00:00:02 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube. 00:00:27 Speaker 2: What a joy on a non like fed day, Jobs Day Now conversation with Priam Mizra of JP Morgan. It's sort of like on a a quieter day where we can be calmer. 00:00:39 Speaker 3: There's charts out there. 00:00:40 Speaker 2: Priam isra of like higher yields and it's worry omg, thirty year bond. Are you you have angst here? Like I read the auction and people showed up to buy our paper. Do you have angst? Or is it like okay to have rates here? 00:00:55 Speaker 4: I like rates here. I mean as a fixed there is incoming fixed income. There is also the ability for capital appreciation if the economy slows down. Fixed income is providing you that hedge. But since you bring up the auction, you know the auction was actually fine. We look at bits to cover, we look at end user demanded dealers have to take it all down. That would create a lot of angst because we have a ton of debts the US government, global governments, corporates. If there wasn't demand to meet this supply, I think then there would be angst. But right now the auctions were fine. Interest rates have risen, but I think if you zoom out and you go back to the late nineties or the pre Lehman time period, actually interest rates don't look particularly odd. I think they are pricing in all the supply that's coming in. They're pricing in potentially higher productivity through AI. But there is still I would go back to we're seeing inflows into fixed income, so there's demand for treasuries. There's demand for all the corporates now at wider spreads, at higher new issue concession. So there's a price that the market is demanded for all this supply. But the demand is there at a price, and I think that's what we're We just have to get used to the new normal of better higher interest rates. 00:02:09 Speaker 5: Who buys our treasury securities these days? 00:02:12 Speaker 4: Great point, because I think it has changed in the last ten years. It used to be foreign central banks, it used to be the FED, and now it's what I call price sensitive buyers, and which is why these interest rates have risen what we call term premium, which is how much more you should get paid to extend out the curve that has risen. So who's buying it. It's people like us, It's asset managers, It's what the FED calls households, which is not necessarily the average person on the street. But if you have any money in a retirement account or in a brokerage account and you put it in a fixed income fund, so those are the largest buyers. But I would say US banks are biased, and foreign investors are still buying treasuries given the yield, given the fact that the FED is credible, I think that there's still that demand from the rest of the world. It's just smaller than it was ten years. 00:03:00 Speaker 6: This Jackson Hole thing is going to be, I think important for the market coming up later this month. It's so important that we're sending Tom Kane and Michael McKee at the. 00:03:08 Speaker 3: Jackson Hole here to cover force. 00:03:10 Speaker 5: What are you looking for? 00:03:12 Speaker 4: I'm very jealous. 00:03:13 Speaker 2: I know. 00:03:14 Speaker 4: Jackson Hole is like the ultimate holy Grail. All these central bankers get there, they debate topics. So Tom enjoy it's an important, very important, you know meeting. I think particularly right now, because there's uncertainty around the economic outlook. There always is. Now there's uncertainly about the FED reaction function. And it's not just one reaction function. 00:03:35 Speaker 6: Reaction function is for people that don't know, it's just how the FED reacts. 00:03:40 Speaker 5: Do we know how the Fed's going to react to a certain piece of economic data? Is that what we're talking about exactly? 00:03:44 Speaker 3: Yes? 00:03:44 Speaker 4: I think we want to understand as data comes in. The FED doesn't know the data and not do us, But as the data comes in, how would the FED react do they Is there a trigger point? Do they need inflation to get back to two percent this year's high bar do they just need it to decelerate? Which is it is doing that to allow them not to hike. So I think getting a sense. I know, Cheer Walsh has not given us much of a sense of his reaction function, but other FED officials have. So what I'll be watching is his speech other FED officials on that reaction function this weekend. 00:04:17 Speaker 2: Everyone's going to have hysteria a lot of barons Saturday morning. Is just is very valuable, Okay, fine, and they're going to all analyze spreads. The difference between the two year and the ten year yield, the three month of thirty year. How does pre and misery use spreads to get a confidence to buy the next marginal bill note bond? 00:04:36 Speaker 4: So you're talking about essentially the yield curve. So has the curve steepened out enough? 00:04:41 Speaker 2: Is it a constructive tool for you or is it just a media frenzy. 