00:00:02 Speaker 1: Bloomberg Audio Studios. Podcasts. Radio. 00:00:06 Speaker 2: News. 00:00:12 Speaker 3: This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. 00:00:27 Speaker 4: Across America and around the world, This important jobs report, of course, joining us now, the foundation of our coverage, Claudia Assam, chief economist, New Century Advisors. I love your opening line. You nailed it, as you always do, Claudia. The chairman saying in Jackson Hole that the labor market is stable. I was sitting there in the little bar off behind the grizzly bear, Claudia, you know the bar, at a table. A young kid from Kansas comes up, civil engineer, and he describes how all his friends are unemployed. Do we really have a stable job economy? 00:01:05 Speaker 5: So in the way that Morse is looking at the economy, certainly you can point to stability or balance, you know, jobs or creation is keeping up with a slowing labor force. But with that perspective you got at the bar in Jackson Hole, like that is a really important one. And it is one that we are going to be grappling with more and more. And in particular, we can see studies. The Dallas Fed had a great piece out this week looking at drilling down into entry-level jobs in Texas, looking at young graduates. 00:01:36 Speaker 4: I mean, you can see this. And this is not. 00:01:40 Speaker 6: I mean, I think the impact. 00:01:41 Speaker 5: Of AI, the disruption in the labor market, you know, that's where it's starting, but. 00:01:44 Speaker 1: That's not where this ends. 00:01:45 Speaker 5: So it certainly is something to pay attention to, even if it's not like the Fed. 00:01:50 Speaker 4: I got to get this in because Damien's got a bunch of questions. Dr. Sam, as simple as I can, there is not one single item my audience argues with me about more than fancy diploma people from the University of Michigan saying we're fully employed. Are we fully employed? I don't buy it for a minute. Oh, boy. 00:02:10 Speaker 5: I mean, you know, the full employment goal, like this is this is such a big one. And I think this is one where, you know, economists might differ from regular people or even from the people who coined the term full employment. And it's really not just about people who want jobs, having jobs. They need to be good jobs, too. And I think, you know, it's something to think about on a jobs day that's right before Labor Day. 00:02:32 Speaker 7: Right. 00:02:32 Speaker 5: We really do need to think about the quality of jobs. And there's a lot in the data that we get this morning that tells us about the quality of the jobs. And there's a lot in the conversation around AI that's really not about, will I have a job? 00:02:42 Speaker 4: It's like, will it be a good job? 00:02:44 Speaker 5: Will it be one that pays well and is fulfilling to have? So I think sometimes when we're arguing, it's because we're kind of talking past each other and looking at different parts of the data. But that really big picture conversation that maybe economists are not the ones to lead. is one that we really do need to be having, too, right now. 00:03:00 Speaker 6: Well, Dr. 00:03:01 Speaker 8: Sam, let's get a bit more granular with that. I mean, the data shows it's really manufacturing and construction. I mean, that's where the labor demand is coming from. It's all the service-oriented retail, hospitality, even healthcare, showing signs of softening here. Talk to us about what's going on underneath the surface. Is that because certain high-paying industries are getting dinged a little bit more than more traditional ones? I mean, what's going on here? 00:03:23 Speaker 5: Right, so I think the Beige Book this time had a lot of color that gets right to this question. I think this is a place where getting at some of the anecdotes and what's behind the different industry patterns is helpful. 00:03:35 Speaker 4: And some of it, I don't wanna like. 00:03:36 Speaker 5: Push everything through an AI lens, but there is an aspect of it that in the timing of the AI, like we're in the build out phase. Like the Beige Book is full of examples of construction, skilled trades, lots of demand, not being able to keep up with the demand for workers in those areas. And then, but at the same time, some of these, again, entry-level things that can be automated more easily, that's where some of the first pressure points are showing in less demand. So I think it's, you know, some of this is like tracing out the timing story. 00:04:07 Speaker 4: And we do know from. 00:04:08 Speaker 5: The AI build-out, like it may take a lot of jobs to build a data center. It doesn't take a lot of jobs to run a data center. 00:04:14 Speaker 9: Right. 00:04:14 Speaker 4: Claudius, please stay with us here. We're going to do the report and get right back to you before Amy Wu. Silverman, red and green in the screen, a nice lift to the market in the last 10 seconds as well. The VIX 14.20. Here's your yield markers into the report. Two-year yield, 4.33%. Ten-year yield, 4.75%. 30-year bond, a lower yield today, 5.23%. Again, commercial-free across America. Damien Sessar and Tom Keene. And just simply to say, the Joff Report for America. 00:04:50 Speaker 7: And with your breaking news on the payrolls numbers for August, the two-month payroll net revision data adds 55,000 jobs to the United States. Non-farm payrolls rising, therefore, month on month by 162,000. That is a, well, three times the estimate, 55,000. The unemployment rate, though, stays the same, 4.1%. The estimate had been for that to stay on hold. And indeed, that's where we are. So, S & P 500, E-mini futures this morning turn negative. They're down by two-tenths of 1%. 00:05:30 Speaker 9: So, this in. 00:05:30 Speaker 7: Breaking news, Treasuries tumbling after August job creation tops estimates. Remember, no markets We'll be trading on Monday. So important to understand the ramifications. That is your breaking news. 00:05:44 Speaker 10: The U.S. 00:05:45 Speaker 7: August non-farm payrolls data. Tom and Damien, what do you make of it? 00:05:49 Speaker 4: Karen, what I make of it is you did a very good job. You've never done the U.S. jobs report before. 00:05:54 Speaker 7: Not live and not out of New York. 00:05:57 Speaker 4: Let me do the market. Thank you, Caroline Hipker, so much. This is a wow report with wow market move. Equities move south as well. We don't have a VIX number yet. But in the yield space, we have a seismic move. Damien, I looked at the 10-year out to 4.80%. And it's just simply price down. price down and yield up. 00:06:18 Speaker 6: Well, I mean, it's the revision, right? 00:06:19 Speaker 8: I mean, we went from down $ 23, 000 last month to up $ 21, 000, and now we're up $ 162, 000. Tom, you asked for it. 00:06:25 Speaker 6: You get it. $ 100, 000 plus in non-farm payroll adds this. 00:06:29 Speaker 8: I mean, and look, you had some average hourly earnings data, the month-over-month acceleration of 0.3%. And the labor force participation rate, as we point out, higher. Still coming off the lows. 00:06:39 Speaker 4: Since I've had the flu, I'm not using my HP-12C. But my quick math is 217,000 positive on the non-farm payroll plus a two-month payroll revision as well. 00:06:52 Speaker 8: Shortened duration here. I mean, you don't want to be along the long end, I guess. I mean, the steepener should be working, one would think. I mean, we're going to ask Amy Wu-Silverman all about that. 00:06:59 Speaker 4: We'll get that. Right now, Dr. Sam with us as she digests some of the early data as well. Claudia, a fascinating report. Is there any value here to three-month moving averages now? Or is it such a cacophony that's not valuable? 