1 00:00:02,240 --> 00:00:05,600 Speaker 1: Global business news twenty four hours a day. If Bloomberg 2 00:00:05,680 --> 00:00:08,720 Speaker 1: dot Com, the radio plus mobile last and on your radio. 3 00:00:09,000 --> 00:00:13,119 Speaker 1: This is a Bloomberg Business Flash and I'm Karin Moscow. 4 00:00:13,200 --> 00:00:15,840 Speaker 1: This updates brought to you by cbo E VIX Options 5 00:00:15,840 --> 00:00:19,840 Speaker 1: and Futures. Volatility can be harnessed with CBOE VIS Options 6 00:00:19,840 --> 00:00:22,560 Speaker 1: and Futures. See disclosures and learn more at cbo e 7 00:00:22,720 --> 00:00:27,280 Speaker 1: dot com. Slash Powerful outcomes vix iron or arose nine 8 00:00:27,280 --> 00:00:30,520 Speaker 1: dollars ninety nine cents or nineteen percent to sixty three 9 00:00:30,520 --> 00:00:33,160 Speaker 1: dollars seventy four cents a ton, according to a price 10 00:00:33,200 --> 00:00:36,600 Speaker 1: index compiled by Metal Bulletin, and that's the biggest one 11 00:00:36,680 --> 00:00:40,120 Speaker 1: day gain on record. Futures this morning, meanwhile, are lower, 12 00:00:40,159 --> 00:00:42,760 Speaker 1: with SMP Mini futures down six and a half points 13 00:00:43,000 --> 00:00:45,960 Speaker 1: DOWNIE Many futures down thirty five and NASH Documuti futures 14 00:00:46,000 --> 00:00:48,720 Speaker 1: down seventeen and a half decks. In Germany's down nine 15 00:00:48,720 --> 00:00:51,880 Speaker 1: tenths percent ten Your treasury down seven thirty seconds, the 16 00:00:51,960 --> 00:00:55,000 Speaker 1: yield one point eight nine percent. Nimex hered oil up 17 00:00:55,040 --> 00:00:57,320 Speaker 1: one point nine percent or sixty nine cents to thirty 18 00:00:57,360 --> 00:01:00,720 Speaker 1: six sixty two A barrel comes gold is changed up 19 00:01:00,720 --> 00:01:04,360 Speaker 1: thirty cents to Twe announced the euro and dollar in 20 00:01:04,480 --> 00:01:07,760 Speaker 1: six five and again one thirteen point five six. That's 21 00:01:07,760 --> 00:01:12,039 Speaker 1: a Bloomberg business flash, Tom and Mike Karen Muskin, thank 22 00:01:12,080 --> 00:01:17,119 Speaker 1: you very much. Well for the year, stocks overall down 23 00:01:17,200 --> 00:01:20,960 Speaker 1: more than two percent, the Dow and SMPA stocks down 24 00:01:21,000 --> 00:01:23,640 Speaker 1: almost six percent, still in spite of the rally that 25 00:01:23,680 --> 00:01:25,920 Speaker 1: we have seen over the last couple of weeks, and 26 00:01:25,920 --> 00:01:29,960 Speaker 1: then today the futures suggesting a lower day ahead. Jim 27 00:01:30,000 --> 00:01:36,080 Speaker 1: Paulson is chief investment strategist at Wells Capital Management. Jim, Uh, 28 00:01:36,360 --> 00:01:41,160 Speaker 1: we have not had a great earning season for the 29 00:01:41,240 --> 00:01:43,559 Speaker 1: fourth quarter, and the forecasts are for the next couple 30 00:01:43,560 --> 00:01:46,160 Speaker 1: of quarters companies are still going to be struggling to 31 00:01:46,200 --> 00:01:49,640 Speaker 1: make money, particularly on the top line. What do you do, 32 00:01:49,880 --> 00:01:52,400 Speaker 1: uh if if you're an investor, you're down for the 33 00:01:52,480 --> 00:01:56,280 Speaker 1: year already? Uh, do you take a chance that things 34 00:01:56,320 --> 00:01:58,480 Speaker 1: come back? Or do you want to be sidelined for 35 00:01:58,520 --> 00:02:02,000 Speaker 1: a while