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tv   Bloomberg Markets  Bloomberg  July 16, 2021 1:30pm-2:01pm EDT

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learn from the rare mass protests that occurred last weekend. authorities will temporarily ease restrictions on food and medicine imports. thousands of people took to the streets to demand freedom and food. cuba's economy shrank 11% last year. one week from the opening ceremonies of the summer olympics, the governor of tokyo says she sees the virus-delayed event becoming in her words a beacon of hope. covid-19 infection numbers in tokyo this week reach highs not seen for months, but she says japan is ready. >> we are preparing whatever the circumstance is. and the success of the games is largely created by the excitement from the athletes. mark: canadian prime minister justin trudeau says his company will welcome fully vaccinated travelers from all countries by
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early september, if the current positive vaccination rates and public health conditions continue. u.s. citizens and residents who have had a full course of covid vaccines should be allowed in for non-essential travel as early as mid august. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ amanda: welcome to bloomberg markets. i'm amanda lang. kailey: i'm kailey leinz in new york. we welcome our bloomberg and bnn bloomberg audiences. here are the top stories we are following from around the world. retail sales in the u.s. surprising to the upside in june. a read on the consumer with stacey widlitz, president of s w
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retail advisors. blend labs goes public. we speak to the president, tim mayopoulos, from the new york stock exchange. l.a. county tells residents they must wear masks indoors, even if vaccinated. why the u.s. remains a dangerous place for the unvaccinated. amanda: we are seeing a negative day across the markets here today. that is despite the fact that we got that strong read on retail sales. perhaps the michigan sentiment number weighing on things. this has been a week of up and down days as markets hover near records, waiting for the next few weeks a pretty big earnings delivery. there may be a bit of weight and see here. rate sensitive groups leading the declines. kind of quiet on the yield front. 1.29 now, so we did see it dip low 1.3.
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this comes even as we see some positive earnings reports. cash on balance sheets is up 14% in the second quarter, $2.13 trillion. some of the biggest stocks are leading the way in that increasing cash. that could bode well for what they will do with it. it is the retail sales data that we are getting a close look at here, what it may say about inflation, wages. so much plays into that data. stacey widlitz, president of swbt advisors is with us -- sw retail advisors is with us. it is a strong number, but in terms of transit you are seeing, this is very specific. we know there will be a lot that is different than ever before, so what jumps out in the data? stacey: clothing and accessories is booming back. pent-up demand.
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you are still seeing sporting-goods be strong. the biggest call out in general is that, what companies are doing right now is raising prices. why are they doing that? two things. inventory is exceptionally low, the lowest i have seen in 20 years covering retail. in addition, we are in the sales season right now, no discounts out there. this is the time for brands to start raising prices, and they have to pass on all the cost from paying their people more. kailey: if they are raising prices, at what point does that affect consumer behavior? wages are not necessarily going higher. stacey: that is the trick. for now, consumers are just try to get their hands on supply. there is a shortage of a lot of the products out there because of the supply chain logjams. for now, consumers are willing to pay up, they have had a lot
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of savings over the last year and a half. but two years from now, do they start getting price-sensitive? i would warn, for companies, once they start raising prices, it is very hard to roll those back. amanda: we saw this sentiment data that might be a little worrisome in terms of a trend. we are hearing increasingly the concern around delta, the unvaccinated. how does that play in, even for those that are moving back to a more normal life? does it put any chill in the broader economic outlook? stacey: it gives people pause, do they want to be out, indoor malls are almost back to -- outdoor malls are almost back to pre-covid traffic. indoor malls are around 20%, so it depends on the psyche of the consumer. but for so many brands it is
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back to business, and it is a higher-margin proposition. retailers are actually able to make up the difference at a higher-margin. kailey: when we talk about the people going to physical stores, going into malls, there has to be employees to greet and service them. we are talking so much about the labor shortage that is out there. are retailers going to face more significant margin pressure leading to raising wages for their employees? stacey: i think they will, and that is what we have seen. it is usually a race to the bottom but it is a race to the top. big retailers have been raising prices and everyone else's matching. i think that continues. i was talking to a restaurant chain. they said covid did not get us but the labor shortage might. that is what you are hearing in the market. amanda: let's lined that up with what we are hearing from central
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banks which is, yes, we are seeing price increases but they are short-lived. some of the stuff you are talking about here is fairly sticky. once you raise a price or wage, you don't lower it easily. how much of that runs contrary to the rhetoric we are hearing from the banks? however much they want it to be true, is the data showing it to be true? stacey: from what i've seen with history in retail, even when there are tariffs implemented and prices creep up, as you say, those are sticky. wage increases are sticky. you cannot take those back. the cost structure is higher, but what is most interesting, a lot of brands are saying, that's ok, we will have a smaller revenue base but a higher margin because we will raise prices. for now that is working. in two years, i'm not sure the consumer will be ok with those
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price increases. amanda: so good to have you with us. stacey widlitz, president of swd retail advisors -- sw retail advisors. for those of us who listen to every word of jay powell at the last meeting, noted his description of used car prices and lumber prices as perhaps a transitory increase. but no question the inventory is down, prices are up, it is a scramble for a variety of reasons, not least because of the chip shortages and supply chain issues. this is one place where you are seeing an increase. kailey: average use car prices up. i don't know if i'm happy or not to need a car or if i had one and i could sell it. i don't have a car so it does not apply to me.
