Speaker 1: Broadcasting live to New York, Kloomberg to Washington, d C,
Speaker 1: Bloomberg to Boston, Bluemberg twelve on its to San Francisco,
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Speaker 1: globe the Bluemberg Radio plus Bloomberg dot Com. This is
Speaker 1: Bloomberg Surveillance. Good morning everyone, Michael McKee and Tom Keene.
Speaker 1: Mr mckeat Berry. Ridholtz pulled the short straw and it's
Speaker 1: with us today Economic indicators brought you by Commonwealth Financial Network.
Speaker 1: When it's time to change the conversation, talk with the
Speaker 1: broker dealer r I A that's ready to listen called
Speaker 1: eight four six two three six three eight or visit
Speaker 1: Commonwealth dot com uh to learn more. We had a
Speaker 1: DP at eight fifteen, fifteen minutes ago, um a little
Speaker 1: bit above but with a revision south. I'm gonna call
Speaker 1: it a churning. A DP did not move markets in
Speaker 1: any way, Jordan thousand, but you know the revision off
Speaker 1: a little bit. Uh. We we we moved to Friday
Speaker 1: and that early April one, John J. Ports thrilled to
Speaker 1: tell you that Jim Glassman and Bill Gross will join us,
Speaker 1: among other worthies. As we look at the American labor economy.
Speaker 1: Right now, we speak with Lindsay pigs Uh on the
Speaker 1: bombshell yesterday from Cheri Yelling. She is with steeple uh
Speaker 1: Nicholas Lindsay, you're perfect to speak to about good data,
Speaker 1: bad data, good data, bad data, good day. You know
Speaker 1: the derby of market economics, Which way is the Fed tilting?
Speaker 1: Is it a series of bad data points? If you
Speaker 1: listen to ye Jerry yelling comments yesterday, you certainly think
Speaker 1: they're airing on the side of focus on that very
Speaker 1: plugging data, particularly from the consumer side. Her comments were
Speaker 1: incredibly dovish, reinforcing the idea that the FED needs to
Speaker 1: exercise caution, which really speaks to the idea of lower
Speaker 1: for longer and really undermine the ability for the Fed
Speaker 1: to even meet that new lowered bar of expected rate
Speaker 1: heikes over the next nine months. Remember in March they
Speaker 1: lowered that from four down to two. But now it's
Speaker 1: the question of whether or not they can raise at
Speaker 1: all this year. So we're looking at jobs data. The
Speaker 1: preview we get from a DP looking at the private
Speaker 1: sector at two hundred thousand, a little above consensus last
Speaker 1: month lowered nine thousand to about two hundred and seven thousand.
Speaker 1: These are fairly robust job numbers we see month after
Speaker 1: month after month, and inflation ticking up to about one
Speaker 1: point seven. The question to ask is what is the
Speaker 1: FED waiting for? Well, I think the employment numbers have
Speaker 1: been fairly consistent. I would argue against fairly ropebusts. Two
Speaker 1: hundred thousand is hardly an empressive employment report. I think
Speaker 1: we've only started calling two hundred thousand robusts because the
Speaker 1: bar of expectations has been lowered so precipitously. But you're right,
Speaker 1: we have seen stability in the labor market and as
Speaker 1: the late inflation does appear to be on the rise.
Speaker 1: But we need to see consistent upward momentum in prices,
Speaker 1: and we've seen that stall in the latest monthly report.
Speaker 1: So I think a lot of committee members are still
Speaker 1: airing on the side of caution, saying, yeah, we saw
Speaker 1: one to two months of rising price pressures, but that
Speaker 1: may prove temporary. We need to see more tangible evidence
Speaker 1: that inflation is a concern as opposed to downside risk
Speaker 1: to inflation. As the global economy seems to remain under
Speaker 1: significant pressure, so it's all about the wages. It is
Speaker 1: all about the wages, And here too, we seem to
Speaker 1: be losing a lot of talking points for the Hawks.
Speaker 1: At the start of the year, we had back to
Speaker 1: back months of above trend wage growth. Remember we were
Speaker 1: up to two point eight. We slowed to two point five,
Speaker 1: but still back to back months of pretty impressive wave chains.
