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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com. The radio blows Mobile lab and on your radio.

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Speaker 1: This he's a Bloomberg business plash from Bloomberg World Handquarters.

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Speaker 1: I'm Charlie Pellett. The Dow, the SMP NEZ stack all declining.

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Speaker 1: We have got the SMP five hundred index down to point,

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Speaker 1: down one tenth of one percent. That is a drop

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Speaker 1: of just about one tenth of one percent, down to

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Speaker 1: point at twenty three night. We have got the down

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Speaker 1: Jones Industrial Average falling seven points to twenty thousand, nine

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Speaker 1: hundred ninety nine, lore by one tenth of one percent,

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Speaker 1: and nastank is down two points. The drop there of

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Speaker 1: one tenth of one percent. The tenure down six thirty seconds,

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Speaker 1: with the yield of two point three seven percent. Gold

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Speaker 1: off a dollar fifty denounced to twelve twenty eight, up

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Speaker 1: by one tenth of one percent. West Texas Intermediate crued

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Speaker 1: up twenty three cents of arrow forty forty five on

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Speaker 1: w T I again there of five tenths of one percent.

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Speaker 1: I'm Charlie Pellett. That's a Bloomberg a business flash. I

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Speaker 1: thank you very much, Charlie Pebla. You're listen to Boomer

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Speaker 1: Markets on Bloomberg Radio. The following is from Bloomberg View

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Speaker 1: opinions in commentary from Bloomberg columnists. I'm Mark white House,

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Speaker 1: an editor from Bloomberg View. One element is missing in

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Speaker 1: an otherwise strong US job market. Ample hiring still isn't translating,

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Speaker 1: and dissimilarly, ample wage gains, particularly for those in the

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Speaker 1: middle of the pay scale. Average hourly earnings were up

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Speaker 1: just two point five percent from a year earlier in April,

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Speaker 1: close to a percentage point short of the pace that

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Speaker 1: prevailed before the last recession. The weakness has been concentrated

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Speaker 1: in middle wage industries such as durable goods, manufacturing, and construction.

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Speaker 1: During the past three months, hourly earnings in this group

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Speaker 1: have increased at an annualized pace of about one point

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Speaker 1: eight percent. That compares with two percent for low wage

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Speaker 1: and four percent for high wage occupations. Persistent demand for

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Speaker 1: workers may eventually push up pay, but in the longer run,

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Speaker 1: wages can't rise much faster unless productivity growth speeds up

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Speaker 1: a lot from its current anemic pace. One hope is

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Speaker 1: that companies will make more productivity enhancing investments than they

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Speaker 1: have been The infrastructure investments that Donald Trump has promised

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Speaker 1: could also help the Lately, the President has focused more

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Speaker 1: on tax cuts that wouldn't have the same effect. In short,

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Speaker 1: barring a lucky break, middlewage Americans could be facing a

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Speaker 1: lot more disappointing paychecks. I'm Mark white House. For more

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Speaker 1: Bloomberg opinion in commentary, please go to Bloomberg dot com,

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Speaker 1: slash view or view go on the Bloomberg terminal. These

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Speaker 1: has been Bloomberg View. Bloomerview commentaries can be heard every

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Speaker 1: week day at this time and also at five forty

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Speaker 1: eight eleven forty eight Wall Street time. We are in Boston,

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Speaker 1: Bloomberg Markets live in the Greater Boston Chamber of Commerce

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Speaker 1: Annual meeting. Carol Master Corey Johnson, I want to talk

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Speaker 1: a little bit about the markets. Were in a convention

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Speaker 1: the Boston Convention Center, so you're gonna hear some noise

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Speaker 1: in the background. We want to talk attle though about

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Speaker 1: the markets as well, because we did see stocks edge

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Speaker 1: a little bit lower, mirroring what we saw in Europe

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Speaker 1: in the aftermath of a French election victory for emmanue

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Speaker 1: about Macron uh the investors had largely priced in let's

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Speaker 1: talk though about the market environment. Matt Melli is with us.

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Speaker 1: He's maaging director Equity strategis at Miller Ta back joining

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Speaker 1: us here at the convention center. Nice to have you here,

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Speaker 1: Nice to see you in person. Great to be here.