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coming up, we are talking about lending in a platform that began trading on the new york stock exchange today. we will speak to the president of the lending platform, tim mayopoulos. that is next. this is bloomberg. ♪
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kailey: this is bloomberg markets. i am kailey leinz with amanda lang. let's talk about mortgages because a lot of people are looking to buy a home. the freddie mac 30-year lending rate moved lower to 2.8%, the lowest level since february. looking at the mortgage rate market, it doesn't look like one
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that is all too concerned about inflation. amanda: it does not. of course, that will be supportive of consumer savings and spending. fannie and freddie are also dropping that refinancing fee, the 0.5%, starting august 1, so that will be an additional savings boosting the savings for americans in the mortgage market. one company that will benefit from all of this is lending platform blend labs. tim mayopoulos is the president, former ceo of fannie mae. thank you for being with us. tim: thank you for having me. amanda: let's start with the health of the consumer, health of the market. rates have been low for long. there has been this perennial sense that at some point they turn higher. of course, you can grow old waiting for that to happen.
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what is your outlook for where the market goes from here? tim: interest rates go up and down, these things are difficult to predict with great accuracy. the reality remains, this is a favorable interest rate environment for consumers. anybody who can refinance should be refinancing because it's a great time. these are historically low rates. kailey: you have processed 1.4 trillion dollars worth of mortgages in 2020. how is 2021 shaping up? tim: really well. mortgage volume will go up and down with interest rates, and that is just fine. the thing we are focused on, the opportunity in front of us is around that secular trend toward digitization. everything in banking has been paper driven, laborious processes. at blend, we are a platform that enables banks and credit unions, lenders to provide all of their services in a much more digital and mobile way.
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it is so much easier for the consumer. amanda: i know blend has big ambitions to make it easier, to be the amazon of fintech. are some of the impediments to that growth and progress being removed? do you see policy shifts that will take a little bit of the corner that goes on in big finance and open up this market? tim: it is clear policy makers are thinking about giving consumers more control over their financial data, making it easier to transfer that data and make it available to other financial services providers. what we do at blend, we are a part of that network that enables us to collect data on behalf of consumers, verify it, provide it to lenders so that they can better serve those consumers. i think that policy shift could be a positive for us, the
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general digitization of banking which will make it more convenient, opening up access to more consumers. kailey: as you try and grow your business in this digital banking world, what you do with the capital raised in this ipo? tim: we are investing in the future, still so much technology to be built to serve the banking world, whether in mortgage or other kinds of consumer banking products. we will be investing in our software capabilities, building up that technology, so we can provide more support to the financial institutions we serve. amanda: of course, when we see refinancings at this rate, we ask about the quality of the mortgages being held, originated. any questions from where you stand about the overall health of the market? tim: i don't have concerns about the health of the mortgage
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market. the quality of mortgages being originated has probably never been higher. part of the reason for that, we are now underwriting mortgages through verify data, first party data that people can rely on. there is much more transparency in the system. lenders know the data they are collecting is reliable. the ultimate holders of that credit risk, they can see the quality of those mortgages before they are even closed, let alone delivered to them in the secondary market. this has been good not just for consumers, lenders, but the overall health of the housing system. kailey: is there adequate access to credit for all consumers? tim: this continues to be a challenge. not everyone has the same access to credit. one of the things we need to do is open that up more, not necessarily by lowering reddit standards, but by considering all of the relevant data as it relates to consumers.
