WEBVTT - Paulsen: Fed should stop stalling

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh to Washington d C,

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<v Speaker 1>Bloomberg to Boston, Bloomberg twelve unders to San Francisco, Bloomberg

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<v Speaker 1>to the Country Channel one, and around the globe the

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<v Speaker 1>Bloomberg Radio Plus Abit Bloomberg dot Com. This is Bloomberg

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<v Speaker 1>Surveillance Now Barnegate thirty on Wall Street at Michael McKee

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<v Speaker 1>along with Tom Keene. Economic Indicators brought to you by

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<v Speaker 1>Commonwealth Financial Network. When it's time to change the conversation,

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<v Speaker 1>talk with a broker dealer r I A that's ready

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<v Speaker 1>to listen to call or six two three six three

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<v Speaker 1>eight or visit Commonwealth dot com to learn more. Actually,

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<v Speaker 1>no economic indicators this morning. We do get the Fed

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<v Speaker 1>minutes this afternoon two pm Wall Street time, and we

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<v Speaker 1>will see if there are any it's within Yeah, you know,

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<v Speaker 1>tell us anything about what's going on. We normally wouldn't

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<v Speaker 1>say this, but I'm gonna say it. Chili ple. Yeah,

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<v Speaker 1>I'll let you pronounce it. G d P two. What

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<v Speaker 1>a joy that is after the gloom of Venezuela, the

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<v Speaker 1>agony of Venezuela, and the outright gloom of Brazil and

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<v Speaker 1>the tumulti Argentina. Two GDP looks great for Joan. Uh

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<v Speaker 1>two percent would have been good for the Minnesota Twins

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<v Speaker 1>last night fall for a second game in a row.

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<v Speaker 1>Tigers scores seven in the seventh inn. He beat Minzotazela too.

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<v Speaker 1>We mentioned that because joining us now is our friend

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<v Speaker 1>from Minneathlas. Jim Paulson from Wells Capital tough summer so far,

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<v Speaker 1>worst team in the Major League. Not good, not good.

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<v Speaker 1>Nice ballpark though, interesting comment from Jim Vogel, who is

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<v Speaker 1>the fixed incomes try just an FTN financial who says

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<v Speaker 1>you why not start to price in a FED move now, because,

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<v Speaker 1>as he puts it, nothing is going especially Row at

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<v Speaker 1>the moment. And I guess that's what passes for good

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<v Speaker 1>news these days. Yeah, I you know. I think the thing,

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<v Speaker 1>Mike that bugs me the most about the suttle reserve

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<v Speaker 1>of the tightening and whether they're gonna or not is

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<v Speaker 1>every time historically when the Federal Reserve moves from accommodation

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<v Speaker 1>to tightening for the first time in the recovery, uh

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<v Speaker 1>nearly every time, the financial markets struggled around that change.

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<v Speaker 1>A little before it, a little after they struggle. And

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<v Speaker 1>this happened in ninety four, it happened nineteen, it happened

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<v Speaker 1>two thousand four every time when the FET first started

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<v Speaker 1>to titan. What what's happened here is the FET has

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<v Speaker 1>suspended the markets at the start here perpetually. It started

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<v Speaker 1>in two thousand fourteen when they ended quee, and then

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<v Speaker 1>they paused, and then they did again in December last

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<v Speaker 1>year when they raised rates, and then they paused, and

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<v Speaker 1>so now we've had more than two years of suspending

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<v Speaker 1>exactly exactly in the market continues to stroll. It's like

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<v Speaker 1>pulling off a band aid a little bit at a

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<v Speaker 1>time rather than ripping it off and just letting the markets.

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<v Speaker 1>Did your father do that? Did your father like put

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<v Speaker 1>the little threader on your tooth and throw the work

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<v Speaker 1>out the window? Absolutely? I did that. Um you know,

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<v Speaker 1>I looked Jim Paulson at your two year malais and

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<v Speaker 1>I love it. In the twelve twelve months moving average

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<v Speaker 1>of the down breaking just below the twenty four months

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<v Speaker 1>on m A within that is the old tribe, the Carter,

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<v Speaker 1>the Carter malaise. Is this the yelling malaise kind of is?

