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Speaker 1: Broadcasting live to New York, Giolberg eleventh, Riyo to Washington,

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Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve unders to San Francisco,

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Speaker 1: Bloomberg nine sixty to the country, SEIS at jam Ganel

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Speaker 1: one ninety and around the globe the Bloomberg Radio plus

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Speaker 1: Apen Bloomberg dot Com. This is Bloomberg Surveillance and good morning.

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Speaker 1: I'm Karen Moscow along with Tom Keene and Michael McKee.

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Speaker 1: The opening Vale brought to you by s E I

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Speaker 1: imagine when cognitive computing shapes the experience you create for

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Speaker 1: your investors. See how SEIS Global Operating Platform can be

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Speaker 1: your catalyst for business intelligence at s C i C

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Speaker 1: dot com, slash imagine and stocks opening lower s and

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Speaker 1: P five hundred down to tenths per cent this morning,

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Speaker 1: down four points to twenty one hundred. Now Jones Industrial

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Speaker 1: Average down three tens per cent or fifty eight points

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Speaker 1: to seventeen thousand, seven hundred seventy nine. The NASTAC down

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Speaker 1: three tenths per cent or fourteen points to forty nine

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Speaker 1: fifty seven. Can your treasury up seconds one point seven

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Speaker 1: one percent yield on the two year point seven seven

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Speaker 1: percent non ex screwede oil down three ten percent or

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Speaker 1: fourteen cents to forty nine O three a barrel. Comacs

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Speaker 1: gold up two point four percent, up twenty eight dollars

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Speaker 1: eighty cents at twelve ounce the euro at oll eight

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Speaker 1: the end one oh seven point three five. Tom and

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Speaker 1: Mike Karen, thanks so much. Chris Rupke, who has been

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Speaker 1: an optimist and has a balanced view of the report.

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Speaker 1: Michael McKee Mr Rupkey, uh quotes the economist DJ Trump

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Speaker 1: Mr Trump out with a tweet, terrible jobs report just

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Speaker 1: reported only thirty eight thousand jobs added. Bombshell. You would

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Speaker 1: you would expect a presidential candidate to comment on the report,

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Speaker 1: and since the Republicans are not the incumbent party, to

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Speaker 1: have a negative view of things. Uh, my question for

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Speaker 1: anybody is, what's your plan? And as we heard from

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Speaker 1: Bill Gross, fiscal policy would be useful at this point. Uh,

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Speaker 1: Let's bring in somebody who's got a very big stake

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Speaker 1: in the jobs report and what it means for the

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Speaker 1: Federal Reserve, and that is the chief investment officer of

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Speaker 1: Pacific Investment Management Companies, Scott Mather. Uh. Scott, you look

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Speaker 1: at well, you look at the yield curve and uh

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Speaker 1: not twenty four hours ago, you were pricing in a

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Speaker 1: rate move from the Fed in June or July. Now

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Speaker 1: you look at the two year and you've got maybe

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Speaker 1: a September move. You start looking at the three year

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Speaker 1: and above, and it's basically priced out to never. Uh,

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Speaker 1: you know, is this an overreaction? Where do you think

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Speaker 1: we should be at this point? What do you think

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Speaker 1: the Fed does do? Yeah, good morning. It certainly looks

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Speaker 1: like a bit of an overreaction. I mean, this is

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Speaker 1: something we observe almost every month. There's sort of, you know,

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Speaker 1: an outsize focused on on one number, which is the

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Speaker 1: payroll number, and of course we know it's volatile in

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Speaker 1: many ways. We should think about today as as as

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Speaker 1: finally a learned to a normal type of payroll number

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Speaker 1: where we expect to see a standard deviation on the

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Speaker 1: order of a hundred thousand around around the central trend rate.

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Speaker 1: It just been a long time since we've seen that

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Speaker 1: sort of volatility, but that's historically what we should expect. So, uh,

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Speaker 1: you know, the markets shouldn't get too concerned. I don't

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Speaker 1: think about this this one number because it's not you know,

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Speaker 1: it's not corroborated with other employment numbers like the jobless claims,

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Speaker 1: the weekly jobless claims number that we see, which which

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Speaker 1: is really the lowest rate UH in recorded history of

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Speaker 1: jobless claims. That when you're just for the population, and

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Speaker 1: then you know other numbers, other labor market numbers I

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Speaker 1: will see on Monday with a quit rate the JOLT survey,

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Speaker 1: the quit rate which has been UM pretty high, indicating

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Speaker 1: a pretty solid job market, and the number of unfilled jobs.

