1
00:00:03,080 --> 00:00:07,640
Speaker 1: Broadcasting live to New York Bloomberg eleventh to Washington, d C,

2
00:00:07,880 --> 00:00:13,160
Speaker 1: Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco, Bloomberg

3
00:00:14,000 --> 00:00:17,600
Speaker 1: to the Country series XM Channel one nineties and around

4
00:00:17,640 --> 00:00:21,000
Speaker 1: the globe the Bloomberg Radio plus Apen Bloomberg got gone.

5
00:00:21,239 --> 00:00:25,360
Speaker 1: This is Bloomberg Surveillance. Good Morning Sunthary on Wall Street

6
00:00:25,400 --> 00:00:27,720
Speaker 1: him Michael McKee along with Tom Keene. It's kind of

7
00:00:27,720 --> 00:00:29,760
Speaker 1: a gray day in New York, and that seems to

8
00:00:29,800 --> 00:00:33,960
Speaker 1: be the mood in the markets today. Sp futures down

9
00:00:34,000 --> 00:00:37,920
Speaker 1: ten points, still half a percent. Uh. No great news

10
00:00:38,000 --> 00:00:41,360
Speaker 1: out there on the horizon either. Pacific Sunwear filing for

11
00:00:41,440 --> 00:00:45,560
Speaker 1: bankruptcy protection today, just the latest of those youth oriented

12
00:00:45,600 --> 00:00:49,600
Speaker 1: clothing chains to Falter List liabilities of as much as

13
00:00:49,640 --> 00:00:53,080
Speaker 1: five hundred million, assets of only one million. E MC

14
00:00:53,320 --> 00:00:55,880
Speaker 1: looking to sell its documentum business, part of a plan

15
00:00:56,000 --> 00:01:00,320
Speaker 1: with Dell to divest more than six billion dollars in sets.

16
00:01:00,360 --> 00:01:02,720
Speaker 1: It's all part of the takeover there. After years of

17
00:01:02,800 --> 00:01:06,960
Speaker 1: pursuit with three separately failed offers to buy the pesticide

18
00:01:07,000 --> 00:01:11,199
Speaker 1: maker Singenta, Monsanto says it no longer sees large scale

19
00:01:11,200 --> 00:01:15,959
Speaker 1: mergers and acquisitions as a strategy, and Valiant apparently is

20
00:01:15,959 --> 00:01:20,640
Speaker 1: out there in the borrowing markets. It is getting permission

21
00:01:21,200 --> 00:01:25,080
Speaker 1: for a credit line amendment. We don't have details on

22
00:01:25,720 --> 00:01:29,080
Speaker 1: what they want to do yet. Those headlines are just

23
00:01:29,200 --> 00:01:31,680
Speaker 1: coming up, but we will keep you informed as we

24
00:01:32,280 --> 00:01:36,720
Speaker 1: get more details. They also extended the deadline for filing

25
00:01:36,760 --> 00:01:41,040
Speaker 1: their ten K to May thirty feet. It was supposed

26
00:01:41,040 --> 00:01:43,440
Speaker 1: to be filed remember last July thirty one. Just this

27
00:01:43,520 --> 00:01:47,200
Speaker 1: week Valiant said they would file it by April twenty nine,

28
00:01:47,319 --> 00:01:50,760
Speaker 1: so it may be another extension. Now let's check in

29
00:01:50,840 --> 00:01:53,880
Speaker 1: with Michael Barr and get the latest world at National Headlines. Mike,

30
00:01:53,880 --> 00:01:56,000
Speaker 1: thank you very much. President Obama will head to the

31
00:01:56,080 --> 00:01:59,320
Speaker 1: University of Chicago Law School to argue his case for

32
00:01:59,440 --> 00:02:02,120
Speaker 1: why this and It should nominate his pick for U

33
00:02:02,200 --> 00:02:05,280
Speaker 1: s Preme Court Justice. A vote on Judge Mary Garland

34
00:02:05,320 --> 00:02:08,160
Speaker 1: has been stalled by Republican Senate leaders who are refusing

35
00:02:08,160 --> 00:02:11,480
Speaker 1: to hold Senate hearings while President Obama is in office.

36
00:02:11,800 --> 00:02:15,400
Speaker 1: More corporations like General Electric and PepsiCo are calling on

37
00:02:15,440 --> 00:02:19,079
Speaker 1: Mississippi Governor Phil Bryant to repeal a news state law

38
00:02:19,120 --> 00:02:22,680
Speaker 1: that would allow government employees, religious groups and private businesses

39
00:02:22,960 --> 00:02:26,280
Speaker 1: to cite religious beliefs against the same sex marriage to

40
00:02:26,360 --> 00:02:29,680
Speaker 1: deny services to people. A two day conference opens today

41
00:02:29,680 --> 00:02:31,920
Speaker 1: in Geneva that's billed as the first of its kind

42
00:02:31,960 --> 00:02:35,560
Speaker 1: to tackle violent extremism as part of you and Secretary

43
00:02:35,600 --> 00:02:39,080
Speaker 1: General Bonki Moon's efforts to address the root causes of terrorism.

44
00:02:39,320 --> 00:02:43,720
Speaker 1: Global News twenty four hours a day, powered by our journalists.

45
00:02:43,760 --> 00:02:46,799
Speaker 1: I'm Michael barn Mike, thank Can I call it time

46
00:02:46,800 --> 00:02:50,000
Speaker 1: now for the Bloomberg NBCY Sports update, John stash Ower,

47
00:02:50,040 --> 00:02:54,959
Speaker 1: the Houston Nastros will not go undefeated this year, go winless.

