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tv   Bloomberg Markets  Bloomberg  December 23, 2021 1:00pm-2:00pm EST

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another at-home treatment option. the drug received emergency authorization on the heels of pfizer's competing pill which was released yesterday. the european union is urging negotiators to speed up their efforts to resolve a standoff between iran and the u.s. when they meet on december 27 for the next round of talks aimed at reviving the nuclear deal. the chief negotiator tweeted today that it is important to pick up the pace on outstanding issues. the u.s. exited in 2018 and reimposed sanctions on iran. new york state will start compiling data on both perpetrators and victims of hate crimes under a measure signed into law today. the court system and local law enforcement will collect information and make it public. it will be used to help people studying hate crimes i looking and basic demographics of those
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arrested and those assaulted. those in london looking to catch the train at home at night. the underground tree network is the oldest in the world, has long been heavily unionized. strikes are commonplace. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ >> it is 1:00 in new york, 6:00 in london, 2:00 in hong kong. welcome to bloomberg markets. here are the top stories we are following on the bloomberg and from around the world. the fda clears merck's covid
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bill for high-risk adults with no other treatment option. the u.s. ordering 3 million doses as a new wave of infections takes hold. keeping retail fresh in 2022. after many companies pivoted, we discuss how they can rediscover innovation to thrive over the next decade. dana telsey joins us. and covid cases may be climbing but holiday travelers are still on the move. we will speak to jason lippert about why demand is revving up. all that and more, ahead. we are right around session highs on the s&p 500. if we close at this level, it will be an all-time high. 4730 on the index. it is christmas eve eve, so volume is very light. about 30% below the average over the last 20 days. more action in the bond market.
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the session closing early today at 2:00 given the holiday. the 10-year yield is up for basis points. wti trading at 71.63 a barrel. in europe, futures coming drastically down from record highs as u.s. lng looks to help solve the energy crisis. here in the u.s., futures are coming down six percentage points on natural gas futures, hitting the lowest since june. christmas will be a lot warmer than initially thought to. let's get back to the news on the fight against covid-19. mark's -- merck's coronavirus antiviral pill was given emergency use authorization. we understand merck says it can make 10 million doses by the end-of-the-year. the u.s. will not take all of those. where does this fit into the strategy?
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>> interesting question, something that we will see play out particularly over the next few months. merck will be able to scale up their production a lot faster than pfizer. the pfizer drug that you talked about that was authorized yesterday, they are used to treat pretty much the same patients. high-risk patients early in the course of the disease. merck will be able to have production right away. pfizer will take longer. however, as we saw today, the merck drug is not for use -- it is being recommended against use for pregnant women, it can be used if they are appropriately advised. but the pfizer drug over all more effective. it appears to be safer, has
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fewer safety concerns. it appears as though the pfizer drug, once it is available, will get more use. we collected figures from this london data firm, we published a story last week. they expect over the next year, the merck pill will sell about $13 million over the year, where pfizer will have about $70 million. kailey: pfizer makes a covid-19 vaccine. these treatments have a longer runway in terms of revenue potential than the vaccine does. john: it is hard to say, we don't know how long the vaccines that we have will be effective, what are the variants will come down the line. right now, pfizer is predicting $31 billion in sales next year for the vaccine.
