1
00:00:03,240 --> 00:00:06,600
Speaker 1: Global business news twenty four hours a day. If Bloomberg

2
00:00:06,680 --> 00:00:09,760
Speaker 1: dot com, the Radio plus Mobile act and on your radio.

3
00:00:10,039 --> 00:00:14,080
Speaker 1: This is a Bloomberg business flag from Bloomberg World Headquarters.

4
00:00:14,160 --> 00:00:18,360
Speaker 1: Hunting Charlie pelt, the Dow and NAZDAK are lower smps hire.

5
00:00:18,440 --> 00:00:20,960
Speaker 1: Let's head right over the first word breaking news desk

6
00:00:21,040 --> 00:00:25,279
Speaker 1: for today's afternoon call. Here he is Bill Maloney. Good afternoon, Charlie.

7
00:00:25,320 --> 00:00:28,120
Speaker 1: Stocks have rebounded from the lows, with the Dow currently

8
00:00:28,160 --> 00:00:30,920
Speaker 1: down twelve points. SUPs are hired by a point in

9
00:00:30,960 --> 00:00:33,400
Speaker 1: NAZAC is lower by seven at one point. The Dow

10
00:00:33,560 --> 00:00:36,240
Speaker 1: is down a hundred and eighteen points, the small cap

11
00:00:36,280 --> 00:00:38,880
Speaker 1: six hundred is little changed, and the US ten yield

12
00:00:38,880 --> 00:00:42,160
Speaker 1: at one point seven four percent. Seven out of eleven

13
00:00:42,159 --> 00:00:44,720
Speaker 1: sub sectors are higher let Big Games and Materials, real

14
00:00:44,840 --> 00:00:49,680
Speaker 1: estate and technology, while healthcare, industrials and telecom fell down.

15
00:00:49,720 --> 00:00:53,040
Speaker 1: Transports are a little change, NASA by Tech's fall seventy

16
00:00:53,240 --> 00:00:56,080
Speaker 1: and the vix is down by point three percent. Leaders

17
00:00:56,080 --> 00:00:59,120
Speaker 1: to the downside and the down included American Express, Walmart,

18
00:00:59,160 --> 00:01:03,240
Speaker 1: and Fiser, while dupot Apple and Mike McDonald's. Lad in

19
00:01:03,320 --> 00:01:06,000
Speaker 1: jel News Quacom said to make progress and talks with

20
00:01:06,240 --> 00:01:09,680
Speaker 1: n XP and Mars to buy out Berkshire Hathwayte equity

21
00:01:09,720 --> 00:01:12,360
Speaker 1: stake in wrig Lely. In other news of Walster, John

22
00:01:12,400 --> 00:01:14,759
Speaker 1: reported that Snapchat parents said he'll be working on an

23
00:01:14,760 --> 00:01:18,240
Speaker 1: I p O valuing the firm at five billion or more.

24
00:01:18,840 --> 00:01:21,119
Speaker 1: Whole food spiked intured A gained as much as six

25
00:01:21,160 --> 00:01:25,760
Speaker 1: point seven percent tweets residing takeover speculation, while al Nylum

26
00:01:25,840 --> 00:01:29,319
Speaker 1: Pharma fell as much as forty nine percent after ending

27
00:01:29,360 --> 00:01:32,200
Speaker 1: development of a key medicine. Live from the first back

28
00:01:32,200 --> 00:01:33,960
Speaker 1: of news desk, gom Bill Maloney charge, all right, thank

29
00:01:34,000 --> 00:01:36,319
Speaker 1: you very much, billing here live breaking news over your

30
00:01:36,319 --> 00:01:40,120
Speaker 1: bloomberd Times squawk gasqu a w K on your terminal.

31
00:01:40,440 --> 00:01:46,880
Speaker 1: I'm Charlie Pellett. That's sub Bloombred Business Flash June listening

32
00:01:46,959 --> 00:01:50,480
Speaker 1: to taking stock with pim Box and Kathleen Hayes on

33
00:01:50,600 --> 00:01:55,240
Speaker 1: Bloomberg Radio. Gold the price of gold declining. Today. You

34
00:01:55,280 --> 00:01:58,600
Speaker 1: can buy an ounce of gold for twelve hundred and

35
00:01:59,000 --> 00:02:03,320
Speaker 1: fifty one dollars an ounce. That is fifteen dollars less

36
00:02:03,360 --> 00:02:06,320
Speaker 1: than it costs yesterday. Here to tell us more about

37
00:02:06,440 --> 00:02:10,040
Speaker 1: gold and other commodities is Mike mccloan. He is commodity

38
00:02:10,120 --> 00:02:13,359
Speaker 1: strategist for Bloomberg Intelligence and he joins us here in

39
00:02:13,440 --> 00:02:15,680
Speaker 1: the studio. Mike, thank you very much for being here.