48
00:02:55,040 --> 00:02:57,120
Speaker 1: They're No. One and one and they were second in

49
00:02:57,160 --> 00:02:59,600
Speaker 1: the major leagues and runs scored last season. They've brought

50
00:02:59,600 --> 00:03:02,440
Speaker 1: back the same line up with one exception better second

51
00:03:02,480 --> 00:03:06,320
Speaker 1: Basement and Starling Castro two games in batting six five

52
00:03:06,520 --> 00:03:08,959
Speaker 1: seven runs better than four hit s, drove home five

53
00:03:09,000 --> 00:03:12,560
Speaker 1: and the Yanks sixteen to six, route of Houston Castro

54
00:03:12,639 --> 00:03:14,920
Speaker 1: belting one of three home runs marked to Sharon Carlos

55
00:03:14,919 --> 00:03:17,920
Speaker 1: Beltron hit the others Yanks and Astros in the series

56
00:03:17,919 --> 00:03:19,960
Speaker 1: four o'clock today, Garden last night, and Nick's beaten by

57
00:03:19,960 --> 00:03:23,280
Speaker 1: the playoff bound Hornets one eleven nineties seven, Kemba Walker

58
00:03:23,320 --> 00:03:26,919
Speaker 1: scored thirty four points. Netts Fellow, Washington one oh three,

59
00:03:26,919 --> 00:03:30,760
Speaker 1: Garden Tonight, Rangers and Islanders Eightiot Master's team off this

60
00:03:30,800 --> 00:03:33,680
Speaker 1: morning at Augusta National. No Tiger Woods, but there is

61
00:03:33,720 --> 00:03:36,840
Speaker 1: world number one Jason Day, Defendi Champ, Jordan Speed and

62
00:03:37,120 --> 00:03:40,040
Speaker 1: Rory McElroy seek and the only major he's yet to win.

63
00:03:40,560 --> 00:03:43,600
Speaker 1: Coverage to the opening round four fifteen today on Bloomberg

64
00:03:43,920 --> 00:03:47,520
Speaker 1: eleven three Bloomberg NBC Sports Update, I'm John stash Award.

65
00:03:48,720 --> 00:03:51,640
Speaker 1: Thank you, John as Uh. As we mentioned the market

66
00:03:51,640 --> 00:03:55,160
Speaker 1: shiller and now right after that valiant headline across they

67
00:03:55,440 --> 00:03:57,800
Speaker 1: took a leg lower. Uh. The SMP future is now

68
00:03:57,840 --> 00:04:00,480
Speaker 1: down by eleven point six tenths of April sent Owe

69
00:04:00,560 --> 00:04:04,240
Speaker 1: Muni futures are off by ninety points right now half

70
00:04:04,360 --> 00:04:08,200
Speaker 1: a percent. Will keep an eye out for what happens

71
00:04:08,280 --> 00:04:10,680
Speaker 1: in the futures markets as we go along here on

72
00:04:11,080 --> 00:04:19,760
Speaker 1: Bloomberg Radio. You're listening to Bloomberg Worldwide. This is Bloomberg

73
00:04:19,760 --> 00:04:23,680
Speaker 1: Surrounds Michael McKeen with Tom Keene. You see some movement

74
00:04:23,680 --> 00:04:26,159
Speaker 1: in the bond markets today with a tenure NOE yield

75
00:04:26,160 --> 00:04:29,159
Speaker 1: at one point seven three percent. The five year one

76
00:04:29,200 --> 00:04:31,600
Speaker 1: point one seven and at seventy two basis points for

77
00:04:31,680 --> 00:04:34,280
Speaker 1: your two year the whole yield curve moving lower, some

78
00:04:34,360 --> 00:04:36,920
Speaker 1: feeling that maybe they fed on hold for a little

79
00:04:36,920 --> 00:04:40,200
Speaker 1: bit longer, and some action in Europe with the German

80
00:04:40,320 --> 00:04:43,640
Speaker 1: curve moving lower. The German two year note now negative

81
00:04:44,000 --> 00:04:48,240
Speaker 1: fifty basis points. Time now for the Bloomberg n j

82
00:04:48,400 --> 00:04:50,320
Speaker 1: I T STEM Report, brought to you by New Jersey

83
00:04:50,440 --> 00:04:52,960
Speaker 1: Institute of Technology, investing more than a hundred and ten

84
00:04:53,000 --> 00:04:55,839
Speaker 1: million dollars a year and applied research to solve problems

85
00:04:55,880 --> 00:04:58,719
Speaker 1: and improve life. Learn more at Stories of Innovation dot

86
00:04:58,800 --> 00:05:01,359
Speaker 1: n j I T dot e d U. Here is

87
00:05:01,400 --> 00:05:05,240
Speaker 1: Baboon Michael. Here's what's making news in science, Technology, engineering

88
00:05:05,320 --> 00:05:07,920
Speaker 1: and math. Kelvin t O, a twenty nine year old

89
00:05:07,920 --> 00:05:10,640
Speaker 1: Harvard Business School student building a web based peer to

90
00:05:10,720 --> 00:05:13,479
Speaker 1: peer lending startup as part of his curriculum, pitched the

91
00:05:13,480 --> 00:05:17,120
Speaker 1: project to a potential partner, DBS Group Holdings Limited, Southeast

92
00:05:17,120 --> 00:05:20,960
Speaker 1: Asia's biggest bank. Omitting his student status, he emailed the

93
00:05:20,960 --> 00:05:24,440
Speaker 1: proposal last October to Chief Executive Officer Pyosh Gupta out

94
00:05:24,440 --> 00:05:28,040
Speaker 1: of the blue at DBSS Singapore headquarters. The CEO received

95
00:05:28,080 --> 00:05:30,880
Speaker 1: the message Gupta had been seeking ways to harness the

96
00:05:30,920 --> 00:05:34,280
Speaker 1: Internet to improve banking services, and t o's venture funding

97
00:05:34,320 --> 00:05:38,960
Speaker 1: societies might work. Three hours later, the executive senters reply interested.