Speaker 1: Now as we look out the Friday, the expectation is
Speaker 1: another month of slowdown to about two point two first sense,
Speaker 1: so really splitting hair when you talk about returning back
Speaker 1: to the two percent trends. The money question for me,
Speaker 1: and I'm not exciting for wisdom lendsay, but maybe you
Speaker 1: can give me a guestimate is if we suddenly look
Speaker 1: at a challenge first quarter without cold weather and other distractions,
Speaker 1: we've got trade to worry about. Do you extrapolate that
Speaker 1: slowed out out the second, third and fourth quarter. I do.
Speaker 1: I don't think we need to extrapolate it out for
Speaker 1: the entire year. We're still looking for about trend two
Speaker 1: percent growth on an annual basis. But certainly what it
Speaker 1: does is it reinforces the idea that the US economy,
Speaker 1: it's still on very fragile footing. As you pointed out,
Speaker 1: first quarter GDP right now is estimated to come in
Speaker 1: right around a half a percentage point. And there's none
Speaker 1: of the usual suspects to blame. It wasn't early easter,
Speaker 1: it wasn't cold weather, it wasn't uh some sort of
Speaker 1: change attack policy. There really wasn't any catalysts aside from
Speaker 1: weakening fundamentals that have for for really undermined that headline
Speaker 1: acts in the first three months. Lindsey Nice, Thank you
Speaker 1: so much. Lindsay pigs with stephil Nicholas after the bomb
Speaker 1: show yesterday. You really see it in the two year
Speaker 1: yield coming in over the last five successions point seven,
Speaker 1: nine to two. Barry Ridholtz, there is a birthday today.
Speaker 1: He is he's thirty nine years old. He is one
Speaker 1: of the great voices of an institution that's really been
Speaker 1: knocked around, and that would be the New York Stock Exchange.
Speaker 1: Mr Paulkari is there every day in the trenches. He's
Speaker 1: one of those people you see folks where you go.
Speaker 1: I remember when it was really really busy and there
Speaker 1: were specialists in the romance that Barry got you and
Speaker 1: me into this business. Kenny pol Cary's birthday today. We
Speaker 1: send birthday greetings. But Barry, who does Kenny work for anymore?
Speaker 1: I mean, he's he's iconic with the New York Stock Exchange.
Speaker 1: It's still there, But for you as a market pro,
Speaker 1: is Ken's world still there? You know? I remember the
Speaker 1: first time I got the tour of the New York
Speaker 1: Sto Stock Exchange, excited, bought the n y S T shirt,
Speaker 1: which I still have. Uh. You go down to the Exchange.
Speaker 1: All of those outer rooms have been closed. They're hurting
Speaker 1: the few remaining humanoids walking around to one small room.
Speaker 1: It's tumble weeds and television sets and that's pretty much it.
Speaker 1: The flour the Exchange is not where the action is
Speaker 1: actutely happening. It's across the across the river at a
Speaker 1: bunch of server farms located right outside of the tunnel.
Speaker 1: Kenney book car his birthday today, and we say greetings
Speaker 1: to him and all down at the New York Stock
Speaker 1: Exchange as they deal with a new world of trading
Speaker 1: and the challenges of the volumes set in the other
Speaker 1: debates that are out there. He's thirty nine, right, I
Speaker 1: don't know. I'll take your word for it. I think
Speaker 1: you should take my word for it. Out of again
Speaker 1: once more and holding Kenny Bakari, UH features up nine
Speaker 1: DELF features up ninety tenure yield one point eight four percent,
Speaker 1: and again that two year stunning point seven nine percent
Speaker 1: oil thirty eight barrel. And it is Bloomberg surveillance. This
Speaker 1: hour of Bloomberg surveillance bought you by Monster White Plains.
Speaker 1: Visit Mazda White Plains dot com with our news from
Speaker 1: New York. Here's Michael Barr Tom Berry. Thank you very much.