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<v Speaker 1>And I almost think Tom that it that if the

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<v Speaker 1>if the FED would just get on a course and

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<v Speaker 1>stay with it, whether they want to raise rates two

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<v Speaker 1>times a year or three times a year. If they

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<v Speaker 1>just stayed with her for a while, the market could

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<v Speaker 1>move on, I think, and so would the economy, and

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<v Speaker 1>so could corp rations and their capital spending plans and

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<v Speaker 1>their hiring plans. I think the FEDS become too much

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<v Speaker 1>of the story here, and when you be you know,

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<v Speaker 1>I used to have an old man to tell me,

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<v Speaker 1>when your manager's style starts to affect results, apply less

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<v Speaker 1>of your management. And I kind of think that's what's

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<v Speaker 1>happened here at the FED. UM. Personally, I think fundamentally,

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<v Speaker 1>as as Mike suggested, Uh, I think things look okay

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<v Speaker 1>by and large. UM, I'm seeing um economic surprising to

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<v Speaker 1>seize rise around the globe. Me last night, we had

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<v Speaker 1>an outsized surprise in Japan's GDP. We've gotten better dat

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<v Speaker 1>out of China, Eurozone data has been better. UM. I

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<v Speaker 1>think we'll continue to okay in the United States. I

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<v Speaker 1>think it definitely could handle just the slow, steady rise

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<v Speaker 1>in monetary policy. And if we did that, I think

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<v Speaker 1>the market would get off the FED and start focusing

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<v Speaker 1>on fundamentals again and be a better market. But what

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<v Speaker 1>are the fundamentals at this point? We're certainly not. The

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<v Speaker 1>company is making a lot of money now. Earnings has

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<v Speaker 1>been a very big concern, There's no doubt about that. UM.

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<v Speaker 1>But I think a few things are going right. Uh.

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<v Speaker 1>One of them is I think there's a sense that

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<v Speaker 1>work can maybe back past the worst earning season uh

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<v Speaker 1>here this year at least, if not in the recovery,

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<v Speaker 1>and earnings are going to get better for no other

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<v Speaker 1>reason than the big culprit that dragged him down was

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<v Speaker 1>a collapse in commodity prices, which is now reversing. UM.

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<v Speaker 1>So you get a sense of better momentum as we

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<v Speaker 1>moved through the rest this year. Earnings. In addition, the

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<v Speaker 1>deflationary abyss story is starting to fall apart, with not

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<v Speaker 1>only recovering commodity prices, but increases in core costs and

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<v Speaker 1>wages as well. Um. I As I said, I think

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<v Speaker 1>economic surprise and disease suggests some revitalization of momentum. And

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<v Speaker 1>I think the biggest thing I like more than anything

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<v Speaker 1>right now as an investor is just I just love

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<v Speaker 1>the widespread pessimism, the climbing a wall of worries back. Um,

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<v Speaker 1>We're we're within an eyelash and new all time record

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<v Speaker 1>highs here, and there's nobody, very few touting that we're

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<v Speaker 1>gonna go to new highs or that it's a good

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<v Speaker 1>time to be in stocks. I kind of think, I

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<v Speaker 1>kind of think the surprise is going to be to

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<v Speaker 1>the upside. That's my guess. Did you know, Michael McKee,

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<v Speaker 1>there is a YouTube video on how to pull your

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<v Speaker 1>child's teeth with a string. We didn't have that, we do.

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<v Speaker 1>I gotta believe that more investors feel that way pulled

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<v Speaker 1>us too slowly rather than just jerking it out exactly.

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<v Speaker 1>That's what we gotta do to move on. I love

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<v Speaker 1>your idea of copy of a new wall of worried.

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<v Speaker 1>Copy that YouTube linked Tom and send it to Jenny Younges. Yeah,

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<v Speaker 1>I will, or maybe to Bill Dudley's Why does he speak, Mike,

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<v Speaker 1>It's like in an hour tomorrow, Okay, excuse me tomorrow.

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<v Speaker 1>I'm sorry. I get Dudley and uh and Fisher tomorrow. Well,

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<v Speaker 1>very good. Jim Paulson with us as well. It will

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<v Speaker 1>continue with Mr Paulson. He's gotta go look at the

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<v Speaker 1>Minnesota Twins box score again. Massive shout out to the

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<v Speaker 1>new York Mets and the Washington Nationals um. Yes, the

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<v Speaker 1>two hours, two hours, thirty two minutes was a game

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<v Speaker 1>that is bliss, That is a perfect game of baseball.

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<v Speaker 1>This hour of Surveillance, brought to by Westchester subar Uve,

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<v Speaker 1>is at Westchester subar out dot com. Here's Michael bar

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<v Speaker 1>with the latest news Headland, Mike Tom, thank you very much.

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<v Speaker 1>Still too close to call. In Kentucky. By the Hillary

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<v Speaker 1>Clinton declared victory and the Democratic primary. Bernie Sanders won Oregon,

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<v Speaker 1>but he still trails Clinton in the delegate account. Donald

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<v Speaker 1>Trump has shifted his focus to foreign policy issues. Trump

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<v Speaker 1>will meet today with former Secretary of State Henry Kissinger.