40
00:02:15,720 --> 00:02:18,320
Speaker 1: Great to see you. Give us the story on goal.

41
00:02:18,440 --> 00:02:21,400
Speaker 1: What's going on? Why the sell off? What are all

42
00:02:21,400 --> 00:02:23,440
Speaker 1: the connections. I think gold is just doing a little

43
00:02:23,440 --> 00:02:25,320
Speaker 1: bit of a catch up to the record high stock

44
00:02:25,400 --> 00:02:27,919
Speaker 1: market prices. The dollar really hasn't been much of a

45
00:02:28,000 --> 00:02:30,960
Speaker 1: factor this year, and gold really got its lift after Brexit.

46
00:02:31,040 --> 00:02:33,839
Speaker 1: That's when it moved above thirteen hundred dollars announced. Both

47
00:02:34,000 --> 00:02:36,160
Speaker 1: remember our gold started the year, It started the year

48
00:02:36,400 --> 00:02:39,360
Speaker 1: below eleven hundred dollars announced. Right now it's around twelve fifty,

49
00:02:39,800 --> 00:02:41,880
Speaker 1: so it's still up eighteen percent on the year. And

50
00:02:41,960 --> 00:02:43,799
Speaker 1: part of the reasons it's up, it's because there's this

51
00:02:43,960 --> 00:02:47,040
Speaker 1: proliferation of negative interest rates in the world that's still

52
00:02:47,040 --> 00:02:50,359
Speaker 1: a pretty good solid support for the world's really quintessential

53
00:02:50,639 --> 00:02:54,239
Speaker 1: you know, alternative asset um. So it's worth a little

54
00:02:54,240 --> 00:02:56,480
Speaker 1: bit about FED tightening. But you know we did that

55
00:02:56,600 --> 00:02:59,359
Speaker 1: last year too, and actually within the tightening, gold within

56
00:02:59,400 --> 00:03:02,799
Speaker 1: a day or two put in its low. So so

57
00:03:03,160 --> 00:03:04,799
Speaker 1: is this then okay? So is this then maybe just

58
00:03:04,960 --> 00:03:07,639
Speaker 1: a bit of a correction. Are you just people like,

59
00:03:08,040 --> 00:03:10,280
Speaker 1: you know, kind of lightning up to run it back up?

60
00:03:11,040 --> 00:03:13,799
Speaker 1: Because I think partly what also is happening, there was

61
00:03:13,960 --> 00:03:17,840
Speaker 1: this speculation that the ECB might be ready to start

62
00:03:17,919 --> 00:03:21,600
Speaker 1: tapering off on its bond purchases, put thoroughly to bed

63
00:03:21,680 --> 00:03:25,120
Speaker 1: today by the ECB minutes also by a couple of

64
00:03:25,400 --> 00:03:28,160
Speaker 1: e CP Council members, at least one of them speaking

65
00:03:28,160 --> 00:03:31,480
Speaker 1: of New York. Um. So if the if the FED

66
00:03:31,600 --> 00:03:33,919
Speaker 1: raises once, I think that's I'm a gold bull, That's

67
00:03:33,960 --> 00:03:36,120
Speaker 1: what I'm saying. So what, especially if the west of

68
00:03:36,120 --> 00:03:38,560
Speaker 1: the central banks in the world aren't gonna stop buying bonds.

69
00:03:40,240 --> 00:03:42,640
Speaker 1: I think that's a good assessment. I mean, gold head,

70
00:03:42,880 --> 00:03:46,480
Speaker 1: it got way overdone. Open interest reach a record high

71
00:03:46,520 --> 00:03:49,800
Speaker 1: in futures in July and it's come off since. And

72
00:03:49,880 --> 00:03:51,360
Speaker 1: this is very similar to what it did in two

73
00:03:51,400 --> 00:03:53,440
Speaker 1: thousand ten before it ran up to that high, or

74
00:03:55,000 --> 00:03:57,520
Speaker 1: that took a major collapse in the dollar. Hopefully that

75
00:03:57,560 --> 00:03:59,560
Speaker 1: won't happen. We don't think that won't happen. But gold

76
00:03:59,640 --> 00:04:02,680
Speaker 1: still as its value. It's just pulling back. There's definitely

77
00:04:02,680 --> 00:04:04,760
Speaker 1: been some profit taking. Open interests come off and the