00:07:16 Speaker 5: There's always value to the three-month moving average. I mean, I think, you know, that going to this, trying to smooth this out, not get too hung up on a month-to-month. And honestly, you know, we have seen for many months a lot of, like, kind of bouncing around a negative print to a positive print. And again, that's because the break-even is not that far from zero. So, like, we're going to keep having this above and below zero. I think this is where we're at to stay. But I will also say that, you know, this... Having the upside surprise this month after a downside surprise last month, this isn't just random noise. There was a really important piece of, you know, the K through 12 teachers and staff that shows up in state and local government education. That was a big decline last month. It also was part of the revisions and it reversed this month. And it is just an area that has a very strong seasonal trend. So I think there's a story to the noise. I don't want to just look at this data and be like, wow, this is horrible. 00:08:13 Speaker 4: Are Fed presidents and governors, Dr. Sam, are they as confused as Puffy the Cat? He's pretty sharp. 00:08:22 Speaker 5: You know, I think what the what I think the Fed will, you know, it is kind of a headline pull out of this. I mean, payrolls have been difficult to read for some time because we've got so many shifts in the labor supply that they've really kind of downweighted that in terms of a strong cyclical signal. The one that they still look a lot to the unemployment rate. And wow, I mean, that thing is is really stable, has been low and stable. And that is for them at least a a really important signal of like, do they need to, you know, or is there something here for them to step in and a problem? And it's very, very low and stable. So I think that, and that's probably where their attention will continue to focus. And the payrolls are going to just be something to dig into the details, understand it and look at the trends. 00:09:05 Speaker 6: I mean, maybe even. 00:09:05 Speaker 5: More than a three month smooth on that, like really just kind of smooth out this bouncy noise. 00:09:10 Speaker 11: Dr. 00:09:10 Speaker 6: Sam, the U.S. 00:09:11 Speaker 8: Treasury yield curve is flattening pretty aggressively here. I guess that means that markets are starting to price in a higher probability of a hike here in September, no? 00:09:21 Speaker 5: So I think we are going to go into the September meeting with really a coin flip. And I think that comes down to, for the Fed, they have some really tough decisions to make. In the messaging from Fed officials, I really haven't heard anybody pointing to the labor market as something that is decisive and what do they do next. It's really trying to interpret where inflation is and where it's headed. I think the labor market in today's report showing the strength in payrolls, this is just not– the downside risks just aren't there in kind of the Fed sense of like what they should do in. 00:09:53 Speaker 4: A couple weeks. 00:09:56 Speaker 5: But it's going to be a tough call for them. 00:09:59 Speaker 12: It really is. 00:10:00 Speaker 4: You get two-year yields, seven basis points higher yield, a 4.41% on the two-year yield. Is this report Waller-friendly? Again, Waller yesterday was not.... 00:10:17 Speaker 5: You know, paying much attention to the labor market. I mean, again, it's consistent with Waller. It's consistent with what Warr said about the labor market. The labor market is stable. 00:10:26 Speaker 11: Stop, stop. 00:10:26 Speaker 4: What do you think this is, Labor Day on my main third Jenny cream ale? It can't be consistent for both of them. Who's this report going to fill it for, Waller or Washington? 00:10:39 Speaker 5: This, I think, you know, the report we got from the labor market, I think the market is pricing this right. This goes in the favor of the Fed officials who think it's time to start hiking. Because, you know, a risk of doing the rate hikes to bring inflation down is you take away jobs that you didn't have to take away because inflation was going to get better. If the labor market looks pretty solid... then okay, maybe work on the inflation piece. So I think this does, today's report probably does fit more on those who are looking to potentially hike in a couple weeks. 00:11:10 Speaker 4: One final question. We've got to go. Amy Silverman's people are upset we're not getting to her. Claudia, Puffy the cat. Does Puffy like cold lobster roll or hot lobster roll? 00:11:20 Speaker 5: We do not let her have lobster again. That is not a habit we want to start. 00:11:24 Speaker 6: It's hot lobster roll, Tom. It's Connecticut style. 00:11:27 Speaker 4: Connecticut. And that's Why don't you bring in our next guest? 00:11:31 Speaker 6: Amy Wu-Silverman, Managing Director, Head of Derivatives Strategy at RBC Capital Markets. Thank you for joining us in the studio here today. The VIX is at 13. I mean, I don't know where the VIX is now. I got to check last. 00:11:41 Speaker 8: But I mean, it was pretty, I mean, look, it's pretty low coming into this Labor Day weekend. What are your thoughts on volatility levels? I mean, what should investors be thinking about here? 00:11:50 Speaker 11: Yeah, it's interesting because I'll take this off. We'll echo here. You know, what's interesting is coming into this, obviously, a lot of complacency and volatility. And especially with the report that we just had, it was interesting that at the money break evens on NFP were basically average. So, you know, you kind of look historically at these break evens and it was sort of pricing a nothing burger, which to some degree was. a little complacent. But the options market was pricing a little bit more for CPI, which is ahead. And I'm interested to see how this reprices, but VIX has been very resilient. I wouldn't be surprised even with how things move in terms of rates pricing, your VIX still floating around that 15, 16 handle. 00:12:32 Speaker 8: So when you look at the volatility market, obviously equities are a big part of that. But, you know, I'd like to call your attention to the FX market and what we're seeing in dollar yen here, because I'm looking at that smile. 00:12:40 Speaker 6: I'm looking at that skew. You guys are hammering the call skew. 00:12:42 Speaker 8: You guys seem a little bit more, at least via options, you know, a little bit more comfortable getting along the yen at these levels. 00:12:48 Speaker 6: Are you seeing the same thing? Are you seeing demand for the Japanese yen here? 00:12:52 Speaker 11: So here's what I'll say. When we look cross-asset, so I primarily focus on equity volatility. But when you look cross-asset, currency vol at rates vol, so move versus VIX or see VIX versus VIX, what I'll tell you is all these cross-asset vol levels have already started to bleed up. So just think about either of these cross-assets versus VIX vol. We're like talking 99th percentile. Why has it seen a bleed in equity vol? One, because the AI trades heavy and strong. Earnings were great. And then two, you've got really high dispersion, right? Like people have not left the equity market. They've just rotated within it. And that's keeping us pretty solid, pretty low VIX levels. 00:13:32 Speaker 4: Amy with Silverman with us here. Thrilled to have her with RBC this morning. Coming up, Christina Katmany of Invesco is, well, it's Labor Day. It's a point where people set up for Q4 to get to the February boni. Is Wall Street participating in this enthusiasm thing? in the market? I get IB's good, I guess, from Damien, private credit's good, et cetera, but is Wall Street in the markets right now or they just get whipsawed so much they can't get the week started? 