Speaker 1: US officials say the Army will announce today it will
Speaker 1: be up military present in Eastern Europe. The Pentagon will
Speaker 1: deploy and armored brigade combat team to Eastern Europe next
Speaker 1: February to reassuring allies worried about threats from Russia. The
Speaker 1: deployment will also send in more modern equipment. Donald Trump
Speaker 1: says he stands behind his campaign manager, who was charged
Speaker 1: with simple battery in Florida for allegedly we're roughing up
Speaker 1: a reporter who tried to ask a question. A new
Speaker 1: survey by the Alzheimer's Association shows many people are not
Speaker 1: prepared for the high cost of home care or nursing
Speaker 1: for a relative with dementia. Many relatives and friends providing
Speaker 1: financial support or care have dipped into their retirement savings,
Speaker 1: cut back on spending, and sold assets to pay for
Speaker 1: expenses tied to the disease. Mark Dunham took care of
Speaker 1: his wife for five years before she died at age
Speaker 1: fifty four. Emotional part of watching her, you know, decline
Speaker 1: from a you know, a vivacious, you know, forty year
Speaker 1: old woman that had worked her whole career and for
Speaker 1: Nordstrom as a merchandiser and a buyer, to you know,
Speaker 1: not being able to dress herself anymore, or understanding that
Speaker 1: a shower was important. The average cost of a semi
Speaker 1: private room in a nursing home is more than eighty
Speaker 1: thousand dollars per year. Global News twenty four hours a day,
Speaker 1: powered by our two hundred journalists more than a hundred
Speaker 1: fifty news bureaus from around the world. I'm Michael Barr, Tom,
Speaker 1: Michael bar thank you so much. Signed out for the
Speaker 1: Bloomberg NBC sports reporters John Tom side of relief for
Speaker 1: Mets fans, The great Matt harve be scare is over.
Speaker 1: He explained what happened. I guess it started with a
Speaker 1: bladder infection that created a blud clot in the bladder
Speaker 1: and passing yesterday. It wasn't a great first day of
Speaker 1: my seventh birthday, but we cleared that and then we
Speaker 1: had a little procedure done this morning just to go
Speaker 1: in and check the bladder and everything was clear. So
Speaker 1: I was gonna pitch two. It is today in the
Speaker 1: Mets final game in Florida, and then as scheduled, we'll
Speaker 1: start the opening Sunday night in Kansas City. Mets will
Speaker 1: be in Las Vegas tomorrow and Friday playing The Cubs
Speaker 1: have not had a good spring. They failed to win
Speaker 1: any of their last twelve games. The Barkley Center Islanders
Speaker 1: shutout in Delander's legal third period. They went through shootout
Speaker 1: and thanks to a Kyleakposso gold and the playoff goalie
Speaker 1: Thomas Gryce, top Carolina two one. I was at a
Speaker 1: four point lead for a wild choir playoffs spot. Devil's
Speaker 1: also won two one over Boston. Not much defense by
Speaker 1: the Nets. Orlando shot sixty the Magic one nine one
Speaker 1: oh five, and I t Semis at the Garden valparasost
Speaker 1: win seventy seventy over b y U Valpo and George
Speaker 1: Washington of the championship game tomorrow, g W past San
Speaker 1: Diego State six and Columbia won a c I T
Speaker 1: final seventy three sixty seven of a. Cal Irvine Lions
Speaker 1: have to play all four games at home. They're the
Speaker 1: first IVY League team to win the post season tournament
Speaker 1: since Princeton won the inn. I We at the bloomber
Speaker 1: AGAINBC Sports Update. I'm John Stafell, Jen, thanks so much.
Speaker 1: We look at that these bonds currencies come out of
Speaker 1: these futures up ten, up a little more earlier, but
Speaker 1: still really elevated off the bang up performance yesterday, the
Speaker 1: Vicks closing thirteen point eight two. While you really wonder
Speaker 1: can we get to a twelve handle of the Vicks today?
Speaker 1: I guess that's within UM reached ten year yield one
Speaker 1: six percent again the two year points seven nine percent
Speaker 1: and abrupt move in the two year um as UM
Speaker 1: Cherry Yelling, Chris Dovish yesterday at the Economic Club of
Speaker 1: New York, Barry Riholtz and Tom King coming up. Barry
Speaker 1: Ridholtz on investment, Bloomberg Savellance, Bloombergs brought to you by
Speaker 1: Ancient Blanket. Ancient named the best accounting form in North
Speaker 1: America for the sixth year in a row by Hedge
Speaker 1: week dot Com Global Business News twenty four hours a
Speaker 1: day at Bloomberg dot com, the Radio plus mobile app
Speaker 1: and on your radio. This is a Bloomberg Business Flash.