78
00:04:04,840 --> 00:04:06,960
Speaker 1: question is whereas it continue. I think for gold to

79
00:04:07,040 --> 00:04:11,800
Speaker 1: really move and sustain above will probably needs something negative

80
00:04:11,800 --> 00:04:14,800
Speaker 1: in terms of the stock market or the dollar like

81
00:04:14,960 --> 00:04:16,560
Speaker 1: it did in two thousand ten. I guess we don't

82
00:04:16,560 --> 00:04:18,320
Speaker 1: really want that to happen. Well, that's where gold comes

83
00:04:18,360 --> 00:04:20,360
Speaker 1: in play. It's a diversifier and it's really done a

84
00:04:20,360 --> 00:04:22,719
Speaker 1: good job doing that this year. Tell us about what's

85
00:04:22,720 --> 00:04:25,120
Speaker 1: going on in oil. I've got a print right now.

86
00:04:25,760 --> 00:04:29,400
Speaker 1: Oil a front month at fifty and forty nine cents

87
00:04:29,440 --> 00:04:32,120
Speaker 1: a barrel. It's up sixty six cents today. Well, I

88
00:04:32,240 --> 00:04:34,400
Speaker 1: think there's two things to remember in oil. It's not

89
00:04:34,520 --> 00:04:37,640
Speaker 1: so much that OPEC is gonna reduce production. Is they're

90
00:04:37,640 --> 00:04:40,040
Speaker 1: going to stop the drill at will trend at least

91
00:04:40,080 --> 00:04:42,200
Speaker 1: they say they will. The market thinks it's gonna happen,

92
00:04:42,240 --> 00:04:44,600
Speaker 1: It doesn't always know that will happen. And we have

93
00:04:44,680 --> 00:04:48,040
Speaker 1: this hurricane brewing. That's really pretty good positive things for oil,

94
00:04:48,120 --> 00:04:50,680
Speaker 1: but we all know they overwhelming. The most significant way

95
00:04:50,760 --> 00:04:54,040
Speaker 1: to describe oil now is glut. One word glutt. We

96
00:04:54,120 --> 00:04:56,720
Speaker 1: all know that. And if oil sustains much higher, we're

97
00:04:56,720 --> 00:04:58,880
Speaker 1: gonna be more supply come on board. Yes, it doesn't

98
00:04:58,920 --> 00:05:01,719
Speaker 1: happen really quick. But oil and the fifty handle has

99
00:05:01,760 --> 00:05:04,080
Speaker 1: been pretty good resistance since the beginning of the year.

100
00:05:04,640 --> 00:05:06,720
Speaker 1: Last year. The key level is sixty, and I think

101
00:05:06,800 --> 00:05:09,680
Speaker 1: most traders, most investors know that this is a level

102
00:05:09,800 --> 00:05:11,960
Speaker 1: if they've been long and they should be lightning up

103
00:05:12,000 --> 00:05:14,000
Speaker 1: and being a little carefully. It's just been good resistance

104
00:05:14,000 --> 00:05:16,120
Speaker 1: for quite a while. It's been a good trade all year, right,

105
00:05:16,160 --> 00:05:18,320
Speaker 1: I mean you take a look at crude oil, I

106
00:05:18,360 --> 00:05:21,359
Speaker 1: mean it's up what more than thirty six percent in price?

107
00:05:21,520 --> 00:05:24,520
Speaker 1: This key thing to remember, it's been a good range trade.

108
00:05:24,560 --> 00:05:27,440
Speaker 1: But gold different than than gold. You can't really invest

109
00:05:27,520 --> 00:05:29,240
Speaker 1: in crude really has futures. So if you look at

110
00:05:29,279 --> 00:05:32,920
Speaker 1: the number one traded um oil ETF this year us SO,

111
00:05:33,000 --> 00:05:36,279
Speaker 1: it's up like five um. So. Actually, when it comes

112
00:05:36,320 --> 00:05:39,279
Speaker 1: to investing standpoints, sometimes it's better. It has been better

113
00:05:39,360 --> 00:05:42,400
Speaker 1: to sell oil on rallies rather than buy it on support.

114
00:05:42,440 --> 00:05:44,600
Speaker 1: But it's been stuck between forty and fifty for a while.