98
00:05:39,279 --> 00:05:41,799
Speaker 1: It's an illustration of how banks in Asia are eager

99
00:05:41,839 --> 00:05:45,080
Speaker 1: to join with financial technology firms rather than get beat

100
00:05:45,120 --> 00:05:48,280
Speaker 1: by them. In a global survey of financial services executives

101
00:05:48,279 --> 00:05:51,960
Speaker 1: by Price Waterhouse Cooper's, of the bankers said part of

102
00:05:52,000 --> 00:05:55,960
Speaker 1: their business might be lost to fintech companies. Google says

103
00:05:56,279 --> 00:05:59,000
Speaker 1: he has developed technology to easily switch away from server

104
00:05:59,120 --> 00:06:01,919
Speaker 1: chips made by in Tell and is helping other companies

105
00:06:01,960 --> 00:06:04,800
Speaker 1: do the same. It's a potentially worrying development for the

106
00:06:04,800 --> 00:06:08,360
Speaker 1: dominant provider of processors, the power data centers. Google says

107
00:06:08,400 --> 00:06:11,400
Speaker 1: it's built software that lets it's use open power chips

108
00:06:11,680 --> 00:06:15,240
Speaker 1: from IBM, and drones might take us were eagles sore,

109
00:06:15,360 --> 00:06:18,880
Speaker 1: and it seems that's precisely the problem. Pennsylvania's Game Commission

110
00:06:18,920 --> 00:06:22,360
Speaker 1: has given unanimous preliminary approval the banning drones over one

111
00:06:22,400 --> 00:06:25,800
Speaker 1: point five million acres of state game lands after reports

112
00:06:26,000 --> 00:06:28,680
Speaker 1: the unmanned craft were flying their bald eagles nests and

113
00:06:29,000 --> 00:06:33,279
Speaker 1: drones were interfering with migrating waterfowl final vote scheduled in July.

114
00:06:33,680 --> 00:06:37,240
Speaker 1: And that's this morning's Bloomberg and j I t Stem report. Michael,

115
00:06:37,520 --> 00:06:39,640
Speaker 1: thank you very much, Bob moom. I think John Tucker

116
00:06:39,680 --> 00:06:42,320
Speaker 1: would agree that. Quite often, Tom Keen and I, uh,

117
00:06:42,560 --> 00:06:44,640
Speaker 1: note what is going on out there, and then everybody

118
00:06:44,640 --> 00:06:47,160
Speaker 1: tells us we're wrong, we have no idea what we're

119
00:06:47,200 --> 00:06:52,440
Speaker 1: talking about. And and he's one of them. Um, But

120
00:06:52,480 --> 00:06:54,360
Speaker 1: I feel a little bit better because Paul Hickey has

121
00:06:54,400 --> 00:06:57,960
Speaker 1: the same problem. He's with the founder of Bespoke Investment Group.

122
00:06:57,960 --> 00:07:00,160
Speaker 1: And you wrote at the beginning of the year, if

123
00:07:00,200 --> 00:07:02,120
Speaker 1: people ask you what's going to happen in the markets

124
00:07:02,160 --> 00:07:03,920
Speaker 1: you have, you would have to tell them you have

125
00:07:03,960 --> 00:07:06,599
Speaker 1: no idea, and it seems to be working out. You

126
00:07:06,600 --> 00:07:08,440
Speaker 1: seem to be the smartest guy in the room by

127
00:07:08,480 --> 00:07:10,440
Speaker 1: taking that position. Well, I mean, I think if there

128
00:07:10,560 --> 00:07:12,720
Speaker 1: was ever a year to say in an outlook that

129
00:07:12,760 --> 00:07:15,200
Speaker 1: you have no idea what's gonna happen, two thousands sixteen

130
00:07:15,200 --> 00:07:17,840
Speaker 1: has been the year. No one would have expected the

131
00:07:17,880 --> 00:07:21,119
Speaker 1: downturn that we saw in the beginning of the first quarter.

132
00:07:21,560 --> 00:07:24,800
Speaker 1: And even if you anticipated that, you certainly didn't anticipate

133
00:07:24,840 --> 00:07:26,680
Speaker 1: the rebound that we had we had a rebound. The

134
00:07:27,080 --> 00:07:29,400
Speaker 1: decline in the rebound by some measures was they haven't

135
00:07:29,400 --> 00:07:32,400
Speaker 1: seen anything like that since the nineteen thirties. So that

136
00:07:32,440 --> 00:07:35,560
Speaker 1: type of rebound is very rare. And I think you

137
00:07:35,600 --> 00:07:38,240
Speaker 1: know that we've three things now focused with the market.

138
00:07:38,280 --> 00:07:40,320
Speaker 1: The two biggest issues driving the day to day movements

139
00:07:40,360 --> 00:07:43,240
Speaker 1: are crude oil and the f O m C. And

140
00:07:43,240 --> 00:07:45,640
Speaker 1: then from a longer term perspective and the backdrop we

141
00:07:45,680 --> 00:07:49,560
Speaker 1: evaluations which are above average and rich. But so in

142
00:07:49,600 --> 00:07:51,720
Speaker 1: the beginning of the year, crude oil and the FED

143
00:07:51,800 --> 00:07:54,360
Speaker 1: we're working against the market. Crude oil was falling. The

144
00:07:54,360 --> 00:07:57,320
Speaker 1: FED was we were expecting hikes, um, you know, up

145
00:07:57,360 --> 00:08:00,680
Speaker 1: to four rate hikes this year by the Federal Reserve. Uh.

146
00:08:00,760 --> 00:08:03,160
Speaker 1: Now that's come down to you know, we're not even

147
00:08:03,160 --> 00:08:06,320
Speaker 1: sure where they're gonna hike in June. Uh. And oil

148
00:08:06,400 --> 00:08:09,160
Speaker 1: has rebounded. So that's been very positive for the markets.

149
00:08:09,200 --> 00:08:10,800
Speaker 1: And so as long as I mean the FED is

150
00:08:11,040 --> 00:08:13,760
Speaker 1: has in the minutes yesterday and Janelle and speech last week,

151
00:08:14,120 --> 00:08:18,160
Speaker 1: we are you know, she's telling telling the investors don't fight,

152
00:08:18,200 --> 00:08:20,160
Speaker 1: don't fight the Fed where you know they keep she

153
00:08:20,680 --> 00:08:23,640
Speaker 1: taking the dovish posture here. So that is um you

154
00:08:23,640 --> 00:08:25,280
Speaker 1: know for the market, that's that's a good thing. We'll

155
00:08:25,280 --> 00:08:28,280
Speaker 1: see day to day movements like today weakness in the futures.