Speaker 1: And I'm Carra in Moscow. This updates brought to you
Speaker 1: by National Railty returns on cash and rented real estate
Speaker 1: find them at n r I a dot net. Companies
Speaker 1: took on two hundred thousand workers in March. The increase
Speaker 1: in employment followed a revise two hundred five thousand game
Speaker 1: the prior month, and that was according to figures from
Speaker 1: the ADP Research Institute. US Stock index futures, meanwhile, are
Speaker 1: higher amid optimism. Interest rates will rise at a slower pace.
Speaker 1: Soil is rising for the first time in five days
Speaker 1: in New York, and we check the markets every fifteen
Speaker 1: minutes throughout the trading day on Bloomberg. SNP EVENI futures
Speaker 1: of eleven and a half a points to Downey Many
Speaker 1: futures of a hundred three and NASDAC eveny futures of thirty.
Speaker 1: The acts in Germany's up one point six percent. Ten
Speaker 1: year Treasury down eight thirty seconds the yield one point
Speaker 1: eight three percent yield on the two year point seven
Speaker 1: nine percent. Nimex screw oil up two point three percent
Speaker 1: or eighty nine cents at thirty nine sixteen of barrel
Speaker 1: and Comexs gold is down to ten percent or two
Speaker 1: dollars seventy cents at twelve thirty four eighty announced the
Speaker 1: euro and dollar thirteen thirteen the yen's one twelve point
Speaker 1: six one Yoga where retailer Lulu lam and Athletic up
Speaker 1: five and a half percent in early trading after reporting
Speaker 1: fourth quarter of profit that beat analysis estimates after improvements
Speaker 1: of the company's supply chain cut costs, and State Street
Speaker 1: agreed to buy General Electrics asset management unit for as
Speaker 1: much as four hundred eighty five million dollars in cash
Speaker 1: to expand alternative investments such as private equity and real estate.
Speaker 1: And that's a Bloomberg business flash, Tom and Berry, Karen,
Speaker 1: I thanks so much. It is. The following is from
Speaker 1: Bloomberg View opinions in commentary from Bloomberg Column. I'm Paula Dwire,
Speaker 1: an editor with Bloomberg View. It's conventional wisdom that Bernie
Speaker 1: Sanders has pushed Hillary Clinton so far to the left
Speaker 1: during the primaries on taxes, trade, minimum wages, and Wall
Speaker 1: Street regulation that she will need to pivot hard back
Speaker 1: to the center if she hopes to win in November.
Speaker 1: Look past the stump speeches and debates, though, and you'll
Speaker 1: see that Clinton's rhetoric has changed while her policy positions haven't.
Speaker 1: One example is the minimum wage. When Sanders called for
Speaker 1: a nationwide fifteen dollar minimum, she backed a higher wage
Speaker 1: two but hers was for twelve dollars, citing economists who
Speaker 1: say a fifteen dollar floor could lead to job losses
Speaker 1: in some areas. She also allowed that a higher minimum
Speaker 1: wage might work in more expensive cities and states, and
Speaker 1: said they are free to enact one if they choose.
Speaker 1: Unlike Sanders, Clinton doesn't call for breaking up big banks,
Speaker 1: a position that might demand modification in a general election. Instead,
Speaker 1: she proposes to close loopholes in the Dodd Frank Law,
Speaker 1: and despite criticism of her well paid speeches to Goldman Sachs,
Speaker 1: she has never vowed to refuse Wall Streets money. Call
Speaker 1: it expediency or call it smart politics. Surprisingly, little of
Speaker 1: Clinton's primary strategy will require her to do an embarrassing
Speaker 1: about base in the fall. I'm Paula Dwire, an editor
Speaker 1: with Bloomberg View. For more commentary and opinion, please go
Speaker 1: to bloomberg View dot com. This has been Bloomberg View
Speaker 1: and Bloomberg View commentaries can be here at hourly weekdays.
Speaker 1: I'm Bloomberg Radio. We think all of our supporters that
Speaker 1: keep us going here. Of course, Investco has made a
Speaker 1: huge commitment. I spent time yesterday with their team and Barry.
