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

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Speaker 1: dot com, the radio plus mobile app and on your radio,

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Speaker 1: this is a Bloomberg Business Flash and I'm Kara in Moscow.

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Speaker 1: This updates brought to you by Sector Spider e t

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Speaker 1: F S. Why buy a single stock weeen if you

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Speaker 1: can invest in the entire sector of visits. Sector spd

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Speaker 1: r SA dot Com are called six Sector one eight

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Speaker 1: six six Sector e t F. We are watching oil.

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Speaker 1: Oil is rising with global equities and its speculation that

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Speaker 1: a production freezes by some OPEC members and Russia could

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Speaker 1: eventually help to abate the surplus. NIMAX screwed oil is

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Speaker 1: currently up six point three percent. It's been extending its

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Speaker 1: gains throughout the morning. It's up a dollar eighty seven

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Speaker 1: to thirty one dollars fifty one cents. A barrel Brent

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Speaker 1: is up five point two per cent, or a dollar

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Speaker 1: seventy four to thirty four seventy five of barrel. U

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Speaker 1: Stock Index futures higher as well. SNP EVENI futures up

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Speaker 1: twenty one points, Dowie Mini futures up a hundred eighty five,

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Speaker 1: and NASA documni futures up about forty six decks in

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Speaker 1: Germany's up one point nine percent ten. Your Treasury down

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Speaker 1: five thirty seconds, the yield one point seven six percent.

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Speaker 1: Comas Gold is down one point six percent, or nineteen

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Speaker 1: dollars to twelve eleven eighty announced the euro a dollar

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Speaker 1: ten twenty the yen one thirteen point one seven. Ding Foods,

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Speaker 1: the largest US milk processor, posting fourth quarter profit that

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Speaker 1: beat out a lists Estamates after it paid less for

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Speaker 1: dairy supplies. It shares up almost four percent this morning,

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Speaker 1: and Allergan also beat. And that's a Bloomberg business flash.

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Speaker 1: Tom and Mike Karen, thanks so much again. I'm looking

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Speaker 1: at Kurve flattening today within a better risk on field again.

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Speaker 1: West Texas up a dollar ninety one, gets your attention.

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Speaker 1: Mark Zandi with us, with Moody in them and analyts

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Speaker 1: um as. We continue forward right now though it is

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Speaker 1: on Wall Street. The following is from Bloomberg View, opinions

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Speaker 1: and commentary from Bloomberg columnists. I'm Claim Crook, columnist for

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Speaker 1: Bloomberg View. How to account for the success of Donald Trump?

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Speaker 1: Put the class. I'm a British immigrant and I grew

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Speaker 1: up in a northern working class town. Moving to Oxford

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Speaker 1: and then London in the nineteen seventies, I learned something

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Speaker 1: about snobbery, but I never witnessed the naked disdain for

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Speaker 1: the working class that America's metropolitan elite finds permissible in

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Speaker 1: two thousand and sixteen. The targets of this disdain understand

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Speaker 1: they're seen as bigots, too stupid to know what's good

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Speaker 1: for them. They don't like being looked down on, and

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Speaker 1: many of them are supporting Trump. Trump is outrageous, and

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Speaker 1: that's the point. This isn't about policies or promises. He

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Speaker 1: delights in offending the people who look down on his fans.

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Speaker 1: The more he offends those people, the better his supporters

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Speaker 1: like it. Supporting Trump is an act of class protest,

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Speaker 1: not just over hard time, the effect of immigration on wages,

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Speaker 1: or the depredations of Wall Street. It's also, and perhaps

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Speaker 1: most of all, over lack of respect. That's something no

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Speaker 1: American will stand for. I'm Clive Crook, a colonist for

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Speaker 1: Bloomberg View. For more Bloomberg opinion and commentary, please go

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Speaker 1: to bloom the View dot com, or you go on

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Speaker 1: the Bloomberg terminal. This has been Bloomberg View and Bloomberg

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Speaker 1: View commentaries can be here in hourly weekdays. I'm Bloomberg

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Speaker 1: Radio Michael. Let's bring back Marks Andy now chief economist

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Speaker 1: at Movies Analytics. So we're talking about the global economy

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Speaker 1: and how the US is sort of the engine of

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Speaker 1: the growth, and I want to get at that a

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Speaker 1: little bit Mark and talk about why do you think

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Speaker 1: that will continue? We had a very rough fourth quarter.

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Speaker 1: Are you in the camp that suggests that was maybe

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Speaker 1: an inventory correction and that we are back to, if

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Speaker 1: not a great level of growth, the plotting level that

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Speaker 1: we've experienced the last couple of years. Yeah, And the

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Speaker 1: fourth quarter was bad in terms of g d P.