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Speaker 1: You know, both those are sort of back to UH

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Speaker 1: to boom time UH sorts of levels. So uh, you know,

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Speaker 1: I think that the markets shouldn't be too focused on

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Speaker 1: this because other labor market indicators, this is what the

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Speaker 1: Fed will likely be looking at. Other labor market indicators

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Speaker 1: suggest that we're on trend with the same sort of

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Speaker 1: pretty strong employment market that we've had. Well, then what

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Speaker 1: do you think Janet Yellen says on Monday. I think

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Speaker 1: she'll she'll probably bring some more focus and attention to

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Speaker 1: those other indicators. Look at all the progress that that's

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Speaker 1: been made, acknowledge that probably the underlying trend hasn't changed

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Speaker 1: that much. UM. The FED Zone forecast though, as as

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Speaker 1: we moved throughout this year, and their own expectation has

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Speaker 1: been that the monthly number of new jobs we're creating,

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Speaker 1: we'll we'll we'll go down on average closer to a

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Speaker 1: hundred thousand by the end of the year because we're

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Speaker 1: full employment. That's natural, it should be happening. It means

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Speaker 1: that you should expect to see more UH, more wage gains,

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Speaker 1: less jobs being created as we get closer to full employment.

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Speaker 1: So you know, we're not so far off the trajectory

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Speaker 1: that they probably thought was appropriate to continue with normalizing rates.

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Speaker 1: So I think you know, they'll definitely want to keep uh,

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Speaker 1: keep the summer alive in terms of rate high probabilities.

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Speaker 1: As you mentioned, the markets probably priced out too much

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Speaker 1: UH in terms of suggestion that the Fed can't move

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Speaker 1: it all this year. I think it's probably their intention

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Speaker 1: to to continue to move you know, one or two times. Well, then,

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Speaker 1: how important is Janet Ellen's speech twelve thirty pm Eastern

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Speaker 1: Time on Monday. We will be very important. I think,

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Speaker 1: you know, we get to hear from her again, and

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Speaker 1: I think uh, a reasonable expectation would be that given

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Speaker 1: the number of of f l MC UH speeches and

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Speaker 1: officials that have combated in the past few weeks about

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Speaker 1: their intentions to move a couple of times this year.

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Speaker 1: I think it'd be pretty unlikely if she deviates from that,

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Speaker 1: from that plan, But that's what we need to be

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Speaker 1: close attention to. Where's the global system as we wander

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Speaker 1: into a Friday and Saturday, as you right herd on

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Speaker 1: the Pimcoe desk in Newport Beach, is there a stability

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Speaker 1: within the system. I'm looking at the jobs report, granted

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Speaker 1: it maybe a one off. I'm looking at German yields.

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Speaker 1: I'm looking at yeah, gold with a big spring back

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Speaker 1: here up twenty nine dollars, But all in all, is

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Speaker 1: there a stability to the financial system right now? Well,

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Speaker 1: we think there is, um certainly a stability within the

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Speaker 1: financial system. We we just came out with our our

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Speaker 1: new secular outlook here last week and we sort of

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Speaker 1: we titled it um you know, the global outlooks stable

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Speaker 1: but not secure. Uh. We think certainly we've got a

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Speaker 1: lot of stability short term, but the longer term, the

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Speaker 1: medium and longer term problems and and and sources of

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Speaker 1: instability have not been addressed whatsoever. And so you know,

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Speaker 1: we're we're subject to any sort of shocks sort of

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Speaker 1: throwing us off what you know, this this path of

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Speaker 1: of near term stability, and that's what we're more concerned

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Speaker 1: about as the years go by. If the FED were

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Speaker 1: raising great, you would obviously be um. Uh you know.

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Speaker 1: Trading differently is can you still make money in bonds?

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Speaker 1: Um given this this report? Well, it's it's going to

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Speaker 1: be a lot harder in all financial assets, is what

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Speaker 1: we would say. I mean, if if if this, as

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Speaker 1: the bond market is sort of indicating, now, if this

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Speaker 1: is truly um a shift down in the growth trajectory,

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Speaker 1: then risk assets equities are priced incorrectly. Uh. If that's

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Speaker 1: not the case and we're on trend with with two

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Speaker 1: percent growth, which would be our base case expectation, and

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Speaker 1: that means uh, front end treasuries in particular or not

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Speaker 1: priced appropriately. So you know, both can't be right here.

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Speaker 1: Either fixed income is wrong or where the equity market

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Speaker 1: we would say is wrong. So you know it is.