00:04:44 Speaker 4: Oh, it's an important tool. I would decompose it further to say, is this real rate or is it inflation? What we're finding is it's real rate, which makes us like further out the curve a little bit more. So, Yes, you know, I think the curve has deepened. The market is charging, is paying you more or is asking for more real rate? And that makes me feel like the FED is still credible the market expects inflation to come back down. I think these spreads are starting to look attractive to extend out the curve. 00:05:13 Speaker 2: What was it like when you got into Lady shri Ram College in Delhi, Like, that's the most prestigious economics program. 00:05:23 Speaker 4: Right, it's a good program. It's all of us debating economics. And actually it was in the late nineties we were debating productivity. So some of what we're going through now, is I go back to when I was in school. What does new technological you know, evolution, What does it mean? Does is it disinflationary? Does it raise our star? The debate that do we have a. 00:05:45 Speaker 2: Classic capital deepening with all this. 00:05:47 Speaker 3: AI capex exactly? 00:05:49 Speaker 4: And you know they'll be winners and losers. But from a macro standpoint, this is actually it tends to be disinflationary. It doesn't tend to result in massive job losses, but there's a transition peeded and we're sort of, I think, in that moment right now. So I go back a lot to when I was studying economics and it's useful. 00:06:09 Speaker 3: Prea, thank you so much. 00:06:10 Speaker 2: What a joy to ever gonna what's the FED gonna do? It's not like a day like this, pre miser you know why she's here. She's the only one in the office today at JP Market. That's what it is, pre am misery. Thank you, Thank you so much. As everybody. Bob, Michael and Teamer work from home to say the least. 00:06:28 Speaker 3: Stay with us. 00:06:29 Speaker 2: More from Bloomberg Surveillance coming up after this. 00:06:40 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern. Listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube. 00:06:52 Speaker 3: And Sarah Hunt joins. 00:06:53 Speaker 2: It's economics out of Wesleyan and of course moving money for Alpine sexon Woods as well. 00:06:59 Speaker 3: Walmart. I guess it's supposed to be a. 00:07:02 Speaker 2: Nominal GDP proxy five six seven percent total return the last ten years, eighteen percent per year, and I got it's popping. It's a poping a forty two present pe multiple. Are we that in love with the American consumer? 00:07:19 Speaker 7: I think we're that in love with consistency, And I think the consistency is one of those things where people are always looking for that kind of long term compounder. So is that a price at which we can continue to long term compound if they continue to grow sales, that consistency gets paid for. But I think that that's one of those questions that, like everything else with valuations, is where people start to get concerned about where things are relative to where they can go. 00:07:43 Speaker 6: Where do you think the AI story is for investors these days? I think at the early stages, we just bought the NVIDIAs of the world and chips. Maybe maybe that's still a great way to play it, but people have been trying to. I think the market's kind of discerning winners and losers. Even some of these software as a service stocks cut its work thrown out recently. How do you how are you guys playing it these days? 00:08:04 Speaker 7: So, yes, in the beginning, it was all about the infrastructure, and we still go back to that periodically, right, we get these scares that either the growth isn't going to be there or the ROI isn't going to be there, and what does that mean? And then you get bigger CAPEX numbers and then they were exciting, and then they weren't exciting, and then they were a problem. So I think that there is people are starting to look at where I'm going to see that return. But you're seeing such good growth out of I mean, I think that the Microsoft numbers and the Amazon numbers, that growth really helped the story a lot, because you're seeing that growth and I don't think we're quite at the point where we can differentiate that granularly yet. So people go back to whenever there's a drawdown in the suppliers, back into that original infrastructure discussion, and I think that that will continue to vacillate and change as we get new information and you get new things happening. 00:08:47 Speaker 5: How about outside of the AI can extend some people who have been kind of have AI fatigue. Where else should I look in this marketplace for some return? 