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Speaker 1: And the beautiful of seaport area that's been this thriving now,

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Speaker 1: especially with ge moving his headquarters. Serious, pretty amazing, right, Um,

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Speaker 1: the markets, You and I were talking a bunch, the

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Speaker 1: three of us were talking a bunch before we got going. Um,

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Speaker 1: can you make sense out of this environment? Well, it's

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Speaker 1: you know, it's very difficult because we've had this weird

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Speaker 1: thing where the stock market ever since we kind of

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Speaker 1: had the oil crashing oil and it's in early two

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Speaker 1: thousand and six. Team, we've had these sharp rallies followed

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Speaker 1: by two months or two or three months of sideways

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Speaker 1: moved in a sharp rally for a couple of weeks,

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Speaker 1: and then sideways moved and we're back on one of

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Speaker 1: those uh, sideways moves. Now we've been in tight, tight

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Speaker 1: range the last two weeks, but really the last two

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Speaker 1: months we've been in a little bit of wider range.

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Speaker 1: Now we're right at the top of that range. We'll

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Speaker 1: see if you can break out or not. Uh. It

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Speaker 1: certainly is an interesting time here too. I mean, we've

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Speaker 1: got this sort of just just romantic drop we're talking

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Speaker 1: about during the comercial break involatility, and the vix has

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Speaker 1: has all sorts of problems with it, but it what

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Speaker 1: does that reflect to you? Well, it's a couple of things,

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Speaker 1: because I think we've kind of got a couple of

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Speaker 1: forces pushing against each other. Number One, we've had these

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Speaker 1: good earnings come out. They're very very strongly. That's got people,

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Speaker 1: uh for good for good reason, very excited. But on

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Speaker 1: the other side, we have valuations which are very stretched.

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Speaker 1: And then of course we're starting to see some a

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Speaker 1: little few cracks in the economic growth not here, not

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Speaker 1: only here in the US, but in China, and I'm sorry,

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Speaker 1: in the global economy, not major at all. I'm not

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Speaker 1: saying things are gonna roll over turn into recession and

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Speaker 1: like that, but we see we see some negative data

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Speaker 1: coming out of China. We see the Chinese stock market

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Speaker 1: at its lowest level of the year. Uh. And then

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Speaker 1: of course you see this uh, this city group as

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Speaker 1: you called the City Group Surprise uh economic Index, and

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Speaker 1: that's fallen off a cliff recently. So you know, even

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Speaker 1: even if for a good indicator, well, it just shows

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Speaker 1: that they're not meeting expectations. It doesn't mean things. You know,

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Speaker 1: when when is it fall off a cliff, It means

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Speaker 1: it not meeting expectations, not that the economy is. And

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Speaker 1: so I just worry that with with nothing really happening

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Speaker 1: in Washington, DC, that we might not get the growth

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Speaker 1: in the second after year that all the people can expect. Matt,

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Speaker 1: We've talked a lot about like the sentiment indicators say hey,

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Speaker 1: I'm up beating, I'm upbeat, but when you look at

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Speaker 1: the hard data, it's not necessarily coming through. What is

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Speaker 1: it that's going to make people much more confident about

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Speaker 1: the future individuals as well as businesses. Well, you've got

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Speaker 1: a couple of things. But obviously this thing with the

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Speaker 1: technology stocks is it's it's I don't know this, it's

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Speaker 1: gonna sound weird, but I actually think it would be

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Speaker 1: great if they pull back a little bit. Uh, we

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Speaker 1: see a little bit people who'd like to buy any exactly,

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Speaker 1: that's true. And I keep saying that going well, next

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Speaker 1: pullback and then never comes back. But you have I

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Speaker 1: mean you look at a stock like Amazon, and and

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Speaker 1: of course it's a retail stock, but with the big

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Speaker 1: cloud computing, but all the the fang stocks. I mean,

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Speaker 1: they have these huge runs and you have a nine

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Speaker 1: percent move in an almost a percent move in just

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Speaker 1: sixteen months in the Amazon. I mean, if it pulled

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Speaker 1: back ten percent and probably scare a few people, however, uh,

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Speaker 1: ten percent after a hundred percent rally, that's nothing. So

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Speaker 1: it's it's the type of thing that I think people

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Speaker 1: should be, you know, preparing themselves for any kind of

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Speaker 1: a pullback so they can take advantage well off and

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Speaker 1: when it happens, the question is I guess my thing really?

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Speaker 1: Was it just technical? You'd like to see a technical correction.