115
00:05:45,120 --> 00:05:47,080
Speaker 1: But yeah, that's where I like to really differentiate and

116
00:05:47,120 --> 00:05:49,160
Speaker 1: make the difference. If you look like you can buy

117
00:05:49,279 --> 00:05:51,400
Speaker 1: gold in et F and get that gold return, but

118
00:05:51,520 --> 00:05:53,640
Speaker 1: in oil it's a much different story. It has to

119
00:05:53,720 --> 00:05:55,960
Speaker 1: use futures. It rolls, and there's a little it's a

120
00:05:55,960 --> 00:05:58,200
Speaker 1: little more complicated, but for traders it's it can be fun.

121
00:05:58,360 --> 00:06:01,640
Speaker 1: So what's the uh what would you say the odds

122
00:06:01,720 --> 00:06:05,320
Speaker 1: are of oil going downhill? Again? I know we have

123
00:06:05,480 --> 00:06:08,960
Speaker 1: the latest to his inventories and they showed more demand.

124
00:06:09,920 --> 00:06:12,400
Speaker 1: But as you said, as people called call this glut,

125
00:06:12,560 --> 00:06:16,600
Speaker 1: this global glut a wall, right. And there's also I

126
00:06:16,680 --> 00:06:18,080
Speaker 1: think a lot of people are going to really believe

127
00:06:18,120 --> 00:06:20,839
Speaker 1: that Saudi Arabic can engineer this this kind of production

128
00:06:20,920 --> 00:06:25,880
Speaker 1: until you actually see it on paper, right, So uh,

129
00:06:25,960 --> 00:06:28,800
Speaker 1: and and and being carried out as well. Would you say,

130
00:06:29,000 --> 00:06:32,040
Speaker 1: one intent chance, how much the risk the oil actually

131
00:06:32,120 --> 00:06:34,200
Speaker 1: takes another turn towards the lows. We have to be

132
00:06:34,240 --> 00:06:36,159
Speaker 1: careful of the actual probabilities. But I think the thing

133
00:06:36,240 --> 00:06:38,400
Speaker 1: that remembers trends, your friend. And guess what, there's no trend.

134
00:06:38,800 --> 00:06:42,719
Speaker 1: It's been stuck in a range we all know supplies overwhelming.

135
00:06:42,800 --> 00:06:44,479
Speaker 1: It's getting up near the upper end of the range,

136
00:06:44,480 --> 00:06:46,120
Speaker 1: at least in the shorter term. It might extend a

137
00:06:46,160 --> 00:06:49,000
Speaker 1: little higher. And I think that we should remember trends,

138
00:06:49,000 --> 00:06:50,440
Speaker 1: your friend. It's near the upper end of the range,

139
00:06:50,480 --> 00:06:52,760
Speaker 1: and what's just expected to stick in the stick within

140
00:06:52,839 --> 00:06:55,360
Speaker 1: a trend and in the short term might be a

141
00:06:55,440 --> 00:06:57,200
Speaker 1: new one, but who knows how long it's gonna last.

142
00:06:58,000 --> 00:06:59,920
Speaker 1: Just quickly you want to do anything on corn or

143
00:07:00,560 --> 00:07:07,159
Speaker 1: or grains con there. Corn corn has reached recently reached

144
00:07:07,200 --> 00:07:10,880
Speaker 1: a ten year low. Supply is just is you know,

145
00:07:10,960 --> 00:07:13,080
Speaker 1: it's going to be the record year harvest in for

146
00:07:13,240 --> 00:07:16,280
Speaker 1: corn and soybeans, but the prices are reached so much

147
00:07:16,400 --> 00:07:19,400
Speaker 1: such a low level that the man is picking up exponentially.

148
00:07:19,600 --> 00:07:22,520
Speaker 1: We're just one weather event away from a pretty substantial railly.

149
00:07:22,640 --> 00:07:26,120
Speaker 1: I'm not predicting weather, but these things happen in cycles,

150
00:07:26,560 --> 00:07:29,560
Speaker 1: and expect that happened at some point. All right, he

151
00:07:29,920 --> 00:07:32,520
Speaker 1: knows how to watch that. Stop watch very very well.

152
00:07:32,600 --> 00:07:35,640
Speaker 1: Mike mclenn, Thank you so very much. Commodity strategist for

153
00:07:35,880 --> 00:07:40,640
Speaker 1: Bloomberg Intelligence on Kathleen Hayes along with pim Fox and

154
00:07:40,800 --> 00:07:48,680
Speaker 1: this is Bloomberg coming up on taking stock Walmart. Walmart

155
00:07:48,800 --> 00:07:51,440
Speaker 1: says it's got more plans to focus heavily on its

156
00:07:51,520 --> 00:07:55,600
Speaker 1: e commerce operations and also warned investors that it's going

157
00:07:55,640 --> 00:07:58,280
Speaker 1: to cost more. We've got details coming up