Skip to main content

tv   Whatd You Miss  Bloomberg  February 25, 2021 4:30pm-5:00pm EST

4:30 pm
♪ caroline: from bloomberg world headquarters in new york and here in london, i'm caroline hyde. romaine: i'm romaine bostick, the markets down, taylor riggs reminding us yields do matter. joe: the question is, "what'd you miss?" caroline: certainly a day in red, rising yields putting pressure on tech shares, while a
4:31 pm
selloff of global bonds deepens. we saw the nasdaq tumble more than 3.5%, biggest loss since october. popular plays are tesla, zoom, peleton, all down. gamestop, up 20%. joe: a mere 20% today. even that had a bad day ultimately, but yes, the big story of the day, rates going much higher, perhaps concerns about inflation even though romaine thinks inflation is a myth. and you can see the tech-related stuff, arc spider and all of that. romaine: transitory. joe: you have changed your stance in the course of a week after rates move. alright come i want to bring in bloomberg's ladonna high wreck -- ladonna. these are interesting moves. >> fun and crazy and hectic, and
4:32 pm
speaking with people, i think there is two different things going on. we have seen a spike in yields. tech is getting hit because it is hard to justify some of these lofty valuations for the likes of tesla, or zoom selling off today, a lot of stay-at-home darlings that have risen so much of the past year. at the same time, you are seeing areas of the market that you would think would typically benefit from rising yields and those are also selling off it is all about this rate of change. carolyn -- cane: the rate in change was the least volatile thing out there, bitcoin currently flat, for once, less volatile of the asset class but the volatility of bonds blows your mind, the tenure up 23 basis points at one
4:33 pm
point. vildana: right. something goldman sachs had been warning about over the past week, their analysts said if we saw a spike of about 36 basis points in 10-year treasuries, that actually could because for concern for the stock market. we have seen yield spike up 40 basis points so far this month. i spoke with art hogan at national security's anti-said this is analogous to a flash crash in treasuries. a lot of investors are getting spooked. they haven't seen this happening in a while and they almost can't envision an end to it. romaine: we are talking a 30-something basis point move over less than the past couple of months and i am curious, we talk about the 10 year sitting at 15. that doesn't seem like much of an erosion and that doesn't seem like much of an erosion of gains in equities or erosion of the
4:34 pm
dividend yield and we talked to a lot of people the past two weeks and said you had that you need to get 3% of nominal yield before you panic. i don't know if we saw today was panic. vildana: again, that rate of change, but the past couple weeks, basically every equity investor was saying yes, we are seeing yields spiking but it is happening for all the right reasons, that is the terminology they used. because what it is signifying is growth down the line, and you are seeing economists at goldman sachs for instance and at jefferies, bank of america, all our revising targets for growth for later this year hired because you are expecting more stimulus, a large package from congress. romaine: and 54 basis points is what i am waiting for. joe: and then you are going to buy. joe: real quickly, we saw it on the board, always in the
4:35 pm
spotlight, everybody fascinated by their positioning in particular. not only are they very long, some of the hottest stocks in the market, but they are long on a lot of stocks on which they are far and away the biggest single holder. how much is that a thing that we are going to be watching? vildana: because of the run-up you have seen in some of these, cathie wood has bet big on tesla and bitcoin, those have been hot topics, but a lot of people are starting to raise warning flags that if you start to see these names selling off, you will start to see a rollover of more and more people offloading their position, and it could potentially have a bigger impact. joe: -- caroline: vildana hajric, momentous moves, thank you for your insight coming up, the $1.9 trillion stimulus plan from
4:36 pm
president biden, we speak to congressman french hill of arkansas next. this is bloomberg. ♪
4:37 pm
4:38 pm
♪ caroline: president biden and, critical leadership are making a final push for the $1.9 trillion pandemic relief bill, looking for votes in congress and trying to sell americans on why stimulus is needed. listen. the u.s. stimulus vote is upon us, with both the senate and house expected to act soon. it comes at an interesting time for the recovery. at one side, retail sales are surging, plus the housing
4:39 pm