00:14:03 Speaker 11: I'd say when, if you kind of think back at this point, six weeks ago during that big momentum drawdown, Tom, people had kind of gotten cleaned out and were relevering. So, so sort of like clean positioning, going into earnings, people really came back in with really good earnings numbers. I would say yes. And the second thing I would say is, you know, you're kind of getting to this seasonal time where it's a little like want, want, we had great earnings, but now all we have are like macro catalysts. Seasonally, this is a time when VIX does rise, but I think we're going to get a surprise this time in the sense that you have had heavy rotation, but no one's really taken money off and no one's hedging either. So people are very involved. And when you have that, and perhaps you get a surprise on something like... You know, September FOMC, I think that's something that could pick up volatility a little bit more than usual during this time of the month. 00:14:52 Speaker 8: Well, then, Amy, let's shift back to the equity market. I mean, taking a factor-based approach, you know, one factor we look at a lot here is momentum. I look at an EMFX. It's performed really, really well. If you put it in the context of a larger portfolio, it becomes a volatility dampener. Talk to us about you seeing momentum, a big shift there on the equity side now. 00:15:08 Speaker 11: Huge shift. I mean, multi-standard deviation shift in what momentum has done. You know, momentum is the thing that has been working. Winners have been winning. And we really had a drawdown in that. We had a reshifting. You know, I can tell you. when we just look at our trading desk level, a lot more interest in something like the software sector. So it's almost anti-momentum, right? Like February this year, you know, we couldn't stop talking about SaaSpocalypse and pencils down. No one wants to talk about anything with existential terminal value. Now people are like, hey, that software is looking pretty good. You know, let's sniff at that. 00:15:41 Speaker 4: So I'm talking to both of you. The Damien says they're naming Woo Silverman. The bottom line is if it's South, buy it. Fear of missing out. You know, if software is down, you load the boat because it's going to come back. Right, Damian? 00:15:54 Speaker 6: Well, I mean, there's a difference between winners keep winning and losers keep losing. 00:15:56 Speaker 13: Right. 00:15:57 Speaker 8: If you take your four look back windows, call it one month, three months, six months, one year, and you kind of take your equal weight and you vol adjust and do all the things that portfolio managers do. You're supposed to get this nice, smooth, upward sloping return. But in times like this, when things kind of go pear-shaped, we saw in March, right, where the markets got surprised. And you saw that kind of reversal sort of kick in. Momentum got crushed. 00:16:14 Speaker 4: Crushed. 00:16:15 Speaker 6: I mean, so this is the thing. Like, you have to be mindful of these kind of pockets. And you're right. This is September, guys. 00:16:20 Speaker 8: I mean, like, historically speaking, seasonally speaking, not a great month for just owning and holding and, you know, kind of putting your blinders on. 00:16:27 Speaker 4: So what's the enthusiasm? I mean, you go out with Laurie Calvasina. Talk about a frightening tandem out there. What's the mood out there, Amy? 00:16:36 Speaker 11: I'd still say it's pretty positive. And if you want to make your brain hurt even more, when you look at the definition of momentum, which is winners win, right, over some window, at some point, if the losers start winning, they're going to be your new momentum basket. It's just going to be a new basket of momentum that picks up. Again, it kind of makes your brain hurt, but that's why we're watching these subsectors really closely. 00:16:55 Speaker 6: And that's why the S & P equal weight is at almost an all-time. 00:16:57 Speaker 9: High, right? 00:16:57 Speaker 11: Exactly. And so the sentiment out there is still not too bad, not that much hedging and not interested in talking about it. 00:17:04 Speaker 4: Do you ask... But yields impinge on equity performance. If yields get high enough, I mean, it's so old school, it's boring. Do yields compete here? 00:17:16 Speaker 11: I think everyone has a psychological threshold they're looking at. It doesn't really make logical sense. But yeah, if we start getting those percentages going higher and higher, then I think some people get nervous. I'll tell you one big theme in our market, retail cohort, right? I don't think they're looking at these yields as much. I don't think they have this kind of old school, hey, when third year gets to X, then I got to pull on my equity. I don't hear that from them, no. 00:17:40 Speaker 4: Amy Silverman with us. We'll continue. RBC Capital Markets. Caroline's going to give us a business flash here in a bit. Christina Katman with Invesco as well. And then on to some really good conversations wrapped around the holiday. Markets pull back a little bit. Equity markets, I should say, with the VIX 14. 0.16, still can't get over that right now. And the yield space, it got seven basis point move in the two-year yield, 4.41%. With Amy Wu Silverman, Damien Sessor. 00:18:11 Speaker 8: So let's talk a bit, let's put our options hat here on. I mean, where do you see the most compelling parts of the market? I mean, is it in playing, I don't know, skew? Is it in playing, you know, the peakedness? I mean, what do you really like? If you have investors, is it cross-asset, you know, taking on spread risk with the asymmetry there relative to equity risk or vice versa? 00:18:28 Speaker 6: What are your clients? What's really interesting to you right now, Amy? 00:18:31 Speaker 11: So a few things. The first is my mantra these last few years has really been give what the market takes you. In the sense that if you get really, really bid call skew, use call spreads. Take advantage of that payout. If you're getting really, really inexpensive downside, think about those puts. It's about optionality at this point. So if you've made a decent amount of money and hedges are inexpensive. It's about that optionality of owning it. Yes, it hasn't worked in the sense that, you know, you've had a market that's continued to rip, but it's about where those payouts are really relatively juicy. You know, that's almost a credit lens when you think about it, but give what the market is giving you. 00:19:11 Speaker 4: For the Greek leverage that you just talked about here, how far out do you make those bets? Are you making a one month bet, three months bet? Are you like Taleb with your own 10 years? 00:19:23 Speaker 11: These are the events I'm watching for right now. FOMC, obviously, there's actually Israeli elections coming up and then midterms. I think that the middle one kind of gets forgotten, but those three things, when you think about the macro events in the next one to two months, can really shift your term structure and it can shift your correlation levels, which again, has been something that really hasn't moved. 00:19:43 Speaker 4: What an honor, Jackson Hole, to speak briefly with Jacob Frankel, the former governor of the Bank of Israel. And he said, America way underestimates the impact of the Israeli elections. 00:19:53 Speaker 6: Oh, the impact of the Israeli elections. I agree with you. 00:19:55 Speaker 4: Not me. He was heated. Dr. Frankel was heated. 00:19:58 Speaker 8: And I'll bet you, I mean, Amy, you're the first guest that I've interviewed, really, in the last few months that's even brought it up. So kudos to you. But there's also an election in Brazil coming up, too. So in emerging markets, I mean, do you see people trying. 00:20:08 Speaker 4: To— Wait, wait, wait. We've got to go. 00:20:10 Speaker 6: We've got to go. 00:20:11 Speaker 4: Amy just got here. Damien. 