Caroline Hybrid, Bostick Taylor, Carol Massa discussed on Bloomberg Businessweek

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Come down to the close Bloomberg's comprehensive cross platform coverage ahead of the U.S. market close guards right now This is the countdown to the close with 60 minutes left in the training session Caroline hybrid main bostick Taylor rigs join now by our colleagues Carol Massa and Tim stern of it Together welcome all full blue mega audiences We go cross platform TV radio YouTube you name it And we look at what falling from records kind of a day big tech small tech in focus as we see those yields continue to climb Yeah exactly It really is a treasury bond market story and I feel like the treasury trade is already saying we're done with 2022 I mean it's pretty dramatic and I feel like I don't know whether Taylor talking at one point or other folks on Bloomberg TV but just should we start to be thinking about a 2% on that ten year note at some point Yeah and look at how this is playing out in the NASDAQ 100 Of course the big tech companies Tesla down 4% Microsoft Nvidia Amazon Apple all leading to the decline of 1.6 I mean volumes up some 23% on the NASDAQ but the overall movement down by one and a half percent I'm looking at 247 points being lost when you're looking at the NASDAQ overall You mentioned those big cap tech names dragging at lower We also see therefore the S&P 500 can not fight higher when you do have these big tech names Under so much selling pressure only down why some four points 3.7 points were at 4792 as we trade So basically flat on the day But we are still seeing money moving to some of the cyclicals Dow Jones but gets lift higher 255 points higher 7 10% higher but the rest of 2000 also some selling going on to day Taylor And it's a cyclical It's a value story I know two days does not a trend make but the story of the year is the story of today as well with energy financials the big outperformers at least on a sector basis on an intraday level energy just continuing to post big gains of about 3.7% financials of course benefiting from that steeper yield curve industrials materials you name it some of the other big performers but Romain you go to the bottom and unfortunately it is technology that is the worst performer down about 1.4% And that really is where some of these big tech companies are coming back into focus as those long duration assets Yeah and I think we got to put this in perspective I mean we're going to talk about obviously the big cap tech names Yeah apple is sliding a little bit here and you have some other companies out there in that space like Microsoft and Tesla as well gear But when you get down to that second tier of companies out there that's really become the issue here You're going to pay what 300 times earnings for a company And it's not just earnings It's a price to sales You want to pay 50 times sales for one of these companies Well I guess maybe when rates were at rock bottom but if you really do believe that rates are going to start to move higher on the long end and on the short end you have to start reevaluating that And it's not just about where the nominal rate ends up guys It's also about what is baked in to that rise in rates The idea here that you're getting a slower economic environment the idea that you're getting a more inflationary economic environment and it turns a lot of those multiples on its head Yeah that is why you see a Robin Hood off by 6% Why you see a beyond meat off by 5.5% Why you of course factory in that all important yield curve is you say steepening Can I check it out The two's the tens Currently really it's a dramatic spike higher that we've seen in the last couple of days remaining going to jump in Yeah I was just going to give Tim a pop quiz here Which company in the S&P 500 and the NASDAQ 100 has the highest price to earnings ratio Oh I don't even know I don't know What is it Oh yeah I wouldn't have gotten that right Here's what I know Doctor Scott leaves on the board Okay I know that Okay I was going to pop this as a Tim all last week That's what you guys miss Oh my God Yeah You know what's great I would go home and then my dad would call me and he'd give me the same pop quiz and I'd get it wrong again Thanks dad That's why you love families Yeah exactly Listen what's going on is the market rotation We're definitely seeing that play out today but so much is still forgive me but it's all about COVID And Stephanie kelton was on Bloomberg TV with David Weston earlier also on an Bloomberg radio She is an economist She follows public policy And she's been following what's going on the economy She's pretty optimistic but she is concerned about the supply demand imbalances Here's what she had to say The supply side has revealed a lot of vulnerabilities And we've seen it at the ports and we've seen it with freight and trucking and all the rest of it And so the supply side I think overwhelms the demand side contributors to the inflationary pressure that we're currently dealing with And so much of course that's Stephanie kelton there from stony brook but it's so much of what happens right in the coming months is if we get beyond COVID perhaps to him and I were just talking about this off air What happens if in a month we're in a much better space Are we all traveling or we spending more money What does that do to the economy Yeah how does our spending shift And does it even matter if our spending shifts and we're still seeing some pork congestion and we're still seeing some factories in Asia closed Because a handful of COVID cases that has serious repercussions that can hit weeks months later I am curious I mean we talk about what the potential dampening effect on economic activity is But because of COVID but then you look back into 2020 and into 2021 we saw more of a shift in spending rather than a complete sort of tamp down in the economy That doesn't mean certain areas of the economy certain industries aren't going to be hit hard by this but they're still seem to be some resiliency and now only consumer spending but also business spending as well But talk about the rehab and the now and the headlines we get Macy's according to CNBC cutting store hours temporarily as COVID cases spike FedEx express is spending U.S. on call pickups from January the fourth looking at AmEx pushing back on the 24th of June January they were looking to release their AmEx flex but they don't want to bring their colleagues back and of course that's way out and several weeks out So this still speaks to companies that are trying to navigate this and finding difficulty particularly from a labor perspective Let's talk about that Labor perspective in that jolt stout of this morning with quit rates again at a record high 3% or four and a half million and some of the job openings Carol at least coming down a little bit but over 10 million I mean so elevated particularly when it comes to those pre-pandemic levels People are quitting and they're also finding new jobs and that's what we're seeing We continue to see them moving into new positions I do think we should mention though ISM manufacturing I know we had it up for our TV team I mean the gauge did fall but there was some underlying support delivery times are being reduced The prices for raw materials That's coming down That's a positive I mean can we I'm sorry can we just go back to the quiz state here because not all those people went out and got new jobs I mean they're gone And when you looked at some of the industries that they were in it really makes you wonder what's going on there This isn't just the great resignation like oh I'm going to move on and start a new business These are people that have my interpretation if I could will that seemed to just be dropping out Well it does remain to be seen what the definition of full employment looks like on the other side of this pandemic who permanently dropped out of the labor force but remain it reminds me of our conversation that we had with the CEO of Dave's hot chicken last week who said $15 an hour was the minimum wage that they were hiring And he was saying something like 20 bucks It's exactly at competitors who are advertising starting salaries of $20 an hour And how does that how does that filter into the higher cost that consumers then pay And then we get back to the I word inflation But you go back to that to the quit the jolt state here I mean you talk about the industries that we had hard as it wasn't just about pay It was also about the conditions that they were working under It was a lot of healthcare workers A lot of services workers And again this goes beyond just pay People have just reevaluated their lives and maybe decided it wasn't worth it at any price Yeah tough time for parents right now you know Second day in a row my kids nursery school is closed I'm not the only one who's struggling to find day care.

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