156
00:08:28,320 --> 00:08:31,200
Speaker 1: But I think overall is when you have oil continuing

157
00:08:31,200 --> 00:08:34,440
Speaker 1: to trend high and you have the FED taking an

158
00:08:34,440 --> 00:08:39,079
Speaker 1: extremely dovish stance, that's good for equities. Um. It just

159
00:08:39,120 --> 00:08:42,760
Speaker 1: makes me wonder kind of um if the average person

160
00:08:42,840 --> 00:08:45,720
Speaker 1: can even compete in the markets these days. You go

161
00:08:45,760 --> 00:08:48,120
Speaker 1: back to the far buffet who goes back to Graham

162
00:08:48,280 --> 00:08:52,720
Speaker 1: and you know, the idea by undervalued stocks and hold them. Uh,

163
00:08:53,160 --> 00:08:56,760
Speaker 1: the pros aren't doing that anymore, it seems. And with

164
00:08:56,880 --> 00:09:00,400
Speaker 1: the price of oil, I mean, we haven't talked about

165
00:09:00,600 --> 00:09:05,000
Speaker 1: it's unchanged today seventy four for West Texas brand, you

166
00:09:05,040 --> 00:09:08,559
Speaker 1: know in range. Uh, whether the FED has interest rates

167
00:09:08,559 --> 00:09:11,480
Speaker 1: to twenty five basis points or seventy five basis points.

168
00:09:11,600 --> 00:09:13,559
Speaker 1: I mean, those are not things that are really going

169
00:09:13,600 --> 00:09:17,199
Speaker 1: to significantly affect the valuation of the average company that

170
00:09:17,240 --> 00:09:20,040
Speaker 1: you buy, right, you know. I mean again, so like

171
00:09:20,520 --> 00:09:23,199
Speaker 1: what we're looking at here is we're focusing investors in

172
00:09:23,240 --> 00:09:25,880
Speaker 1: the markets are focusing on FED policies and central bankers

173
00:09:25,880 --> 00:09:27,800
Speaker 1: that they're like the new e F Hunton's of Wall

174
00:09:27,800 --> 00:09:31,480
Speaker 1: Street here where whatever they say the markets pounce on. H.

175
00:09:31,559 --> 00:09:35,040
Speaker 1: We're not focusing on individual companies, and uh, if you

176
00:09:35,240 --> 00:09:37,640
Speaker 1: were to focus more on individual companies, you do have

177
00:09:37,679 --> 00:09:41,880
Speaker 1: a slight uh issue here. Valuations are above average or not.

178
00:09:42,080 --> 00:09:45,000
Speaker 1: I mean, we had historical extremes by any stretch, but

179
00:09:46,160 --> 00:09:48,200
Speaker 1: for the first time in this bull market that we've

180
00:09:48,200 --> 00:09:50,679
Speaker 1: had since two thousand nine, we're in a situation where

181
00:09:50,960 --> 00:09:53,360
Speaker 1: it's hard to find a cheap company in the sp

182
00:09:54,440 --> 00:09:57,280
Speaker 1: so uh, you know, in in any case, you would

183
00:09:57,320 --> 00:09:59,160
Speaker 1: go to a smaller you know, in the past you

184
00:09:59,240 --> 00:10:01,480
Speaker 1: looked at a smaller ups or mid mid caps, right,

185
00:10:01,480 --> 00:10:04,280
Speaker 1: and smaller caps are having there one of their that

186
00:10:04,440 --> 00:10:06,440
Speaker 1: they they haven't been formed well either, one of like

187
00:10:06,480 --> 00:10:09,320
Speaker 1: on a relative strength basis, it's one of the worst

188
00:10:09,440 --> 00:10:11,880
Speaker 1: years that they've had to open a year relative to

189
00:10:11,960 --> 00:10:14,640
Speaker 1: large caps. So it's very uh, you know, they've just

190
00:10:14,679 --> 00:10:16,480
Speaker 1: been falling under a lot of pressure and there's more

191
00:10:16,600 --> 00:10:19,720
Speaker 1: energy exposure there, uh in the small caps, So that's

192
00:10:19,720 --> 00:10:22,640
Speaker 1: one thing holding the entire sector down. But small caps

193
00:10:22,720 --> 00:10:25,360
Speaker 1: lead this market for much of their ally, so it's

194
00:10:25,400 --> 00:10:27,480
Speaker 1: only understandable that they're going to see some you know,

195
00:10:27,760 --> 00:10:30,360
Speaker 1: see some weakness here and and and catch up the things.

196
00:10:30,679 --> 00:10:33,360
Speaker 1: All right, Well, let's continue with Paul Hicky will try

197
00:10:33,400 --> 00:10:37,200
Speaker 1: to figure out something, uh that we can say definitively

198
00:10:37,280 --> 00:10:40,200
Speaker 1: about two thousand and sixteen. We can't even say that

199
00:10:40,240 --> 00:10:42,400
Speaker 1: the Red Sox are going to win the World Series.