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Speaker 1: It wasn't bad in terms of jobs. It's fact it

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Speaker 1: was fantastic in terms of job growth. And that's what's

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Speaker 1: the most important because at this pace of job growth

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Speaker 1: for a fast approaching full employment, which were months away from,

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Speaker 1: and that means stronger wage growth, and stronger wage growth

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Speaker 1: is the fodder for consumer spending and that's the engine

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Speaker 1: pert cool economic growth. So you know, as long as

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Speaker 1: the American company continue to hire UH and paerills continue

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Speaker 1: to expand, will be fine. And every indication is that

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Speaker 1: they will h you know, we the u un punt

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Speaker 1: turns claims are very low. They remained very very low.

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Speaker 1: And the most encouraging thing most recently is that the

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Speaker 1: number of people quitting their jobs has skyrocketed, which you know,

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Speaker 1: people don't do that unless they're so pretty comfortable that

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Speaker 1: they're gonna find another one. So, you know, as long

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Speaker 1: as the labor market hangs together, we'll be fine. Well,

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Speaker 1: Mike jump in here on this year better on the

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Speaker 1: Joel survey and all that, but this was a source

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Speaker 1: of conversation at least three times this weekend. Is people

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Speaker 1: really have shifted Mike on the enthusiasm to exit the job. Well,

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Speaker 1: the the quit rate certainly went up, and you know,

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Speaker 1: hiring in theory will continue as long as demand is strong,

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Speaker 1: and we saw reasonably good retail sales for the prior month.

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Speaker 1: I just want to mark what you hear from companies

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Speaker 1: and uh, once you think the possibility is that with

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Speaker 1: the volatility in markets and uncertain the out there, and

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Speaker 1: certainly with the crazy turns the presidential campaign has taken,

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Speaker 1: whether we will see ceo s just put things on

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Speaker 1: hold as they did in previous years when we had

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Speaker 1: these black Swans come out Greece and other things. Well,

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Speaker 1: I think clearly they're nervous. You know, in my business,

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Speaker 1: I talked to a lot of senior management ceo CFOs

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Speaker 1: and you know they're focused on their stock price, and

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Speaker 1: with the decline in stock values, it makes them anxious.

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Speaker 1: And it's more in stock prices volatively across all financial

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Speaker 1: markets globally. So there's no doubt about that. Uh. But

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Speaker 1: at least to this point, Uh, you know, there's no

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Speaker 1: indication sign that they've actually called up their human resource

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Speaker 1: head and said, you know, stop hiring or certainly no

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Speaker 1: one's saying lying off people. That hasn't happened. Uh. Investment

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Speaker 1: spending has been on the soft side. But but you

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Speaker 1: know that's mostly energy. If exclude energy, where where is

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Speaker 1: it ex energy? You know, it's it's fine, it's you

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Speaker 1: know here, I'll give another statistic. Come in this recovery. Uh,

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Speaker 1: investment spending reel all in, you know, this whole shooting

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Speaker 1: match that business investment is four point eight percent peranum.

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Speaker 1: That's that's pretty good. I mean in the last expansion

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Speaker 1: in a decade ago, and that was a six year

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Speaker 1: long expansion peranum investment growth was four point one percent.

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Speaker 1: And if you look at investment in R and D

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Speaker 1: and intellectual property, which is you know, the most risky

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Speaker 1: stuff with long payoff payoffs, and you think people, if

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Speaker 1: their business are really scared to be pulling back on that,

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Speaker 1: you don't say it. So, yeah, they're nervous, there's no doubt,

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Speaker 1: but they're not nervous enough to say, you know, I'm

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Speaker 1: going to pull back here, at least not yet. What

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Speaker 1: about the the idea that the stock markets problems are

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Speaker 1: going to have a wealth impact on spending and that

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Speaker 1: could push us towards our session. Yeah, that's I worry

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Speaker 1: about that. You know, we've done some recent research that

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Speaker 1: indicates that the stock wealth effect is large by historical standards. Uh,

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Speaker 1: you know, historically the stock wealth effect is about two

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Speaker 1: three cents, So every dollar decline in stock prices would

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Speaker 1: reduce consumers spending ultimately by two three cents. That doesn't

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Speaker 1: sound like a lot, but you know, just to give

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Speaker 1: a sense of it, a temper cent decline in stock values,

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Speaker 1: which is roughly what we've experienced. Your peaked the current

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Speaker 1: is about two trillion dollars in well, so that adds