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<v Speaker 1>Trump also says he's open to speaking with North Carean

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<v Speaker 1>leader Kim John. Vice President Joe Biden says the middle

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<v Speaker 1>class is getting clawbered. The Obama administration is announcing changes

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<v Speaker 1>to overtime rules for workers. I means workers making about

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<v Speaker 1>twenty three thousand dollars a year have to be paid overtime.

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<v Speaker 1>I'm to a forty seven thousand, five hundred dollar cap.

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<v Speaker 1>Biden says employers will have to make a choice either

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<v Speaker 1>they pay their workers over time the over time that

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<v Speaker 1>they work, or they cap their salary workers below forty

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<v Speaker 1>seven thousand, five hundred dollars. They cap their way We're

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<v Speaker 1>work week at forty hours. Either way, the worker wins.

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<v Speaker 1>The new rule kicks in December one. Global News twenty

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<v Speaker 1>four hours a day, powered by our twenty four hundred

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<v Speaker 1>journalists and more than a hundred fifty news bureaus around

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<v Speaker 1>the world. I'm Michael Barr, Mike Tom, Thank you, Michael.

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<v Speaker 1>Time now for the Landrover Parsippany Bloomberg NBC Sports Update

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<v Speaker 1>with Rob Bush, Go Rob, Good morning, Mike and Tom. Noah.

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<v Speaker 1>Synderguard painted a masterpiece of City Phil. He tossed seven

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<v Speaker 1>scoreless and instruct out ten Nats in the route to

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<v Speaker 1>a to nothing win in the series Open or Syndergard

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<v Speaker 1>need a little run support, You got it early on

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<v Speaker 1>a huge crystal game. Kate, you run out and fanners

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<v Speaker 1>at the lead off bomb. It really takes a lot

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<v Speaker 1>of preture on off and then into goes out there

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<v Speaker 1>and if it's another one. So uh, they were really

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<v Speaker 1>nice to Bell to go out there and picture of

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<v Speaker 1>the lead. It was Granderson's seventh home run of the year. Tonight,

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<v Speaker 1>Geo Gonzalez faces Bartolo Cologne Yankees dropped a five three

0:09:17.200 --> 0:09:20.640
<v Speaker 1>decision at Arizona. Michael Pineda dipped to one in five. Tonight,

0:09:20.679 --> 0:09:24.360
<v Speaker 1>Shelby Miller hosts Nathan Uvaldi Alex Rodriguez. He has his

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<v Speaker 1>return pushed back through the weekend. NBA Eastern Conference Finals

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<v Speaker 1>Game one Cleveland trounces the Raptors one four. The trio

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<v Speaker 1>of Lebron Kyrie Irving and Kevin Love at sixty five.

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<v Speaker 1>The Calves are nine and oh in the playoffs. Nothing

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<v Speaker 1>new for Lebron. I don't think we have complacency in

0:09:39.800 --> 0:09:41.679
<v Speaker 1>our in our minds right now. We have a go

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<v Speaker 1>and our goal is not nine wins. It's just not.

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<v Speaker 1>It's not my focus of won nine games in the

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<v Speaker 1>postseason before won fourteen games in the postseason before. Game

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<v Speaker 1>two is Thursday. The seventies Sixers, owners of the league's

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<v Speaker 1>worst record, won the NBA lottery on Tuesday. The draft

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<v Speaker 1>is June at Barkley Center. First round pick this year

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<v Speaker 1>for both the Knicks and the Nets and NHL playoffs.

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<v Speaker 1>San Jose even up the Western Conference Finals at one

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<v Speaker 1>with a four nothing win in St. Louis. Brent Burns

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<v Speaker 1>had a pair of goals and that is your NBC

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<v Speaker 1>Bloomberg Sports Update. Mike and Tom, thanks so much greatly

0:10:17.120 --> 0:10:21.040
<v Speaker 1>appreciate a ten year yield one two year yield advances

0:10:21.080 --> 0:10:23.040
<v Speaker 1>two days in a row. We've got some real elevation

0:10:23.559 --> 0:10:27.200
<v Speaker 1>in the two year point eight five. That's a big deal. Seriously,

0:10:27.240 --> 0:10:30.480
<v Speaker 1>we've seen some real movement there, curve flattening because of that.

0:10:30.679 --> 0:10:34.320
<v Speaker 1>Rising to your yield. Ten year yield fairly static and

0:10:34.360 --> 0:10:37.240
<v Speaker 1>the two year yield higher means less of a difference

0:10:37.240 --> 0:10:40.240
<v Speaker 1>in yield between the tenure and the two year yield.

0:10:40.640 --> 0:10:43.480
<v Speaker 1>Brent crude forty nine dollars exactly made a real dash

0:10:43.480 --> 0:10:47.560
<v Speaker 1>for fifty. Didn't get there this morning. Barrel on Brent

0:10:47.800 --> 0:10:53.200
<v Speaker 1>West Texas twenty year a week dollar modestly stronger this morning.