00:20:13 Speaker 6: She just got here. 00:20:13 Speaker 4: I know she just got here. We should interview her for an hour. 00:20:16 Speaker 13: God. 00:20:17 Speaker 4: Okay, can I just state that in your world, there's always another election? I mean, come on. I mean, does Thailand have an election? Amy, go away. Amy Wu Silverman, take the long weekend. I know calvacine is off all of September getting the kids back to school, but you know. Nice to see you. Amy Wu Silverman, RBC Capital. 00:20:39 Speaker 2: The best. 00:20:39 Speaker 4: At Markets. To save the show, from the interactive broker studios of Bloomberg Business Flash, Caroline Hepker. 00:20:46 Speaker 9: Good morning, Tom and Damien. Thank you. 00:20:48 Speaker 7: So, let's just remind you around the jobs data that we broke live about 15, 16 minutes ago. 00:20:54 Speaker 9: The U.S. 00:20:54 Speaker 7: Unemployment rate holds steady at 4.1%, 162,000, blowout payrolls number. So, that actually beat all of the 76 forecasts. in the Bloomberg survey. Construction jobs picking up, though the sector is down on the year. Participation rate also ticks higher, 61.6% wages picking up too. And that means a rethink for traders now, ramping up bets on a Fed hike in September. What do we watch next? The CPI data next week, of course. No Treasuries trading on Monday for that US public holiday. Reaction in markets. US dollar is up. Looking at the Bloomberg Dollar Spot Index, gaining a quarter of 1%. Stock futures for the S & P 500 down a quarter of 1%. NASDAQ futures in the red. Dow Jones E-mini futures down by three-tenths, almost four-tenths of 1%. And in the Treasury markets, you've got two-year Treasury yields right now. up by seven basis points, 441. The 10-year yield is at 4.8%, up by three basis points. You've got some bear flattening, basically, in the markets. Nat gas prices are up 1.8%. WTI crude futures down 1%. That is your Bloomberg Business Flash. 00:22:06 Speaker 4: You're just killing it. It's Friday. That was almost subpar. You're killing it. Are you going to be able to go back and do a British data check? 00:22:18 Speaker 2: Yeah, absolutely. 00:22:19 Speaker 6: What is a normal data check like out of London? 00:22:22 Speaker 7: I mean, it's similar. It's just that we're watching the European markets, right? But obviously, so much flows from the news out of the U.S. 00:22:28 Speaker 9: And global markets. We're global. 00:22:29 Speaker 4: I got yelled at when I first came here for saying FTSE. The equity market's the. 00:22:34 Speaker 1: FTSE, right? 00:22:34 Speaker 4: FTSE, yeah. 00:22:35 Speaker 9: Thank you. Like playing FTSE under the table. 00:22:38 Speaker 4: OK. 00:22:38 Speaker 7: OK. 00:22:39 Speaker 2: Loony. 00:22:41 Speaker 4: Yeah, I get those. 00:22:44 Speaker 7: I can't tell you anything about the markets, Tom Key. 00:22:48 Speaker 4: Caroline Apker, thank you so much. And yes, we'll play. What's the band you want us to play? 00:22:55 Speaker 9: The last dinner party. 00:22:56 Speaker 4: The last dinner party. 00:22:56 Speaker 9: I'm trying to bring us, like, some modern bands. 00:22:59 Speaker 6: How sterile are you having your person? 00:23:01 Speaker 4: Yeah, like, you don't know who are you. You charge us to. 00:23:03 Speaker 6: Get your songs on. I never get to. They never let me. 00:23:06 Speaker 9: Oh, I'm privileged. Thank you. 00:23:08 Speaker 4: Christina Kemp many going, why am I doing this? Joining us now with Invesco. She always does. How's your summer been? At the desk in front of the Bloomberg terminal. Is it like you're making coupon and things are good or is it just been nuts? 00:23:24 Speaker 9: Nuts. 00:23:25 Speaker 14: Very non-Summer-like for sure. 00:23:27 Speaker 7: Okay. 00:23:27 Speaker 4: In what way has it been just like you've never seen? 00:23:30 Speaker 14: Well, I think we have a new Fed share, new leadership there. The whole market's trying to kind of grasp like, What is communication? How do we interpret this? We've had pending elections, midterms coming up. I think you obviously brought up the Brazil election. Emerging markets have been choppy. 00:23:46 Speaker 1: On again, off again. 00:23:49 Speaker 4: On again, off again. 00:23:50 Speaker 14: Situation in the Middle East. I mean, it's just been nonstop. 00:23:54 Speaker 8: All right, well, let's talk about the intervention, right? And all the things we saw with Besson in the backup to that. My mind goes to a different place, right? Japan has been the currency that investors writ large, risk managers have used to fund their exposure in other places. Now you see a lot of that being taken off the books. 00:24:08 Speaker 4: Where do you go? 00:24:10 Speaker 10: As a funder? 00:24:10 Speaker 6: As a funder for a funding currency. Is that Swiss franc? 00:24:13 Speaker 8: I mean, because my concern is many a time in the past, if we've seen the S & P really, really surprise the markets. And if you start to see, especially in Europe, I mean, Christine, you can speak to this, I mean, look, the potential for some of these low-yielders to surprise the market, to me, seems pretty rich. And so I'm just curious to hear your thoughts, too. Do you get kind of nervous when you hear about some of these other central banks like the ECB ahead next week? 00:24:34 Speaker 14: Look, so I think from a funder perspective, we've talked about this for a long time, that I think the Asian currencies are the most just out of whack from a valuation perspective. So- This, I think, we sit here with knowing that the yen is priced at the wrong level. And I think some of the follow-on from the initial intervention, coordinated intervention from the MOF and the Treasury, then the follow-on was a little disappointing. 00:24:58 Speaker 6: But there. 00:24:59 Speaker 14: There is going to be movement. I think it's hard to kind of pinpoint what the timing is. The BOJ should be going in September. But still, even sitting at 155, the yen is wildly at the wrong level. 00:25:11 Speaker 4: I want to explain to our folks across the country and worldwide the way you choose to listen to us. This is magic what you're hearing. You're hearing two adults. and the international bond market talking. Christina Katmany and Damien Sasso are just grizzled pros at this. I understood about half of it. Caroline Hapker understood the other half. But the answer is, this is like magic. Give one more question, because I've got to go back to China. 00:25:37 Speaker 6: The U.S. 00:25:38 Speaker 8: Just added 162,000 jobs. I mean, does this give the Fed leeway to hike in September? I mean, I think it does, right? 00:25:44 Speaker 14: I think so. And I think, again, we started talking about the Fed in this communication flip-flopping back and forth. And it feels like the messaging was very different from June to July to Jackson Hole. And I think coming out of Jackson Hole, that was a very hawkish message. And I think it left it on the data to hold them back. Obviously, Waller's comments yesterday said, everything lies on CPI print next week. It's hard to be, it's frustrating to be back in a point that we're hinged on one data point. But I think the market has a very hard time if they don't follow through and deliver a hike. And you go back to what we talked about, about Besson's comments in the long end, which is a Japan situation and a US. But I think the long end of the bond market has a real issue if they don't. 00:26:26 Speaker 4: Right. How do you and Invesco deal with the odd boom economy nominal GDP we have? inflation loaded, let's say, but also a real GDP loaded, 162,000 jobs. How do you structure a bond portfolio knowing nominal has to come down, but you don't know how? 00:26:50 Speaker 14: Nominal yields have to come down? No, nominal GDP has to come down. Look, so I think you look at, this is still, if we look at global bond markets, generally a market that we want to be shorter duration, shorter duration versus benchmarks. I don't really want to own duration out the curve, even at these levels. And I know people have gotten