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Speaker 1: It is riskier for investors, There's no question about it.

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Speaker 1: There's not many good places to hide. Uh. That's why

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Speaker 1: we say the right thing to do is to probably

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Speaker 1: look to d risk. It means you don't take as

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Speaker 1: much Come on, you sound like a portfolio manager. Pimco,

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Speaker 1: you looked at your escape, but help me here are

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Speaker 1: you selling bonds this morning because prices are high and

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Speaker 1: yields are low. Well, yes, we'll be fading a little

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Speaker 1: bit of of some of these moves. Um, you know

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Speaker 1: it's uh, as I mentioned, we we've had a more

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Speaker 1: conservative passion, We've had lessduration risk on the portfolios. We've

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Speaker 1: had this view that the FED is likely to move

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Speaker 1: faster than markets expecting. And I think we'll be sticking

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Speaker 1: with that view. Okay, Actually we leave it there, Mike.

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Speaker 1: I think we've we leave it there and we hope

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Speaker 1: that uh that Scott very valuable makes some money. Scott Mather,

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Speaker 1: he's de risking with Pimco this morning. We're gonna de

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Speaker 1: plane here. At some point, where did these words come?

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Speaker 1: De risk, the plane, de surveillance, indeed, d D e

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Speaker 1: hyphen de fed, de gold, de brexit We got, Michael Barr.

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Speaker 1: If you use the word to brexit yet plane risk,

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Speaker 1: we're doing that. That's our Scott mother, thank you. With Pimco. So, folks,

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Speaker 1: we're gonna do more here. I'm Bloomberg surveillance this morning.

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Speaker 1: Of course, all of us off the job report. I

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Speaker 1: want to emphasize that's some of the things that plunge

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Speaker 1: have actually found some stasis in the last twenty minutes.

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Speaker 1: A two year finally has a bit of a little

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Speaker 1: bit yield, not plunging like it did before. That's a

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Speaker 1: little confusing, but a little bit of calmness in the

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Speaker 1: market right now. Yeah, and one oh seven point one zero.

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Speaker 1: All right, let's check out with Michael bar and get

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Speaker 1: the latest world of national headlines. Michael, Mike Toime, thank

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Speaker 1: you very much. US Fence Secretary Ash Carter says the

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Speaker 1: military will attempt to learn from the tragic loss of

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Speaker 1: life in two incidences. In their hearts and and thoughts

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Speaker 1: are with the families of those who lost. Five soldiers

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Speaker 1: were killed and four are missing after a troop carrier

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Speaker 1: over turned yesterday in the Rainspolden Creek at Ford Hood, Texas.

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Speaker 1: Three soldiers are rescued and will be released from a

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Speaker 1: military hospital today. Also, a Blue Angels pilot was killed

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Speaker 1: when this plane crashed near Nashville, Tennessee. Donald Trump is

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Speaker 1: taking aim at the U. S. District judge who was

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Speaker 1: presiding over a class action lawsuit against the now defunct

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Speaker 1: Trump universe today, the presumptive Republican presidential nominees, that's Judge

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Speaker 1: Gonzalo Curio, is unable to judge this case because in

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Speaker 1: part of his parents being Mexican immigrants. Judge Curio, who

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Speaker 1: is American, was born in Indiana. German officials say they

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Speaker 1: consider four D is not make extremists in the country

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Speaker 1: to be a potential security threat. A spokesman for the

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Speaker 1: Interior Ministry provided the figure today following this week's arrest

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Speaker 1: of three Syrians suspected planning an attack for the Islamic State. Group.

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Speaker 1: Global News twenty four hours a day, powered by our

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Speaker 1: twenty four hundred journalists and more than a hundred fifty

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Speaker 1: news bureaus around the world. I'm Michael Barrlink Tom, Michael Barr,

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Speaker 1: thank you so much. Negative ninety eight and the Dalla

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Speaker 1: Vics fourteen point two one only up point five eight points.

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Speaker 1: That's a less than the moving bonds the tenure yield

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Speaker 1: one point seven Michael McKeon Tom Keene Worldwide. This job's day,

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Speaker 1: Bloomberg Surveillance. Bloomberg Surveillance is brought to you by your

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Speaker 1: Mercedes Benz tri state dealer, The Star. You've been wishing

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Speaker 1: for is waiting at the Mercedes Benz Summer Event at

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Speaker 1: your Mercedes Benz Tri State dealer for more details. Hurry

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Speaker 1: before this star flies by