200
00:10:42,440 --> 00:10:44,160
Speaker 1: Now we'll have talked Tom about that when they come back,

201
00:10:44,160 --> 00:10:51,960
Speaker 1: because John, they lost last night. The streak streak, Oh,

202
00:10:52,120 --> 00:11:01,160
Speaker 1: nothing changes. This is Bloomberg Surveillance on Bloomberg Radio. Bloomberg

203
00:11:01,160 --> 00:11:03,160
Speaker 1: Surveillance is brought to you by Bank of American Marri Ledge,

204
00:11:03,200 --> 00:11:05,720
Speaker 1: committed to bringing higher finance to lower carbon DAVE, the

205
00:11:05,760 --> 00:11:09,200
Speaker 1: most innovative investment bank for climate change and sustainability by

206
00:11:09,320 --> 00:11:11,680
Speaker 1: the banker. That's the power of Global Connections. Bank of

207
00:11:11,720 --> 00:11:18,679
Speaker 1: America n A F D I C Global Business News

208
00:11:18,760 --> 00:11:21,680
Speaker 1: twenty four hours a day at Bloomberg dot com. The

209
00:11:21,800 --> 00:11:24,959
Speaker 1: radio plus mobile lap And on your radio is a

210
00:11:25,040 --> 00:11:29,559
Speaker 1: Bloomberg Business Flash And I'm Karen Moscow. Valian Pharmaceuticals as

211
00:11:29,559 --> 00:11:32,360
Speaker 1: one lender can send for a credit line Amendment. Amendment

212
00:11:32,440 --> 00:11:36,360
Speaker 1: terms restrict Valiant Pharmaceuticals ability to make certain acquisitions and

213
00:11:36,440 --> 00:11:39,800
Speaker 1: other investments, and to pay dividends and other restricted payments.

214
00:11:39,880 --> 00:11:43,760
Speaker 1: Until further until financial statements are filed and Valiant achieve

215
00:11:43,840 --> 00:11:47,839
Speaker 1: certain leverage ratios. Canagra Foods reporting third quarter profit that

216
00:11:47,880 --> 00:11:51,079
Speaker 1: beat analysts estimates it's outlooked for the year missed. CarMax

217
00:11:51,160 --> 00:11:54,560
Speaker 1: is fourth quarter profit beat. US doc Indise futures are lower.

218
00:11:54,679 --> 00:11:57,920
Speaker 1: SNP emity futures down twelve points DOWNIE many futures down,

219
00:11:58,880 --> 00:12:01,440
Speaker 1: NASA docuumity future is down twenty four. That acts in

220
00:12:01,440 --> 00:12:04,400
Speaker 1: Germany's down four tenths per cent. Ten Your treasury of

221
00:12:04,520 --> 00:12:07,240
Speaker 1: seven thirty seconds, the yield one point seven three percent.

222
00:12:07,640 --> 00:12:09,559
Speaker 1: Now I'm ex scrude oil down to tenths per cent

223
00:12:09,640 --> 00:12:12,560
Speaker 1: or six cents at thirty seven sixty of arrol comes

224
00:12:12,640 --> 00:12:14,840
Speaker 1: gold up one point one per cent or thirteen dollars

225
00:12:14,920 --> 00:12:17,719
Speaker 1: ninety cents at twelve thirty seven sixty and ounce the

226
00:12:17,840 --> 00:12:20,280
Speaker 1: euro A dollar thirteen eighty the n one oh eight

227
00:12:20,320 --> 00:12:23,880
Speaker 1: point four six and improving gender equality would add at

228
00:12:23,920 --> 00:12:27,439
Speaker 1: least two point one trillion dollars to US gross domestic

229
00:12:27,480 --> 00:12:32,240
Speaker 1: product by five according to a McKenzie Global Institute's study,

230
00:12:32,480 --> 00:12:35,480
Speaker 1: a boost roughly the size of the Texas economy. And

231
00:12:35,480 --> 00:12:39,040
Speaker 1: that's a Bloomberg business flash. Tom and Mike mascot, Thank

232
00:12:39,040 --> 00:12:43,199
Speaker 1: you very much. We are talking markets with an expert,

233
00:12:43,240 --> 00:12:47,000
Speaker 1: Paul Hickey of Best Book Investment Group, the founder and

234
00:12:47,080 --> 00:12:50,520
Speaker 1: head of the organization, and uh Tom, Paul tells us

235
00:12:50,520 --> 00:12:52,559
Speaker 1: he doesn't have any idea where the markets are going.

236
00:12:52,960 --> 00:12:58,679
Speaker 1: So we know we have found Diogenes honest man, ums

237
00:12:59,400 --> 00:13:04,960
Speaker 1: think the red. He has four daughters. Do we need

238
00:13:05,000 --> 00:13:08,079
Speaker 1: to say anything else? So I don't wonder he's confused.

239
00:13:10,240 --> 00:13:12,480
Speaker 1: We're talking about how this is you think you think

240
00:13:12,480 --> 00:13:14,839
Speaker 1: the markets are voultable? Way until I get home from

241
00:13:14,880 --> 00:13:22,160
Speaker 1: work in the day, it's just nuts. Uh Alexa. We

242
00:13:22,160 --> 00:13:23,840
Speaker 1: were talking before the break about how this is not

243
00:13:23,920 --> 00:13:26,480
Speaker 1: Benjamin Graham's market? Is it? Is it? If we got

244
00:13:26,520 --> 00:13:29,040
Speaker 1: to the point where everybody's a day trader, where everything

245
00:13:29,080 --> 00:13:31,440
Speaker 1: is kind of being driven on momentum and you just

246
00:13:31,800 --> 00:13:34,080
Speaker 1: have to pick a data point to move on, like

247
00:13:34,160 --> 00:13:36,400
Speaker 1: the FED, like oil prices. I mean, I think there's

248
00:13:36,400 --> 00:13:38,480
Speaker 1: more and more of that in the markets now. It's

249
00:13:38,520 --> 00:13:41,520
Speaker 1: more of a day to day movements are all about positioning,

250
00:13:41,760 --> 00:13:44,800
Speaker 1: it seems, rather than um, you know, longer term trends.

251
00:13:45,280 --> 00:13:48,200
Speaker 1: Hopefully when we get into earning season, maybe I mean again,

252
00:13:48,200 --> 00:13:50,880
Speaker 1: we're gonna see day to day and reactions to company earnings.