0:10:53.520 --> 0:10:55.880
<v Speaker 1>Michael McKee and Tom Kane. We need you to stay

0:10:55.920 --> 0:11:03.120
<v Speaker 1>with us across this nation. Good morning. The Sports report

0:11:03.160 --> 0:11:04.920
<v Speaker 1>was brought to you by land Over Participan e. The

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<v Speaker 1>spring sales event is happening now. Visit Landard for Parcipi

0:11:07.640 --> 0:11:18.720
<v Speaker 1>dot com, land Rover pup and via Global Business News

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<v Speaker 1>twenty four hours a day at Bloomberg dot com, the

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<v Speaker 1>Radio Plus mobile app, and on your radio. This is

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<v Speaker 1>a Bloomberg business flash and I'm car in Moscow. This

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<v Speaker 1>updates brought to you by Carbonite. You never know when

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<v Speaker 1>Visit carbonite dot com today to get two three months

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<v Speaker 1>with offer code. Broadcast target down almost eight percent this morning,

0:11:45.800 --> 0:11:48.959
<v Speaker 1>after first quarter sales missed analysts estimates and the discount

0:11:49.040 --> 0:11:52.080
<v Speaker 1>chain delivered a disappointing forecast, adding evidence that the biggest

0:11:52.160 --> 0:11:55.719
<v Speaker 1>US retailers are suffering from a slump. Mose posting first

0:11:55.800 --> 0:11:59.120
<v Speaker 1>quarter profit that beat analyst projections and raised its forecast

0:11:59.240 --> 0:12:02.200
<v Speaker 1>for the year. IT shares are up six tenths per set.

0:12:02.800 --> 0:12:06.720
<v Speaker 1>US Dock Index futures are lower as investors away minutes

0:12:06.760 --> 0:12:09.400
<v Speaker 1>from the latest FEDO Reserve meeting. We checked the markets

0:12:09.400 --> 0:12:12.840
<v Speaker 1>every fifteen minutes throughout the trading day. On Bloomberg SNP

0:12:12.960 --> 0:12:16.240
<v Speaker 1>Emni futures are now down seven points down EVENY futures

0:12:16.280 --> 0:12:19.440
<v Speaker 1>down sixty now as DOCUMENTI futures down twelve. The acts

0:12:19.480 --> 0:12:22.400
<v Speaker 1>in Germany's down three tenths per cent, ten Your Treasury

0:12:22.400 --> 0:12:25.079
<v Speaker 1>down to thirty seconds. The yeld one point seven eight percent.

0:12:25.480 --> 0:12:27.520
<v Speaker 1>Name x Scrude oil down three tenths per cent or

0:12:27.559 --> 0:12:30.800
<v Speaker 1>fifteen cents to forty eight sixteen of barrel COMEX gold

0:12:30.880 --> 0:12:33.000
<v Speaker 1>is down three tens per cent or three dollars seventy

0:12:33.040 --> 0:12:35.920
<v Speaker 1>cents to twelve seventy three forty n ounce the euro

0:12:36.040 --> 0:12:38.320
<v Speaker 1>and other twelve seventy four the n one oh nine

0:12:38.320 --> 0:12:41.880
<v Speaker 1>points three nine and US independent grain trader The Enderson's

0:12:41.960 --> 0:12:45.400
<v Speaker 1>rejecting a hostile one point oh four billion dollar takeover

0:12:45.520 --> 0:12:49.040
<v Speaker 1>offer from HC two holding cents of Bloomberg Business Flash,

0:12:49.080 --> 0:12:52.040
<v Speaker 1>Tom and Mike Karen, thank you so much. Futures again

0:12:52.080 --> 0:12:55.800
<v Speaker 1>to tier E negative seven. It is on Wall Street.

0:12:56.960 --> 0:13:00.360
<v Speaker 1>The following is from Bloomberg View. Opinions in the Jerry

0:13:00.400 --> 0:13:03.880
<v Speaker 1>from Bloomberg columnists. I'm Megan mccartell, a columnist for Bloomberg

0:13:03.960 --> 0:13:06.160
<v Speaker 1>View in Chicago. This weekend, as security lines at the

0:13:06.200 --> 0:13:09.240
<v Speaker 1>airport stretched for hours, dozens of people were stranded overnight.

