Market, that is the title. Retail earnings rolling out this morning. Economic data showing customers are slowing their spending. October retail sales data shows the slowest growth in about six month. Joining us to break it down is michael mckee, Bloomberg Economic and policy correspondent. Michael we call it getting whacked upside the head here in the colonies. In april, just a 0. 3 gain for the month of october, down from 1. 6 in the month of october, with the pendant was at its worst in april. Only five of 13 categories rose last month, compared with 11 of 13 in the prior month. October andm november seems to be getting worse. Jp morgan economists report that chase card spending has fallen notably in the first part of this month. It is, as they say, really dropping off,. That suggests a weaker month ahead. Who knows what will happen with black friday, if anybody cares about that anymore, but it is a clear americans are cutting back. The actual results come a much less meaningful than the Third Quarter numbers. It is about who is doing well and why. Take a look at the chart here. Walmart beats expectations pretty much across the board. Earnings up 6. 4 . Sales fellstore 6. 4 compared to walmarts gain. It is because walmart is an essential retailer. They are selling stuff like toilet paper and groceries, whereas kohls is selling apparel. It depends on who you are and what you are selling at this point, which may be budged difficult for the coming quarter. Home depot slipped in early trading. They had a good quarter in terms of sales, but they are expecting higher costs because of the pandemic. Everybody being affected by what is going on with the virus. It just gets back to what we always said. The virus decides. Guy absolutely. The market getting whacked in the head by this data. You have to wonder what the november number is going to be looking like because many of the restrictions that we have seen starting to be put in place in the states are not in that data series, they will be in the november number. Mike mckee, thanks very much, indeed. Lets carry on the conversation about what is happening with the u. S. Consumer. Joining us is chuck grom, gordon analyst. Esearch retail start big picture. The retail sales number today was weaker than the market , wecipated, and as they say are going to see the next set of Data Factoring in significantly greater restrictions as a result of covid. What is your big picture view of what is happening with u. S. Retail . Chuck good morning. We expected some of the commentary this morning on walmart to be a little bit negative. Our traffic data in the beginning of the month pointed to a little bit of a deceleration. You could sort of articulate for warmer temperatures throughout the country, but ironically, i just got off the calls for both walmart and home depot, and home depot said so in, the first two weeks november has accelerated from a 23 pace in the month of october. Walmart outlined that the back half got better as back to school more normally and food strengthened. We will see. I know the retail sales number was softer on a yearoveryear data weut the realtime are getting from walmart and hd is pretty constructive this morning. Alix lets take home depot for a moment. We did get the Housing Market index that beat again. Forecasting depot for the First Quarter as lockdowns continue . Chuck they didnt specifically give a guide, but i would say their tone on the house was about us constructive as i have ever heard them. I think that bodes well for them. The backlog on the pro business continues to grow and get bigger, which echoes commentary from a number of other homeimprovement names. In the the outlook homeimprovement space is very good as we move into the Fourth Quarter and the beginning of next year. Guy lets explore that a little bit. Are these stocks you want to own when the vaccine effect kicks in . Am i going to want to fix up my house, or am i going to go to a bar . Am i going to be spending money at home depot or at the bar . Chuck personally i would rather go to the bar, but thats just my own thoughts. Guy exactly. Chuck i do think you need to be balanced. We outlined this in our retail playbook we published last week. We do think you want to own some names that are going to become back players. In my view, that would be the offprice retailers. To abandon some of the covid winners would be shortsighted. A lot of these businesses are going to be sick if lay better significantly better off today. A number of retailers are going to buy back more stock. I think a balanced approach next year its really the way to play it. Alix lets end here on walmart. I am curious as to how they are looking at their inventory over the next few quarters, particularly when we got the news that amazon is launching an online pharmacy. I cant imagine that that is not worrying them in some capacity. Chuck actually asked that question on the call. They feel comfortable about where their health and wellness business is at this time. They are probably still digesting the results. On a noon tory, inventory was flat yearoveryear, relative to sales up 6 . So they are in a very good position. The bright spot in moments results is really on the gross margin line. Margins are really strong, and part of that is being fueled by better profitability on their digital business. I dick bremer i think walmart, which is flat now, should be up. That was one of the best prince in quite some time. Prints in quite some time. The results were really very strong. Alix check, thank you so much. Chuck, thank you so much. Coming up, alan blinder, Princeton University professor and former Federal Reserve vice chairman, will get his