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$17 million for the drug. it is anybody's guess. i think we will see vaccines for some time to come personally. nobody knows. kailey: now there is conversation about potentially a fourth booster shot. let's talk about when things may actually start to be removed from the thesis. fda saying monoclonal antibodies are unlikely to work against omicron. will we see a praising on of those treatments at -- as new ones come to the fore? john: maybe not those types of treatments, those particular treatments. those treatments interfere with the action of the spike protein directly. the covid drugs from pfizer and
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others work on other parts of the virus that do not change as quickly. the more the spike protein changes, the less likely those monoclonal antibody treatments will work. it all depends on what we see in the future in terms of mutations. it appears the virus is quite adept at mutating. kailey: thank you so much. happy holidays to you and yours. the holiday shopping season is almost over but retail has made a big shift to adapt throughout the pandemic. we will speak to dana telsey about how retailers can keep that innovation going through the coming years. this is bloomberg. ♪
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>> we are going to look back on these last few years and call this the retail of it. >> the biggest jobs in retail that we have seen in 20 years. >> they go to the store and see what they want to buy, and then they go home online and they buy. or they go online and see what they want and then go to the store. the basket is much bigger than in the past. >> i always referred to domino's pizza. i want us to be ahead of other people. we have proper close to the consumer. let's find a way to deliver that product faster. >> we thank our stars every day that we are not in the tailoring business making neckties, tuxedos, because people have adopted a
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lifestyle of what they wear, and in many ways, it is an outdoor lifestyle. >> as soon as consumers can get back into the store, they want this apply. about 7% higher when it comes to shopping online versus 2019, however, as soon as they were able to get into the stores, they want to buy. kailey: that was some of the many guests on bloomberg talking about the pivot in retail. let's talk more about that with dana telsey, telsey advisory group ceo. when we think about the way that retail has changed in the pandemic, are those changes permanent, or could we see a reversion to the norm in the coming years? dana: thank you for having me and happy holidays. i think a lot of the changes will be permanent. the structural changes and the old narrative has gone away, the old there to that amazon will take over the retail world. that didn't happen.
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we have only seen traditional and new business company models become more vibrant. the second narrative was that so many stores need to go away. yes, they did, and we closed a lot of stores in 2020, but you still need physical stores. as you heard, stores are essential, they combine social and digital. another element is consumer bankruptcies. we had that in 2020, with 96 companies closing. the innovation of digitization, social interactions, companies enhancing their processes to include purpose, whether it is esg, community, loyalty, i think that purpose has taken on new meaning. what it all means is this process should drive profit. i'm excited about the retail transformation for the future. kailey: i wonder if that transformation will all lead to
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a more automated retail industry? we talk about the challenges they faced in the pandemic. it was not just foot traffic, you need people to staff the store. labor was a problem. with that lead to more investing in not people but robot? dana: two elements. yes, automation is a big part of were cap spending for retailers are going, but nothing replaces the human touch. i think we are seeing that with the reopening of stores, how you are seeing online sales continue to be important, but the transformation of retail stores is becoming even more actionable. the labor market, i think there is headwind, both for employees who love being sales associates, who love being digital ambassadors. i don't think that goes away. labor challenges are hard. being able to show consumers, who want to have a path of employment in retail, show them the opportunity for growth and
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engagement. i think there is a new job creation opportunity ahead of us for the retail landscape. kailey: that is the labor challenge. on the supply chain side, you think retailers have rethought how they approach supply chains? will we see more re-shoring of supply chains, closer to where they need to sell the items, to not have things stuck out on ships in the port of los angeles? dana: i think changes have been going on with the chase model, just-in-time delivery. shifting some of the ports to the east coast and west coast so it is not all in one place, shifting locations in manufacturing. this was certainly a teaching moment in terms of how to ensure your inventory is available when needed. it is more agility that every company is putting into place. kailey: is this also a teaching
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moment that maybe you don't need to have as much inventory because it actually gives you more pricing power? dana: yes, it is. the drug of promotions that consumers react to. you see a for sale sign, and you see the consumer,. let's hope the management of inventory on a cleaner basis -- yes, we will go back to promotions. we cannot expect the full sale through price of 2021 will go forward but hopefully that level of promotions will not be as high. i think we will go back to more normalized promotions, but hopefully also more profit involved, too. kailey: let's talk about windows promotions have been. the supply chain challenges, getting inventory in for the holidays, if all of that comes in later, they will have to offloaded that. does that mean that we will see more discounting immediately after the holiday season? dana: if the merchandise comes
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in late, you'll see more discounting. but think of the other opportunities that come in. there will be an increased abundance of good that will drive more traffic or the treasure hunt appeal for off price. kailey: looking ahead to 2022, what are your top retail picks? dana: i like brand value -- value in brand strength. where there is value in brand strength, i think of it into apparel, where, companies like deckers, levis, companies on the specialty side. i love that bath and body works has reformatted their business. the of cosmetics, estee lauder, ulta are interesting. luxury continues to gain share with lvmh. and casualization with
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lululemon, continue to do dominant. kailey: how much of a risk factor is china in that equation? dana: it is a risk because the chinese are buying at home now, not traveling as much. certainly with some lower-priced options in cosmetics, it has been an impact. another one of our topics is nike. earlier we saw the weakness in asia, but the global strength help to drive that business. if we get tourism coming back, that will only propel brands further. kailey: great to get your insight, dana telsey. thank you for making some time. happy holidays. we will get insight on demand for rvs during this holiday season, and the impact on supply chain problems. we will speak to jason lippert. this is bloomberg.