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Speaker 1: It's not that you think fundamentally everything's falling apart. You

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Speaker 1: just would like to see things technically to more normal levels. Well, yes,

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Speaker 1: and and because the higher it goes, the more fragile

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Speaker 1: things become, you know, and and and you know, we

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Speaker 1: saw it the thing I started worrying about, and I

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Speaker 1: hear more and more suddenly that hey, that the fact

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Speaker 1: that the stock market is rallying on a just a

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Speaker 1: few names, you know, five names or shifted and suddenly

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Speaker 1: that's normal, And I'm like, what I mean two months

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Speaker 1: ago that was like, oh, everybody was worried about it.

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Speaker 1: Now there saying it's a that's okay, then well, gee's

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Speaker 1: not necessarily true. I mean, we've got the correlation still

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Speaker 1: wrapped up pretty time. And yes, you've got some stocks

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Speaker 1: that have gone bonkers, you've got your fangs or you know,

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Speaker 1: throwing your tesla as off, but you've got you've got it.

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Speaker 1: Pretty much everything is getting a bit, that's true. And

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Speaker 1: of course financials, real estate, utilities, industrials, consumer staples, materials, healthcare,

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Speaker 1: consumer discretion consumer discretionary, n INFO tech is up seventeen percent,

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Speaker 1: only energy and telecom er lagging this year. Right, well,

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Speaker 1: the one thing though, it's interesting though even though the

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Speaker 1: end I'm sorry, the financial stocks are up, they've underperformed

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Speaker 1: and and and even though the one it's weird greatly

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Speaker 1: recently because industrates have moved up a little bit in

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Speaker 1: the long term rate anyway fial, which should be and

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Speaker 1: they and they've rallied. But you know that it's funny

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Speaker 1: that the k V banky TF whatever other reasons, can't

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Speaker 1: seem to break that fifty day move in average, and

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Speaker 1: they were pretty oversold there and they haven't been able

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Speaker 1: to rally as much as I thought. And then we

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Speaker 1: saw it with the UH Capital one Financial and some

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Speaker 1: of these others. There there's some problems with loanly issues.

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Speaker 1: And of course we will worry about the auto loans

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Speaker 1: and student loans, so that we don't we should all worry,

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Speaker 1: but we don't know. That's another thing. And it's like,

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Speaker 1: you know, last year we saw subprime lending, but uh,

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Speaker 1: a driver, I can I can't say whether it's the

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Speaker 1: biggest or a big or but as the subproble, learning

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Speaker 1: the extensions of the loans as well. And we see

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Speaker 1: record also says, hey, everything's great. Well, that's the last

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Speaker 1: tool and and in the in the toolbox for the

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Speaker 1: automaker is the only direction from there is down. We're

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Speaker 1: getting those numbers now exactly and and the cracks are

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Speaker 1: showing high. And then of course we saw Tesla the

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Speaker 1: other day. But that's that the last week you get hit.

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Speaker 1: But the exactly that's a whole different, that's in a

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Speaker 1: different It's true, you don't know that it's a fan club.

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Speaker 1: The fundamentals that stock changing the world again. The fundamentals

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Speaker 1: of the people make fun of Einstein and some others too,

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Speaker 1: did they don't know, Well, they've been talking about his

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Speaker 1: battery for several years now, and it's not his battery. Yeah,

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Speaker 1: it's Panasonic's battery and it's a battery that Okay, well

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Speaker 1: it's not coming around. We're not gonna get awere with this.

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Speaker 1: But Matt, forty seconds left here, So what's your advice

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Speaker 1: to investors at this point? Okay, I gotta tell you

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Speaker 1: the most important advice I can give right now. This

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Speaker 1: is life or guest stuff. Okay, this week, Okay, before

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Speaker 1: you make another investment decision, right, make sure to go

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Speaker 1: out and get your mother and if your wife applies

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Speaker 1: a Mother's Day gift, okay, because you think about it.

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Speaker 1: If you you know, if you forget to do that,

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Speaker 1: it could cost you. I mean, and already warned my daughter.

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Speaker 1: I've seen my wife give first three times, and I

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Speaker 1: was like, if you can't, if you can't do something

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Speaker 1: about that, you're you're, you're, you're, you get the trouble

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Speaker 1: you stock tips, But Hallmark says, thank you, that's a

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Speaker 1: good tip. That mainly managing director Equity Strategy with Miller

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Speaker 1: tay Back and co. Listen to Bloomberg Marcus on Bloomberg

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Speaker 1: Radio of Core Johnson, Carol Master here in Boston, will

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Speaker 1: be here all week. We will stick around everybody. We've

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Speaker 1: got a market tech coming your way in just a moment,

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Speaker 1: right here on Bloomberg Radio