0:13:09.360 --> 0:13:11.440
<v Speaker 1>The problem is occurring all around the country. The t

0:13:11.600 --> 0:13:14.200
<v Speaker 1>s A blames inadequate staffing, but the number of passengers

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<v Speaker 1>isn't actually up at O'Hara that much, so I tend

0:13:16.280 --> 0:13:19.440
<v Speaker 1>to believe there other explanation. They've slowed down screening after

0:13:19.520 --> 0:13:22.640
<v Speaker 1>last summer's humiliating failure to detect almost any of the

0:13:22.679 --> 0:13:25.560
<v Speaker 1>contraband and a security audit. Whole screening involves a trade

0:13:25.600 --> 0:13:28.640
<v Speaker 1>off between false positives and false negatives. You eliminate one

0:13:28.679 --> 0:13:30.520
<v Speaker 1>by accepting more of the other. When the t s

0:13:30.559 --> 0:13:33.079
<v Speaker 1>A decides to ensure they don't miss a single potential threat,

0:13:33.120 --> 0:13:35.120
<v Speaker 1>they're going to end up flagging every person with an

0:13:35.160 --> 0:13:37.600
<v Speaker 1>oddly shaped body or a badly packed bag, and the

0:13:37.720 --> 0:13:41.520
<v Speaker 1>lines will grow. Rational cost benefit analysis might well dictate

0:13:41.559 --> 0:13:44.040
<v Speaker 1>that it's better to accept some higher risk of threat

0:13:44.080 --> 0:13:46.960
<v Speaker 1>than to accept the lines. After all, no one blew

0:13:47.000 --> 0:13:49.280
<v Speaker 1>up a plane last year even with lax or screening,

0:13:49.280 --> 0:13:51.480
<v Speaker 1>and the collective value of all those man hours spent

0:13:51.520 --> 0:13:54.080
<v Speaker 1>waiting in ninety minute lines is quite high. But that's

0:13:54.080 --> 0:13:56.800
<v Speaker 1>not how political and bureaucratic logic works. I bet that

0:13:56.840 --> 0:13:58.520
<v Speaker 1>in the next six months the t s A will

0:13:58.520 --> 0:14:01.760
<v Speaker 1>be rewarded for longer lines, having its budget and headcount increased.

0:14:01.840 --> 0:14:03.800
<v Speaker 1>If that doesn't fix the problem, I guess the t

0:14:04.000 --> 0:14:05.760
<v Speaker 1>s AS next step would mean to make it look

0:14:05.800 --> 0:14:08.439
<v Speaker 1>as if it did by relaxing the screening standards to

0:14:08.480 --> 0:14:10.880
<v Speaker 1>speed up the lines. The end result a bigger and

0:14:10.920 --> 0:14:13.360
<v Speaker 1>more expensive agency that still doesn't too much to keep

0:14:13.400 --> 0:14:15.240
<v Speaker 1>us safe. As a nice lady said to me when

0:14:15.240 --> 0:14:18.360
<v Speaker 1>I finally deplaned, Welcome to Washington. I'm Megan McCardell. For

0:14:18.440 --> 0:14:20.120
<v Speaker 1>more of you, Please get a movement view dot com

0:14:20.200 --> 0:14:22.600
<v Speaker 1>or do you go on the Bloomberg terminal. This has

0:14:22.640 --> 0:14:26.080
<v Speaker 1>been Bloomberg View and Bloomberg View commentary can be here

0:14:26.120 --> 0:14:30.120
<v Speaker 1>to hourly weekdays. I'm Bloomberg Radio out of the great

0:14:30.160 --> 0:14:33.000
<v Speaker 1>state known as Iowa State. Jim Paulson is with us

0:14:33.560 --> 0:14:38.080
<v Speaker 1>with Wells Capital Management. Jim, is there opportunity within our

0:14:38.200 --> 0:14:42.920
<v Speaker 1>food malaise is a general statement? And look at food stocks,

0:14:42.960 --> 0:14:46.120
<v Speaker 1>and look at agriculture stocks. I look at Caterpillar, Dear,

0:14:46.600 --> 0:14:49.760
<v Speaker 1>let's say cat maybe is the global flat on its

0:14:49.800 --> 0:14:54.160
<v Speaker 1>back moment? Is there an opportunity there? Yeah? I'm more

0:14:54.160 --> 0:14:58.080
<v Speaker 1>in client time right now towards the more producer capital

0:14:58.120 --> 0:15:01.840
<v Speaker 1>goods sort of side of the UH economic equation as

0:15:01.840 --> 0:15:04.800
<v Speaker 1>far as investments in the equity market and and away

0:15:04.840 --> 0:15:07.400
<v Speaker 1>a little bit from the consumer side. UH. You know,

0:15:07.440 --> 0:15:12.400
<v Speaker 1>consumer stocks have dominated the performance under this bull market.