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kailey: this is bloomberg markets. i'm kailey leinz. u.s. rv shipments posted a record in november, up 15.6 percent compared to a year ago, as people look for ways to travel without staying in motels or riding in airplanes. the industry seems to be steering around supply chain, labor problems, but what does the picture look like going forward? joining us is jason lippert, chief executive of lci industries, the largest parts supplier to the rv industry. we know that everyone was interested in alternate travel at the start of the pandemic. you had a lot of demand for rvs and campers. is that starting to wane now that we are in the later stages of the pandemic?
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jason: we will have a record year this year, looking at next year as well, largely because we cannot build demand because of supply problems. 72 million americans are projected to camp next year, a record from 58 million this past year. 46 the year before. kailey: we will get to the supply issues in a moment. while we are talking about demand, have you seen it pickup or so in the last month given the new threat of the omicron variant? jason: it is too early to say how the omicron variant will impact rv sales, but i think we have seen through covid from the beginning, every time covid rears its ugly head, people jump back in and we get more demand for the products. kailey: let's talk about how you are able to meet that demand. how are the supply-side
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challenges for you? are you able to get everything you need in order to supply these rv makers? jason: freight has been a huge issue from asia. we have the same supply constraints that every other company in the country has. our industry has been resilient, we found substitutions, diversified our supply chain. kailey: how have you diversify the supply chain, what steps have you taken, brought them closer to shore? jason: we brought some of our products back into the u.s. we have two or three more suppliers than we had. we have gone to other countries. we found other suppliers are willing to make arts for us here in the u.s. we have tried every strategy we can. that resulted for us, about a 50 6% increase in sales over
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last year. kailey: where have the bottlenecks been most challenging? jason: a lot of components not on our part of the world. silicon, wood, chip shortages impacted us a little bit with motorhomes. with respect to our core components, we have not had the kind of issues that you have seen with some of the other industry peers. kailey: all of the supply-side challenges have been driven by more inflation. how has your pricing had to adapt? jason: the fact that there is maybe 40% new buyers into rv's, not that they don't know what to expect on pricing, a lot of the market is built on that $20,000, $30,000 travel trailer. you are talking about a $350 payment.
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americans have almost $3 trillion more in their bank accounts this year compared to pre-covid, so that is a lot of extra money on the sidelines. kailey: thank you very much to fiscal stimulus. is it mostly people looking to buy an rv or is this a primary rental market? how has that shaken out? jason: that has been one of the great disruptors, new things to our industry. they came onto the scene before covid and i think they have over $1.5 billion in bookings. they say they have posted over 377 million miles in terms of miles logged by runners. there was not a good rental platform, so it is giving families a good opportunity to rent rvs where that was not there prior. kailey: something else the pandemic has highlighted is a push toward esg, more environmental goals.
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what does the future of the rv industry look like when you think about decarbonization, the green transition? jason: you will see a lot of other vehicles, our industry is talking about that now. 90% of the vehicles in the u.s. are being pulled by other vehicles, but we are trying to come up with solutions that allow for renewable, sustainable energy. there are lots of options for rv's to go off-road, camp without hooking up to traditional power, sewer. kailey: the grid. thank you so much to jason lippert, chief executive of lci industries. happy holidays. we will be talking about the fed's favorite inflation gauge. it hit the highest level since 1982. we will discuss what to expect next with julia coronado of macropolicy perspectives. the market is charging toward
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record highs. the s&p could close at a record high, right now trading at 4728. it is on lighter volume, as it is christmas eve eve. this is bloomberg. ♪
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ritika: welcome to the bnn audience. president biden signed into law
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a bill banning goods from china's region unless companies can prove they are not made with forced labor. it will add to tensions over beijing's treatment over the uighur minority, a predominately muslim ethnic group. the bill passed with unanimous backing in the house and senate earlier this month. one chinese city has imposed a lockdown on its 13 million residents after mass testing identified 127 covid infections. residents have been told to go in their homes and designate one person to go out every other day for necessities. vladimir putin is urging the west to move quickly to meet russia's demand for security guarantees to insure a standoff with ukraine. he warned that moscow will be talking with the u.s. in geneva and hopes to have quick results. >> it is not us threatening
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them. we didn't come to the border of the united states or united kingdom. no, they came to our border. now they are saying, we want ukraine to be a part of us as well. and you want guarantees from us? no. you are owing as guarantees now without any delay, not in decades. ritika: he made no mention of the threat of military action earlier this week. single use plastic shampoo and lotion bottles will be banned in new york hotels starting in 2025. legislation was signed today. in 2019 california became the first state to pass a similar measure. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.