thoughts on stimulus and who is in line , asake the chair of the fed well as treasury secretary in a new Biden Administration. This is bloomberg. Lets Ritika Ritika lets check in on the bloomberg. In the u. S. , new infections are soaring at the fastest pace since the earliest days of the benefit. California has reimposed bands on many businesses. Oregon, washington, and new jersey have tightened restrictions. Former president bill clinton says it is clear that joe biden will work to strengthen ties with organizations such as nato and the world health organization. He spoke at the Bloomberg New economy forum. Clinton we shouldnt accept or assume that it is all going to be bad without working to make it better. Newe got to give the administration a chance to articulate an approach, and then try to achieve, in cooperation with europe and the united bodies. Nd international ritika he said the u. S. And its allies need to take a more coordinated approach with beijing. Senate republicans are trying to push through the president s controversial nominee for the Federal Reserve board of governors. Now a third republican says he opposes the nomination, Lamar Alexander of tennessee. Approval could determine on whether all senators who approve of shelton show up for a vote this week. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Alix former fed chair Janet Yellens had to be among those in consideration to be joe bidens treasury secretary. Speaking yesterday, the former fed chair did not push back on those reports. I have to ask you, would you like to be more closely involved in that as treasury secretary for the new administration . I dont have anything for you on that. Im sorry. You do think youd be a good treasury secretary . I could probably ask the rest of the panel that. That is for other people to decide, i think. She would be a great treasury secretary. Alix great exchange. Joining us now, alan blinder, Princeton University professor of economics and former Federal Reserve vice chairman. It is so great to talk to you on this. Do you agree . Would she make a great treasury secretary . Alan i think so. I have no idea if President Biden is going to choose her, but she is very well suited for the job. Guy do you think in that situation, we could see Monetary Policy and fiscal policy working more closely together . We are certainly seeing that here in the u. K. At the moment with the treasury and the bank of england. Alan very much so. You dont want to get too close. There is a separation, which janet yellen knows better than anybody, and necessary separation between the executive branch and the legislative branch and the central bank. But in terms of close cooperation on things that are of common interest like the fed liquidity facilities and many other things, it is hard to imagine a tighter relationship than janet yellen and jay powell. Alix fair point. The other question is what it who isor lael brainard, reportedly in the running for treasury secretary. Do you think Something Like that is enough to do Something Like extend all of these programs past december, things like definitely getting some kind of stimulus done . Handsstimulus is in the of the congress, but extending the liquidity facility past december, i dont see why steve hasnt let that go for one millisecond, but apparently he is. I dont think there will be any hesitation. It is borderline crazy to stop those now. Guy ok. Why is that . What do you expect from the economy between now and january . We saw today with the retail sales number an indication perhaps that the covid restrictions have started to have an effect, and that is being done at a time when we dont have that stimulus that we did have earlier on in the year. How bad could those sorts of numbers get between now and the end of the year . Alan we dont know, but they could get very bad if we dont have another tactic. I dont think it is covid restrictions doing it. It is the voluntary actions of people who dont want to get sick and die. People were afraid in march, and they are afraid again now, and that kind of thing can wear on Consumer Spending and the economy more broadly. To your question about , the fed hasazy been amazingly successful without putting that much money at risk in backstopping the bond market and several other things, but putting their pledge on the line that we will be there if necessary. Why in the world would anybody dream about taking the way pledge now . Alix you are really echoing what vice chair Richard Clarida said yesterday. He said the Federal Reserve is committed to using all of our available tools, not just the federal funds rate, but also largescale asset purchases, to achieve our dual mandate goal. Right before this changed their fed call and sees more fed bond by income december by about 80 billion bond buying come december by about 80 billion. What does it do . Alan i thing it is a tiny difference. The fed is grasping for straws now. I wont say it has shot its entire wad, but almost its entire wad. Theres just a little more it can do. I think you have to be incredibly up to mystic incredibly optimistic or trying to put on a brave face. I would be doing what clarida is doing if i was vice chair of the fed now. But realistically, it would be positive for the economy, but a very small positive. Guy one of the things the fed could do now that it is no longer really supporting market function is extend the duration of the bond buying. Do you think that is a logical next step . Alan absolutely. Think those are the two. The two most likely things the fed will do if it feels it needs to do more, and that is tied up with whether there is a fiscal buy more andore buy longer. By historical standards, the fed is buying out the yield curve, but it could go further than it is. That would have a marginal positive effect on longterm Interest Rates. The 10 year bond rate in recent 0. 