WEBVTT - Conference Board's Goldstein on the April LEI Index (Audio)

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<v Speaker 1>Global business news twenty four hours a day. If Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Charlie Pellett. The Dow, the SMPNAZ, DAC all lower

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<v Speaker 1>stocks sliding in a broad sell off. This update brought

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<v Speaker 1>to you by weather Tech, car mats and floor liners.

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<v Speaker 1>Stocks are lower right now, with the SMP five hundred

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<v Speaker 1>index falling nine points to two thousand thirty eight, a

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<v Speaker 1>drop of five tenths of one percent, NAZ Stack down

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<v Speaker 1>thirty two points, a decline of seven tenths of one percent,

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<v Speaker 1>and the down Jones Industrial Average is down ninety three points,

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<v Speaker 1>a drop of five tenths of one percent. The tenure

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<v Speaker 1>of to thirty seconds that yield one point eight four percent.

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<v Speaker 1>Gold down nine ten the ounce to twelve fifty five

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<v Speaker 1>thirty a dropped there of one and a half percent.

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<v Speaker 1>Crew down seven cents. The barrel forty twelve right now

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<v Speaker 1>on West Texas Intermediate that is a drop of point

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<v Speaker 1>two percent. So again recapping another sell off for stocks

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<v Speaker 1>with the SMP down nine, drop of five tenths of

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<v Speaker 1>one percent. I'm Charlie picton that's a Bloomberg business flash.

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<v Speaker 1>You're listening to Taking Stock with Kathleen Hayes and Pim

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<v Speaker 1>Fox on Bloomberg Radio. The consumer, What is the consumer

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<v Speaker 1>think about the future of the economy. What is the

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<v Speaker 1>Conference Boards Leading Economic Index for the United States? What

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<v Speaker 1>is it telling us? What we have? Ken Goldstein to

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<v Speaker 1>tell us he's the economist for the Conference Board, and

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<v Speaker 1>he joins us, now, thank you very much for being here. Ken,

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<v Speaker 1>give us the update the Conference Board Leading Economic Index

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<v Speaker 1>l EI for the United States. It's it's up, and

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<v Speaker 1>it's up again. And not only is the lead up,

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<v Speaker 1>but in some sense more important to coincident, because that's

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<v Speaker 1>what tells us where we are right now. After no

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<v Speaker 1>change last month in April, that's back up. So, in

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<v Speaker 1>other words, the measure belt where the economy is right

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<v Speaker 1>now is telling us we continue to chuggle along, and

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<v Speaker 1>the lead is telling us expect more of this at

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<v Speaker 1>least through the summer, maybe even into the fall. The

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<v Speaker 1>economy is not, you know, way picking up, but it

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<v Speaker 1>certainly is not losing steam. That maybe one reason why

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<v Speaker 1>bonds are rallying. Leading Economic Index contains how many hours

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<v Speaker 1>are worked in manufacturing, the jobless claims, new orders of

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<v Speaker 1>various kinds, building permits obviously another leading indicator for housing

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<v Speaker 1>stock prices. Investors are betting where they think things are going. Uh.

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<v Speaker 1>That we've got the interest rate spread uh to give

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<v Speaker 1>us some sense of the credit markets are saying. So

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<v Speaker 1>all of this is but you're missing you're missing the

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<v Speaker 1>most I'm not the most important one, but but you know,

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<v Speaker 1>to follow onto the earlier question, one of the measures

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<v Speaker 1>here is about overall confidence, not just consumer confidence, overall confidence. Um.

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<v Speaker 1>And it's been one of the you know, sort of

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<v Speaker 1>you know, lagging behind the rest of the interview, very

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<v Speaker 1>volatile lately. But that's different from being steadily down. So

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<v Speaker 1>there's been a change over the last six twelve months

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<v Speaker 1>there in terms of confidence. People are anxious. They're a

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<v Speaker 1>little bit more solid about way the economy is it

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<v Speaker 1>right now, but they're a little bit you know, worried

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<v Speaker 1>about where things are good going to go, what's the

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<v Speaker 1>next shoe that's going to hit the floor. That's part

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<v Speaker 1>of the reason why until April you didn't see that

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<v Speaker 1>big pickup in retail sales. We might you know, unless

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<v Speaker 1>that was just a one month bounce. We might be

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<v Speaker 1>starting to see some of that, a little bit more spending,

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<v Speaker 1>a little bit less saving because people are a little

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<v Speaker 1>bit less concerned about the bottom falling out. Ken Golds team, you,

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<v Speaker 1>I'm sure read the report having to do with the

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<v Speaker 1>Federal Open Market Committee meeting minutes for April. The context

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<v Speaker 1>is they will raise rates at a future meeting if

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<v Speaker 1>the economic data continues to come in as it has

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<v Speaker 1>given today's report. I know it's incomplete. Be given today's report,

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<v Speaker 1>if you had to decide whether the Federals are would

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<v Speaker 1>raise interest rates, which way would you come down in July?