and see where the central banks, the political campaigns, 36 00:02:02,160 --> 00:02:07,400 Speaker 1: the threats to Europe take us. Yeah? Um, well, I've 37 00:02:07,480 --> 00:02:09,959 Speaker 1: had a I've had a target price this year since 38 00:02:10,000 --> 00:02:13,520 Speaker 1: you're in a basically well in the year where we 39 00:02:13,560 --> 00:02:17,680 Speaker 1: started it again, Mike, and but I have also arranged 40 00:02:17,760 --> 00:02:23,480 Speaker 1: from eight SMP. I think we might see that full range. 41 00:02:23,520 --> 00:02:29,000 Speaker 1: I think we saw hundred. I think we might still. UM. 42 00:02:29,040 --> 00:02:34,200 Speaker 1: My guess is that economic data is improving UM and 43 00:02:34,280 --> 00:02:38,400 Speaker 1: will not only back away from recession fears. Will we'll 44 00:02:38,440 --> 00:02:40,480 Speaker 1: maybe get to the point of where we embrace an 45 00:02:40,520 --> 00:02:44,120 Speaker 1: idea of a synchronized bounce globally and there could be 46 00:02:44,280 --> 00:02:46,480 Speaker 1: some excitement that might take us up to the old 47 00:02:46,560 --> 00:02:51,440 Speaker 1: highs and it maybe slightly above sometime this year. Yet UM. 48 00:02:51,960 --> 00:02:55,079 Speaker 1: I think though, if once we do that, we may 49 00:02:55,120 --> 00:02:58,880 Speaker 1: come back very quickly to the concern about inflation and 50 00:02:59,480 --> 00:03:02,200 Speaker 1: cost pressures and how fast the Fed has to raise 51 00:03:02,320 --> 00:03:04,560 Speaker 1: rates and how much the tenure you go, and it 52 00:03:04,680 --> 00:03:07,440 Speaker 1: might bring us back by a year end to that 53 00:03:07,600 --> 00:03:11,519 Speaker 1: unchanged level. One thing I would do is I would 54 00:03:11,560 --> 00:03:16,359 Speaker 1: I would manage domestically to that unchanged level of year 55 00:03:16,480 --> 00:03:21,840 Speaker 1: in UH my portfolio exposure. But I think the outside 56 00:03:21,880 --> 00:03:25,120 Speaker 1: the United States has a different investment pictures. If they 57 00:03:25,200 --> 00:03:29,000 Speaker 1: get a bouncing growth UH internationally, I don't think they're 58 00:03:29,000 --> 00:03:31,800 Speaker 1: going to face imminent rate pressures like we will here 59 00:03:31,800 --> 00:03:34,920 Speaker 1: in the United States. So I would take this opportunity 60 00:03:35,120 --> 00:03:38,960 Speaker 1: to remain invested in stocks, but to move more increasingly 61 00:03:39,680 --> 00:03:42,520 Speaker 1: outside of the United States. You know, on Friday, I 62 00:03:42,560 --> 00:03:46,040 Speaker 1: was thinking, Jim paulse is that Monday cool explained to 63 00:03:46,120 --> 00:03:51,960 Speaker 1: me the certitude that wage growth of some nominal, minimal 64 00:03:52,080 --> 00:03:57,400 Speaker 1: amount affects the income statement of a multinational. I don't, 65 00:03:57,440 --> 00:03:59,640 Speaker 1: but you know, I never give my opinion, folks, But 66 00:04:00,000 --> 00:04:02,160 Speaker 1: no where do I see that in the literature. Can 67 00:04:02,200 --> 00:04:05,600 Speaker 1: we just assume wage growth means less, you know, challenges 68 00:04:05,640 --> 00:04:08,760 Speaker 1: on the income statement unless operating income ebit don down 69 00:04:08,800 --> 00:04:12,640 Speaker 1: to the gap in that income. Yeah, yeah, I mean, 70 00:04:12,720 --> 00:04:15,720 Speaker 1: I I do