excited about all in yields and the level of yields or like coupons of hyperscalers. There is a flood of supply, especially out the curve that is coming to global bond markets. And there is indigestion happening and we have fiscal concerns and we don't have kind of a lot of, certainly in the U.S., the U.S., being the U.S. market that it is, kind of has this pass that people aren't concerned about the level of kind of debt outstanding. I think at some point that comes and takes its bite. 00:27:39 Speaker 6: Crowding out, Christine, I couldn't agree with you more. It is certainly a risk. 00:27:41 Speaker 8: I mean, we know that this is all about finding a clearing price for bonds, especially those at the long end. But, you know, for me, I love the fact that you're still long and strong EM local currency debt. Talk to us a little bit about your basis for that position. I mean, obviously, we've seen the dollar off, you know what, round about one and a half percent this year. Is this more of a currency play or do you see something deeper going on? 00:28:01 Speaker 9: I think it's both. 00:28:02 Speaker 14: I think the, again, 2025 felt like a clear weaker dollar story. This year has been a bit more challenged with the cross currents, but it still, I think, is a place where there's value in EM carry and some of the high yielders from an FX perspective. And then if you look at some of the country specific, like Brazil with the election coming up, you've it's traded poorly this year. But we do think that there's value of just like the overall level of high yield and a reprice. And you've started to see some movement in the polls there with expectations around Bolsonaro. But three weeks ago, you were pricing a very consensus that Lula takes it away. So the question is, this would be Lula 4. How much worse can the bond market really price when you're already sitting with yields at 14.5%? 00:28:50 Speaker 6: Caroline, it's just unbelievable. 00:28:54 Speaker 4: They're looking at the Brazilian election, and next week it'll be the Peruvian election. 00:28:59 Speaker 8: Only 225 big cuts priced into the DI curve in Brazil right now. I mean, you know, go figure. 00:29:04 Speaker 4: Christina Katmany, thank you so much. With Invesco.... 00:29:09 Speaker 10: Stay with us. More from Bloomberg Surveillance coming up after this. 00:29:20 Speaker 3: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. 00:29:26 Speaker 1: Eastern. 00:29:27 Speaker 3: Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. 00:29:31 Speaker 1: Or watch us live on YouTube. 00:29:33 Speaker 4: Okay, here's the quote of the moment for the week for the zeitgeist. This is sophisticated. Lucy of the Peanuts comic strip. We'll pull out the football once again, once Trump is out of office. Joining us now, the Charles Schultz of Energy Academics, Ed Herz, with us. You have driven our analysis of Venezuela, their heavy oil, the madness of the expense, etc., etc. What's the number one thing you'd tell the president right now? 00:30:04 Speaker 2: You know, this is not a deal. Easily, Rodriguez, the interim acting president, however you look at it, understands that her boss was taken out at gunpoint. And she can be taken out at gunpoint. And so anything they can do to accommodate the United States right now, they're going to do. They don't care. They know that Trump is a lame duck. And if they get through the next two and a half years and they get some investment in, which Venezuela desperately needs. 00:30:33 Speaker 4: What's it mean for Chevron? 00:30:35 Speaker 2: Chevron is going to continue to operate there. They've got two, three hundred thousand barrels a day of production. They can extend it a little bit. Keep in mind, of course, China's there. China has a concession on four billion barrels of so-called reserves. We don't know what those numbers are. Chevron's got a lot of issues they have to deal with here in the U.S. Their purchase of Noble has brought them a huge bunch of liabilities, back office with ownership issues that they really haven't dealt with yet. 00:31:08 Speaker 6: You know, the U.S. 00:31:08 Speaker 8: Government just acquired a 35 percent stake in Betancourt's North American Blue Energy Partners. 00:31:14 Speaker 6: So they're actually purchasing oil fields in Venezuela now. 00:31:17 Speaker 2: Right. 00:31:17 Speaker 8: So, I mean, so this is going beyond, you know, just, you know, in word only, so to speak. So talk to us a little bit about what this means for all that Chinese debt you rightly point out is owed to them. I mean, what happens to all these barrels? I mean, when does China get paid? Where do they stand in the capital stock? 00:31:33 Speaker 2: I think China stands behind Exxon, who is still waiting to be paid for the second or third expropriation they had in Venezuela. The paper is only as good as the paper it's written on. 00:31:45 Speaker 6: Interesting. Interesting. 00:31:46 Speaker 8: And then talk to us a little bit about Venezuela cargos. I mean, are they really accelerating? I mean, are we seeing real evidence that oil is coming online at a pace that the markets are pricing in right now? 00:31:56 Speaker 2: No, not at all. It's marginal. We had a bunch of oil bottled up with the sanctions. They couldn't take it to market. And a lot of the Venezuelan crude is really the heavy asphalt stuff. It's difficult to get into the market. We have a few refineries left on the Gulf Coast that can handle it. 00:32:13 Speaker 8: You know, you rightly point out that there just hasn't been, despite the fact that I think the energy sector and the S & P is up 50% year to date. Despite all of that, we're not seeing deals in the energy patch. We're not seeing M & A. We're not seeing as much activity as one would have otherwise thought. Is that because yields are going up and funding costs are becoming too prohibitive? Or is there something else going on? 00:32:30 Speaker 2: There's some hinky stuff going on. That's an oil field term. 00:32:34 Speaker 11: What? 00:32:35 Speaker 2: Hinky. 00:32:36 Speaker 4: Can you say that at the University of Houston without losing tenure? 00:32:40 Speaker 2: I can say a lot of things at the University of Houston without losing tenure. I work in the oil patch, too. And, you know, for example. 00:32:47 Speaker 4: He looks like a landman. 00:32:49 Speaker 6: He does look like a little landman. 00:32:51 Speaker 2: Here we are, you know, 25 years following the collapse of Enron, and this is where it was going. Yeah, EOG Resources is a crack technical team. They can pull oil out of a turnip. The problem is they're really loosey-goosey and cavalier about the ownership, not for the shareholders, but for the mineral owners. And in some of the basins where they operate, they can't tell you, and they've admitted in court, they can't tell you how much they owe the owners, mineral owners. That's the United States government. That's state government. That's ranchers. They've got a huge problem. They can't pass a due diligence. 00:33:27 Speaker 8: I mean, Ed, first of all, let me begin by saying both Tom and I think that Billy Bob Thornton is very, very handsome. But outside of that, I'd just like to focus on Russia, all the oil that's been taken offline. I mean, is it really impacting the market? Is that evident yet in not only the prices of WTI and Brent, but in products, NatGas, heating oil, Arbob, all of that stuff? 00:33:46 Speaker 2: The Times has a piece today about the cost of diesel being up. And Bloomberg has a piece about the cost of LNG in Bangladesh, $ 28 per human BTU. That's the equivalent of $ 168 a barrel for diesel, roughly. And so, you know, Qatar being offline has cost everybody a lot of money. It's a lot of pressure on the diesel market. 