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there are a lot of creditworthy consumers out there that don't have the financial record that the traditional lender or process relies on. there is a huge opportunity there to open that up to more consumers, not with the goal of giving credit to people who really cannot make those payments, but instead to provide it to the people who can. amanda: he is it important to you that blend labs remains independent, do you see some future possibility, whether some strategic partnership or acquisition that makes sense? tim: we foresee a future where we are independent. we think there are lots of growth opportunities for us. there is so much work to be done in this space. we are planning for a long future. we think about this in terms of decades, not months or quarters. that is the way we think about building relationships with our
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customers. decades long relationship with our customers. we plan to pursue that path. amanda: so good to have you with us, tim. appreciate it. tim: thank you so much. amanda: president of blend labs. coming up, new concerns about the rising cases of covid-19 among unvaccinated americans. we will look at some of the economic ramifications, after this. ♪
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kailey: this is bloomberg markets. kailey leinz with amanda lang. time for the bloomberg business flash. companies that thrive on lockdown lifestyles are rushing to cash in. the biggest american manufacturers of barbecue
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grills, weber and trager, will tap public investors for the first time this summer. netflix is coming to new york. it is opening a massive new tv and film studio in brooklyn. the film john has pledged to spend more than $100 million in the city as part of the plan to build the world's first global tv service. it already has production facilities in madrid,seoul, toronto, and london. turning to covid-19, even with half of the u.s. vaccinated, the virus continues to kill people faster than guns, car crashes, and influenza combined. for more, we are joined by emma. fatalities are still quite high but lower than they were. are we now at a rate where it is tolerable for policymakers in the u.s.? emma: that is a really great
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question. i think what is significant about this analysis which was done by my colleague tom randall, when you look at how many people are dying each day from covid-19, it is still relatively high. still outpaces gunshots, car crashes, complications from the flu, based on historic averages. just over 300 deaths a day in june from covid-19. that is higher than gunshots, car crashes, complications from the flu combined. public health experts would like to see covid going into the background such that it resembles more like the flu. i think we still have a ways to go there. again, this is not to not point out the progress we have made since january, just a fraction of where we were. covid was the top killer, higher than heart disease or cancer,
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normally the top killers. amanda: just today, the center for disease control and prevention saying there is a pandemic of the unvaccinated. it seems pretty clear the concern are unvaccinated americans. stats are pretty shocking. the vast majority, 70% -- 40% of the cases are four states alone. one in five cases from florida. you can pinpoint certain areas. it raises the question, what do you do with a huge complex economy where part of it will be held back by those numbers and fear? people will be afraid to go out and other parts will be kicking along fine. what will that look like? emma: it looks like a continuation of some of the things we have seen in the last year, continuation of some economic activity not being able to restart fully.
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these are very local issues, so each area will handle issues differently. but importantly, what you are seeing is the vaccination campaign slowing down. once the u.s. was the envy of the world in terms of how quickly we were vaccinating our citizens, people who live here, and now that has really slowed down significantly. it is looking like the vaccine gaps we have in this country will be pretty long lasting. kailey: l.a. county nala telling people even if they are vaccinated, they have to wear masks indoors. will that be a deterrent for people on the fence? emma: it is not clear how mask guidance goes for those that are unvaccinated. the cdc song raising mask guidance as something that would get people to want to be vaccinated. we have not seen that play out exactly. it remains a big question. amanda: not a ton of time, but as those questions percolate, do
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you think those who have been unvaccinated be more persuaded, persuaded that they are now among the sickest? emma: i think this is an important moment for that conversation. we have seen only vaccination rates slow. if we see that data change, we can make that conclusion, but it is an important turning point. this is a really important time for people who are not vaccinated to see these results and think, maybe i should get a vaccine. amanda: the data is so important. thank you for being with us, emma court. this is bloomberg markets. ♪
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mark: in south africa, the death toll from days of riots is at least 117. the worst of the violence has appeared to ease with the deployment of thousands of soldiers starting to take effect. an acting prime minister and acting ministerial officials say authorities have arrested nearly 1500 people, including one of 12 who allegedly help instigate the unrest. more than 100 people have died in the worst letting in decades in germany. many more people are missing and there are 15 deaths in belgium and other parts of western europe had been hit. several days of heavy rain forest rivers to overflow. many rail lines and streets were blocked and tens of thousands were without electricity. the bind administration warns u.s. companies about the risks of doing business in hong kong. an advisory said china's push to exert more control over the financial hub endangers employees and data.
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and the u.k. might r


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