00:08:55 Speaker 7: Well, I think you've seen some incredibly good numbers in places that are outside the AI space, and I think that there. I mean, the earnings growth is really what's helping this market, and the concern is really that the earnings growth is going to slow down, because it's all about earnings in the end, and that's usually what presage is any real problems right now, you're not seeing that yet. And even to the extent that your prior guest was talking about consumer, it was interesting the nuance in his understanding of both the weather and other phenomenon. I do think that the consumer is still spending. Whether or not they can continue to do so ad infinitum is the question. But that hasn't been a problem and people have been looking it for it. 00:09:26 Speaker 2: I want to come back after the retail bombshell. We're going to get and talk about, you know, some of the things you've said here on how far out we look, but I guess to get it to retail sales right now. Give us your reinterpretation and update on a K shaped consumption economy. 00:09:42 Speaker 7: Well, there has been a lot of talk about that lower part of the K doing better from both a job's perspective and a wage perspective, and I think that that's where you start to see. 00:09:50 Speaker 3: Instead of the. 00:09:51 Speaker 7: Top of the K coming down, you'd rather see the bottom of the K come up. Whether or not that is a sustainable move, and or whether or not that was a dipping gas prices that have now come back as go to be. We're gonna have to see how that plays out over the next several months, but that cohort spending is good news for the economy. 00:10:05 Speaker 3: Really, come back, Sarah Hunt with us. 00:10:07 Speaker 2: We're gonna go see if a nerd when we come back, unless it's a massive bombshell. And after talking to aditya bave miss Hunt mentions he was quite dour about the data we will receive here in thirty seconds. 00:10:21 Speaker 3: But Paul, I mean, there it is. 00:10:22 Speaker 2: It's a It used to to me, it used to not be a big deal, and all of a sudden, retail sales is like a Tier one kind of economic study. 00:10:30 Speaker 5: Yeah, I think it is. 00:10:31 Speaker 6: It gets its own day here, But I think the you know, the fact time that we do have a greater appreciation of how much consumer is of this US economy. You really have to have your fringer on the pulse of kind of how the consumers really doing it there? And retail sales is one of those. 00:10:46 Speaker 3: Name one quick metric here. 00:10:47 Speaker 2: Remember this number, do not write it down, Do not take your hands off the steering wheel. Four point one one percent is a two year yield in three basis points right now, that's that short term fed guessing kind of two year four point one one percent. We'll see where we are across American retail. 00:11:06 Speaker 8: And a big pullback in July, retail sales down six tenths of a percent. Wall Street was expecting a gain of a tenth of a percent, and this is compared to a rise of two tenths of a percent in June. Some analysts say part of that pullback is due to Amazon's Prime Day moving from July to June this year. If you take out automobiles, month over month retail sales negative zero point three percent compared to a drop of zero point two percent the prior month. Again, Wall Street was expecting a gain there of two tenths of a percent, And if you take out auto and gasoline, we've got retail sales negative a zero point two percent. That's compared to a rise of four tenths of a percent the prior month, and it is less than the three tenths of a percent. Wall Street was looking for additional factors here, maybe contributing to weakness. We had a July heat wave around the July fourth weekend, also post World Cup effect, most of the games were played. We know in June this spending slow down looking like it was broad based across a lot of categories, including clothing, furniture, and gasoline. So once again, the overall number retail sales four July negative zero point six percent, worse than expected. Tom and Paul. 00:12:13 Speaker 2: Alexis thinks so much, we're going to offer to titcha Bave to come back with us here across the arc of the show. Can we just basically, I mean, I mean, Michelle Meyer never did this at Bank of America. 00:12:23 Speaker 5: I think you nailed it. 00:12:23 Speaker 2: They absolutely nailed it over at Fortress point a hand, Michael was working for Michael Gabe. 00:12:31 Speaker 3: It's hard. I mean, say he's a tenness master. 00:12:33 Speaker 5: Negative zero point six percent. I'm like, what what did I hear? 00:12:36 Speaker 9: Well? 00:12:37 Speaker 3: So there it is. 00:12:38 Speaker 2: And you know, maybe it's because they got banking knowledge out of consumer bank. 00:12:42 Speaker 9: I don't know. 00:12:43 Speaker 2: What you got is a bond move. I mean, that's all there is to it. The two year hield was a four point one one and comes into a handle of four point zero nine. We're in four basis points maybe not a little bit of resiliency inequities. 