it. romaine: a lot of development here. a lot of people are making a bet that the office market will be bound not just in new york city, but across the united states, even across the world. john gittelsohn out there in los angeles. in new york, we have breaking in the ghislaine maxwell trial, the sex trafficking trial, the trial -- the jury has reached a verdict. we will be getting that news hopefully shortly and we will bring you that on bloomberg tv and radio as soon as we get it. a verdict has been reached by the jury in a ghislaine maxwell sex trafficking trial. we want to pivot back to the markets. a record day for the s&p 500,

low-volume but pretty much ending the year more or less where we have been all year long. tim: we are in the question is to what extent does this rally continue into 2022? santa claus rally is the first two days of the year, including the first two days of the year. my bigger question, 1999, what was the top song? romaine: was it prince? tim: it was not. do you have a guess? kriti: i'm giving up on this one. tim: this is according to wikipedia. believe by cher. the top 100 hot singles of 1999. romaine: you stumped me on that one. i did not know you were such a big cher fan. tim: no scrubs was number two. we all member that one. romaine: we will see what kind of scrubs come out tomorrow, whether we hit another high on the s&p 500. this has been a bloomberg simulcast.

we say good night right now to our audience. this is bloomberg. ♪

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