Speaker 1: I was absolutely thrilled to meet Megan Walsh. She is
Speaker 1: a world famous within dividend analysis. She's got that rare
Speaker 1: distinction which she actually was a trader before she did
Speaker 1: the cf A portfolio management track. And to get everybody's attention,
Speaker 1: is it okay year today to be in the nine
Speaker 1: percentile or one year nineties six percentile or three year
Speaker 1: ninety third percentile or five year ninety four percentile. That
Speaker 1: gets everybody's attention to that's not too shabby. So Barry,
Speaker 1: I'm not going to give you the name of the company.
Speaker 1: It's a company we all know, we all use their products.
Speaker 1: It pays a dividend of two point nine, it's got
Speaker 1: a five year dividend growth rate of ten point one
Speaker 1: two percent, but the pe is twenty two. Is Megan
Speaker 1: Walsh's world price to perfection. If you're talking about dividends,
Speaker 1: there's a huge spread in companies. Some are modestly priced,
Speaker 1: some are fairly priced, and some are a little pricey.
Speaker 1: And history has told us that when you buy expensive stocks,
Speaker 1: especially dividend stocks, when you overpay for them, that doesn't
Speaker 1: work out especially well over the long haul. And when
Speaker 1: you say work out, and this is so important, folks,
Speaker 1: the distinction between getting killed, which you obviously don't want
Speaker 1: to do, but the other distinct should it should buy
Speaker 1: them fully priced? And then you go nowhere, Yeah you
Speaker 1: when you let's let's let me randomly pick a company
Speaker 1: out there, um like McDonald's, right, and and we haven't
Speaker 1: talked about this. I'm just randomly punched punched it in.
Speaker 1: You have a hundred eleven billion dollar market cap and
Speaker 1: then a forward PE of about twenty five and not
Speaker 1: exactly a fast growth rate growth rate of eight point
Speaker 1: five off of lower levels too. It's hard to see
Speaker 1: how that's a company that that can continue to grow
Speaker 1: with those those levels. By the way, I think back
Speaker 1: a few years ago. And it was just two or
Speaker 1: three years ago when Chapultle was on the rise, McDonald's
Speaker 1: was out of favor. The stock was at multi year
Speaker 1: lows and it was changed trading at a very very
Speaker 1: cheap multiple. If you, if you, if we're not as
Speaker 1: smart as Megan Walsh Vinvesco, I get that. What's the
Speaker 1: strategy for someone who wants to play in the rithols
Speaker 1: Meganwash World knows they're not gonna be Megan Walsh, but
Speaker 1: at least they don't want to get hammered. You don't
Speaker 1: have to be smart. You can outsource your thinking to
Speaker 1: Warren Buffett. Do I want to be Peter Lynch? So
Speaker 1: if you want to be Peter Lynch, or better yet,
Speaker 1: Benjamin Graham, that's what I mean by outsourced you're thinking.
Speaker 1: They've made it clear, they've proven that when you buy
Speaker 1: inexpensive companies for the long haul, you're gonna do much
Speaker 1: better than when you buy expensive companies. And by the way,
Speaker 1: very often we're talking about the same exact name McDonald's
Speaker 1: two years ago, McDonald's two years forward, very very different
Speaker 1: risk reward pres Look at Microsoft another great example. The
Speaker 1: next idea, if I'm smart enough to buy McDonald's when
Speaker 1: it was a total disaster and now it's twenty five
Speaker 1: times forward or whatever the ratio as you gave. Do
Speaker 1: I hold it and then wait for the buy again,
Speaker 1: or you're gonna do a transaction and find the next
Speaker 1: smartest cheap thing. It depends on where you're sitting. If
Speaker 1: you're sitting, depends on your text, right, if your that's
Speaker 1: what I was, I mean, it depends on what you're sitting.
Speaker 1: Are you holding this in a in a qualified account
Speaker 1: or you hold it in an individual account? Are you
Speaker 1: trading for P and L on a desk somewhere, or
Speaker 1: or are you a long term investor who made a
Speaker 1: goodbye two years ago and are probably better off just
Speaker 1: letting it run for the long haul. It's always hard
Speaker 1: on the radio or on television to say here's what
Speaker 1: you should do. I don't know who you are. I
Speaker 1: don't know what your tax bracket is, I don't know
Speaker 1: how much money you've saved for retirement. I don't know
Speaker 1: what your risk parameters are. So just saying by McDonald
Speaker 1: cell McDonald's doesn't give people a lot of insight. If
Speaker 1: you're in it cheaper and and you're doing well with it.