00:34:08 Speaker 4: From the University of Houston, Ed Herz with us. Just an encyclopedia. First quote on the Venezuela up where we've seen the last... a week or so with him. She's been to Aberdeen. She's been out there on the rigs. Caroline Hepker with us from London with Professor Herz. 00:34:24 Speaker 7: This is a running joke, isn't it? I'm the correspondent of every different issue. 00:34:29 Speaker 4: No, she's figured out the plot. 00:34:30 Speaker 7: I know. 00:34:31 Speaker 4: She can stay. 00:34:33 Speaker 7: I want to question you a little bit about the North Sea. I mean, the UK government's under pressure to open up more drilling in the North Sea. 00:34:41 Speaker 9: It's a political issue. Let's leave that aside. 00:34:43 Speaker 7: Does it make any difference to extract more from a kind of dying North Sea oil field? 00:34:48 Speaker 9: I mean, Norway is. Your view on that? 00:34:51 Speaker 7: Does it help with the energy crisis in the UK and Europe? 00:34:55 Speaker 2: It certainly can. It depends on how quickly it can come back online. As we know, the North Sea production is off, what, three to four million barrels a day over the last 15 years. Brent is just a fiction as an index. I mean, it includes WTI as part of its basis for the calculation. We know that the UK has opened up onshore drilling and is working to do that. The North Sea is an importing market now. It used to be an exporting Yeah. 00:35:26 Speaker 4: Yeah. 00:35:26 Speaker 7: Miata Fanbuda is the UK Energy Minister. Very interesting to see what she has to say on those signing off on more deals. 00:35:34 Speaker 6: Damian, get one more in here. And I'd love to bring it backstage. 00:35:37 Speaker 8: I'd love to bring it backstage right here. It's 2026 in 2001, Enron. And, you know, we're celebrating the 25 year anniversary of that crisis. Are there any parallels between what happened then and what you're seeing now in the financial market? 00:35:51 Speaker 2: Yes. So in 1996, Enron began these off-balance sheet transactions. Essentially, as we see in almost every corporate failure Ponzi scheme that comes apart, they began selling assets to themselves at the end of a period of time. 00:36:06 Speaker 6: Circular financing. 00:36:08 Speaker 12: Absolutely. 00:36:08 Speaker 2: One of the things we're seeing in the oil patch are private equity groups trading assets amongst each other. I mean, one of them, NCAP, just bought into a field that they had been part of 10 years ago, 12 years ago, how can they add value? What these guys are becoming essentially are leveraged long-only commodities funds. 00:36:29 Speaker 4: I've got time for one more question, Professor Hurst, as simple as I can. We're nearing $ 6 a gallon in America on diesel. In London, it's $ 9 a gallon equivalent with the taxes and all. There's a lot of gloom about that. Are you worried about the microeconomics of these high diesel prices? 00:36:49 Speaker 2: It's going to continue. The SPR releases are coming to an end, no matter what the president says. The IEA releases are coming to an end. If China goes back and adds back its 5 million barrels a day of imports, we've got a real issue of prices that will continue through the rest of the year. 00:37:08 Speaker 4: This has been wonderful. Thank you so much. 00:37:10 Speaker 6: So good. 00:37:11 Speaker 4: National impact here on the issues over Venezuela. We'll do this again. Honored that he could join us. He's an energy fellow. That means he gets good football tickets and basketball. 00:37:21 Speaker 6: Yeah, exactly. 00:37:22 Speaker 4: March Madness tickets. At the University of Houston, Ed Hurst with us. Stay with us. 00:37:28 Speaker 10: More from Bloomberg Surveillance coming up after this. 00:37:39 Speaker 3: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. 00:37:44 Speaker 1: Eastern. 00:37:45 Speaker 3: Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. 00:37:51 Speaker 4: I love what Eric and the interns have done with the 9 o'clock hour. Oh, yeah? It's just great. Nicole from ZipRecruiter is totally twisted. More twisted is Leah Taniguchi joining us now this morning, I should say, from Bullhorn because it's really, really different. I should point, she's out of Simmons College. Graham McKean went to Simmons College like 400 million years ago when Isabel Gardner was there. Good morning, Boston. Leah, I love, love having you in. And you've got the sentence here that I don't hear from the fancy economists. Jobs across all education levels are down negative 13%. year over year. That's the way my audience feels. Yeah. 00:38:34 Speaker 7: Yeah. 00:38:34 Speaker 13: And that's what we're seeing in our job market trends. What we do is we track job openings across millions of us job boards, and we are seeing that the job openings are down everywhere, except in construction. Construction is the one outlier job openings. There are up about 10% year over year. And I think that aligns with what we saw in the jobs report today. These are all about AI data center construction. The manufacturing jobs are all around machinery. 00:39:02 Speaker 6: And metal fabrication. 00:39:03 Speaker 13: The construction jobs are all about AI data center bills. 00:39:07 Speaker 4: So what's the unemployment rate x AI malarkey? 00:39:12 Speaker 13: You know, I don't know that I can give you a precise estimate, but I'd say it's probably. 00:39:16 Speaker 1: It's Bloomberg surveillance. 00:39:17 Speaker 4: You don't have to be precise. Make up a number. 00:39:19 Speaker 13: It's probably about, you know, 5% to 10% higher than it is in the reported number, if I were to take a guess. And, you know, it's funny because we keep seeing this real diversions between skilled trade job openings and white collar job openings. Skilled trade openings are up more than 5% year over year, whereas white collar job openings are down about 3%. A friend of mine recently wrote a really great tongue-in-cheek essay that was entitled, My Father Toiled Away as a Lawyer So I Could Be a Plumber. And there's definitely some truth in that. You know, if you're guiding young people these days, there's a lot of opportunity still on the skilled trades front. 00:39:55 Speaker 6: And I don't think it's going to change anytime soon. 00:39:57 Speaker 8: Now, we know some of the tailwinds for the market last year were healthcare, right? And some of these other service-oriented sectors. Talk to us a little bit. I mean, we obviously saw the bounce back in leisure and whatnot. Talk to us a little bit about, you know, some of those skilled sectors of the workforce. You know, are you seeing... things just deteriorate even further? Are we sort of leveling out? Do you see promise for things to turn and get better? What are your thoughts? 00:40:16 Speaker 13: Well, I'm really hoping that I see promise for things to turn and get better because I just dropped my youngest off at college for the first day yesterday, and I'm really hoping in four years when he gets out, there are some jobs for him. 00:40:26 Speaker 4: Oh, come on. The suspense is too much. We're going to go back here, Tom. 00:40:29 Speaker 8: It's invariable. We go back to our children getting jobs so we can get them off the payroll. But please, Leah, continue. 00:40:34 Speaker 4: Which school? 00:40:35 Speaker 9: Skidmore. I dropped him off in Skidmore. 00:40:37 Speaker 4: A real school. 00:40:38 Speaker 6: A real school. 00:40:39 Speaker 4: Do you know that Emily, who founded this show with me, The only reason this show worked is she was so twisted and destroyed by going to Skidmore that she made it work. That's a cool school. 00:40:52 Speaker 6: It is a good school. 00:40:52 Speaker 13: And Saratoga Springs is fantastic. I had a great time there yesterday. I'm looking forward to lots of fun parents weekends up there. 