00:12:55 Speaker 3: Fish is a bait. 00:12:56 Speaker 2: I don't want to play it, but there it is, Sarah. And with this right now, I got to go to these numbers, is as well? Do you think the economists will recalibrate Q? What are we in Q three Q three GDP of these negative numbers if it's. 00:13:12 Speaker 7: More sustainable than a month But I did. I mean, it's incredible that he nailed that to such incredible specificity, right because it wasn't negative five tens, it was negative six, and here we are negative six. 00:13:22 Speaker 3: I think that the explanations that. 00:13:23 Speaker 7: He was talking about, and the fact that they have good credit card data probably helps a lot of that understanding, because you can sort of see the trends there. I think you yeah, So I don't know that that is a if that was all of the forces that we just discussed, the heat wave of the World Cup, everything else, and or the fact that gasoline was all over the place in July. We'll see how that comes into next year, in the next month, but I don't think that that's a permanent thing. We'll see how that goes. 00:13:48 Speaker 2: I want to come back to your wisdom on how we're pricing equities right now, and I think we're talking about Walmart at a forty multiple. And the basic idea is we're all wet into a mathematics of a terminal value. And I'm going to suggest, almost European like, we've mentally extended out our terminal value. And the textbook was five years, seven years, and I don't know where the new one is, but it's eight years, nine years. 00:14:17 Speaker 3: Mike ro saw it alone one year. It's old world almost. 00:14:21 Speaker 2: You are we valuing a new terminal value, which lifts the guess. 00:14:26 Speaker 7: I think that what we're adding to that terminal value is, as I said earlier, consistency. And when companies can put up consistent numbers, they get a benefit to that, and when that breaks is when you start to see a correction. 00:14:37 Speaker 10: And you saw a lot of stocks get. 00:14:38 Speaker 7: Punished really badly in earning season when they had any kind of disappointment or something that looked like looking forward wasn't going to show the linear trajectory that we were showing. That linear trajectory is going to end up being the issue because we tend to as Wall Street and investors project out in a straight line. That line is very rarely straight, but at the time that's what you have to go off of. So if we start to see that line come down, if we start to see that second derivative turn negative, I think that's the biggest risk for the market right now. 00:15:05 Speaker 2: There you go. 00:15:06 Speaker 5: So, I mean, I'm still dumbfan of Tom Bike. It just nail on call there. 00:15:11 Speaker 3: Well, some things are you know. 00:15:13 Speaker 2: I'm going to say that that this is easier to guess than non farm payrolls, which has a massive standard error. It's called a standard air. It's one over the square of something. 00:15:22 Speaker 9: Yep. 00:15:24 Speaker 5: All right, Sarah Hunt, thanks so much. 00:15:25 Speaker 3: Appreciate that you have a target. It's Friday. I need a target. Do you have a doubt? 00:15:31 Speaker 7: Want to Edyard Denny got himself to the top of the leader borg on targets. If you're talking about for the S five hundred and I think that it's a very difficult thing to come out with. I mean, I think that we expect the market to continue right now as it is, absent any major shocks, which has been a long slow drive up with some bumps in between. I don't know that that is a number target that I want to give you, but I definitely think that we see a good, good year. 00:15:54 Speaker 2: Sarah Hunt, thank you so much. Bloomberg Surveillance. Stay with us are from Bloomberg Surveillance. Coming up after this. 00:16:10 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube. 00:16:22 Speaker 2: Joining us now on short notice. As literally as people are a hyper apoplectic. He's got to get back to Bank of America thrilled it after Lisa A. Bramwt's beat him to death on Bloomberg Television. Aditya Bave can come back, Sweeny demanded, you come back. I don't care. How did you nail this retail call? What's the process that got your team there? 00:16:45 Speaker 10: Right? 00:16:46 Speaker 3: So it's a few things. 00:16:47 Speaker 5: Right. 00:16:47 Speaker 10: We have incredible data scientists. That's the first thing I'll say. We get this very large data set that's aggregated credit and debit god spending from Bank of America. Our data scientist process it. They are really really top notch. And then they gave us kind of a variety of ways of thinking about the forecast. Then we apply some judgment, and we also think about how the seasonal factors are going to behave for the month. But that will mush that all together. 00:17:13 Speaker 3: And we here we are an hour ago. Let's listen, it's a mixed story here. 00:17:18 Speaker 10: We are very low in July retail sales. We I believe have the lowest forecast on the street for the control group negative sixtents. However, negative negative sixtents however, is that what. 00:17:29 Speaker 5: You're catulus from near Chicago. That's what that spits up. 00:17:33 Speaker 10: That's what the card data are telling us. How BAC card datake it? 00:17:36 Speaker 3: I mean that's scary. Yeah, it's like you nailed it. 00:17:39 Speaker 5: Yeah, I mean, if you're in a congress that this is a good day. 00:17:41 Speaker 3: Post swizzing with doctor balve D. 00:17:43 Speaker 6: I guess you know the probably follow up question all your clients are going to be asking you is is this just a blip or is this something we need to be worried about here? 00:17:50 Speaker 3: No, it's it's largely a blip. Look. 00:17:52 Speaker 10: I would say that the downward revisions to May and June were a little bit more concerning than the weakness in July. We knew July was going to be weak. So if you think about the control group, a third of that is non store retailers. Right now, imagine what happens when you pull forward Prime Day and the related retail promotions from July to June. 00:18:14 Speaker 3: Especially. 