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♪ >> jon erlichman, welcome to bloomberg markets. kailey: i'm kailey leinz. we welcome our bloomberg and bnn audiences. here are the top stories we are following for you from around the world. with spending stagnant as prices continued to surge, we speak to julia coronado of macropolicy perspectives on what this means for the economic outlook. the covid surge is also impacting airlines as travelers second-guess their travel plans, bringing new uncertainty to the recovery. a santa claus rally underway. can risk appetite avoid the grinch for the rest of the year. john: we are watching some positive performance on wall street as things start to slow
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down at of the holidays. generally positive week for stocks and we are sitting near the all-time high for the s&p 500. industrial stocks have been driving the index higher. boeing moving higher. we were talking about that data on the consumer front. every time i go out, even if i don't go into a store, it feels like $20 is flying out of my pocket. when you adjust for inflation, the fastest price gains in nearly four decades, eroding purchasing power, as many americans start their holiday shopping earlier than usual. lots of new economic data to discuss. kailey: the question becomes, is this showing that the consumer is becoming less tolerant of these higher prices as they draw down those savings? what does it mean for the fed? ira jersey putting out a note, saying that it real spending
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is zero, will the fed act? john: just to go a little bit deeper into this data, as we had toward the new year, we can further break it down. if you think about grocery store bills, gasoline prices, all of that is more coming out of your pocket. the personal consumption into index -- we talked about that stagnating at the fastest price gains in nearly four decades. let's bring in julia coronado, resident and founder of macropolicy perspectives. thanks for being with us. if we were not talking about the latest on the covid front, we would probably have a deeper conversation around the inflation realities. how are you thinking about that heading into the new year? julie: in terms of the data, we
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saw a lot of shoppers pulling forward their shopping, shopping early in response to all of these reports about supply chain concerns. consumers shop early. a flat reading on november is not a bad reading after the surge we saw in october. what we are seeing are on-time delivery of christmas gives is a little bit better than last year, so consumers are getting their holiday shopping done. on a quarterly basis, even with a flat reading on real spending in november, consumer spending is about 5% annualized growth in the recorder. that is extremely healthy. consumers are still doing very well. the economy is running pretty hot, and that is partly what underpins some of the inflation numbers. you touched on it well, which is the question, to what degree are
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consumers going to begin responding to some of these surging prices and becoming more price-sensitive? we have seen a story of extremes. before covid, consumers were incredibly price-sensitive, even at the peak of the last cycle. they were just really stingy -- stingy with their dollars in terms of how they allocated them. with the fiscal impulse in the limitations of what consumers could spend the money on, there was a lack of price sensitivity. 2022, we will evolve to something that is in between those two extremes. consumers will probably become more price-sensitive as they have less cash in the bank to allocate as they are rely more just on their labor income, which is solid. the job market has been great, but it is different from getting trillions of dollars pumped into your checking account. i think we are evolving and
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therein lies the balance the fed will have to strike next year. kailey: let's talk about the fiscal runoff in conjunction with federal reserve policy starting to get tighter, not being so easy. if consumption is slowing down because savings accounts have been drawn down, tolerance for price hikes is not there, and you have a fed potentially starting to stifle demand, what does that mean for the growth outlook going forward? julie: what the fed is outlining is not an attempt to stifle demand but achieve that ultimate soft landing, cool things off a little bit. they will calibrate that off of the data. the degree to which we see the economy moderate. all of us forecasters are expecting some degree of moderation in the first quarter. how much we get depends on the impact of the omicron variant. it depends in part on whether we see the child tax credit expir,d
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stay expired. the fed will watch that incoming data and calibrate accordingly. it seems like but we are hearing from from fed speakers who have come out after the december meeting, they will and qe, broad agreement that we do not need that anymore, and then maybe even hiked once or twice, and then take a pause later in the year when they do expect inflation to be moderating as semiconductors become more available and they get a better sense of the underlying momentum as fiscal support fades. they will calibrate according to the economy. they are not a preset path of slamming on the brakes and taking away the punch bowl. they will be data-dependent and that is good news. that is why you see markets remain fairly optimistic about the prospects for next year. john: given what you are saying, the idea of the soft landing