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Speaker 1: up to real money but if the wealth effect is

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Speaker 1: by six cents, and then might research suggests that it

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Speaker 1: might have gotten that high, then the damage will will

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Speaker 1: be greater. And you know that, and that goes right

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Speaker 1: to the heart of my thesis. You know that the

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Speaker 1: American consumers is gonna you keep spending. So that's the

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Speaker 1: key thing I worry about here, at least in the

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Speaker 1: very near term. You know what the damage is going

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Speaker 1: to be created by the financial turmoil. In the last

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Speaker 1: minute that we've got with you, Mark Sandy helped me

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Speaker 1: with the FED. Mike, I think we've been It's important

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Speaker 1: to understand with a meeting March sixteen, how fed free

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Speaker 1: we've been in conversation in research this morning. What will

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Speaker 1: you listen for from FED officials Marks Andy, Well, you

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Speaker 1: know we're coming in a full employment check. Uh, actual

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Speaker 1: inflation is actually picking up. Core inflation is picking up.

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Speaker 1: Check we're not We're still below target, but we're moving

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Speaker 1: towards target. I think the key thing really will be

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Speaker 1: obviously what damage will this financial terminal do? But and

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Speaker 1: I think they'll be focused on unemployment trance claims and

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Speaker 1: labor market data to focus on that. But the real

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Speaker 1: thing I think they are now focused on is un

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Speaker 1: inflation expectations that feels really soft, and that continues to

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Speaker 1: be the case. I don't see they're just that's you know,

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Speaker 1: they're not gonna be able to check that box and

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Speaker 1: they won't tighten monetary policys. What's your forecast for inflation.

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Speaker 1: We have seen a you know, definitely moving up of

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Speaker 1: core rates. It's gonna pick up. I mean, did my

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Speaker 1: script roughly holds together? Because the labor markets tightening, We're

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Speaker 1: going to get wage growth, and then you lay on

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Speaker 1: top of that a very tight housing market. Vacancy rates

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Speaker 1: are thirty year lows and we're getting very strong rent growth.

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Speaker 1: And healthcare costs are going to pick up because it's

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Speaker 1: very labor intensive and its wage costs rise, healthcare costs

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Speaker 1: will rise, and the effects of Obamacare are gonna are

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Speaker 1: to fade a bit. So everything is adding up for inflation,

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Speaker 1: getting core inflation getting back to target over the next

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Speaker 1: year eighteen months, and then it's something beyond that. Mark Sandy,

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Speaker 1: thank you so much. With the moodies, Mike, the speakers

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Speaker 1: starting with February two today, Potter Fisher, Kaplan, Bullard in

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Speaker 1: New York City, Lockert Williams, Paul Brainerd, and finally Stanley

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Speaker 1: Fisher March seven. Before we descend into quiet, there will

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Speaker 1: be a lot of opinions expressed what is going to happen,

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Speaker 1: And we have a pretty good idea of where a

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Speaker 1: lot of people sit at the moment. And uh, it

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Speaker 1: was not unrealistic to expect the FED to do nothing.

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Speaker 1: On the sixteen, he played twenty minutes eight seconds of hockey.

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Speaker 1: That's a lot for anybody. The other night he is

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Speaker 1: forty four down in Florida, where you can I know

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Speaker 1: what you're talking about. If you say so, I would

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Speaker 1: note we can retire four fifty three second period Yager

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Speaker 1: from Kolakoff, who was born the year Yearrami Yager started playing,

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Speaker 1: and you see yokin In and then in the third

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Speaker 1: period Yager from yokin In. And for those of you

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Speaker 1: who don't know hockey, it's much different when you score

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Speaker 1: when everybody's on the ice versus a power play when

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Speaker 1: the other team as a man in the penalty box.

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Speaker 1: Mr Yager scored two goals to win the game five

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Speaker 1: on five. Gotta give him credit. Remark. Remark reminds one

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Speaker 1: of Gordy Hunt playing into his fifties. You know, this

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Speaker 1: is maybe the roughest, hardest sport, and the people perform.

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Speaker 1: If you had power play goals, they'd say, okay, they

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Speaker 1: set him up, the big gun in the slot, blah

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Speaker 1: blah blah. Two goals five on five at ato Is.

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Speaker 1: I don't believe I've ever said that at any time

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Speaker 1: or place. Futures up. Two, dry cheers up. One think

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Speaker 1: yet one thirteen twenty one. Weaker again today with a

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Speaker 1: little bit no nicely stronger dollar. I should say, another

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Speaker 1: hour of Bloomberg surveillance. You need to be with this.

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Speaker 1: Thank you,