00:18:14 Speaker 10: It's a double whammy, right, because you're pulling this forward, so it flips the month of a month growth without the seasonal adjustment. But then your seasonal factor is actually expecting it to happen in July not June, so it's much more punitive for July than June. 00:18:28 Speaker 3: Right, So it's a big flip. 00:18:30 Speaker 2: This is a window folks in the specificity or speaking of that in studio, Stacy Van Smith Everybody's Business a podcast with a question for doctor bove Bank of America. 00:18:41 Speaker 11: Oh yeah, I was wondering. I mean one of the factors, certainly Prime day is a big one, but also we just have not been keeping up with inflation for a while now. Is that possibly what's hitting retail sales? That things are just less affordable for a lot of people. 00:18:53 Speaker 10: So retail sales have actually been quite strong. Yeah, the last several months. We had one bad month and then somehow would revisions that make the previous months look a little bit less strong. But actually, what's happened since the period where prices outpaced wages started with the Iran conflict and then the increase in gas prices. But simultaneous to that there was fiscal stimulus. So until a couple of weeks ago, our estimates were that cumulative, the cumulative increase in tax refunds was actually greater than the impact of higher gas prices. That's flipped now, but we did get a sixty billion increase in tax refunds reutive to last year. 00:19:32 Speaker 5: Has that played out do you think in this economy? 00:19:35 Speaker 10: Well, the question is have folks spent all that money? And I would guess probably not all of it because a good amount of that money went to middle and higher income folks rather than lower income. But it's certainly been a pretty helpful offset. 00:19:49 Speaker 3: That's good. 00:19:49 Speaker 2: They just see the Moini had just emailed me from Bank of America, says tell us that you can take the rest of the day off. Thank you so much, your trooper for coming back. Thank you, thanks so Jadicia, Babe. Where the with just a brilliant, brilliant call on retail sales? 00:20:04 Speaker 3: It is not easy to do that. 00:20:06 Speaker 2: Of course, they're advantaged by the reach of mister Moynane's consumer banking across his Bank of America. 00:20:15 Speaker 3: Stay with us. 00:20:16 Speaker 2: More from Bloomberg Surveillance coming up after this. 00:20:26 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube. 00:20:38 Speaker 2: Good morning everyone, you're going to stagger to the market opening here. Yes, it feels like a Friday tape. What you do you get out of Boston? Escape to Boston weekend in New York City? Sounds like a Barry manilis yep. Katheryn Kaminski joins us. Now Alpha simplex honor to ever in the studio. Let's let's do the why here before we get to the market opening. There was a guy ages ago, there was a point where derivative finance, quantitative finance became cool. And there were axes, and one of them was Imperial College Paul Wilmot in London, and another was a Massachusetts Institute of Technology, a small science school on the River Charles in Boston, and a guy named Andrew Lowe sort of spearheaded it. There's others that we don't need to bother with, but you know Steve Ross out at Michigan, and you know Berkeley, I think it was knee deep in it, and you know other mathe iness schools. But the leadership out of Mit was jaw dropping out of this combine. King Catherine Kaminski, who dumbs it down for us every time she's in town with al alpha simplex. 00:21:43 Speaker 3: Talk to me. 00:21:43 Speaker 9: I brought this up yesterday with a know it all talk to me about theta right now in this the noise that's out there, alpha, beta, gamma, delta equities up up. 00:21:56 Speaker 3: What's the X axis look like right now? 00:21:59 Speaker 12: Well, I think it's interesting if you're looking at equity markets we're actually not seeing you know, it's not a breakout trend, but it's been a trend that has sort of continued persistently all years. 