7 , 0. 8 ,een 0. 9 . How much lower could it be pushed . The answer is somewhat lower, but if you believe if i do, as the fed has said many times, it is not going for negative rates in the short end, it is not obvious that you could go very , even byr on long end concentrating more purchases. Dont get me wrong, i think they should. I dont think we should have High Expectations of how much. Alix today we are going to see a procedural motion in the senate to approve President Trump said nominee judy shelton President Trumps fed nominee duty shelton. If this goes through, do you think this changes how they think about Monetary Policy . Alan not much. If she gets on the fed, which i hope she wont, sheldon will be one vote shelton will be one vote. She wont take many people with her. Shes the only one really that has the kind of beliefs that she has. But maybe a tiny bit in that the fed might think if we are going to do more, maybe we should do more before we have judy shelton voting. Alix that is interesting. Alan not a major effect, but if there is an effect, i would think about it in that way. Guy a broad kind of thought on this. Do you think there has ever been a point, using there is a point where the fed can suffer from groupthink . As a result of which, do you think a more Diverse Group of should be on the look out this point . It looks that way to me when i joined the fed in the mid1990s. I joined, and janet yellen joined right after i did. We were the first democrat to go over and 1000 years or something, and i think there was groupthink, and i thing it is good to have diversity. That is why we have staggered terms. The idea is the president gets to make some appointments. But theres a long way between that and putting somebody from the economic equivalent of the flat Earth Society on the board. I mean, those kinds of use are not going to be taken serious kinds of views are not going to be second seriously. A serious conservative or serious liberal voice on the committee might have some effect. I think in any case, it will be salutary in terms of getting away from groupthink. But somebody that is way out in left field or right field is just not going to be relevant to the debate. There may be more dissents. You could see someone like that descending all the time from the majority. The fed would rather not have that, but it is not going to really influence the debate. Alix something that also may come up under a Biden Administration is regulation. You were really focused on Bank Supervision and regulation, derivative instruments when you are at the fed. Do you expect more oversight of big banks, regional, private equity, hedge funds, nonbanks . What do you think . Alan well, that was a long list. [laughter] lets start with the place i dont think it will change, which is the big banks. The big banks have been under the feds supervisory umbrella for some time now, with not much ambiguity since doddfrank. There is no ambiguity now. It is the fed now. It will be the fed a Biden Administration. Then you reeled off a bunch of other institutions, going all the way to hedge funds come eight not regulated by anybody basically hedge funds, which are not regulated by anybody visibly. It is conceivable that the Biden Administration would like to extend the regulatory umbrella to some of these other institutions. Depending on the details, it will likely need Congressional Authority to do that. As we all know, if the republican majority stays there with Mitch Mcconnell acting like a cement block, the prospects for doing that are pretty poor. The question will be what can you actually do with the Regulatory Authority that exists. And i dont mean to demean that. You can go a long way. We now have, leaving aside the fed, which takes it much more seriously, a bunch of deregulatory regulators. If you put in place people who believe the Financial System needs regulation under the same laws that exist now, i think you can make a very big difference. Guy just a final quick question for me. We have just seen the nahb homebuilder index come in at a record. You think the fed can never step away from supporting the Housing Market . Time so i is a long guess i will say yes, but it is not on the near term horizon. The way the fed supports the Housing Market is basically by keeping Interest Rates very low, and that is not going to end for quite a long time. Itsndarily, by including quantitative easing, which helps market enormously, which in turn helps the mortgage market. The fed is not stepping away from that for a while. Onei think the principal which a lot of people dont understand is the Federal Reserve act gives the fed a very limited menu of assets. The ecbs menu is much broader. The bank of japans menu is far broader. The fed is highly restricted in terms of what, other than treasury issues, it can by. But one of those things are the mbs of fannie and freddie. As long as it needs to buy assets, it is going to want to keep buying them. Guy alan, really appreciate your time. Thank you for sharing it with us. Alan blinder, former fed vice chair, thank you very much. Lets now go to the Bloomberg New economy forum. Bloombergs Erik Schatzker is hosting a panel with ray dalio, the cochairman and coceo of bridgewater associates, and the executive chair of santander. They are talking about what investments will look like in a postcrisis world. Lets listen. News of major progress on vaccine developed has looked at our hopes on Vaccine Development debt on that on Vaccine Dev