253
00:13:50,920 --> 00:13:53,680
Speaker 1: But it would be nice to UH to be able

254
00:13:53,720 --> 00:13:56,000
Speaker 1: to focus more on the corporate side of things. The

255
00:13:56,240 --> 00:13:58,839
Speaker 1: US economy, the growth scare that we saw towards the

256
00:13:58,920 --> 00:14:00,760
Speaker 1: end of last year and into the quarter this year,

257
00:14:01,000 --> 00:14:03,160
Speaker 1: has you know, showing signs of abating. So that's a

258
00:14:03,480 --> 00:14:05,760
Speaker 1: that's a good thing there, UM. And I think the

259
00:14:06,040 --> 00:14:09,199
Speaker 1: you know, we should see as continued improvement UM from

260
00:14:09,240 --> 00:14:13,000
Speaker 1: an international perspective from these multinationals that have been getting

261
00:14:13,080 --> 00:14:15,359
Speaker 1: killed over the last two years from their foreign exposure.

262
00:14:15,600 --> 00:14:18,000
Speaker 1: They should continue. I think they should see some improvement

263
00:14:18,520 --> 00:14:20,920
Speaker 1: going forward here. Well, I mean, I'm not sure you

264
00:14:20,960 --> 00:14:24,040
Speaker 1: want to focus on earnings. If the numbers that the

265
00:14:24,040 --> 00:14:27,800
Speaker 1: analysts are putting together right, the totals and paid down

266
00:14:27,880 --> 00:14:31,360
Speaker 1: nine point eight percent, industrials down eleven point four percent,

267
00:14:31,440 --> 00:14:36,080
Speaker 1: financials down fourteen energy tom the forecast is for earnings

268
00:14:36,120 --> 00:14:41,920
Speaker 1: to contract by one percent. Yeah, Well, the economy of

269
00:14:41,960 --> 00:14:44,680
Speaker 1: this spread here is fine. What does the spokes say

270
00:14:44,760 --> 00:14:49,560
Speaker 1: about UM consumer stocks? I mean, they're mad men fifty

271
00:14:49,640 --> 00:14:53,760
Speaker 1: fifty like evaluations. But you put an asterisk by that

272
00:14:54,280 --> 00:14:56,200
Speaker 1: and say I can own them. Well, I mean it

273
00:14:56,240 --> 00:14:58,480
Speaker 1: depends on what I mean. What maybe consumer stocks you're

274
00:14:58,520 --> 00:15:00,600
Speaker 1: you're focusing on. I mean it's read brick and mortar

275
00:15:00,640 --> 00:15:03,080
Speaker 1: retailers have just been getting I mean that does sound

276
00:15:03,080 --> 00:15:06,640
Speaker 1: a consumer stock, that's a that's a dinosaur. Yeah, I mean,

277
00:15:06,680 --> 00:15:08,560
Speaker 1: well you see, okay, like an Amazon, which has a

278
00:15:08,640 --> 00:15:12,400
Speaker 1: very high valuation there from a pure fundamental perspective, again,

279
00:15:12,520 --> 00:15:14,960
Speaker 1: it's it's hard to get in. Uh, you know, it's

280
00:15:14,960 --> 00:15:18,000
Speaker 1: hard to make a bullish case on a stock like Amazon,

281
00:15:18,360 --> 00:15:21,760
Speaker 1: but um, you know you have as a Bill Miller said,

282
00:15:22,040 --> 00:15:26,320
Speaker 1: makes the the comparison between I think it was John

283
00:15:26,360 --> 00:15:29,720
Speaker 1: Malone and Liberty the company never made a profit, um

284
00:15:29,760 --> 00:15:32,640
Speaker 1: in several in the years that it was in the

285
00:15:32,720 --> 00:15:34,600
Speaker 1: years and then he sold it, uh you know ten

286
00:15:34,680 --> 00:15:37,720
Speaker 1: years later for you know, investors made ninety nine times

287
00:15:37,760 --> 00:15:40,360
Speaker 1: or money. So I mean again, there's different ways of

288
00:15:40,400 --> 00:15:43,200
Speaker 1: measuring things. But you just have to getting back to

289
00:15:43,240 --> 00:15:45,280
Speaker 1: what you're saying, Mike. It's it's there's a lot of

290
00:15:45,640 --> 00:15:48,040
Speaker 1: focus now on the day to day movements. What's this

291
00:15:48,080 --> 00:15:51,320
Speaker 1: FED governor saying, what's this FED head saying? And um,

292
00:15:51,360 --> 00:15:54,920
Speaker 1: it's more of an event driven market than uh longer

293
00:15:55,000 --> 00:15:58,120
Speaker 1: term fundamentals here. Well, I mean, you you like to

294
00:15:58,160 --> 00:16:02,200
Speaker 1: it be spoken. Looking to historical parallels. Uh, have you

295
00:16:02,240 --> 00:16:06,040
Speaker 1: seen markets like this before, they'd give you any guidance. Yeah,

296
00:16:06,120 --> 00:16:08,240
Speaker 1: I mean, I think one thing, like we were talking

297
00:16:08,240 --> 00:16:10,840
Speaker 1: about earlier, we saw one of the biggest rebound declines

298
00:16:10,880 --> 00:16:13,240
Speaker 1: and then rebounds in the first quarter of this year.

299
00:16:13,560 --> 00:16:15,720
Speaker 1: And when you look back at history, I mean, when

300
00:16:15,720 --> 00:16:17,680
Speaker 1: you've seen those kind of rebounds from a you know,

301
00:16:17,760 --> 00:16:20,240
Speaker 1: a decline of ten percent to a rebound of ten

302
00:16:20,280 --> 00:16:23,280
Speaker 1: percent in the first quarter. The market has done well

303
00:16:23,320 --> 00:16:24,920
Speaker 1: in the second quarter of the year and through the

304
00:16:24,920 --> 00:16:27,040
Speaker 1: remainder of the year. But what's really interesting is when

305
00:16:27,040 --> 00:16:29,320
Speaker 1: you dig a little deeper into it. Uh. The last

306
00:16:29,360 --> 00:16:31,320
Speaker 1: two times we've seen this, we're in two thousand three

307
00:16:31,360 --> 00:16:34,560
Speaker 1: and two thousand nine. The market did great those years.