00:40:59 Speaker 4: Oh, this is the painful mom that won't go away. So, yeah. 00:41:04 Speaker 8: So, I mean, look, obviously we talk about inflation. You know, when we have to talk about, you know, unemployment, we talk about payrolls. The flip side of that coin is talking about inflation. 00:41:12 Speaker 7: Yeah. 00:41:12 Speaker 6: Talk to me about, you know, what these salaries are like, you know, what the income is like. 00:41:16 Speaker 8: I mean, wage pressures and what have you. I mean, talk to us about what you're seeing on that element. 00:41:21 Speaker 13: Yeah, I mean, we're not really seeing wages keeping up with inflation. And, you know, the pain is real when people say there's an affordability crisis and they feel that. We're not seeing the wages keeping up except in, again, some of these skilled trade areas where we really are, you know, we are a company that makes staffing software. So we help staffing firms keep track of clients' jobs and payroll and time card records in the system. And we're definitely seeing, you know, margins on the staffing side improving in those skilled trades. But everything else is a little bit flat. And, you know, we saw that in the jobs report, right? Like finance jobs are down, insurance, IT. 00:42:00 Speaker 4: To Damien's good question, and this is what I hear from family members and such, the kids seem to have a completely twisted idea of what entry-level pay is. I mean, help me with this, because my kids, I think, are pretty good. Damien's are out of control. But if I'm not making $ 140, 000 day one, I'm a failure. Where did this come from? 00:42:24 Speaker 13: I don't know, because I feel like my kids have, maybe we've been too good to them. Maybe we've created a lifestyle expectation for them. 00:42:30 Speaker 4: It's your fault, but tell me. Seriously, if you're lecturing at Simmons, the framework these kids have of compensation is a comedy. How do we get there? 00:42:41 Speaker 13: They're not pricing in benefits. They don't understand any of what that's worth in the market. They don't understand how much they need to pay for insurance for healthcare. So they're just looking at the bottom line number. 00:42:54 Speaker 6: I think some of it is that. Absolutely. And then what's left over for discretion. I mean, really what it comes down to is our kids, at least my kids, they like to look at their discretionary income first and foremost and work backwards. The reality is in a real world, you've got to see what's left over and then you have that to spend. And so, you know, you're right. 00:43:10 Speaker 8: Once you pay for insurance and your mortgages and everything else, there's really not. 00:43:14 Speaker 6: Much left, is there? 00:43:15 Speaker 4: Get one more in here with Leah. 00:43:17 Speaker 8: So, Leah, I mean, look, you know, we've just had this payroll print, obviously my head. And I think the rest of the market now is looking ahead to next week's inflation print. 00:43:23 Speaker 4: Right. 00:43:24 Speaker 8: So, you know, as as you look ahead to that, you know, what are you looking for? I mean, are you going to kind of differentiate between headline and core? Are you going to be looking at shelter costs and what have you? Are you going to be looking at wages and the impact there? I mean, what do you really honed in on? 00:43:37 Speaker 13: I've been thinking a lot lately about energy costs because between the war and inflation still keeping those costs really high and the tremendous need for energy from AI data center construction, I'm really interested in what happens to energy costs and what that does to the seemingly completely inelastic spending that they have on the AI data center front, as well as what the spillover might be on the manufacturing side where they also are going to be seeing the pressure of higher energy costs. 00:44:06 Speaker 4: Don't you be up at Skidmore every single weekend. 00:44:10 Speaker 13: Absolutely not. 00:44:11 Speaker 4: The dean will be on the phone. 00:44:12 Speaker 13: I'm looking forward to being an empty nester. I'm feeling like I want to lean into that. 00:44:17 Speaker 6: A Connecticut lobster roll, right? A hot lobster roll over cold? Yeah, warm. 00:44:21 Speaker 2: Warm. 00:44:21 Speaker 6: Warm with butter. Here we go, Tom. 00:44:22 Speaker 2: Here we are. 00:44:23 Speaker 6: Thank you. You're welcome back. 00:44:25 Speaker 4: Next. I can't even talk. I can't get there. It's un-American. Leah Taniguchi, thank you so much. Head of Cold Lobster Rules at Bullhorn. Greatly appreciate it this morning. 00:44:37 Speaker 10: Stay with us. More from Bloomberg Surveillance coming up after this. 00:44:48 Speaker 3: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. 00:44:54 Speaker 1: Eastern. 00:44:55 Speaker 3: Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. 00:44:59 Speaker 1: Or watch us live on YouTube. 00:45:01 Speaker 4: Okay, Jonathan Fessatelli with us with Surge Development, which is like helping sports teams do this. We keep track of this for Alexis Christophorus. Four rows back behind the Knicks. Opening night, 76ers, $ 88, 000. Two seats. Why did you bring in the guy? It's his fault. 00:45:23 Speaker 6: That's not true. So here's the thing. 00:45:24 Speaker 8: John Fasciatelli, the chairman and founder of Surge, which, you know, by the way, John used to be the head of real estate for Harris Blitzer Sport and Entertainment. I'm talking, you know, the Devils, the Sixers, you know, all of the mixed-use real estate, which goes around. This is big business, Tom. This is driving a lot of the SASB, commercial real estate finance market. 00:45:41 Speaker 6: We talked about that earlier. 00:45:42 Speaker 8: Talk to us about this evolution that we've seen, John. into the mixed-use play. I mean, the focus shifting to one scalable, exportable development platform. Talk to us about what is keeping you busy in the sports real estate market today. 00:45:56 Speaker 12: Oh, it's hot. It's very hot. This is a $ 1 trillion global industry. 00:46:03 Speaker 8: And it's moved on from Battery Atlanta and Hollywood Park to, I mean, Bloomberg. I mean, we own the Orioles, right? There's a lot of activity going on in Inner Harbor. 00:46:11 Speaker 6: Talk to us a. 00:46:16 Speaker 8: Talk to us about some of the projects that are out there in the U.S. and obviously internationally. I know you have plans to. 00:46:22 Speaker 12: Yeah, this is a global phenomenon. I mean, what we're seeing is this is a derivative of kind of AI and AI investment. If you think about where productivity is headed, if you prognosticate shorter work weeks, etc. People are going to need something else to fill the void. 00:46:46 Speaker 6: Leisure and entertainment. 00:46:47 Speaker 12: Leisure and entertainment experience. We're entering an experiential economy. 00:46:50 Speaker 4: It's like your world is booming right now. Am I right on that? 00:46:54 Speaker 12: If you talk about $ 88, 000 for a ticket, where we're seeing luxury, if you look at the growth in price of luxury goods, it's kind of flatlining along the lines of inflation. If you look at The cost of unique experience, it's up 1,000% over the last five years. 00:47:13 Speaker 4: What would you— and, you know, Damien's underselling it. You're hugely experienced. 00:47:18 Speaker 2: Unbelievable. 00:47:18 Speaker 4: What would you do with a U.S. Open now, tennis? Mrs. King's been out there like three days in a row, whatever, rooting on the Philippines. Okay. What would you do with the U.S. Open now? 00:47:29 Speaker 12: Look, what I'd say is that these venues, these experiences are drivers of foot traffic. And when people go, they want to have an experience. They want to come early. They want to leave late. They want restaurants. They want hospitality. 00:47:44 Speaker 4: They want honeydew. 00:47:45 Speaker 12: They want honeydews and more. But that ecosystem begets restaurants and retail, which then people want to live around, they want to work around. And as a result, you have the ultimate new anchor. 