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with the uncertainty we are all feeling heading into the holiday season around covid, are you feeling relatively upbeat about the ability to navigate that next year? julia: we have seen the economy prove incredibly resilient in many ways and also very rigid in other ways, supply chains, for example. it is sort of a very messy recovery, because we are dealing with an ongoing pandemic. the buzz word that we are going from pandemic to an endemic, something that we will learn to live with. it may leave a permanent imprint on how we spend our money, live our lives, work from home, what kind of homes we walked, etc. it is not a neat and clean story, but to be fair, most recoveries are not. the recovery from the great recession featured a lot of
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unanticipated twists and turns. the u.s. consumer, on average, looks to be in fantastic shape. the question really is again that price versus real spending, profits versus wages. how does that allocation play out next year? do we get some easing in the tightness of the labor market from maybe improved immigration numbers, improved labor supply, or do we remain in this incredibly tight situation where employers will be increasingly forced to hand out higher pay wages? these are some of the unknowns as we move into 2022. the resiliency of the overall economy, the prospects of that look good despite repeated waves of exhausting news on omicron, the need to manage that.
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we are going to keep moving forward. kailey: exhausting is a good way to characterize it. thank you to julia coronado, founder and president of macropolicy perspectives. coming up, we will be talking more about covid. bloomberg has released its covid resilience ranking, which shows how nations are handling their different cases of covid. stick around to see which country talked the list -- topped the list. this is bloomberg. ♪
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kailey: this is bloomberg markets. i'm kailey leinz. airlines are facing an uncertain few weeks after the holidays and into january as the spread of
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the omicron coronavirus variant up and one of the best periods of the year for flights. in a couple of hours, i'll be heading down on a train to washington, and i'm taking a flight back but i don't really feel good about it. about three times more likely than delta. john: the spouse of one of our producers is a flight attendant, and i feel like they get caught in the middle of all of this. you have airlines having to give new guidance. we saw that in ireland with ryanair. southwest, a couple weeks ago, they had a very encouraging outlook. how does that change if you decide i'm not going to fly? i guess we will find that over the next couple of weeks. kailey: i wonder how quickly we will get the answers to that demand question. an interesting one to watch. john: meanwhile, omicron putting
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a halt on return to normalcy. countries have had to adapt quickly to the new variant. rachel chang breaks down which country has been the most resilient. a hint, it is a warm climate. ♪ rachel: in the december covid resilience ranking, we saw broadly the arrival of omicron has very much halted the momentum to it normalization and reopening that we would see through 2021. but still a key differentiator remains that most major economies were not willing to go fully back to the lockdowns of 2020, instead using guidance, softer curves, relying on accelerating booster campaigns to fight the new variant. in the ranking, we saw warmer places in south america and asia pacific had the advantage because they did not have to face a winter, accelerating the
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spread of omicron. at the same time, omicron had not advanced in the same way that we saw in europe and the u.s.. in december, number one was chile, followed by ireland and the uae. rounding out the top tens, we saw places around the world facing infections were ahead on inoculations, rolling out the booster shots that we know are key to fighting omicron. in 2022, the key question, as we see omicron take over in the u.s. and europe, is whether or not death toll's will trend up in line with what we are seeing the case numbers. in south africa right now, the evidence is mixed. we saw hospitalizations and deaths did not go up in the same way, but at the same time, south
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africa is a different place with a different different demographic, just coming out of the delta weight, which may affect immunity as well. we don't know how this will play out in the northern hemisphere, also consider that there is more cold weather the virus to spread. in the next few months, that will be the key question. can health systems maintain what they are doing in the face of these infections? will omicron be proven to be mild and the death tolls stay flat although the waves are searching upward? in the case of the u.s. and u.k., the governments have said they are taking a pretty much hands-off approach. they have ruled off going back to the curves of lockdowns of 2020. what that means is that their outlooks are entirely dependent on how that tally line trends. in the rankings over all, we see countries have pushed back their reopening plans, populations are less mobile because of fears of
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omicron sweeping through the world. people staying home more. we are not seeing a full reversal of reopenings in the past year. borders remain open throughout the world. international travel remains possible. the essential shops and schools are open as well. it is a very different situation from what it was in 2020 before vaccines. kailey: that was rachel chang reporting. now let's get a bloomberg business flash, a look at the biggest stories in the news right now. signs of continued strength in the housing market in the u.s. according to government data, sales of the new homes grew to a seven-month high. purchases of new single-family homes increased 12.4%. meanwhile, orders placed at u.s.