think. I do think Tom that you know, 71 00:04:15,880 --> 00:04:19,240 Speaker 1: for the first time in this recovery, you know, companies 72 00:04:19,279 --> 00:04:21,640 Speaker 1: may start to face cost push pressures. I don't think 73 00:04:21,640 --> 00:04:24,520 Speaker 1: it's just gonna be wages though, and I'd also think 74 00:04:24,560 --> 00:04:27,800 Speaker 1: it's gonna be you know, interest rates and raw materials 75 00:04:27,920 --> 00:04:30,719 Speaker 1: and and and the like. Um, you know, one of 76 00:04:30,720 --> 00:04:32,760 Speaker 1: the most interesting things fastly things about you know, people 77 00:04:32,760 --> 00:04:35,560 Speaker 1: are so focused on oil going up right now, for example, 78 00:04:35,960 --> 00:04:39,159 Speaker 1: but if you look at raw industrial commodity prices, look 79 00:04:39,160 --> 00:04:41,520 Speaker 1: at the c RB raw industrials or even the SNP 80 00:04:41,680 --> 00:04:45,960 Speaker 1: gold sacks industrial they're making their biggest upward moves since 81 00:04:46,040 --> 00:04:48,760 Speaker 1: the collapse and oil started in mid two thousand and fourteen. 82 00:04:49,200 --> 00:04:51,760 Speaker 1: So I think it's gonna be a general interest rate, 83 00:04:51,880 --> 00:04:56,200 Speaker 1: labor cost, materials costs, sort of pressure on margins that 84 00:04:56,320 --> 00:05:00,000 Speaker 1: we haven't seen, uh in this recovery, because we're really 85 00:05:00,120 --> 00:05:03,320 Speaker 1: haven't been a full employment again. If I look offshore, though, 86 00:05:03,360 --> 00:05:06,000 Speaker 1: if I look at Europe, Japan and a lot of 87 00:05:06,040 --> 00:05:09,680 Speaker 1: emerging world companies, they're at an earlier point of their 88 00:05:09,720 --> 00:05:12,840 Speaker 1: earning cycle, just like they're at an earlier point of 89 00:05:12,880 --> 00:05:15,680 Speaker 1: their economic recoveries. And because of that, they don't have 90 00:05:15,880 --> 00:05:19,680 Speaker 1: maximum profit margins by his storage standards, and they probably 91 00:05:19,680 --> 00:05:22,040 Speaker 1: will not feel the pressure of the US companies are 92 00:05:22,040 --> 00:05:24,719 Speaker 1: going to feel in that regard. Jim Paulson, thank you 93 00:05:24,760 --> 00:05:28,360 Speaker 1: so much. Greatly appreciated Well's capital management. Getting started on 94 00:05:28,520 --> 00:05:32,160 Speaker 1: a Monday here. Um, as we look at a better economy, 95 00:05:32,480 --> 00:05:35,240 Speaker 1: the jobs, Mike, I wanted to take some time here 96 00:05:35,279 --> 00:05:38,600 Speaker 1: to summarize you remember remember the jobs report when the 97 00:05:38,680 --> 00:05:41,760 Speaker 1: unemployment rate was like nine point two percent, and we'd 98 00:05:41,760 --> 00:05:44,039 Speaker 1: all go hysterical if it went up or down a 99 00:05:44,040 --> 00:05:47,920 Speaker 1: little bit. Now we're a point which is surreal, and 100 00:05:48,320 --> 00:05:50,520 Speaker 1: I think the data is after three days of thinking 101 00:05:50,560 --> 00:05:53,599 Speaker 1: about it as you and I do, seven what was 102 00:05:53,640 --> 00:05:57,360 Speaker 1: your observation? Mine is we almost got the three thousand 103 00:05:57,480 --> 00:06:02,560 Speaker 1: jobs with the revision. Was a terrific report. It was 104 00:06:02,600 --> 00:06:05,080 Speaker 1: a good report. On the headline, the problem is the 105 00:06:05,120 --> 00:06:08,240 Speaker 1: wage numbers, and we don't know and all at the 106 00:06:08,279 --> 00:06:10,440 Speaker 1: same time, the hour's work went down. We don't know 107 00:06:10,560 --> 00:06:13,560 Speaker 1: exactly why that is. We're gonna have to wait and see, 108 00:06:13,600 --> 00:06:16,719 Speaker 1: but it is true that jobs. We have been adding 109 00:06:16,800 --> 00:06:19,240 Speaker 1: jobs in this country for seventy two months, and you 110 00:06:19,360 --> 00:06:21,159 Speaker 1: keep talking about you you were way out in front 111 00:06:21,160 --> 00:06:25,360 Speaker 1: of this on a tighter labor market, within the job economy. 112 00:06:25,560 --> 00:06:27,560 Speaker 1: I notice the aw meted rate came in and other 113 00:06:27,640 --> 00:06:30,360 Speaker 1: rates came in as well. I mean, it may be 114 00:06:30,839 --> 00:06:33,839 Speaker 1: a lot longer than any of us wanted, but you 115 00:06:33,880 --> 00:06:36,560 Speaker 1: begin to think Dean mckie's not crazy at point seven 116 00:06:36,600 --> 00:06:41,080 Speaker 1: two with his four point zero percent unemployment rate, call 117 00:06:41,320 --> 00:06:43,720 Speaker 1: well a lot of people. I mean, if you keep 118 00:06:43,720 --> 00:06:45,840 Speaker 1: adding jobs, jobs at this rate, you're gonna get there. 119 00:06:45,839 --> 00:06:50,279 Speaker 1: I mean, just mathematically, but be interesting to see the 120 00:06:50,279 --> 00:06:53,440 Speaker 1: follow on of inflation with your your has the ivy hurt. 121 00:06:53,520 --> 00:06:54,880 Speaker 1: I mean, I like that you've got the I V 122 00:06:55,000 --> 00:06:58,080 Speaker 1: Poll next year. You're being medicated this morning. This is 123 00:06:58,080 --> 00:07:02,880 Speaker 1: not during our show, right, Peyton man is retiring officially today. Um, 124 00:07:02,880 --> 00:07:06,240 Speaker 1: but it's good. I think the best line, uh was 125 00:07:06,800 --> 00:07:08,280 Speaker 1: somebody who told me all the weekend It's good he 126 00:07:08,279 --> 00:07:10,280 Speaker 1: didn't signed with some other team just to play for 127 00:07:10,280 --> 00:07:13,640 Speaker 1: another year, because now he goes out with wasn't he 128 00:07:13,720 --> 00:07:16,880 Speaker 1: the greatest? Instead of isn't that? Sad? Moment of silence 129 00:07:16,920 --> 00:07:19,920 Speaker 1: as well for Dwight Evans, who did the same courageous 130 00:07:19,920 --> 00:07:23,480 Speaker 1: thing with the Boston Red Socks a few years ago. Peyton, 131 00:07:23,880 --> 00:07:26,240 Speaker 1: Mr McKee, for the many emails I've gotten. Yes, Mr 132 00:07:26,320 --> 00:07:29,560 Speaker 1: McKee is generally sedated as we go through the show 133 00:07:29,600 --> 00:07:33,240 Speaker 1: as he waits for the retirement of his Peyton Manning 134 00:07:33,280 --> 00:07:36,680 Speaker 1: Future seven down Futures negative thirty seven. We have a 135 00:07:36,760 --> 00:07:39,720 Speaker 1: terrific book on the show today, From Silk to Silicon. 136 00:07:39,840 --> 00:07:42,920 Speaker 1: Jeff Carton will joined us in a bit. Bloomberg's Surveillance. 137 00:07:45,960 --> 00:07:48,600 Speaker 1: Bloomberg Avalance is brought to by land Rober Adventures. Yours 138 00:07:48,600 --> 00:07:50,640 Speaker 1: for the taking. Visit Landrover ChRI state dot Com for 139 00:07:50,640 --> 00:07:53,640 Speaker 1: special lease and financi offers. Land Rover above and be