0:15:13.200 --> 0:15:16.240
<v Speaker 1>It's been dominated by disinflation. I think we're starting to

0:15:16.440 --> 0:15:20.240
<v Speaker 1>see some rise in inflation happening, and that's going to

0:15:20.360 --> 0:15:23.680
<v Speaker 1>benefit more of the producers and economy. Uh So some

0:15:23.720 --> 0:15:26.480
<v Speaker 1>of those names you mentioned certainly fit, uh fit that

0:15:26.520 --> 0:15:30.000
<v Speaker 1>bill Um. I think a big part what fits is

0:15:30.040 --> 0:15:33.920
<v Speaker 1>there's much more producer capital goods based economies outside of

0:15:33.960 --> 0:15:36.560
<v Speaker 1>the United States than there is within the United States,

0:15:36.920 --> 0:15:41.160
<v Speaker 1>and so international investments I have have good appeal. That's

0:15:41.160 --> 0:15:43.960
<v Speaker 1>an old radio trick, Jim Paulson. If I mentioned eight sectors,

0:15:43.960 --> 0:15:45.640
<v Speaker 1>I can at least say I'll be right down the

0:15:45.720 --> 0:15:51.840
<v Speaker 1>road investment advisors drink right's gonna say you're scratching an

0:15:51.840 --> 0:15:57.640
<v Speaker 1>old analyst here. Well, when you when you talk about

0:15:57.680 --> 0:16:00.160
<v Speaker 1>being heavy and you're climbing the wall, worry work us

0:16:00.200 --> 0:16:04.240
<v Speaker 1>to a new hikes? Can we go much higher at

0:16:04.280 --> 0:16:09.200
<v Speaker 1>this point? Do we need a consolidation again? Yeah? I

0:16:09.520 --> 0:16:12.480
<v Speaker 1>you know, I'm not saying that we're going to have

0:16:12.680 --> 0:16:15.840
<v Speaker 1>you know, ten to by an old return to the

0:16:15.840 --> 0:16:18.280
<v Speaker 1>rest of the bull market, Mike. But I just think

0:16:18.360 --> 0:16:20.800
<v Speaker 1>right now we may well break the new highs, move

0:16:20.840 --> 0:16:23.720
<v Speaker 1>up towards and then maybe struggle a little bit with

0:16:24.360 --> 0:16:27.960
<v Speaker 1>rate increases, in inflation and margin erosion. But right now

0:16:28.000 --> 0:16:29.920
<v Speaker 1>I think we moveing higher. I like a couple of things.

0:16:30.480 --> 0:16:35.040
<v Speaker 1>I think that domestic demand, to me, of all things

0:16:35.040 --> 0:16:37.600
<v Speaker 1>I look at, is the best thing that's happening is

0:16:37.600 --> 0:16:41.120
<v Speaker 1>ours worked just soared to new high here in the

0:16:41.200 --> 0:16:43.520
<v Speaker 1>latest month. They had stalled out earlier this year, and

0:16:43.560 --> 0:16:45.520
<v Speaker 1>they now broke out to new highs. And even look

0:16:45.560 --> 0:16:49.800
<v Speaker 1>at the Jolts numbers that are there, the unemployment claim numbers. Uh,

0:16:49.920 --> 0:16:52.000
<v Speaker 1>there's good reason to believe that ours worked are gonna

0:16:52.000 --> 0:16:55.360
<v Speaker 1>contain to climb. The domestic demand is going to stay firm. Now.

0:16:55.440 --> 0:16:57.560
<v Speaker 1>What we got in addition to that, which was what

0:16:57.680 --> 0:17:00.520
<v Speaker 1>we haven't had, is we just had the real value

0:17:00.520 --> 0:17:03.920
<v Speaker 1>of the broad US dollar declined by five to six percent,

0:17:04.080 --> 0:17:08.600
<v Speaker 1>which has reversed about one quarter of its rise that

0:17:08.720 --> 0:17:11.199
<v Speaker 1>occurred since for in two thousand fourteen. That is a

0:17:11.359 --> 0:17:16.119
<v Speaker 1>huge change which rather than the rise and dollar reducing

0:17:16.640 --> 0:17:20.359
<v Speaker 1>international demand for US, we're now going to see tail

0:17:20.440 --> 0:17:24.280
<v Speaker 1>winds from the currency boosting international demands at the same

0:17:24.320 --> 0:17:27.280
<v Speaker 1>time that domestic demands stay firm. I think that's a

0:17:27.359 --> 0:17:32.400
<v Speaker 1>really good fundamental change and will likely surprise people maybe

0:17:32.480 --> 0:17:35.600
<v Speaker 1>how fast earnings come back a little bit and UH

0:17:35.760 --> 0:17:38.400
<v Speaker 1>growth in the United States right now, the Atlanta Fed

0:17:38.440 --> 0:17:41.399
<v Speaker 1>GDP now numbers two and a half percent for this quarter,

0:17:42.000 --> 0:17:45.280
<v Speaker 1>and the PC the personal consumption number is estimated at

0:17:45.640 --> 0:17:48.880
<v Speaker 1>three point six percent for the quarter we're in. If

0:17:48.880 --> 0:17:52.320
<v Speaker 1>there's anything close to those numbers, UM, with the tail

0:17:52.359 --> 0:17:54.560
<v Speaker 1>win of dollar weekness, I think we'll feel a lot

0:17:54.600 --> 0:17:57.080
<v Speaker 1>better about international companies in the U. S. In general.