00:22:13 Speaker 2: Is it just mass is it just an inertial force hire? 00:22:16 Speaker 5: I mean it feels like that. 00:22:17 Speaker 12: I mean, especially this month. You if you take a look at how equities have moved this month, particularly US equities, because we compare you know, clearly US equities with international equities and sort of the story is a US story, it's an AI story. And you've seen massive acceleration this month in prices and we're getting close to all time highs. Yeah, and several indocies. So it feels like a rock ship. 00:22:42 Speaker 6: If you you guys take how do you think about you know, going large cap, MidCap, small cap? 00:22:47 Speaker 5: How do you think about that when you look at the equity market. 00:22:50 Speaker 10: So this is a good question. 00:22:51 Speaker 12: You know, Nasdaq has been one of the bigger outperformers this year, but it has started to lag and Dow Jones and some of the other to see is you've seen that rotation this summer, but again this month you're starting to see tech take the lead again. So you've seen broadening in terms of the trend strength, but you've also seen just continued strength in terms of the AI growth narrative. Just it's there and it's not disappearing. It's looking through all the noise. 00:23:22 Speaker 6: Yeah, i'd say, you know, in the bond market fixed and come just going at the ten year treasure, I kind of felt like for the longest time we were in this tight range of four to four and a half percent, but then we've kind of popped up above what do you make in the bond market these days. 00:23:35 Speaker 12: So bonds have been the hardest asset class to trade this year, but there's been really interesting trend breakout periods where you've seen short positioning in trends in bonds breakout March this summer. In July you started to see that as well. And I think for me, we look a lot at short term correlations between asset classes and bonds have had about a forty four percent correlation short negative correlation to energies and they've been trading at about a thirty six correlation thirty six percent correlation positive with equity, so means geopolitical risk is a bigger deal for bonds in the equity space. 00:24:17 Speaker 2: Everybody continues to go back to mag seven, where a fair amount of people have modest or even more than modest gains in them. 00:24:24 Speaker 3: How do you know when to get out? 00:24:26 Speaker 12: Oh, this is a good question because the challenge with trend and that's why we have a systematic process is we don't pick the tops and the bottoms of markets. What we try to do is look for deterioration. And when I say deterioration, I mean we statistically try to measure whether or not signal versus noise is reducing. And so you start to see that a little bit in NASAC this summer. You started to see that in energies, but that has kind of been coming back. So for us, it's about taking profit and sort of realizing when a trend is sort of hit sort of that noisy point where volatility expands and you've already seen sizable. 00:25:05 Speaker 5: Gains coming into the year. 00:25:07 Speaker 6: I think the call in US dollar was for lower, lower, lower, and then we start a war and I ran and ohait, that trade goes off the table. But what do you think in back currency markets? 00:25:16 Speaker 5: You're in the dollar. 00:25:17 Speaker 3: So that's a really good question. 00:25:19 Speaker 12: Currencies have also been somewhat difficult to trade, but you have seen some very strong themes that have pushed the dollar higher. So I think the biggest one right now is having a fed on hold. Having sort of no pressure for cutts is the biggest strength for the dollar. But we've seen a very mixed basket versus the dollar, and then you know em currencies is a very different story. So the end altogether different. 00:25:45 Speaker 3: Can I get on NERD when we come back? 00:25:47 Speaker 2: Okay, we're gonna get to the market opening here Katherin Kominski in the studio with us today, Alpha Simplex up in Boston as well, running green in the screen right now, the vix is better forteen point four to seven. Alexis, I'm trying to make some excitement here as we. 00:26:04 Speaker 3: Go to the opening. 00:26:05 Speaker 10: I know you are. 00:26:06 Speaker 3: I appreciate it. 00:26:06 Speaker 2: I have to take the baton from me here so you can get through a Friday. Here's your excitement, folks. All you need to know the thirty year bond up three bases points rounded up five point two four percent into Friday. That would be a shock. But the thirty year auction I'm just a big coin is down six hundred. That's as I just I failed. Alexis, No, you did. 00:26:29 Speaker 8: You pulled it through? 00:26:30 Speaker 5: All? 00:26:30 Speaker 4: Right? 