Greg Jarrett, Ellis Pfeiffer And Raymond James discussed on Bloomberg Markets

Automatic TRANSCRIPT

Much Greg Jarrett there with your Bloomberg business flash Now I want to get over to LS Pfeiffer managing director of fixed income capital markets over at Raymond James and we've been talking about this market for the past couple of days now and the increased volatility we see in the move index and I mean just looking at the numbers you can see especially at the shorter end of the curve there has been a sell off Thanks so much for joining us Tell us what you think the fixed income market is telling us that the equity market isn't Good morning man Paul is great to be here You have the volatility is something that's not abnormal as we approach a potentially important call like the fed should make this November which I would expect them to not only make the announcement of a taper but to start in November And so we've seen in the past in 2013 where even after the paper tantrum the markets calmed down a bit and as we approached the next the actual announcement It did move up quite a bit into that announcement So I think that's really what's telling us and there are two oh no Oh no Oh no Ellis Pfeiffer I believe we lost him but I have faith that Ken fell you is going to get right back in touch with them Or rich Truman Yeah I mean both of those today And we can get him right back on because I think it's one of the most interesting things right now sort of basic but fascinating when you get mixed signals from the bond market and the equities market And people tend to think of the bond market as the smart money That's what I've been told They take more days off You know The bond market is more civil I feel like you know the equity is market can be relentless at times Yeah I want to chat with about inflation that whole transitory thing The more conference calls I listen to it seems like it's not going to be that transitory So we have LS Pfeiffer back The phone is working he's standing closer to the cell tower now Let's talk to us about inflation here The fed tells me it's transitory but as I listen to more and more conference calls from more and more management teams I'm not so sure about that How are you thinking about it It has become more of a temporary status I think than a really a transitory stand I think it's here with us for a bit We have our supply chain issues that continue to press forward inflation and continue to push prices up too much money chasing too few goods right It's the definition of inflation We are seeing maybe a little bit light at the end of the tunnel from things like the port to start to see a little bit of supply chain problems easing a bit As we get those kind of work through the supply chain I don't know down there in Tennessee It's not just the supply chains it's not just chip manufacturing but telecom Exactly That are dogging us today I don't know how we get around this You can't reconnect to someone twice can you No I don't think so You get one shot and then my issue is again I've been listening to a lot of these conference calls here in these earnings and a lot of the management teams that you hear from various parts of the economy I'm not hearing the transitory talk as much as maybe from the fed They kind of feel like it might be something that they need to focus on through the remainder of 2022 as they think about their business plans for next year Well Alan Joe the CEO of Unilever which makes soap and you're gonna leave her PG tips British tea it's like the best tea that there is It's called builders tea colloquially Anyway they make so much stuff as I was saying earlier They're kind of the P and G of Europe And he was saying he expects inflation to peak in the first half of 2022 but not be gone by the second half and he said at least 12 months before this inflation So the other thing is Mark cudmore from our M life blog was saying how silly he thinks the word transitory is because at least he used in this sense it could mean three months It could mean three years It could mean 5 or ten years Yeah yeah I'm not sure That's a great point I'm not sure what that means I guess my first herd that I kind of thought three to 6 months and I think we all did Yeah And there are some supply demand issues that we hear about from the economists are out there obviously we have lots of demand as the global economy begins to reopen But then what we didn't quite figure on is again the supply chain issues in the challenges on a global scale that wasn't necessarily something that we were thinking about initially But it's a thing And it's still a thing Boy you hear that as well a lot for a lot of these conference calls these people thinking about their businesses and how they're going to maybe just go into the holiday season But just overall going forward is the just in time inventory strategy which had been kind of invoke for decades really on a global scale That's being called in question a little bit and maybe people are going to be taking on a little bit more inventory I think the problem is the wild card is labor right Because you can say President Biden can say all right you know what from now on the port in LA is going to be open 24 7 Right But it doesn't matter If you can't hire anyone to work there you know they could be open 34 11 It doesn't make a difference No and I just read a story recently on the Bloomberg where they're saying okay we get the containers off the ship so we reduced that number of ships out at sea But there's no truckers to take them inland to put them on the trains for example You know so it's just it's pervasive throughout So it just feels like it's going to be something that takes longer to kind of I would be a great trucker Oh boy I did that once when I was taking a trucking company public We went from LA to Chicago It was cool That is awesome But that's a tough job

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