308
00:16:34,600 --> 00:16:36,840
Speaker 1: I mean, we could only dream of having a repeat

309
00:16:36,880 --> 00:16:40,720
Speaker 1: of that. But what was really interesting in two thousand three,

310
00:16:41,080 --> 00:16:44,840
Speaker 1: the the real uh down ground zero for the market

311
00:16:45,360 --> 00:16:47,080
Speaker 1: was the tech sector and it was very you know,

312
00:16:47,080 --> 00:16:49,320
Speaker 1: there was a lot of weakness there, a lot of altility,

313
00:16:49,440 --> 00:16:51,440
Speaker 1: and then when we saw the rebound, their tech let

314
00:16:51,520 --> 00:16:53,440
Speaker 1: us out of the way in the rebound in the

315
00:16:53,440 --> 00:16:55,640
Speaker 1: first quarter, and going forward in the second quarter is

316
00:16:55,640 --> 00:16:58,280
Speaker 1: one of the best performing sectors. Fast forward to two

317
00:16:58,280 --> 00:17:00,920
Speaker 1: thousand and nine, it was financi shills which everyone was

318
00:17:00,960 --> 00:17:04,080
Speaker 1: focusing on, and they let us out of the rebound

319
00:17:04,080 --> 00:17:07,320
Speaker 1: in the first quarter, so that this coming to this time,

320
00:17:07,359 --> 00:17:10,000
Speaker 1: you're looking at energy and energy had let us out

321
00:17:10,040 --> 00:17:12,520
Speaker 1: of the UH you know, in the first quarter. It's done.

322
00:17:12,880 --> 00:17:15,119
Speaker 1: It was one of the first areas to hit it

323
00:17:15,200 --> 00:17:18,480
Speaker 1: slow and it's rallied back. And again what we're saying

324
00:17:18,480 --> 00:17:22,240
Speaker 1: before expectations, you can't get much lower than UH expectations

325
00:17:22,280 --> 00:17:25,080
Speaker 1: for the energy sector. UH analysts, the revisions on the

326
00:17:25,240 --> 00:17:28,119
Speaker 1: stocks are are more negative than any other sector in

327
00:17:28,160 --> 00:17:31,479
Speaker 1: the market. For Ernie's forecasts are expected to be zero. So,

328
00:17:31,960 --> 00:17:35,040
Speaker 1: especially in the larger cap area, people aren't expecting a

329
00:17:35,080 --> 00:17:36,680
Speaker 1: whole lot of good to come out of the energy

330
00:17:36,720 --> 00:17:40,840
Speaker 1: sector needs UH this quarter. As we slice and dice

331
00:17:40,920 --> 00:17:43,919
Speaker 1: the equity markets here, we spoke with a lot of

332
00:17:44,040 --> 00:17:48,919
Speaker 1: fancy I mean fancy analysis. Does PE matter anymore? Is

333
00:17:48,920 --> 00:17:51,600
Speaker 1: it a ratio that's a value to anybody? You know,

334
00:17:51,680 --> 00:17:54,200
Speaker 1: I think, I mean I whenever you try and make

335
00:17:54,240 --> 00:17:57,560
Speaker 1: those statements that does this matter anymore? That's when it

336
00:17:57,600 --> 00:18:00,560
Speaker 1: really does matter. UH, you know, when we're so we're

337
00:18:00,560 --> 00:18:03,480
Speaker 1: looking at valuations in the market here uh. We they're

338
00:18:03,520 --> 00:18:07,280
Speaker 1: above average by historical perspective there in the eight percentile,

339
00:18:07,560 --> 00:18:10,280
Speaker 1: which is high. Uh. But when you look back at history,

340
00:18:10,400 --> 00:18:13,520
Speaker 1: you haven't necessarily seen always seen market the clients following

341
00:18:13,960 --> 00:18:16,680
Speaker 1: this high of a pe. What high pe ratios are.

342
00:18:16,800 --> 00:18:19,239
Speaker 1: They're not a catalyst for a market declimb. There are

343
00:18:19,320 --> 00:18:21,439
Speaker 1: fuel for a market to climb, so you need a

344
00:18:21,480 --> 00:18:25,840
Speaker 1: catalyst to spark things, and then the high valuations can

345
00:18:25,960 --> 00:18:28,880
Speaker 1: exacerbate it because they leave less margin for error. Conversely,

346
00:18:28,920 --> 00:18:31,399
Speaker 1: when you have low valuations, people the market doesn't just

347
00:18:31,480 --> 00:18:34,720
Speaker 1: rally because valuations are cheap. It rallies because of something else,

348
00:18:34,920 --> 00:18:37,600
Speaker 1: and then people say, hey, valuations are cheap uh, and

349
00:18:37,640 --> 00:18:40,840
Speaker 1: it gives you more of more room to go to

350
00:18:40,880 --> 00:18:44,760
Speaker 1: the upside. So we wouldn't necessarily focus on valuation as

351
00:18:45,119 --> 00:18:48,600
Speaker 1: a reason not to uh, a reason to get out

352
00:18:48,600 --> 00:18:51,040
Speaker 1: of stocks, but it would be it would be something

353
00:18:51,080 --> 00:18:53,400
Speaker 1: that keep in the back of your mind because when

354
00:18:53,480 --> 00:18:57,119
Speaker 1: when we do see a catalyst, um, it could provide

355
00:18:57,560 --> 00:19:01,359
Speaker 1: uh more downside to the market here. But they valuations

356
00:19:01,400 --> 00:19:04,000
Speaker 1: matter until they matter, and that's when you know it

357
00:19:04,080 --> 00:19:06,119
Speaker 1: doesn't provide much help. But that's just the way it

358
00:19:06,240 --> 00:19:09,640
Speaker 1: is uh Jimmy Diamond out with a note today um

359
00:19:09,680 --> 00:19:14,760
Speaker 1: suggesting that he's got big concerns about liquidity, although he

360
00:19:14,800 --> 00:19:16,760
Speaker 1: can live with it, but he thinks the markets are

361
00:19:16,760 --> 00:19:20,840
Speaker 1: not prepared for a FED rating. For the number of

362
00:19:20,880 --> 00:19:23,920
Speaker 1: FED rateing increases, we may have to see. Uh, we've