market remains on a tear, leaving some to question whether more stimulus is needed at all. >> i look at the fiscal stimulus under discussion and with the $1.9 trillion, you are talking about something that, relative to the gdp gap, is six times as large. caroline: on the other hand, still some 10 million americans remain without work, minorities and women bearing the brunt of the losses, data showing some 2.5 million women dropped out of the labor force during the pandemic, compared to 1.8 million men, numbers painting a clear and present danger to the recovery. >> we are going to need. more aid. -- we're going to need more aid. right now, with interest rates at historic lows, the smartest
4:40 pm
thing we can do is act big. caroline: word from the fed remains consistent. >> we are long way from our employment and inflation goals, the economic recovery remains uneven. caroline: at with benefits set to expire, pressure is on president biden and democrats to make the case for the mammoth, $1.9 trillion relief package. joe: joining us is someone who will end up having to vote on the bill, republican congressman from arkansas, representative french hill. congressman, thank you so much for joining us. let's set aside for a moment specifics of the bill and what you think of it. is it your view that on some level, this is an economy that still could use fiscal stimulus or support in some way? representative hill: joe, thanks for having me. on december 27, we passed $900 billion, nearly $1 trillion of new money on top of the $3
4:41 pm
trillion plus we passed earlier in 2020. that money is just now entering the economy, at the time of the vaccine rolling out on the economy opening in the economic statistics you just cited, with growth outlook between 5.5% and 7% this year, the money is coming into the economy right now along with this rapid vaccination attempt across the country. romaine: is there a sense here though, that the fiscal money in this bill, is there any sense if it is past and gets out there into the economy, that there would actually be some negative snap back with growth being too high? representative hill: i'm not sure about that. but larry summers who you quoted , former treasury secretary, said six times too much. the senators agree with that and they may over the next 48 hours better target this bill.
4:42 pm
the 1.9 trillion dollars is not accountable to the taxpayers and not accountable to the mission. it is only 9% dedicated specifically to getting the covid virus killed in getting the economy reopened. it is a broad wish list of policies that are not temporary, that are too broad and as larry summers says, approximately six times more than the economic out what gap indicates for 2021. caroline: congressman hill, let's take the other side of the argument from janet yellen, that it would be far worse to go to little than too big, particularly when the federal reserve is so committed to the labor market, to ensure those left behind in the previous recessions, it doesn't happen again. what about ensuring all boats rise? representative hill: thank you for that. we have the paycheck protection program extended, unemployment benefits ext and the 10 million jobs cap, that there is
4:43 pm
so much time through executive travel, meetings, restaurants, how do we get that? we could get people billions of dollars each but it wouldn't get them back out into the travel, the live entertainment business, until the vaccine is killed. that is why getting americans vaccinated is the number-one thing we can do at this stage of the economic recovery, and then go that final course and bring those 10 million people back to employment. joe: i want to pivot to a topic you considered, stuff going on in the stock market. worriedly, once again game stop, the stock that inspired hearings and your committee, surging over the past couple days. does this episode warrant legislation or is in a weird thing? representative hill: well, when we have zero interest rates and
4:44 pm
trillions and reserves flooded into the economy, you are going to have immediate buoyancy of all asset prices. you see it in commodities, real estate home prices, stocks, and you create this periodic bubble activity. i think that is what you saw with gamestop. when we went to the hearing, i took away that the equity market structure and plumbing work effectively, that robinhood has risk-management practices that failed and were not ideal for their investors, but i didn't take away a wholesale change of what we need to do insecurities. romaine: when people talk about shortening the time of settlement, basically same-day settlement, is that something you would support? representative hill: we are moving that way. when i started in the securities business in the dark ages it was t plus five, and we typed out
4:45 pm