00:48:00 Speaker 8: Well, let's just tear up the script here, John. I mean, the driver in my mind for all of these franchises, trading hands, let's talk the Seattle Seahawks. Vinod Khosla, who just took on Sixth Sense and Carlisle as minority partners, they bought the Seattle Seahawks. 00:48:14 Speaker 6: Why? They bought it because of Lumen Field, didn't they? Because, I mean, Lumen Field, they. 00:48:18 Speaker 8: I mean, only 4% of the seat capacity is premium seating, Tom. They can blow that out and make a killing and improve their margins. I mean, isn't the real estate. 00:48:27 Speaker 6: One of the primary drivers for all this activity we're seeing in terms of record. 00:48:31 Speaker 12: Deal in sports? 00:48:34 Speaker 4: Absolutely. 00:48:35 Speaker 12: I mean, the secret is out. There's a real opportunity to develop around these stadiums. And as you see content increasing and the number of event couches going on, I mean, some of these arenas now, they can have three to five shows in a week, whether that's sports or concert. And so once that programming goes up, that foot traffic goes up. Once that foot traffic goes up, you can build around it. 00:48:57 Speaker 6: What about the level of, sorry. 00:48:59 Speaker 4: Jonathan Vasitelli with his Surgia development. We're going to come back with him. Just absolutely fascinating. Here, surveillance correction. The ticket price is at the Knicks. This is where Alexis is sitting. It's $ 88, 000 for two tickets. 00:49:12 Speaker 6: For two tickets. 00:49:13 Speaker 2: Not one ticket. 00:49:14 Speaker 6: Oh, okay. 00:49:15 Speaker 4: That makes it more reasonable. 00:49:16 Speaker 6: Exactly. 00:49:17 Speaker 3: $ 44, 206. 00:49:20 Speaker 4: Exactly to say. At least we're going to come back. Damian, I get so many questions on this. Just this absolute boom in sports entertainment. The markets ebbed away from the shock of that jobs report to get to the market opening. Looking at the Dow, she misses the footsie. Caroline Epker. 00:49:42 Speaker 9: Good morning. I'm Caroline Hepke. 00:49:43 Speaker 7: Let's look at the markets just beginning to trade here in the U.S. So, the S & P 500 at the moment down by a tenth, almost two-tenths of 1% this morning. So, after the unemployment figures that we had out this morning, the stronger than anticipated increase in U.S. jobs, which has been rippling through markets and has seen The dollar gaining this morning and yields moving quite aggressively, certainly on the two-year up four basis points. Now, it had seen a bigger increase in yields earlier, 438. Looking at those U.S. markets, we're actually trading down a little bit. Dow Jones also dropping two-tenths of 1%. NASDAQ is flat up at S & P 500. is at the moment down a tenth of 1%. So, looking at some of the individual stocks that are getting some attention, it looks like Oracle Corp and SanDisk are some of the biggest gainers this morning. Bottom of the league right now, and it is still early doors, I'll say. Lululemon Athletica down by 18%. They were dropping pre-market pretty heftily. Also, Equifax is down by 9.6% this morning. That's around. 00:50:56 Speaker 9: The U.S. 00:50:57 Speaker 7: Administration moving on that. So the S & P 500 at the moment is down by two-tenths of one percent. 00:51:02 Speaker 9: Tom, Damien. 00:51:03 Speaker 4: Caroline, thanks so much. Damien says we're right now with Jonathan Fasatelli. 00:51:07 Speaker 8: Well, John, I know you've done a lot of work internationally. And I mean, we just had the World Cup here in the U.S. And it was a huge, huge success by any metric, you know. And for me, when I define success, it means we had a lot of foreigners who came to New York and Boston and wherever else and had a really, really, really good time. And, you know, if you look at Qatar, which was the last World Cup four years ago, one of the things I heard about Qatar was There. 00:51:25 Speaker 6: Was just nothing to do outside of going to the game day matches. 00:51:28 Speaker 8: So, you know, do you believe, and in your meetings, obviously, with team owners and governments and what have you, that internationally people are coming to the realization that this mixed-use play is exactly. 00:51:44 Speaker 6: What their focus should be on? I mean, whereas they weren't before. 00:51:47 Speaker 4: Absolutely. 00:51:48 Speaker 12: To build a stadium is a huge investment. And I think folks now realize that when thinking about that investment, they have to think about how they build the ecosystem around it. And so, in the U.S., it's about urban revitalization and capitalizing on the trend and growth in sport. I think globally, it's about new content distribution and new infrastructure. So, as you see Saudi prepare for the World Cup, these stadiums are centered in Giga projects, which have large-scale master plans around them. 00:52:21 Speaker 4: Are tax dollars still being used to build the stuffers? It becomes so private enterprise that we're not asking people to build anymore? 00:52:31 Speaker 12: These venues can support multiple billion dollars of investment of development around it. So we're talking about thousands of residential units, retail, office, even hotel. 00:52:41 Speaker 4: It takes a tech center out of the loop. 00:52:43 Speaker 12: Well, so what I'd say is that public private partnership is, is essential on multiple levels. I mean, for the size scale of the project, you have to think about how you integrate the community, how you, how you serve the community, et cetera. And, And look, there are situations where it makes sense for the city to invest along or the state or the sovereign to invest along. 00:53:05 Speaker 6: Yeah, exactly. 00:53:05 Speaker 4: It's the funding. Your resume is extraordinary, but it's got one gapping hole in it. What would you do with the New York Jets? 00:53:15 Speaker 12: Look, they had a great plan to come to the west side at one point not so long ago. That would have been pretty incredible. 00:53:23 Speaker 4: In my opinion, and I know he signs a paycheck. I totally agree with Mike on this. Massive missed opportunity. 00:53:31 Speaker 2: Massive. 00:53:31 Speaker 8: And same thing with the casinos, right? I mean, they gave the casino rights to everyone but Manhattan. Can you imagine a casino shining in the middle of Times Square? 00:53:39 Speaker 6: It would have been crazy. 00:53:40 Speaker 12: Look, I would say that leveraging sports and entertainment, leveraging experiential, leveraging live entertainment is important. is an essential catalyst for large-scale development and building communities of the future. 00:53:53 Speaker 4: Did UBS work out where Ledecky actually was on speaking tours with Irv Azov and all? 00:53:58 Speaker 12: It's still working out. 00:54:00 Speaker 4: It's working out. It's like phenomenal. Yeah, it's great. I mean, I saw Springsteen there, and I'm in the back of the arena. Ledecky puts me in the cheap seats. 00:54:09 Speaker 12: Of course. 00:54:09 Speaker 4: I mean, I could barely see Bruce. And I'm sitting there, Neil Lofkin's on stage, and the snare drum is like right there. That's how good all this has been. 00:54:18 Speaker 12: One of the nicest owners in the industry. 00:54:21 Speaker 4: Yeah, that's great. Jonathan, don't be strange. 00:54:23 Speaker 6: Thanks for coming in, John. John is a guest lecturer at my business course at Harvard. 00:54:27 Speaker 4: Are you doing this just for tickets? 00:54:28 Speaker 6: Yes, no, I'm doing it so he teaches my course at Harvard with me and it's a guest lecturer. 00:54:31 Speaker 4: Okay, very good. Damien Sinnesauer, thank you. Bloomberg Surveillance. 00:54:35 Speaker 3: This is the Bloomberg Surveillance Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, 7 to 10 a.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.