363
00:19:23,960 --> 00:19:27,919
Speaker 1: talked about how the markets swing wildly on what people say,

364
00:19:27,920 --> 00:19:31,399
Speaker 1: are are we set up for a junk condition? Should

365
00:19:31,400 --> 00:19:34,679
Speaker 1: the Fed actually surprise I think if you if you

366
00:19:34,680 --> 00:19:36,879
Speaker 1: saw the Fed suddenly I mean, as much as the

367
00:19:36,920 --> 00:19:39,720
Speaker 1: FED has surprised us to the dovish side recently in

368
00:19:39,760 --> 00:19:42,360
Speaker 1: the markets of rallied, you could see, you know, equally,

369
00:19:42,400 --> 00:19:45,640
Speaker 1: see a situation where the FED finds that, oh way,

370
00:19:45,920 --> 00:19:49,800
Speaker 1: inflation is picking up here, we need to act on things,

371
00:19:49,840 --> 00:19:52,800
Speaker 1: and that would have, you know, provide a downside catalyst

372
00:19:52,840 --> 00:19:55,840
Speaker 1: for the market and things could you know, increase volatility,

373
00:19:55,880 --> 00:19:57,760
Speaker 1: which is one reason why they said they're also investing

374
00:19:57,760 --> 00:19:59,959
Speaker 1: a lot more money in trading, because if you're gonna

375
00:20:00,000 --> 00:20:03,880
Speaker 1: of a more volatile environment, you want to focus on trading.

376
00:20:04,119 --> 00:20:06,320
Speaker 1: What was another really interesting thing about what he said

377
00:20:06,320 --> 00:20:09,080
Speaker 1: in his letter was that you know, the greater session

378
00:20:09,119 --> 00:20:11,720
Speaker 1: is still in front center of investors minds. So whenever

379
00:20:11,760 --> 00:20:14,520
Speaker 1: you see weakness, the first instinct is to run for

380
00:20:14,560 --> 00:20:15,960
Speaker 1: the door because you don't want to get caught in

381
00:20:16,000 --> 00:20:18,920
Speaker 1: the situation like you saw back in in oh eight. Again,

382
00:20:18,960 --> 00:20:22,000
Speaker 1: nobody wants to do that, and so that creates, you know,

383
00:20:22,320 --> 00:20:25,320
Speaker 1: more downside pressure, That creates more of an incentive for

384
00:20:25,800 --> 00:20:29,600
Speaker 1: UH two. Investors are worrying about the bigger, big one,

385
00:20:29,640 --> 00:20:33,240
Speaker 1: and it creates higher volatility. But in the long run,

386
00:20:33,280 --> 00:20:39,640
Speaker 1: the big one usually doesn't happen. But aciatives Investment Services. Um,

387
00:20:39,680 --> 00:20:44,080
Speaker 1: this is a wonderful story, and it's a little story,

388
00:20:44,720 --> 00:20:47,080
Speaker 1: and it by no means Mike can talk with Tom

389
00:20:47,119 --> 00:20:50,280
Speaker 1: Watson did at the British Open X number of years ago.

390
00:20:50,359 --> 00:20:54,080
Speaker 1: That was truly once in a lifetime. First of all,

391
00:20:54,200 --> 00:21:00,200
Speaker 1: Gary Player looks like he's seventy two, maybe sixty eat,

392
00:21:01,040 --> 00:21:08,720
Speaker 1: he's eight, he's eighty. He had a hole in one yesterday. Yes,

393
00:21:08,840 --> 00:21:12,639
Speaker 1: and the masters I can I can honestly say that,

394
00:21:12,760 --> 00:21:16,080
Speaker 1: I that's great. It not only makes you feel like

395
00:21:16,119 --> 00:21:17,800
Speaker 1: you can do more, but I can also say, well,

396
00:21:17,800 --> 00:21:19,359
Speaker 1: of course I haven't made a hole in one because

397
00:21:19,400 --> 00:21:24,879
Speaker 1: I'm not eighty yet. Um, it's extraordinary. All these years

398
00:21:25,760 --> 00:21:28,320
Speaker 1: about time they were not. They had the hole in

399
00:21:28,400 --> 00:21:33,000
Speaker 1: one contest yesterday nine people made home Holton one on

400
00:21:33,040 --> 00:21:37,080
Speaker 1: the third hole at Augusta, which is just amazing. Well,

401
00:21:37,359 --> 00:21:41,239
Speaker 1: it shows the skill. Could it happen today? I don't know.

402
00:21:41,400 --> 00:21:46,680
Speaker 1: As the Masters kicks off, very cool, you don't want to, Yeah,

403
00:21:46,720 --> 00:21:49,640
Speaker 1: you don't. You won't miss it. As John Tucker knows,

404
00:21:49,920 --> 00:21:53,119
Speaker 1: a lot of times, I opened my mouth and somebody says,

405
00:21:53,240 --> 00:21:56,760
Speaker 1: would you put the surveillance cork in his mouth? Once

406
00:21:56,880 --> 00:22:00,360
Speaker 1: Alpha New Jersey said golf and Radio, and I said,

407
00:22:00,359 --> 00:22:03,359
Speaker 1: you're kidding me. That's the dumbest idea I've ever heard of.

408
00:22:04,080 --> 00:22:07,240
Speaker 1: And then I heard it and it was fabulous, And

409
00:22:07,320 --> 00:22:11,280
Speaker 1: we do that. It's very exciting, it's very cool. We'll

410
00:22:11,320 --> 00:22:13,159
Speaker 1: be listening. You and I are gotta come in tomorrow.

411
00:22:13,320 --> 00:22:19,160
Speaker 1: I'll be talking like this nationwide, Boston, Washington, San Francisco,

412
00:22:19,280 --> 00:22:23,400
Speaker 1: New York on Serious ex M. The Master's Golf Tournament

413
00:22:23,800 --> 00:22:29,399
Speaker 1: four fifteen this afternoon. This is Bloomberg Savllas all in one.