every confirmation to confirm the trade. we are at t2 and will go to t zero. the op-ed in "the wall street journal" i thought was pretty good on the subject. we need the plumbing, the computer support to make that happen, but we are headed in that direction. perhaps blockchain can play a role as well. caroline: e.r.a. men who understand the plumbing, that you are a man who understands the plumbing, and i think it was only yesterday that the fed system collapsed in terms of the payment systems. representative hill: well, real-time payments is well underway. we see that than the private sector with the largest financial institutions pursuing their real-time payment systems, and the federal reserve's going to create a competing system, a real-time payment system led by the federal reserve bank of boston. but i don't expect to see that
4:46 pm
in the marketplace for three or four years, but real-time payments are coming. it will benefit consumers. it will benefit businesses. it will be good for our economy. romaine: congressman, we really appreciate you taking the time to be with us. that is representative french hill, who represents arkansas and a former member of the financial industry. coming up, we are talking about meme stocks making a comeback, gamestop up next. this is bloomberg. ♪
4:47 pm
4:48 pm
♪ ♪ romaine: joe, yesterday we were supposed to talk about gamestop and started talking about yields and are talking about gamestop today. yields took the lead, we are
4:49 pm
finishing the day talking about your favorite stock, dme, did you buy the dip? joe: did i buy the dip? i can't say. [laughter] it is my favorite stock. it is back. we thought this story was gone, rearview mirror, look at the surging yesterday, also getting today come up 136% last three days. caroline: fundamentals. are they back? joe: that is the big question for you about fundamentals. we are going to bring back gme -- bring back gmedd.com rod alzmann rod alzmann longtime investor --gmedd.com longtime investor rod alzmann. robd, -- rod, good to have you back.
4:50 pm
there is a sense a strategic shift is happening. what is your sense about what is happening on the strategic pivot? rod: joe, thanks for having me back on. it is more than the cfo departing. we got hires that happened since last time you had me on a late january. we have a new chief technology officer, a new vice president of customer care, new vice president of fulfillment, we had those ads, two former amazon execs and one former chuy's executive. we will see who take the reins but i think they are making progress. romaine: articulate what that progress is, or at least the general vision for gamestop. is this going to be the brick and mortar retailer we knew a few years ago when you walked in and bought a game, or is this
4:51 pm
more about online offerings and the ability to buy things? is that going to be substantial? rod: the supplier relationships gamestop has are the place i believe they can get better leverage points on outside the brick and mortar channel. given that they have purchasing through both oe's and publishers, are there ways they can create gamestop exclusive digital content? perhaps subscription-based to get better revenues on that sort of model? we haven't seen that come from the company yet, but those of us monitoring it very closely see that they continue to follow a very select groups of company, electronic arts, activation, blizzard, etc. one would presume if we are trying to read the tea leaves like his tweets, that he has something going on behind the scenes. one thing i want to highlight
4:52 pm
that i think people keep missing is that it is not a mall-based retailer domestically. i was looking at transcripts from the fourth-quarter earnings call from 2018 it specifically says, outside the u.s., 90% of our stores are mall-based but inside the u.s., 90% of stores are stripped mall-based. the retailer locations are significantly different when we think about a strip mall-based retailer in the foot traffic implications. that is something important to dispel. people keep saying mall-based retailer, and it is not that. caroline: interesting, we are trading at a price of $108 for gamestop, way off the highs of $400 plus that it once had, but last time we asked you whether they should make the most of this moment, with an elevated share price, maybe they should
4:53 pm
sell stock and invest. there are reasons that they didn't, but would you like to still see them do that now? rod: your point is good. writers had that exclusive that explained the sec implications on why they wouldn't take that action that we had hoped they would. the price, joe and i talked about it, joe and tracy and i, and there is not a compelling need for them to raise capital just to raise capital, because market observers think the price is elevated.
4:54 pm
4:55 pm
4:56 pm
4:57 pm
4:58 pm
4:59 pm
5:00 pm
♪ emily: i am emily chang in san francisco and this is "bloomberg technology." tech shows lead a rout in u.s. stocks as investors move away from pandemic winners. gamestop surging more than 100% on retail investor action, volatility and volume the words of the day. we have the latest. plus, ar

11 Views

info Stream Only

Uploaded by TV Archive on