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factories for durable goods rose in november by the most in six months. that points to a steady demand that will drive production growth in early 2022. bookings for durable goods increased 2.5% from the prior month, reflecting a sharp rise in commercial aircraft orders. intel is facing criticism in china after it asked suppliers not to use chin jang or products -- xinjiang products. that is your bloomberg business flash. we just got news that intel has pulled out of in person attendance at ces. ces says it will continue to go on in person, but intel is not the only one switching to digital participation because of covid-19 fears. john: we hear a number of technology companies making those kinds of announcements. this is bloomberg. ♪
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john: this is bloomberg markets. i'm john erlichman. with kailey leinz. all signs pointed to a traditional santa rally in the u.s. stock markets next week. we want to get more perspective on that with katie greifeld. generally speaking, if you look at history, it tends to be a positive stretch of the year, so we will be watching closely. katie: today and the past couple of days, forget monday, that santa claus rally is underway. the breadth is also amazing. over the past couple of days, if you look at the top gainers in the s&p 500, it spent a lot of the travel names, from airlines
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to cruises to hotels. you are looking for a fundamental reason for the santa claus rally. it seems a lot of those omicron fears, at least the worst-case scenarios, are in the rearview. you see those names reflected under the hood a little bit. kailey: the equity market will be trading as normal until 4:00, but the bond market will be closing at 2:00 for the holidays. still below 1.50 on the 10 year. why? katie: great question and you are seeing some curve steepen is on the day. consensus seems to be, if you hike rates three times next year, even though our policy is loose at that point, that may take the edge off of growth. at least it is not a big move, yields are moving higher, in step with that pretty optimistic tone that the equity market has taken. kailey: katie greifeld with our macro look. let's get the micro one and look at our stock of the hour. ritika gupta.
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ritika: let's start by looking at toll brothers. shares are in the red, reversing some earlier losses, but this is after that new home sales data missed estimates by 3.3%. the median home price is 407,000 dollars, a record. this is a red-hot housing market despite that sales miss. new home sales still at a seven-month high, yet new home sales have consistently been missing the estimates, after peaking earlier this year despite the fact that mortgage rates have taken another move lower. part of this could have to do with rising prices, as we have higher demand, but also reflecting those higher costs we are seeing on labor, lumber, material costs. if you look at the average home prices, you can see toll brothers breaching its competitors in that sense. the average price almost double
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that of its competitor lennar. we do have a number of issues to think about going into 2022. one of them is those backlogs we have been seeing, a number of contracted homes that have not had construction on them is at a record high. builders don't know what to do with because they are facing or what they will be. that is something to keep in mind as we have those labor headwinds ahead of us. kailey: great look at the housing market. that will wrap it up for jon erlichman and myself. thank you for joining us. happy holidays. the s&p closing in on a record high. it looks like we could close at a all-time high. right now trading at 4762. from new york and toronto, this is bloomberg. ♪
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>> former president trump has as the supreme court to block the
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release of his white house papers to a congressional committee investigating the january 6 attack. trump is seeking to override president biden's decision to waive executive privilege. -- congress' need for the document outweigh trump's claim to secrecy. the u.s. says moscow needs to take steps to de-escalate tensions on the ukraine border to make process on easing tensions. this amid concerns that putin could order an attack on the eastern european nation. the u.s. continues to see signs of its stepped up campaign from russia. both sides have agreed to have lower level officials begin talking soon. a date has not been set. -- has been cleared by u.s. regulators, giving patients --

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