Speaker 1: There's no reason to cut and run. On the other hand,
Speaker 1: it's a tough stop to buy up at this price.
Speaker 1: But one alternative, and it's that doesn't work so much
Speaker 1: within the oligopolin known as a industry. But one idea
Speaker 1: is if you have a big name and you know
Speaker 1: it's too visible, loved, etcetera shift to a mid cap
Speaker 1: equivalency um right now. So we spoke with Tom Dorsey
Speaker 1: last week. That will be that will be on Master's
Speaker 1: business this weekend. Why did you see that change? Shameless
Speaker 1: plug right there. One of the things that Tom has
Speaker 1: been discussing is the big caps have been dominating for
Speaker 1: six or seven years and at only over the past
Speaker 1: quarter or two have we seen that shift from dominance
Speaker 1: of lodge cap towards small cap. So again, if you're
Speaker 1: a nimble trader and you want to look at better,
Speaker 1: better rivers to fish in, small mid cap might be
Speaker 1: a place to look at. But if you're a long
Speaker 1: term investor and you own these things inexpensively, there's no
Speaker 1: reason to guess that this is the top for McDonald's
Speaker 1: and then try and see what you can find. I'm
Speaker 1: guessing you're too young to remember when people sat around
Speaker 1: with a blue book, which was the SMP bond book.
Speaker 1: The bond guide came every month and your your grandfather
Speaker 1: would drop a cigarette ashes on it as he looked.
Speaker 1: I remember the value line books that used to call
Speaker 1: I have a bad right ankle from tripping over a
Speaker 1: thick and you would get one every and there were
Speaker 1: the insucts would come every month. It was like a
Speaker 1: loose leaf bindre. Do you create income now in bonds?
Speaker 1: Do you have to go to prefer its you convertible?
Speaker 1: So it's a philosophical shift. Number one. You have to
Speaker 1: get out of the mindset. You know, my father in
Speaker 1: law who's no longer here, BUTO the New York City
Speaker 1: GEO bonds that were yielding twelve and four and when
Speaker 1: they came up, when the bonds were finally called and
Speaker 1: the tenure was yielding five and a half percent, he
Speaker 1: was very angry. People would be thrilled with the five
Speaker 1: and a half percent. You have to recognize that it's
Speaker 1: no longer days gone by that we've had a thirty
Speaker 1: year bond bull mark sucket the ten years at two percent.
Speaker 1: If you want munis that gives you some opportunities. It
Speaker 1: depends on what state you live in, but it's not
Speaker 1: a high yield environment. Thirty seconds and Bill Gross to
Speaker 1: join us Friday here on Job Today. Were thrilled about that.
Speaker 1: Do you like the concept of unconstrained Do you want
Speaker 1: to know what your portfolio is gonna buy? Or do
Speaker 1: you want to give the privilege to someone who's wise?
Speaker 1: As I'm an asset allocator, so I don't like the
Speaker 1: idea of an unconstrained bonds. I want this guy running
Speaker 1: my my mortgage backed securities, and I want that guy
Speaker 1: running my corporates, and I want this guy running my
Speaker 1: high yields, and I want to make that asset allocation
Speaker 1: decision as opposed to a sort of nebulous thing. Although listen,
Speaker 1: I can't argue with Bill Gross's long term track record.
Speaker 1: It's been He's run into a few troubles over the
Speaker 1: past few years, but his long term forty year track
Speaker 1: record is phenomenal, and on a relative basis, he's had
Speaker 1: a spirited year versus some of his good competitors. Yes,
Speaker 1: Capital is well, this is wonderful, very rid holts with
Speaker 1: us as we do a little more investment because McKay
Speaker 1: and I are economics, economics, economics, all the time. Futures up,
Speaker 1: eleven down, features up one oh four uh, and again
Speaker 1: a two year yield. Oh it's sound flat point seven
Speaker 1: eight percent. Let's have a song for cher yelling as
Speaker 1: we go to another hour of surveillance