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<v Speaker 1>Why is that? Because I don't think that they're going

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<v Speaker 1>to do it right before the Brexit vote in June.

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<v Speaker 1>So July, which is early enough to get away from

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<v Speaker 1>our own election, but but you know, soon enough in

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<v Speaker 1>order to move not to tighten, but to go back

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<v Speaker 1>to this normalizing program that they've been trying to get

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<v Speaker 1>on for so long. So if I had a bet

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<v Speaker 1>right now, I would bet on exaggerator on Saturday and

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<v Speaker 1>on the Fed raising in July. Okay, well that would

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<v Speaker 1>be exciting Saturday. The Preakness. Now, well, let me ask

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<v Speaker 1>you this um in terms of the economy has your

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<v Speaker 1>view changed ially when you look at on what growth

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<v Speaker 1>rate we're going to have shaking his head there, you've

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<v Speaker 1>been saying something around what two to two and a half?

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<v Speaker 1>Two to two and a half, and I think, you know,

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<v Speaker 1>might even be closer to two perhaps, but you know

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<v Speaker 1>that has been the view now for maybe the last

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<v Speaker 1>two years. So that the statistics, at least the gd

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<v Speaker 1>PEACE statistics bounce a little bit, you get much less

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<v Speaker 1>bounce out of the labor market. And so one of

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<v Speaker 1>the questions is which do you really rely on GDP

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<v Speaker 1>your jobs? I think jobs is a better measure um

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<v Speaker 1>And again, I mean it's not telling us things are

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<v Speaker 1>going to pick up dramatically, but certainly that the bottom

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<v Speaker 1>is not falling out. And I think that even the

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<v Speaker 1>consumer is beginning to relax a little bit that the

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<v Speaker 1>bottom is not gonna fall out, that if they signed

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<v Speaker 1>a contract to make thirty six car loan payments, at

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<v Speaker 1>the bottom is going to fall out in the middle

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<v Speaker 1>of that. Tell me about stock prices, because we're trading

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<v Speaker 1>in this range and I'm wondering what. I wonder what

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<v Speaker 1>people take away. Well, with some some exceptions that may

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<v Speaker 1>have frightened people to death, Tell us. What this tells you, well,

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<v Speaker 1>what it tells me is that, you know, earnings haven't

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<v Speaker 1>been very good this earning season. We saw this coming

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<v Speaker 1>and I don't think that this is a one earning

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<v Speaker 1>season phenomena. I think that you know, we're in for

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<v Speaker 1>several of these, and I think that the stock prices

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<v Speaker 1>are beginning to reflect that. But again, it's not that

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<v Speaker 1>the bottom is falling, but just that things are may

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<v Speaker 1>not get much better. They're not going to get that

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<v Speaker 1>much worse, not for the economy, not for the job market,

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<v Speaker 1>not for the stock market. Of course, the bob market

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<v Speaker 1>got hit pretty hard. As I saidgested, people obviously were

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<v Speaker 1>not positioned for a FED that was this what they

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<v Speaker 1>considered hawkers. Right today, bonds doing doing a little bit

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<v Speaker 1>better as as stocks sell off a bit. I want

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<v Speaker 1>to ask you the global question, because you know very

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<v Speaker 1>well kN it seems people who are opposed to the

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<v Speaker 1>FED raising rates now and think it's a mistake, is

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<v Speaker 1>that the global economy is still soft, you know, still

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<v Speaker 1>have negative rates around the world. What is your view

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<v Speaker 1>of the potential linkage and and if if there's some

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<v Speaker 1>worry there, well, there is some worry there that you

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<v Speaker 1>know that growth is not quickening across the globe. It

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<v Speaker 1>is in certain places, you know, uh, and in some

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<v Speaker 1>other places China, for example, maybe it's beginning to soften.

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<v Speaker 1>But India is very strong, UM Africa, Latin America commodity producers,

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<v Speaker 1>both in terms of prices and in terms of what

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<v Speaker 1>that means for their economy. So again, you know, even

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<v Speaker 1>if we look at the globe, it is not as

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<v Speaker 1>if everything is beginning to implode on itself. And and

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<v Speaker 1>because that's the case, and there even are some bright spots,

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<v Speaker 1>this might be the time to just do not you know,

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<v Speaker 1>a fifty point or seventy five point move, but maybe

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<v Speaker 1>a twenty point move, and then do another one after

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<v Speaker 1>the election, both for the domestic economy and for the

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<v Speaker 1>global economy. Can Goldstein betting on exaggerated? All right? I

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<v Speaker 1>can hardly wait. Thank you so much for joining us

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<v Speaker 1>today from the New York based a conference board to

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<v Speaker 1>look at the growth in leading economic indicators and what

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<v Speaker 1>it needs for the economy. This is Bloomberg Radio coming

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<v Speaker 1>up on taking Stock. After a week of dismal earnings

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<v Speaker 1>reports and forecasts from retailers, Walmart stores and other chains,

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<v Speaker 1>delivered some upbeat news in the past twenty four hours.

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<v Speaker 1>We're gonna give you the details