0:17:58.880 --> 0:18:01.159
<v Speaker 1>This may be something of an embarrassing question to us

0:18:01.160 --> 0:18:04.159
<v Speaker 1>and to others in a sense, Um, we like to

0:18:04.160 --> 0:18:06.480
<v Speaker 1>interview c e o s and everybody makes a big

0:18:06.480 --> 0:18:09.439
<v Speaker 1>deal out of it. But do you really when you

0:18:09.560 --> 0:18:11.560
<v Speaker 1>listen to c e o s do you get much

0:18:11.560 --> 0:18:13.399
<v Speaker 1>out of it? Do you listen to them? I was

0:18:13.480 --> 0:18:16.040
<v Speaker 1>just thinking as you were speaking about Gary Stern, who

0:18:16.080 --> 0:18:18.000
<v Speaker 1>used to be the president of the Minneapolis Fed up

0:18:18.000 --> 0:18:20.359
<v Speaker 1>in your area, did a very famous study where you

0:18:20.400 --> 0:18:23.639
<v Speaker 1>found the last people to recognize when a business cycle

0:18:23.720 --> 0:18:27.280
<v Speaker 1>and the markets were turning were CEOs either because they

0:18:27.280 --> 0:18:30.520
<v Speaker 1>were you know, not seeing the forest for their own

0:18:30.560 --> 0:18:33.439
<v Speaker 1>companies trees, or because there was no percentage in it

0:18:33.560 --> 0:18:37.440
<v Speaker 1>for them because as long as they are um undercutting

0:18:37.520 --> 0:18:44.680
<v Speaker 1>expected you know, expectations, they overperformed and under under forecast

0:18:44.800 --> 0:18:49.880
<v Speaker 1>that they're going to keep their jobs. Well, they said,

0:18:49.880 --> 0:18:52.400
<v Speaker 1>you're scratching an old analyst, and there's plenty of blame

0:18:52.440 --> 0:18:54.920
<v Speaker 1>to go around. And in my pretty three years, I've

0:18:55.040 --> 0:18:58.520
<v Speaker 1>I've had a checkered history, So I live as you say,

0:18:58.560 --> 0:19:00.439
<v Speaker 1>if you live in a glass house, you don't of stones.

0:19:00.520 --> 0:19:03.760
<v Speaker 1>I don't see any particularly U CEO is being any

0:19:03.800 --> 0:19:06.040
<v Speaker 1>worse than any of the rest of us at UH

0:19:06.080 --> 0:19:09.320
<v Speaker 1>sort of forecasting growth. Um. But what I do see

0:19:09.520 --> 0:19:12.080
<v Speaker 1>right now when I go around the country is UH

0:19:12.400 --> 0:19:14.359
<v Speaker 1>a lot of fear, a lot of concern about the

0:19:14.359 --> 0:19:19.200
<v Speaker 1>economy in general, about the global economy, about weakness, and

0:19:19.320 --> 0:19:21.840
<v Speaker 1>I think it's a bit overdone, not only among CEOs

0:19:21.880 --> 0:19:26.240
<v Speaker 1>but among analysts and economists, and that to me smells

0:19:26.280 --> 0:19:29.840
<v Speaker 1>like an opportunity. I often look for where sentiment is

0:19:30.040 --> 0:19:33.960
<v Speaker 1>and then try to judge whether that is overdone or underdone,

0:19:34.000 --> 0:19:36.280
<v Speaker 1>and if it has to move, what does that mean

0:19:36.320 --> 0:19:40.239
<v Speaker 1>for securities pricing? And right now I think CEOs are

0:19:40.240 --> 0:19:43.159
<v Speaker 1>going to find themselves not expanding enough and having to

0:19:43.200 --> 0:19:45.480
<v Speaker 1>catch up as well as investors when we look over

0:19:45.560 --> 0:19:49.040
<v Speaker 1>the balance of this year, well within that and within

0:19:49.080 --> 0:19:51.600
<v Speaker 1>the wall of worry, is it almost a buying hold

0:19:51.600 --> 0:19:56.720
<v Speaker 1>strategy where you just ignore the news and climb on board. Well, uh,

0:19:56.840 --> 0:20:00.760
<v Speaker 1>I think right now, as I say, Tom, I like

0:20:00.920 --> 0:20:04.239
<v Speaker 1>to be overweight equities right now, and and uh I

0:20:04.280 --> 0:20:07.840
<v Speaker 1>think we my best guesses, we're gonna have a decent

0:20:07.880 --> 0:20:11.919
<v Speaker 1>little rally here to new highs over the balance of

0:20:11.960 --> 0:20:16.560
<v Speaker 1>this recovery. However, I really think returns on average on

0:20:16.600 --> 0:20:19.600
<v Speaker 1>a buy and hold is maybe like five percent annualized

0:20:19.640 --> 0:20:23.000
<v Speaker 1>returns with a two percent dividend, or even four. You know,

0:20:23.080 --> 0:20:26.080
<v Speaker 1>I don't think earnings can grow nearly as fast as

0:20:26.080 --> 0:20:29.920
<v Speaker 1>they have going forward now, simply because we were got

0:20:29.920 --> 0:20:33.800
<v Speaker 1>a very mature profit cycle with very high margins, and

0:20:33.920 --> 0:20:36.440
<v Speaker 1>so I think at best earnings grow at or less

0:20:36.480 --> 0:20:40.000
<v Speaker 1>nominal GDP, which tells me four to five plus two

0:20:40.040 --> 0:20:42.840
<v Speaker 1>percent divon. That's you're buying old return. But that doesn't

0:20:42.840 --> 0:20:47.000
<v Speaker 1>mean that we could fly up to rise and then

0:20:47.000 --> 0:20:50.639
<v Speaker 1>pull back again maybe later on. And I think a

0:20:50.680 --> 0:20:54.159
<v Speaker 1>little timing at the margin right now in the market,

0:20:54.160 --> 0:20:56.560
<v Speaker 1>which I've referred to from here as a bunny market

0:20:56.680 --> 0:21:00.120
<v Speaker 1>that hops around a lot but doesn't go very far um,

0:21:00.160 --> 0:21:02.439
<v Speaker 1>I think makes some sense. So your core call, this

0:21:02.520 --> 0:21:06.119
<v Speaker 1>is critically your core call is the idea of the

0:21:06.160 --> 0:21:09.760
<v Speaker 1>two year range continuing it is, But I think we're

0:21:09.760 --> 0:21:14.520
<v Speaker 1>gonna set up higher high, and people will become convinced

0:21:14.520 --> 0:21:17.720
<v Speaker 1>that we're breaking out the bulls resuming by and hold

0:21:17.760 --> 0:21:20.440
<v Speaker 1>his back. At that point, you might find me getting

0:21:20.480 --> 0:21:23.840
<v Speaker 1>more defensive again. Okay, it sounds like you're rooting for

0:21:23.880 --> 0:21:28.560
<v Speaker 1>the twins. Jim Paulson, go away. Jim Paulson Wells Capital Management,

0:21:28.560 --> 0:21:32.000
<v Speaker 1>giving his perspective on I guess, Mike the definition of range,

0:21:32.040 --> 0:21:35.280
<v Speaker 1>which is a good way to flunky if a level one, two,

0:21:35.280 --> 0:21:42.000
<v Speaker 1>three four the Bunney market, Doc, well, there it is.

0:21:43.000 --> 0:21:46.720
<v Speaker 1>Futures are deteriorated, Mike and I have no reason yields

0:21:46.760 --> 0:21:48.879
<v Speaker 1>don't move. I mean the two year yield is higher

0:21:48.960 --> 0:21:53.280
<v Speaker 1>point eight five one three percent dollar dynamics micro they're

0:21:53.320 --> 0:21:57.000
<v Speaker 1>a little bit stronger. Dollar oil has not broken higher

0:21:57.119 --> 0:22:00.440
<v Speaker 1>lower forty nine oh six on Brent. True, but none

0:22:00.480 --> 0:22:04.760
<v Speaker 1>of those. There's equities just it's probably fit related to

0:22:04.800 --> 0:22:07.320
<v Speaker 1>a certain extent. You know, people bad news is good

0:22:07.320 --> 0:22:09.440
<v Speaker 1>news or good news is bad news, or whatever kind

0:22:09.440 --> 0:22:11.600
<v Speaker 1>of feeling. At this point. There it is. We're looking

0:22:11.600 --> 0:22:14.720
<v Speaker 1>at equities, funds, currencies, commodities. We do that with economics,

0:22:15.320 --> 0:22:19.520
<v Speaker 1>as Mike mentioned tomorrow, Bill Dudley and Vice Chairman Fisher

0:22:19.600 --> 0:22:22.000
<v Speaker 1>speaking as well, give you a perspective on that with

0:22:22.119 --> 0:22:26.520
<v Speaker 1>many of our steemed guests. Bonus ground another hour of

0:22:26.520 --> 0:22:27.720
<v Speaker 1>Bloomberg surveillance