00:26:31 Speaker 8: Here we have the opening bell on this Friday, and it certainly does feel like a Friday on Wall Street. The volume is pretty thin as well, a mixed picture here to start our morning. Not even a weaker than expected retail sales report was able to get anything out of this market. So S and P five hundred up six points here to start our day. Dow Jones Industrial Average down by sixty six and the Nasdaq Composite is up by forty five. Here's something exciting though. The S and P five hundred is actually in record territory, even though it is up just six points. We have got a yields mixed right now, the two year at four point twelve percent, the ten year at four point sixty five percent, and the thirty year yield at five point two to three percent, up three basis points. Brent crude is down a quarter of a percent at eighty six eighty five. A barrel WTI crewed down a tenth of a percent at eighty one sixteen. A barrel Bloomberg Dollars spotting decks down a third of a percent at twelve hundred point sixteen. Japanese n up a third of a percent at one fifty eight ninety nine against the US dollar. How about little stock news Applied materials down five percent out of the gate. Good earnings just weren't good enough for investors, and read it up eleven percent. It's going to be added to the S and P five hundred next Tuesday morning. Yes, and that is your opening velve report. Guys, back over to you. 00:27:40 Speaker 3: Okay, this is really Alexis. Thanks so much. 00:27:42 Speaker 2: We're doing two minutes of nerd Patrol with Katie Kaminski A right now, there was a in economics, it was a world before nineteen forty seven, and then we figured out statistics and data, and is it world after nineteen forty seven? In quant and particularly technical quant, it's before I think it was nineteen seventy eight. Wells Wilder codified so much of what we do with charts. So I want to go to the outcome of blah blah blah blah blah, which is a strange thing called position sizing, and stunned how nobody talks about this. Paul, you lose twenty five percent, You have seventy five percent of your account remaining, and you need thirty three point three. 00:28:23 Speaker 3: Percent up just to get back to even as well. 00:28:25 Speaker 5: Get it. 00:28:26 Speaker 3: Katie Kaminski on the need that all of us need to position size. 00:28:31 Speaker 12: So I would agree in that position. Sizing and the way we think about it is sort of the way it's the secret sauce, right. 00:28:38 Speaker 3: It's how do you size into a move? 00:28:41 Speaker 12: So, for example, for equities, when you're asking when is a trend over? If you need to make a binary decision, that's a really hard thing to do, right, So what we're trying to do is make small decisions over time and size positions as things move. 00:28:55 Speaker 2: So that's what I call them when I give speeches on this is how much of this in Vidia goes up end of August? Right, do you buy more is Nvidia goes up or do you buy less? 00:29:08 Speaker 12: It would depend on the prevailing volatility and the moves over the recent period, So you need to think about sort of as it's going up. If you're a momentum trader, you're going to continue to size into that position. But as you start to see resistance like we saw in the Nasdaq and some of the tech companies this summer, you pull back a little bit some of your gains so that if things go the other direction, you're ready. 00:29:31 Speaker 2: My father called this average true home on the range. 00:29:34 Speaker 3: That's a joke. 00:29:35 Speaker 2: It's a weird technical Stay with me, folks, It's a Friday Paul Swinging with Katie Kaminsky A. 00:29:41 Speaker 5: Cross stocks, bonds, commodities, currencies. How many positions do you guys typically have in any given day. 00:29:46 Speaker 12: So for most trend followers, we're trading hundreds of markets, and it's really about, you know, whatever is really liquid to trade, So you know, things like silver, copper, livestock. 00:30:00 Speaker 5: How many people do you have a Alpha Simplings thirty five? 00:30:03 Speaker 2: That's it. 00:30:04 Speaker 10: Yeah. 00:30:05 Speaker 3: I don't know how you get computers. Computers the invent them. Katie's too young to remember. 00:30:12 Speaker 5: For it's very so commodities rolls quickly. Anything jump out of you in commodities. 00:30:17 Speaker 12: So we have seen some pretty strong moves in base metals, but base metals are coming back a little bit as well, so copper, aluminum. But I'd say the energy trade has been making me scratch my head quite a bit because you know, we've all thought it was over, then it came back, and then you know, I think that's one to keep following. But it's higher. But not excessively higher, so I think it's really yeah. 00:30:42 Speaker 5: Yeah, I could never be an oil trader. Those things whip around so quickly. I have no idea why. 00:30:47 Speaker 2: L Goldman legend. A. G. Edwards told me once the single hardest thing to make money on, yeah, oil oil pits. He said, it's just brutal. It's on a log normal basis. It's not making money, it's not losing money. 00:31:03 Speaker 3: Yep. 00:31:04 Speaker 10: On it was this. 00:31:05 Speaker 3: Okay, Katie, you're gonna come. 00:31:06 Speaker 2: Back, sure, thank you, Cancer Kaminsky. Usually in Cambridge they call it. It's a city. I think it's north of Boston. Katiekominsky Office Simplex. 00:31:16 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apples, Spotify, and anywhere else you get your podcasts. Listen live each weekday, seven to ten am Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal