1 00:00:03,720 --> 00:00:07,400 Speaker 1: This is Bloomberg Surveillance. We don't know where the next 2 00:00:07,400 --> 00:00:10,320 Speaker 1: procession is. All we know is that the expansion is 3 00:00:10,320 --> 00:00:12,480 Speaker 1: about six and a half years old, and that's longer 4 00:00:12,520 --> 00:00:17,000 Speaker 1: than the average expansion. We're getting signals which are the 5 00:00:17,079 --> 00:00:19,960 Speaker 1: started cause interest transfer too long. It would be a 6 00:00:20,040 --> 00:00:23,040 Speaker 1: terrible commentary and the terrible thing in reality if it 7 00:00:23,079 --> 00:00:25,840 Speaker 1: takes an overt crisis to get agreement or get progressive, 8 00:00:25,840 --> 00:00:29,640 Speaker 1: then you're risking things going crazy. Bloomberg Surveillance your link 9 00:00:29,720 --> 00:00:34,080 Speaker 1: to the world of economics, finance, and investment on Bloomberg Radio. 10 00:00:34,120 --> 00:00:37,080 Speaker 1: Good morning everyone, Michael McKee and Tom Keene this Thursday 11 00:00:37,120 --> 00:00:40,560 Speaker 1: before Jobsday, coming up Stewart Offman of p n C. 12 00:00:40,760 --> 00:00:43,440 Speaker 1: We'll look at a fair, using balanced view of the 13 00:00:43,440 --> 00:00:48,080 Speaker 1: American economy from Dr Hoffman. Really looking forward to talking 14 00:00:48,400 --> 00:00:52,000 Speaker 1: to Stewart Hoffman. Bloomberg Surveillance this morning brought to by 15 00:00:52,080 --> 00:00:57,920 Speaker 1: Cone Resnick Accounting, tax advisory, regulatory changes can impact your business. 16 00:00:58,240 --> 00:01:00,800 Speaker 1: See how the experts at Cone Resneck can help you 17 00:01:00,960 --> 00:01:05,000 Speaker 1: navigate these complexities. Find out more at cone Resnik dot com. 18 00:01:05,080 --> 00:01:07,640 Speaker 1: C O h n R e z n I c 19 00:01:07,920 --> 00:01:13,679 Speaker 1: K cone Resnik dot com. Jobs Today Tomorrow started catching up. 20 00:01:13,720 --> 00:01:16,200 Speaker 1: I mean, we've got Governor Romney speaking today. There'll be 21 00:01:16,240 --> 00:01:18,560 Speaker 1: a lot of political news out of that. With all 22 00:01:18,640 --> 00:01:23,040 Speaker 1: due respect with perspective this evening, Mark Halperin and John Heilman, 23 00:01:23,280 --> 00:01:26,520 Speaker 1: we're trying to get back into economics, finance, investment, the 24 00:01:26,640 --> 00:01:30,360 Speaker 1: linkages into our international relations. And I guess you do 25 00:01:30,400 --> 00:01:33,360 Speaker 1: that at eight thirty tomorrow morning, Alan Krueger, Bill Gross 26 00:01:33,440 --> 00:01:37,640 Speaker 1: joining us among other worthies right now, Michael McKee, Stewart 27 00:01:37,800 --> 00:01:42,880 Speaker 1: Hoffman joining us, which is wonderful because what I've never 28 00:01:42,959 --> 00:01:50,240 Speaker 1: seen anything plunge, crater, surge, dominate whatever in the research 29 00:01:50,280 --> 00:01:53,920 Speaker 1: work of Stewart Hoffman. It is a careful, measured look 30 00:01:54,560 --> 00:01:56,600 Speaker 1: it where we are. That's a good thing. Stewart off 31 00:01:56,680 --> 00:02:00,920 Speaker 1: wands been too long, good morning very much. Try to 32 00:02:00,960 --> 00:02:04,960 Speaker 1: be measured, but never afraid to take a stand within 33 00:02:05,040 --> 00:02:08,520 Speaker 1: to take the stand. What is the linkage of this 34 00:02:08,760 --> 00:02:12,040 Speaker 1: job's report to what share Yelling and other worthies will 35 00:02:12,080 --> 00:02:16,040 Speaker 1: do at the March sixte meeting. Are they linked? Of 36 00:02:16,080 --> 00:02:18,720 Speaker 1: course they're linked, But I think it's a very high 37 00:02:18,760 --> 00:02:22,440 Speaker 1: bar to get the Fed to move, you know, in 38 00:02:22,440 --> 00:02:25,040 Speaker 1: in in their meeting in two weeks. You know, I 39 00:02:25,080 --> 00:02:28,399 Speaker 1: suppose if this number, we're just off the charts. Three 40 00:02:28,480 --> 00:02:33,120 Speaker 1: or four hundred thousand jobs. Another five tenths increase in 41 00:02:33,200 --> 00:02:38,200 Speaker 1: the average ary earnings, maybe that could change the dynamics. 42 00:02:38,240 --> 00:02:41,960 Speaker 1: But I think the number is important. But given what 43 00:02:42,000 --> 00:02:44,639 Speaker 1: the Fed has said that they're monitoring and they need 44 00:02:44,720 --> 00:02:48,919 Speaker 1: some more time to figure out what these international events 45 00:02:48,960 --> 00:02:53,800 Speaker 1: and start market events and tighter or wider spreads, I 46 00:02:53,840 --> 00:02:56,280 Speaker 1: think they just say let's buy some time no matter 47 00:02:56,320 --> 00:03:03,280 Speaker 1: what this job's report shows us tomorrow. Interesting because if 48 00:03:04,120 --> 00:03:09,760 Speaker 1: the the markets had not cratered in January, would the 49 00:03:09,840 --> 00:03:13,840 Speaker 1: Fed be on track to raise rates in March given 50 00:03:13,880 --> 00:03:19,040 Speaker 1: the data that we have. The hypothetical, given that the 51 00:03:19,080 --> 00:03:24,640 Speaker 1: inflation data, not the expectation numbers, but the actual inflation data, 52 00:03:24,760 --> 00:03:29,640 Speaker 1: the PC deflator, the cores was cruising along one point 53 00:03:29,680 --> 00:03:32,440 Speaker 1: three percent in the first three quarters of last year 54 00:03:33,160 --> 00:03:35,880 Speaker 1: with some upward revisions, and now turns out to eat 55 00:03:35,960 --> 00:03:39,000 Speaker 1: up a little to one four in the fourth quarter. 56 00:03:39,120 --> 00:03:41,760 Speaker 1: And then that January number, although it's still one month, 57 00:03:41,840 --> 00:03:44,800 Speaker 1: you know, it was a biggest increase we've seen in years. 58 00:03:45,480 --> 00:03:49,640 Speaker 1: Shall I suppose if the Judge report tomorrow was super 59 00:03:49,720 --> 00:03:53,560 Speaker 1: strong and the stock market was higher than it was 60 00:03:53,600 --> 00:03:56,200 Speaker 1: at the beginning of the year and spreads were narrower, 61 00:03:57,480 --> 00:04:00,560 Speaker 1: maybe the Fed would be on track. But you know, 62 00:04:00,600 --> 00:04:03,920 Speaker 1: they're going to deal with the reality that the markets 63 00:04:04,400 --> 00:04:09,000 Speaker 1: are telling them, at least biblettle time go a little slower. 64 00:04:09,360 --> 00:04:11,520 Speaker 1: They probably don't want to see the dollar go up 65 00:04:11,560 --> 00:04:13,760 Speaker 1: a lot, especially if next week the e c B 66 00:04:14,040 --> 00:04:16,960 Speaker 1: is they're highly likely to do, are going to expand 67 00:04:17,080 --> 00:04:21,280 Speaker 1: their monetary policy, go deeper on negative rates, extend and 68 00:04:21,640 --> 00:04:26,440 Speaker 1: probably in large QUEWI so, yes, how many heads, how 69 00:04:26,440 --> 00:04:28,800 Speaker 1: many pin? How many angels can you fit on the 70 00:04:28,839 --> 00:04:31,120 Speaker 1: head of the pin? But right now is the data 71 00:04:31,160 --> 00:04:32,960 Speaker 1: they have? You know, you know, I look, I look 72 00:04:33,040 --> 00:04:36,279 Speaker 1: stewarted it. Why will C plus I plus G plet's 73 00:04:36,400 --> 00:04:38,480 Speaker 1: n X. Let's start with the basic idea Mike and 74 00:04:38,520 --> 00:04:41,119 Speaker 1: I address us in our trip to Washington the last 75 00:04:41,160 --> 00:04:43,599 Speaker 1: few days. I think we have a handle of the 76 00:04:43,720 --> 00:04:47,039 Speaker 1: state of austerity in the United Kingdom. What is the 77 00:04:47,160 --> 00:04:51,240 Speaker 1: state of austerity within the G part of g d P. 78 00:04:53,240 --> 00:04:55,920 Speaker 1: I wouldn't call it austerity. I mean it's pretty neutral. 79 00:04:56,400 --> 00:04:59,680 Speaker 1: It certainly was austere in the sense that for the 80 00:04:59,760 --> 00:05:05,400 Speaker 1: last three years federal spending was pretty flat, which maybe 81 00:05:05,560 --> 00:05:08,240 Speaker 1: in the short run, is a little austere, but you 82 00:05:08,279 --> 00:05:11,400 Speaker 1: know precisely what we need for the intermediate or longer run. 83 00:05:11,960 --> 00:05:15,320 Speaker 1: Of course, the tax hikes of thirteen of you know, 84 00:05:15,440 --> 00:05:19,360 Speaker 1: been absorbed. Last year. We did get a budget, uh, 85 00:05:19,400 --> 00:05:22,279 Speaker 1: and federal spending is going to go up a bit 86 00:05:22,320 --> 00:05:26,080 Speaker 1: this year defense and non defense. We didn't get any 87 00:05:26,080 --> 00:05:29,960 Speaker 1: additional tax hikes. So at the federal level, I would 88 00:05:30,000 --> 00:05:34,640 Speaker 1: say it is not austere neutral. At the state and 89 00:05:34,680 --> 00:05:38,080 Speaker 1: local level, I think it's actually positive. We're seeing you know, 90 00:05:39,640 --> 00:05:44,479 Speaker 1: we're seeing jobs growing. Uh. In the construction report that 91 00:05:44,560 --> 00:05:47,719 Speaker 1: came out on public instruction, and you know, those numbers 92 00:05:47,720 --> 00:05:50,719 Speaker 1: are very jumpy. That's why I don't use words like plunge, 93 00:05:50,880 --> 00:05:53,640 Speaker 1: because I'd like to use three month moving average, which 94 00:05:53,640 --> 00:05:56,520 Speaker 1: often smooth out a lot of the plunges and the 95 00:05:57,320 --> 00:05:59,560 Speaker 1: and the spikes. But if you look now over the 96 00:05:59,600 --> 00:06:05,400 Speaker 1: last or four months, construction at the public level, highways, roads, bridges, 97 00:06:05,440 --> 00:06:08,440 Speaker 1: its desk but we needed is definitely doing better. And 98 00:06:08,480 --> 00:06:11,840 Speaker 1: certainly you see construction jobs going up, so they're not 99 00:06:11,960 --> 00:06:15,320 Speaker 1: hiring those people to do to sit around and do nothing, 100 00:06:15,440 --> 00:06:18,400 Speaker 1: both on the public side and on the private side. 101 00:06:18,880 --> 00:06:22,960 Speaker 1: So yes, I think I would say government, state, local, 102 00:06:23,279 --> 00:06:28,719 Speaker 1: and federal is a positive for the US economy this year. Well, 103 00:06:28,760 --> 00:06:31,240 Speaker 1: we have the jobs report tomorrow and everybody we're looking 104 00:06:31,240 --> 00:06:34,000 Speaker 1: at wage growth when we get a little more of 105 00:06:34,040 --> 00:06:36,680 Speaker 1: a hint from the unit labor costs number that comes 106 00:06:36,680 --> 00:06:39,680 Speaker 1: out today. But what are you expecting are is the 107 00:06:39,720 --> 00:06:42,599 Speaker 1: trend going to continue? Yeah? I think the trend of 108 00:06:42,680 --> 00:06:45,599 Speaker 1: going up slowly is going to continue, you know. We 109 00:06:46,520 --> 00:06:49,440 Speaker 1: you know, you can use the employment cost index or 110 00:06:49,480 --> 00:06:51,680 Speaker 1: the number that of course comes out is the average 111 00:06:51,760 --> 00:06:55,400 Speaker 1: hourly earnings index comes out monthly with the employment report. 112 00:06:56,000 --> 00:06:59,080 Speaker 1: I mean that measure. Really both measures were stuck at 113 00:06:59,080 --> 00:07:03,800 Speaker 1: two percent or little under thirteen fourteen. I'm sure that's 114 00:07:03,800 --> 00:07:06,719 Speaker 1: where some of this angst, not only that short run 115 00:07:06,760 --> 00:07:09,240 Speaker 1: but longer run uh we see in the in the 116 00:07:09,279 --> 00:07:13,120 Speaker 1: political environment. But last year, finally, particularly in the second 117 00:07:13,120 --> 00:07:16,360 Speaker 1: half of the year, we started to see some acceleration 118 00:07:16,400 --> 00:07:18,120 Speaker 1: in that. I tend to like to look at it 119 00:07:18,160 --> 00:07:21,440 Speaker 1: as a two quarter moving average or year over year. 120 00:07:21,440 --> 00:07:23,600 Speaker 1: In the year over year number in January was two 121 00:07:23,600 --> 00:07:26,720 Speaker 1: point five. I think the MARS number particip for a 122 00:07:26,760 --> 00:07:30,280 Speaker 1: month of February will back off maybe a tenth or two, 123 00:07:30,720 --> 00:07:33,480 Speaker 1: but still be up two and a half percent from uh, 124 00:07:33,760 --> 00:07:36,400 Speaker 1: this time last year. So I think ways are accelerat. 125 00:07:36,600 --> 00:07:39,880 Speaker 1: Let me recast what I asked Scott Wren earlier, who's 126 00:07:39,880 --> 00:07:44,720 Speaker 1: an investment equity strategist, same question, folks, For an economist 127 00:07:45,440 --> 00:07:49,080 Speaker 1: like Stewart, often the basic idea of a single digit 128 00:07:49,120 --> 00:07:52,960 Speaker 1: world in your language, Stewart, a new lower damn phenomenal 129 00:07:53,040 --> 00:07:56,440 Speaker 1: g d P, a new terminal rate or potential g 130 00:07:56,560 --> 00:08:01,960 Speaker 1: d P. Are we prepared for that? By we do 131 00:08:02,000 --> 00:08:07,840 Speaker 1: you mean or the nation? I don't think the nation, 132 00:08:08,960 --> 00:08:11,400 Speaker 1: whether they're prepared or not, they're not taking it well. 133 00:08:12,000 --> 00:08:15,160 Speaker 1: And you know, we look back at this recovery. It 134 00:08:15,280 --> 00:08:18,560 Speaker 1: has fortunately continued this long, and I still think we're 135 00:08:18,560 --> 00:08:21,320 Speaker 1: maybe in the seventh inning. I don't think I've never 136 00:08:21,400 --> 00:08:23,360 Speaker 1: been in the recession camp. You know, a month or 137 00:08:23,400 --> 00:08:26,520 Speaker 1: two ago, it kind of felt like the markets were 138 00:08:26,560 --> 00:08:28,960 Speaker 1: saying the economies in the ninth inning, there's two out 139 00:08:28,960 --> 00:08:31,520 Speaker 1: and the pictures of bat and the home team is 140 00:08:31,520 --> 00:08:34,440 Speaker 1: about to go down. Well, I never thought that that 141 00:08:34,600 --> 00:08:38,000 Speaker 1: that view anyway. But if you look at the as 142 00:08:38,000 --> 00:08:41,000 Speaker 1: I said, slow wade growth of the last five years, 143 00:08:41,000 --> 00:08:44,800 Speaker 1: over the last fifteen years, uh, I think the country 144 00:08:44,920 --> 00:08:47,960 Speaker 1: wants to grow faster. It needs to grow faster. And 145 00:08:48,000 --> 00:08:50,280 Speaker 1: I think that's where, you know, some of this frustration 146 00:08:50,320 --> 00:08:53,080 Speaker 1: we're seeing both on the coach i'll call it left 147 00:08:53,120 --> 00:08:57,720 Speaker 1: and right is coming from that we got to do better, 148 00:08:57,840 --> 00:09:01,440 Speaker 1: and it's productivity. It's in the prescriptions I had to do. 149 00:09:01,480 --> 00:09:06,400 Speaker 1: It are quite different between less government regulations or you know, 150 00:09:06,480 --> 00:09:10,760 Speaker 1: on the left, a big tax site. But there's a 151 00:09:10,800 --> 00:09:13,800 Speaker 1: feeling that the US economy is not living up to 152 00:09:13,840 --> 00:09:17,720 Speaker 1: its potential and that if that's the best our potential is, 153 00:09:17,760 --> 00:09:19,320 Speaker 1: we've got to figure out a way to get it. 154 00:09:20,160 --> 00:09:23,120 Speaker 1: Let's drive that for Our conversation continues with Stewart often 155 00:09:23,520 --> 00:09:25,880 Speaker 1: of P and C. Mike Herbal Life has a bid 156 00:09:26,280 --> 00:09:29,520 Speaker 1: UH to review fifty six down to a printed bid 157 00:09:29,559 --> 00:09:31,360 Speaker 1: of forty eight. And I'm not sure the pre market 158 00:09:31,400 --> 00:09:34,280 Speaker 1: stock price got there, but that forty eight is lifted 159 00:09:34,360 --> 00:09:37,600 Speaker 1: up to fifty one thirty. There's a i'm gonna call it, 160 00:09:37,720 --> 00:09:40,160 Speaker 1: you know, an eight percent mover. So fifty six down 161 00:09:40,200 --> 00:09:48,280 Speaker 1: to fifty one, yeah, um, and and that's better than 162 00:09:48,280 --> 00:09:53,880 Speaker 1: where we were earlier. Again, some real challenges all in all, 163 00:09:54,520 --> 00:10:00,400 Speaker 1: UH with their unit accounting, UH complex and convoluted set 164 00:10:00,520 --> 00:10:03,920 Speaker 1: of headlines. You wonder where this story will move drive 165 00:10:03,960 --> 00:10:09,840 Speaker 1: forward Price Waterhouse Coopers, is there um there auditors? According 166 00:10:09,880 --> 00:10:13,600 Speaker 1: to Bloomberg Herbal Life right now fifty one, I'm gonna 167 00:10:13,600 --> 00:10:17,960 Speaker 1: center tendency fifty one on Herban Life. Futures of negative one, 168 00:10:18,040 --> 00:10:22,920 Speaker 1: doubt futures negative ten. We look at equities, bonds, currencies, commodities, 169 00:10:22,960 --> 00:10:27,199 Speaker 1: oil thirty four sixty two Flat Brant Your thirty seven, 170 00:10:27,280 --> 00:10:31,800 Speaker 1: thirty six seventy nine. Michael McKee manchiny Gold earlier elevated 171 00:10:31,840 --> 00:10:35,040 Speaker 1: twelve forty four. Good morning to not the goldbugs, but 172 00:10:35,080 --> 00:10:38,640 Speaker 1: people that have rationally talked about a stronger gold market 173 00:10:39,440 --> 00:10:42,200 Speaker 1: off of an extended two and three year bearer market, 174 00:10:42,200 --> 00:10:45,760 Speaker 1: people like James Steele at HSBC the Yen one thirteen 175 00:10:46,600 --> 00:10:53,559 Speaker 1: ninety weaker yen this morning. But let's check out with 176 00:10:53,640 --> 00:10:56,320 Speaker 1: Michael bar and get the latest world in national headlines. Michael, 177 00:10:56,400 --> 00:10:59,160 Speaker 1: Mike Town, thank you very much. Former Massachusetts Governor Mitt 178 00:10:59,240 --> 00:11:03,680 Speaker 1: Romney will give us speech later today calling out Donald Trump. Romney, 179 00:11:03,679 --> 00:11:09,200 Speaker 1: who was the Republican presidential nominee, says Trump is a phony. 180 00:11:09,360 --> 00:11:12,600 Speaker 1: Four Republicans will gather on stage for tonight's Fox News 181 00:11:12,640 --> 00:11:16,280 Speaker 1: presidential debate in Detroit. Ben Carson will be a no show, 182 00:11:16,559 --> 00:11:19,120 Speaker 1: having signaled that he is on the verge of officially 183 00:11:19,200 --> 00:11:22,880 Speaker 1: quitting his white house bid. A white Alabama police officer 184 00:11:22,960 --> 00:11:24,760 Speaker 1: has charged with the murder in the shooting death of 185 00:11:24,800 --> 00:11:27,840 Speaker 1: a black man. A family lawyer says Greg Gunn was 186 00:11:27,880 --> 00:11:31,040 Speaker 1: walking home when he was killed outside a neighbor's house. 187 00:11:31,400 --> 00:11:35,200 Speaker 1: An attorney for Montgomery officer, Aaron Smith calls the arrest 188 00:11:35,480 --> 00:11:39,120 Speaker 1: a political witch hunt. Global News twenty four hours a day, 189 00:11:39,120 --> 00:11:42,280 Speaker 1: powered by our twenty four hundred journalists and more than 190 00:11:42,320 --> 00:11:45,080 Speaker 1: a hundred fifty news bureaus from around the world. I'm 191 00:11:45,120 --> 00:11:47,920 Speaker 1: Michael Barr, Mike Micha, thanks so much. We're gonna rip 192 00:11:47,960 --> 00:11:49,760 Speaker 1: up the script of Stewart Off and P and C. 193 00:11:49,960 --> 00:11:54,640 Speaker 1: Neil Dutta just out with a fabulous chart showing the 194 00:11:54,720 --> 00:11:58,800 Speaker 1: bipolar nature of this American economy. You need to stay 195 00:11:58,840 --> 00:12:06,440 Speaker 1: tuned for that future negative to Bloomberg Surveillance. The news 196 00:12:06,480 --> 00:12:08,520 Speaker 1: update brought to you by Mercedes Ben's. This month, here 197 00:12:08,559 --> 00:12:11,000 Speaker 1: Mercedes Ben's Tri state dealers welcome Spring with limited time 198 00:12:11,000 --> 00:12:13,120 Speaker 1: offers on select models like the Sporty c L A 199 00:12:13,200 --> 00:12:15,959 Speaker 1: and Versatile g l A, each engineered in price to move. 200 00:12:16,040 --> 00:12:24,160 Speaker 1: Visit m b USA Dot com today. Surveillance continues global 201 00:12:24,240 --> 00:12:27,640 Speaker 1: business news twenty four hours a day. If Bloomberg dot com, 202 00:12:27,840 --> 00:12:30,679 Speaker 1: the radio plus mobile app and on your radio, this 203 00:12:31,080 --> 00:12:34,720 Speaker 1: is a Bloomberg Business flash. And I'm car in Moscow, 204 00:12:34,840 --> 00:12:36,920 Speaker 1: US dock in. Day's futures are a little change to 205 00:12:37,000 --> 00:12:39,240 Speaker 1: lower this morning. Let's go to the First Word Breaking 206 00:12:39,240 --> 00:12:42,480 Speaker 1: news desk for today's morning call. And here's Bill Maloney. 207 00:12:42,520 --> 00:12:45,360 Speaker 1: Good morning, Bill, Good morning Karen. That's right us. You 208 00:12:45,480 --> 00:12:48,280 Speaker 1: just are quiet today. Doubt future is currently lower by 209 00:12:48,320 --> 00:12:51,080 Speaker 1: twenty points, as apps and as a futures are lower 210 00:12:51,160 --> 00:12:53,920 Speaker 1: by two. The US ten yield at one point eight 211 00:12:54,040 --> 00:12:57,720 Speaker 1: five percent, and your PM markets are mostly lower this morning. 212 00:12:57,960 --> 00:13:01,400 Speaker 1: Frances down point four percent on the US economic front 213 00:13:01,520 --> 00:13:06,040 Speaker 1: dight thirty non farm productivity and initial jobs claims at market, 214 00:13:06,120 --> 00:13:08,599 Speaker 1: US services p M I and at ten o'clock I 215 00:13:08,840 --> 00:13:13,320 Speaker 1: s M, non manufacturing, composite factory orders and durable goods orders. 216 00:13:13,720 --> 00:13:16,319 Speaker 1: In other news, Herbal Life said active new member data 217 00:13:16,400 --> 00:13:19,680 Speaker 1: had errors. Shares a down eight percent pre market, and 218 00:13:19,720 --> 00:13:22,720 Speaker 1: a deal news. The Wallstreet Journal reported Samson Night said 219 00:13:22,760 --> 00:13:25,760 Speaker 1: near a deal to buy too Me after de Bellous Knight, 220 00:13:25,800 --> 00:13:29,240 Speaker 1: American Eagle Q and EPs view top to estimates, Costco 221 00:13:29,360 --> 00:13:32,040 Speaker 1: missed and regarding errings. This morning, joy Global Q and 222 00:13:32,120 --> 00:13:35,559 Speaker 1: loss was wider than expected. Tech Data beat and CIANA 223 00:13:35,640 --> 00:13:39,240 Speaker 1: Q when adjusted EPs also beat. Finally, some Q wall 224 00:13:39,240 --> 00:13:42,680 Speaker 1: shoot upgrades and downgrades at Bank of America, Alcola cut 225 00:13:42,720 --> 00:13:46,360 Speaker 1: to neutral, Lateral Energy raised to neutral, and Marathon Petroleum 226 00:13:46,440 --> 00:13:49,120 Speaker 1: raised to buy. Sharon Williams raised to buy over at 227 00:13:49,160 --> 00:13:52,480 Speaker 1: City Group, Intel raised to outperform at Robert Baird and 228 00:13:52,559 --> 00:13:56,319 Speaker 1: Freeport mcmarhon cut to neutral versus by over at UBS. 229 00:13:56,760 --> 00:13:58,840 Speaker 1: Live from the First Breaking News Desk on Bill Maloney 230 00:13:58,880 --> 00:14:02,040 Speaker 1: Karen All, thanks bailan to hear live breaking news over 231 00:14:02,080 --> 00:14:04,880 Speaker 1: your Bloomberg type squaw could go on your terminal, that's 232 00:14:04,880 --> 00:14:06,880 Speaker 1: ask you you a w K go and that's a 233 00:14:06,920 --> 00:14:10,640 Speaker 1: Bloomberg business flash. Tom and Mike Karen, thanks so much. 234 00:14:10,640 --> 00:14:13,960 Speaker 1: Futures negative two and a churn into the screen as well. 235 00:14:14,040 --> 00:14:18,280 Speaker 1: Bloomberg Surveillance. Brought to you by Investco. Investco believes it's 236 00:14:18,320 --> 00:14:22,440 Speaker 1: time to bench the benchmarks to consider active management and 237 00:14:22,520 --> 00:14:26,400 Speaker 1: factor based strategies. Find out more at investco dot com. 238 00:14:26,520 --> 00:14:30,200 Speaker 1: Slash high Conviction without Question. The chart of the day. 239 00:14:30,240 --> 00:14:33,840 Speaker 1: Neil Data, Renaissance, Macro folks. I'm not gonna send it 240 00:14:33,840 --> 00:14:37,800 Speaker 1: out because it's his proprietary chart. We protect copyright here. 241 00:14:38,080 --> 00:14:42,840 Speaker 1: Contact Renaissance Macro for his wonderful chart. Stewart often, you 242 00:14:42,880 --> 00:14:49,280 Speaker 1: know the chart layoffs and layoff announcements the American economy 243 00:14:49,680 --> 00:14:54,080 Speaker 1: and then separate energy. I have no idea how stark 244 00:14:54,160 --> 00:14:56,480 Speaker 1: it is. I mean, we know energy is flat on 245 00:14:56,520 --> 00:14:59,760 Speaker 1: its back, but the layoff announcements for the rest of 246 00:14:59,800 --> 00:15:04,040 Speaker 1: them America are shockingly good. How does the FED to 247 00:15:04,120 --> 00:15:08,000 Speaker 1: handle that? Well, the FED knows, I mean, it can't 248 00:15:08,040 --> 00:15:12,000 Speaker 1: directly target the energy industry. I haven't seen the chart, 249 00:15:12,080 --> 00:15:15,680 Speaker 1: but you know the Challenger of Gray Christmas number was out. 250 00:15:15,840 --> 00:15:19,080 Speaker 1: It did show a drop in UH layoffs in January 251 00:15:19,120 --> 00:15:23,120 Speaker 1: and February January February, though, we're still up by thirty 252 00:15:23,200 --> 00:15:26,720 Speaker 1: three percent from a year ago. But as you mentioned, 253 00:15:28,520 --> 00:15:32,040 Speaker 1: of the layoffs, twenty five thousand people in the month 254 00:15:32,080 --> 00:15:34,880 Speaker 1: of February. Now those are announced layoffs. That doesn't mean 255 00:15:34,920 --> 00:15:37,520 Speaker 1: they're out of the job yet, but will be soon. 256 00:15:38,160 --> 00:15:40,720 Speaker 1: But look at what's happened now for we'll see you tomorrow, 257 00:15:40,800 --> 00:15:46,200 Speaker 1: probably tomorrow. The fourteenth straight month losses in the energy industry, 258 00:15:46,240 --> 00:15:49,640 Speaker 1: and they've been averaging about ten thousand a month uh 259 00:15:49,680 --> 00:15:54,480 Speaker 1: since frankly January of twenty fifteen. And this suggests they 260 00:15:54,520 --> 00:15:57,120 Speaker 1: may be picking up the pace of that uh. And 261 00:15:57,200 --> 00:15:59,000 Speaker 1: that's one of the reasons why. I mean, I've got 262 00:15:59,000 --> 00:16:03,600 Speaker 1: about two hundred and rising jobs tomorrow, but for the 263 00:16:03,640 --> 00:16:06,720 Speaker 1: whole year, you know, we're thinking we'll google date closer 264 00:16:06,760 --> 00:16:09,720 Speaker 1: to two million jobs. Last year we created two point 265 00:16:09,800 --> 00:16:13,720 Speaker 1: seven million. And part of that difference is layoffs in 266 00:16:13,720 --> 00:16:17,880 Speaker 1: the energy industry going in to adding to laying off 267 00:16:17,920 --> 00:16:22,400 Speaker 1: in and probably even deeper in. But from the FEDS 268 00:16:22,440 --> 00:16:26,040 Speaker 1: point of view, uh, you know, they can't target the 269 00:16:26,160 --> 00:16:29,920 Speaker 1: energy industry. They know there's a supply issue. I think 270 00:16:29,920 --> 00:16:32,080 Speaker 1: they have to look, as you said, at what's happening 271 00:16:32,200 --> 00:16:36,400 Speaker 1: outside of energy. Knowing both in energy and manufacturing there 272 00:16:36,440 --> 00:16:40,360 Speaker 1: what economists like to call multiplier effects. You throw the 273 00:16:40,360 --> 00:16:43,440 Speaker 1: stone into the lake and the ripples go around, and 274 00:16:43,520 --> 00:16:47,160 Speaker 1: that is going to affect other industries, other companies, and 275 00:16:47,200 --> 00:16:52,080 Speaker 1: other individuals. But you're right, so far it's been extraordinarily contained. 276 00:16:52,120 --> 00:16:54,480 Speaker 1: And then Mike, you know, it goes to Kruger's to America's. 277 00:16:54,560 --> 00:16:58,200 Speaker 1: This is a different debate. There's a debate about labor 278 00:16:58,280 --> 00:17:02,000 Speaker 1: economy and wage growth. In a broader macro view, this 279 00:17:02,080 --> 00:17:07,920 Speaker 1: is about the micro dynamics of job formation and disformation. 280 00:17:07,960 --> 00:17:12,440 Speaker 1: It's a different story. Yeah. I mean one of the 281 00:17:12,520 --> 00:17:16,800 Speaker 1: least followed numbers by economists is the Challenger Job Cuts Report, 282 00:17:16,880 --> 00:17:19,720 Speaker 1: because it's worldwide, not just in the United States, and 283 00:17:19,760 --> 00:17:23,520 Speaker 1: many of those jobs never actually get cut or it's attrition. 284 00:17:24,040 --> 00:17:27,760 Speaker 1: But when you uh, the real question Stewart is, of course, uh, 285 00:17:28,600 --> 00:17:31,879 Speaker 1: when you have we knew that there is there have 286 00:17:31,960 --> 00:17:34,960 Speaker 1: been layoffs and left more laoffs coming in the energy industry. 287 00:17:35,200 --> 00:17:38,040 Speaker 1: It's when it follows on, when when the energy people 288 00:17:38,119 --> 00:17:41,000 Speaker 1: are no longer working in, no longer spending money at 289 00:17:41,040 --> 00:17:43,640 Speaker 1: the local stores, and the local stores go out of business. 290 00:17:43,680 --> 00:17:46,520 Speaker 1: That's a problem. And I note that in North Dakota 291 00:17:47,440 --> 00:17:51,280 Speaker 1: the unemployment rate is still two point seven even after 292 00:17:51,320 --> 00:17:54,680 Speaker 1: all the layoffs. Well, Mike, and I think that gets 293 00:17:54,720 --> 00:17:57,359 Speaker 1: to the idea that you know, well we are reading 294 00:17:57,400 --> 00:18:03,600 Speaker 1: about announced layoffs in energy, Nobody in maybe the transportation industry, 295 00:18:03,640 --> 00:18:07,680 Speaker 1: the airlines, or the hotels or the motels, or technology 296 00:18:07,880 --> 00:18:12,280 Speaker 1: or some parts of manufacturing said we hire twenty thousand 297 00:18:12,359 --> 00:18:16,159 Speaker 1: or a thousand people this month because our energy costs 298 00:18:16,160 --> 00:18:19,040 Speaker 1: are down, and that is a big savings and we're 299 00:18:19,080 --> 00:18:23,119 Speaker 1: seeing a little stronger demand. So you you see, you know, 300 00:18:23,240 --> 00:18:25,879 Speaker 1: you always hear the bad news, and there is plenty 301 00:18:25,920 --> 00:18:28,520 Speaker 1: of it and legitimate, but what you don't see is 302 00:18:28,560 --> 00:18:30,400 Speaker 1: the good news. The only way you kind of see 303 00:18:30,440 --> 00:18:32,920 Speaker 1: it in general was look at the total job numbers 304 00:18:33,440 --> 00:18:36,840 Speaker 1: and if they're up two hundred thousand tomorrow despite the 305 00:18:36,920 --> 00:18:39,959 Speaker 1: layoffs and energy, and looking over the last twelve or 306 00:18:39,960 --> 00:18:44,960 Speaker 1: thirteen months, jobs are up about two hundred thousand a month, 307 00:18:45,080 --> 00:18:48,879 Speaker 1: even absorbing the losses and energy. So there are positive 308 00:18:48,920 --> 00:18:52,960 Speaker 1: effects of people getting jobs or keeping jobs, or maybe 309 00:18:52,960 --> 00:18:56,359 Speaker 1: now getting better wages because of the dropping energy. And 310 00:18:56,400 --> 00:19:00,480 Speaker 1: I've been adamant about the fact that the net impact 311 00:19:00,480 --> 00:19:03,960 Speaker 1: on the US economy of lower energy prices as positive, 312 00:19:04,359 --> 00:19:07,200 Speaker 1: but a lot of distributional effects and there's not much 313 00:19:07,240 --> 00:19:10,000 Speaker 1: the FED can or should do about it. And by 314 00:19:10,000 --> 00:19:13,200 Speaker 1: the way, it's also helping Europe, it's helping Japan, it's 315 00:19:13,240 --> 00:19:16,359 Speaker 1: helping China. Maybe not enough, but think of where the 316 00:19:16,480 --> 00:19:18,800 Speaker 1: U s economy and some of those economies might be 317 00:19:19,320 --> 00:19:22,919 Speaker 1: if gasoline was coming up on or fifty a gallon 318 00:19:23,480 --> 00:19:28,120 Speaker 1: and oil prices were still nine hundred bucks a Gallon. Yeah, 319 00:19:28,240 --> 00:19:30,280 Speaker 1: it's not to say the least. Stuart Off in brilliant, 320 00:19:30,280 --> 00:19:32,760 Speaker 1: Thank you so much with p n C H Financial, 321 00:19:32,800 --> 00:19:35,280 Speaker 1: Michael McKie, John Tucker emailing me yesterday in the middle 322 00:19:35,280 --> 00:19:37,280 Speaker 1: of the show. I think you know as our as 323 00:19:37,320 --> 00:19:40,800 Speaker 1: our proxy for cheap New Jersey gas. Mr Tucker was 324 00:19:40,800 --> 00:19:44,960 Speaker 1: suggesting a dollar fifty six. That was my memory. Could 325 00:19:45,000 --> 00:19:47,840 Speaker 1: we get under a dollar and I'm not ready for 326 00:19:47,880 --> 00:19:50,280 Speaker 1: that as well. On an inflation of justice basis here 327 00:19:50,320 --> 00:19:52,960 Speaker 1: there um, but we need John to come in and 328 00:19:53,000 --> 00:19:55,359 Speaker 1: tell us what he's spending his extra money on. Yes, 329 00:19:55,440 --> 00:19:59,480 Speaker 1: we do no question about that. Economic data. Will review 330 00:19:59,520 --> 00:20:07,359 Speaker 1: product of any later today. Bloomberg Surveillance coming up there, 331 00:20:07,400 --> 00:20:09,320 Speaker 1: with all due respect. Highlight brought to you by land Rover. 332 00:20:09,400 --> 00:20:10,880 Speaker 1: If it's in your nature to cast off the every 333 00:20:10,920 --> 00:20:12,960 Speaker 1: day and seek adventure, the Discovery Sport was built to 334 00:20:12,960 --> 00:20:15,520 Speaker 1: help your search. Visit landover tri State dot com for 335 00:20:15,600 --> 00:20:18,000 Speaker 1: special offers during the only Adventure Sales event. Land Rover 336 00:20:18,080 --> 00:20:26,360 Speaker 1: Above and Beyond broadcasting live to New York, Bloomberg eleventh 337 00:20:26,960 --> 00:20:31,720 Speaker 1: to Washington, d C, Bloomberg to Boston, Bloomberg twelve ons 338 00:20:31,760 --> 00:20:36,000 Speaker 1: to San Francisco, Bloomberg n to the Country Series Exam 339 00:20:36,119 --> 00:20:39,560 Speaker 1: Channel one ninety and around the globe the Bloomberg Radio 340 00:20:39,640 --> 00:20:45,240 Speaker 1: Bus and Bloomberg dot Com. This is Bloomberg Surveillance. It 341 00:20:45,400 --> 00:20:47,879 Speaker 1: is a thirty on Wall Street. I'm Michael McKee along 342 00:20:47,920 --> 00:20:50,600 Speaker 1: with Tom Keen. Our Economic indicators today, brought to you 343 00:20:50,640 --> 00:20:53,840 Speaker 1: by Commonwealth Financial Network. When it's time to change the conversation, 344 00:20:53,880 --> 00:20:56,200 Speaker 1: talk with a broker dealer? Are I a that's ready 345 00:20:56,200 --> 00:21:00,000 Speaker 1: to listen? Call six six six two three six three 346 00:21:00,080 --> 00:21:03,000 Speaker 1: or visit common Wealth dot com to learn more. Here's 347 00:21:03,040 --> 00:21:06,600 Speaker 1: Vinnie deal Judais. At the first word desk, Micael Economic 348 00:21:06,640 --> 00:21:09,720 Speaker 1: News jobless claims. They are up by six thousand a 349 00:21:09,760 --> 00:21:14,199 Speaker 1: two hundred seventy eight thousand, topping forecast. Revised data on 350 00:21:14,359 --> 00:21:19,120 Speaker 1: fourth quarter productivity meantime down two point two percent less 351 00:21:19,119 --> 00:21:23,080 Speaker 1: than forecast. Unit labor costs up three point three percent again, 352 00:21:23,160 --> 00:21:26,879 Speaker 1: jobless claims rising last week, up by six thousand to 353 00:21:27,000 --> 00:21:29,640 Speaker 1: two hundred seventy eight thousand. At couple of first word 354 00:21:29,640 --> 00:21:31,760 Speaker 1: Desk'm Vidye del Judai. Let's go back to New York 355 00:21:32,440 --> 00:21:36,879 Speaker 1: Vine Dell ju Uh. Well, I don't know whether you 356 00:21:36,960 --> 00:21:39,880 Speaker 1: call a move from a negative three percent a three 357 00:21:39,920 --> 00:21:42,720 Speaker 1: percent contraction in productivity to a two point two percent 358 00:21:42,760 --> 00:21:45,600 Speaker 1: contraction is good news or not, I suppose on a 359 00:21:45,640 --> 00:21:49,240 Speaker 1: relative asis, but the unit labor cost job three point 360 00:21:49,280 --> 00:21:52,320 Speaker 1: three percent is catch people's eye. Can you adjust the 361 00:21:52,359 --> 00:21:55,840 Speaker 1: mic of our next steam guest? He is UM, he's 362 00:21:55,840 --> 00:21:59,480 Speaker 1: been he's been searching for something to do moving into spring, 363 00:21:59,520 --> 00:22:03,439 Speaker 1: and some were in onto Cleveland and Philadelphia. Maybe we 364 00:22:03,440 --> 00:22:07,400 Speaker 1: could get them to be the gop SR. I mean, 365 00:22:07,680 --> 00:22:11,440 Speaker 1: I think there's a job opportunity. I don't. I don't 366 00:22:11,440 --> 00:22:15,800 Speaker 1: think I'm qualified, but they definitely need somebody go ahead. 367 00:22:16,040 --> 00:22:19,400 Speaker 1: Where we're watching what's going on with fascination and wondering. 368 00:22:20,000 --> 00:22:21,960 Speaker 1: We were talking over the last two days while we 369 00:22:21,960 --> 00:22:24,200 Speaker 1: were done in Washington about how Wall Street is seeing 370 00:22:24,200 --> 00:22:26,840 Speaker 1: all this, I mean, leaving aside individual candidates, with the 371 00:22:26,880 --> 00:22:31,600 Speaker 1: fracturing of one party, um, the move to the left uh, 372 00:22:31,640 --> 00:22:34,439 Speaker 1: and in the other party, um, the people with the 373 00:22:34,480 --> 00:22:37,680 Speaker 1: money and a lot at stake, how they're viewing all 374 00:22:37,720 --> 00:22:40,720 Speaker 1: of this at this point, I think with fear intrepidation. 375 00:22:40,840 --> 00:22:44,160 Speaker 1: I think people on Wall Street. People on Wall Street 376 00:22:44,200 --> 00:22:47,679 Speaker 1: are basically not that ideological in many ways. They have, 377 00:22:47,760 --> 00:22:48,960 Speaker 1: you know, they have a point of view, they have 378 00:22:49,000 --> 00:22:51,520 Speaker 1: they may belong to a party. But they're not extremists. 379 00:22:51,520 --> 00:22:54,560 Speaker 1: They're kind of pragmatists. They're kind of centrists, a bit 380 00:22:54,600 --> 00:22:57,520 Speaker 1: like the majority owner of Bloomberg LP. And there's our 381 00:22:57,560 --> 00:23:02,560 Speaker 1: there's our Disclaimers radio stage, uh and and so they 382 00:23:02,680 --> 00:23:05,320 Speaker 1: view all this with alarm. They they you know, in 383 00:23:05,320 --> 00:23:07,360 Speaker 1: an extreme case, they worry that we could go off 384 00:23:07,400 --> 00:23:10,480 Speaker 1: the deep end into into some unknown political area, the 385 00:23:10,480 --> 00:23:13,600 Speaker 1: way countries in europeath from time to time. And even 386 00:23:14,080 --> 00:23:17,000 Speaker 1: short of that, they worry about about, you know, who's 387 00:23:17,000 --> 00:23:19,720 Speaker 1: going to be in the White House. Mr Trump enjoys, 388 00:23:19,760 --> 00:23:23,320 Speaker 1: as far as I can tell, zero support on Wall Street. 389 00:23:23,080 --> 00:23:25,600 Speaker 1: I don't know anybody in the business community, but I 390 00:23:25,640 --> 00:23:27,879 Speaker 1: shouldn't say anybody, but virtually nobody in the business can 391 00:23:27,920 --> 00:23:30,760 Speaker 1: be supporting him for any number of reasons. I think 392 00:23:30,760 --> 00:23:33,199 Speaker 1: on the Democratic side, things have gotten a bit what 393 00:23:33,280 --> 00:23:35,960 Speaker 1: I would call better, in that I think Hillary Clinton's 394 00:23:36,000 --> 00:23:39,160 Speaker 1: path to the nomination is now quite clear, and so 395 00:23:39,359 --> 00:23:41,120 Speaker 1: while she may have moved a bit to the left 396 00:23:41,200 --> 00:23:43,920 Speaker 1: during this primary season, I think I don't think we're 397 00:23:43,920 --> 00:23:46,480 Speaker 1: gonna have a socialist as the Democratic nominee. Let's see, 398 00:23:46,560 --> 00:23:49,439 Speaker 1: right now, that's the issue. You nail it. Absolutely, People 399 00:23:49,520 --> 00:23:53,680 Speaker 1: shift through an election year. Do you see any perception 400 00:23:54,320 --> 00:23:57,760 Speaker 1: that any of the three Republican front runners right now 401 00:23:58,359 --> 00:24:02,439 Speaker 1: can shift is right and did to the middle of 402 00:24:02,520 --> 00:24:07,640 Speaker 1: this nation's psychology. I'd say I would say, I think, 403 00:24:07,760 --> 00:24:09,960 Speaker 1: I think it's possible that Ruby O can and and 404 00:24:10,000 --> 00:24:12,359 Speaker 1: I don't know whether this is a backhanded compliment, but 405 00:24:12,440 --> 00:24:14,720 Speaker 1: I think he's shown that he is, how shall I 406 00:24:14,760 --> 00:24:19,119 Speaker 1: put it, flexible in his opinions, pragmatic on immigration. As 407 00:24:19,160 --> 00:24:22,600 Speaker 1: you know, he's had a variety of opinions on choice, 408 00:24:23,160 --> 00:24:26,720 Speaker 1: He's had a variety of pro choice, choice choice versus 409 00:24:26,760 --> 00:24:29,600 Speaker 1: life issues. He's had a variety of opinions. So I 410 00:24:29,640 --> 00:24:33,119 Speaker 1: think he is capable of moving. Ted Cruz is a 411 00:24:33,160 --> 00:24:36,400 Speaker 1: complete extreme idealogue who in some ways would be worse 412 00:24:36,440 --> 00:24:38,840 Speaker 1: for the Republican Party I think in a general election 413 00:24:38,840 --> 00:24:43,280 Speaker 1: than Trump, and Trump has Trump has deep psychological problems 414 00:24:43,320 --> 00:24:46,679 Speaker 1: that make him really unfit. You are a student of 415 00:24:46,720 --> 00:24:49,639 Speaker 1: our history on this, I think of William Jennings, Bryan 416 00:24:49,840 --> 00:24:56,400 Speaker 1: or any of the other movement coalescing eight forward, coming 417 00:24:56,400 --> 00:24:59,120 Speaker 1: out of the civil or the word the last few 418 00:24:59,200 --> 00:25:02,639 Speaker 1: days has been moved meant if it is a movement 419 00:25:02,880 --> 00:25:08,200 Speaker 1: that Mr Trump is affecting, how to institutions staunch that 420 00:25:08,320 --> 00:25:11,760 Speaker 1: movement so it doesn't get over thirty x percent of 421 00:25:11,800 --> 00:25:15,280 Speaker 1: the electorate in the long run. This is what I'm 422 00:25:15,280 --> 00:25:17,800 Speaker 1: about to say. Has been discussed many times, but but 423 00:25:18,160 --> 00:25:20,520 Speaker 1: what seems very clear to all of us is that 424 00:25:20,960 --> 00:25:24,720 Speaker 1: Trump represents a group of Americans who have not done 425 00:25:24,720 --> 00:25:28,080 Speaker 1: well economically over the last five, ten, fifteen, twenty years, 426 00:25:28,119 --> 00:25:33,000 Speaker 1: who feel marginalized, who therefore feel threatened by immigrants and 427 00:25:33,040 --> 00:25:36,399 Speaker 1: things like that, and makes them more nativists. And the 428 00:25:36,480 --> 00:25:38,800 Speaker 1: way to deal with this is not there's no short 429 00:25:38,880 --> 00:25:40,520 Speaker 1: term fix. The way to deal with this in the 430 00:25:40,600 --> 00:25:43,639 Speaker 1: long term is to take care of these people and 431 00:25:43,800 --> 00:25:48,320 Speaker 1: find them jobs, help them with increase their incomes, and 432 00:25:48,359 --> 00:25:50,800 Speaker 1: give them a better life. That's really what that's really 433 00:25:50,840 --> 00:25:54,239 Speaker 1: what's bothering them? Why are we doing When you look 434 00:25:54,280 --> 00:25:57,240 Speaker 1: at the markets, there doesn't seem to be any reflection 435 00:25:57,280 --> 00:26:01,520 Speaker 1: of horror in what's been going on uh in the 436 00:26:01,520 --> 00:26:04,359 Speaker 1: stock market versus what's going on in the campaign trail. 437 00:26:05,080 --> 00:26:07,920 Speaker 1: Investors have to discount the future even as they look 438 00:26:07,960 --> 00:26:11,080 Speaker 1: at this and the negatives that you're sighting with these candidates. 439 00:26:11,880 --> 00:26:15,120 Speaker 1: Is there a view as they game things out that yes, 440 00:26:15,200 --> 00:26:17,120 Speaker 1: these people may get elected, but the way the American 441 00:26:17,119 --> 00:26:20,679 Speaker 1: system works, not much terrible is going to happen. I 442 00:26:20,720 --> 00:26:22,439 Speaker 1: think there's a few things going First of all, I 443 00:26:22,480 --> 00:26:27,000 Speaker 1: think that, uh, the probability of any one candidate getting 444 00:26:27,000 --> 00:26:30,600 Speaker 1: elected is obviously not even because you still have primaries 445 00:26:30,640 --> 00:26:32,119 Speaker 1: going on. Then you have a general election, and so 446 00:26:32,160 --> 00:26:35,360 Speaker 1: if you started doing probability math, I think you calculate 447 00:26:35,400 --> 00:26:38,119 Speaker 1: that the chance of Trump being elected are maybe twenty 448 00:26:38,200 --> 00:26:41,159 Speaker 1: or between having to get nominated and then having to 449 00:26:41,160 --> 00:26:43,920 Speaker 1: get past Hillary Clinton. I think the market probably today 450 00:26:43,960 --> 00:26:45,560 Speaker 1: we guess that Hillary Clinton is going to be the 451 00:26:45,600 --> 00:26:48,400 Speaker 1: next president, and I don't know that that's that threatening. Yes, 452 00:26:48,440 --> 00:26:51,720 Speaker 1: she has some different ideas, but she's a sensible, rational person. 453 00:26:52,040 --> 00:26:53,639 Speaker 1: But I think the other thing you alluded to that 454 00:26:53,680 --> 00:26:56,600 Speaker 1: the market is relying on is the gridlock in Washington 455 00:26:56,680 --> 00:26:58,680 Speaker 1: and the fact that it's unlikely that no matter who 456 00:26:58,680 --> 00:27:02,879 Speaker 1: gets elected, there's to be some massive policy shift. UH. 457 00:27:02,920 --> 00:27:06,120 Speaker 1: Getting from Congress, Steve Ratners, thank you so much, short 458 00:27:08,080 --> 00:27:10,240 Speaker 1: and then Governor Romney again speaking. This will be cover 459 00:27:10,320 --> 00:27:13,280 Speaker 1: Michael Barrow have full coverage of this, uh through the 460 00:27:13,359 --> 00:27:17,359 Speaker 1: morning and into the afternoon. Is well, onto Michigan and 461 00:27:17,400 --> 00:27:20,880 Speaker 1: then onto Florida. Look for the announcement of Steve Ratner's 462 00:27:20,920 --> 00:27:24,280 Speaker 1: go ops are coming from the White House sometime in 463 00:27:24,359 --> 00:27:27,480 Speaker 1: the near in the near future. Futures negative to down, 464 00:27:27,480 --> 00:27:33,120 Speaker 1: futures negative ten uh West Texas thirty four A barrel. 465 00:27:36,920 --> 00:27:39,240 Speaker 1: All right, let's just bring in Michael bar and get 466 00:27:39,280 --> 00:27:41,720 Speaker 1: the latest news. Michael, Mike Tom, thank you very much. 467 00:27:41,760 --> 00:27:45,760 Speaker 1: Former Republican presidential nominee mid Romney plans to deliver some 468 00:27:45,840 --> 00:27:49,520 Speaker 1: strong words against Donald Trump. Romney plans to call Trump 469 00:27:49,520 --> 00:27:53,680 Speaker 1: in a speech later today phony and a fraud. The 470 00:27:53,760 --> 00:27:57,000 Speaker 1: former Massachusetts governor says Trump is playing the American public 471 00:27:57,040 --> 00:28:00,640 Speaker 1: for suckers. The excerpts are from the speech Romney plans 472 00:28:00,680 --> 00:28:03,280 Speaker 1: to give later today at the University of Utah and 473 00:28:03,359 --> 00:28:06,159 Speaker 1: the bids who dislaunched Trump from the top of the 474 00:28:06,200 --> 00:28:11,360 Speaker 1: Republican Party's presidential race. Meanwhile, Trump fired back on ABC. 475 00:28:11,800 --> 00:28:15,399 Speaker 1: Trump called Romney a failed candidate and should have beaten 476 00:28:15,400 --> 00:28:19,040 Speaker 1: Barack Obama. Millions of people are joining the Republican Party 477 00:28:19,080 --> 00:28:22,240 Speaker 1: because of me, and you know what, the republic establishment. 478 00:28:22,280 --> 00:28:25,359 Speaker 1: Republican Establishment's probably going to give it right back and 479 00:28:25,400 --> 00:28:27,600 Speaker 1: go back to the old days of Mitt Romney, who 480 00:28:27,640 --> 00:28:30,920 Speaker 1: couldn't win. Trump will take part in to Night's Republican 481 00:28:30,960 --> 00:28:34,919 Speaker 1: presidential debate on Fox News. Only four podiums will be 482 00:28:34,960 --> 00:28:37,520 Speaker 1: on the stage tonight for the debate in Detroit. Ben 483 00:28:37,560 --> 00:28:40,640 Speaker 1: Carson issued a statement yesterday saying he does not see 484 00:28:40,640 --> 00:28:43,040 Speaker 1: a political path forward and will be on no show. 485 00:28:43,560 --> 00:28:47,880 Speaker 1: South Korean officials say North Korea fired six short range 486 00:28:48,040 --> 00:28:51,440 Speaker 1: projectiles into the sea off its east coast today. The 487 00:28:51,560 --> 00:28:55,200 Speaker 1: launches came hours after the UN Security Council approved tough 488 00:28:55,240 --> 00:28:59,120 Speaker 1: sanctions on pyong Yang for its recent nuclear tests. Global 489 00:28:59,120 --> 00:29:01,960 Speaker 1: News twenty four hour Today, powered by our two hundred 490 00:29:02,000 --> 00:29:04,760 Speaker 1: journalists more than a hundred fifty news bureaus from around 491 00:29:04,760 --> 00:29:08,120 Speaker 1: the world. Mike Labark, Mike Tom, thank you, mich A 492 00:29:08,160 --> 00:29:11,320 Speaker 1: little time now for the Bloomberg NBC Sports update. Here's 493 00:29:11,400 --> 00:29:14,560 Speaker 1: John Sesshion, my greater and act. The flake Gate is back. 494 00:29:14,680 --> 00:29:17,360 Speaker 1: Oral arguments today in New York as the NFL appeals 495 00:29:17,400 --> 00:29:19,480 Speaker 1: to a three judge panel that's lost last year in 496 00:29:19,600 --> 00:29:22,520 Speaker 1: district court. If balls were deflated, and if so, how 497 00:29:22,560 --> 00:29:25,040 Speaker 1: not really the issue here? The NFL will argue Commissioner 498 00:29:25,160 --> 00:29:28,800 Speaker 1: Roger Goodell had the collectively bargained right to suspend Tom 499 00:29:28,840 --> 00:29:31,760 Speaker 1: Brady for four games the Union will contend the NFL 500 00:29:31,800 --> 00:29:34,720 Speaker 1: made mistakes in its application. Neither Goodell or Brady will 501 00:29:34,720 --> 00:29:37,360 Speaker 1: be in court, and the decision could be many months away. 502 00:29:37,400 --> 00:29:40,480 Speaker 1: The Yankees exhibition opener in Tampa was a wild one. 503 00:29:40,560 --> 00:29:43,080 Speaker 1: Yanster down seven nothing, ended up winning tend to nine 504 00:29:43,080 --> 00:29:46,520 Speaker 1: in a drop fly ball in the ninth inning. Manitor 505 00:29:46,600 --> 00:29:49,360 Speaker 1: Joe Girardi was asked about the month long suspension just 506 00:29:49,400 --> 00:29:51,480 Speaker 1: given to his new closure or old As Chapman, for 507 00:29:51,520 --> 00:29:54,280 Speaker 1: domestic violence and use of a firearm. The thing to 508 00:29:54,320 --> 00:29:56,320 Speaker 1: do when you have issues like this is to learn 509 00:29:56,320 --> 00:29:59,120 Speaker 1: from him and try to be there for people. I 510 00:29:59,320 --> 00:30:02,240 Speaker 1: think he's ready to move on, and then he took 511 00:30:02,280 --> 00:30:04,880 Speaker 1: responsibility for what happened, and he wants to be better 512 00:30:04,920 --> 00:30:06,720 Speaker 1: as a as a player. Ran a person ch happening 513 00:30:06,760 --> 00:30:08,360 Speaker 1: to pitch in spring training, but now in the regular 514 00:30:08,400 --> 00:30:11,080 Speaker 1: season until May nine. Yankees and Phillies today and the 515 00:30:11,160 --> 00:30:14,560 Speaker 1: Mets open up with the Nationals. March Madness Conference tournaments 516 00:30:14,640 --> 00:30:17,160 Speaker 1: underway in the Northeast, Winds for l I Youth, Fairly 517 00:30:17,280 --> 00:30:20,520 Speaker 1: Dickinson and the top scene Wagner St. Francis was ounced. 518 00:30:20,560 --> 00:30:23,800 Speaker 1: In America East, top seed Stony Brook moves on and 519 00:30:23,840 --> 00:30:25,880 Speaker 1: gets help when second seed and three times if any 520 00:30:25,920 --> 00:30:28,240 Speaker 1: league champ all but he got upset Seaton all his 521 00:30:28,280 --> 00:30:31,480 Speaker 1: four game Winstrey came to an end at butler Fordham 522 00:30:31,520 --> 00:30:34,960 Speaker 1: beat Ducane. Rutgers still winless in the Big Ten, had 523 00:30:34,960 --> 00:30:37,680 Speaker 1: to play second rank Michigan State and lost by thirty one. 524 00:30:37,760 --> 00:30:41,640 Speaker 1: With the Bloomberg NBC Sports Up Day, I'm John stashell, John, 525 00:30:41,920 --> 00:30:44,440 Speaker 1: thanks so much. A futures negative two deaf features at 526 00:30:44,520 --> 00:30:48,560 Speaker 1: negative thirteen again a churn all in all to the market. 527 00:30:48,680 --> 00:30:52,720 Speaker 1: You really gotta believe we're slotted into a job's day move. 528 00:30:53,440 --> 00:30:56,000 Speaker 1: As we moved to eight thirty tomorrow morning, Alan Krueger 529 00:30:56,000 --> 00:30:59,040 Speaker 1: and Bill Gross will join us to review that data. 530 00:30:59,080 --> 00:31:02,720 Speaker 1: I'm gonna scroll down here to get to a thousand 531 00:31:02,880 --> 00:31:05,200 Speaker 1: is the final sample. We make it a tick on 532 00:31:05,320 --> 00:31:09,400 Speaker 1: that here as we get to tomorrow, with the unemployment 533 00:31:09,480 --> 00:31:14,160 Speaker 1: rate similar four point nine percent, Michael McKee and Tom 534 00:31:14,240 --> 00:31:22,440 Speaker 1: Keene coast to coast worldwide Bloomberg Surveillance. Bloomberg Surveillance has 535 00:31:22,480 --> 00:31:24,680 Speaker 1: brought to you by NYCB ask about their my community 536 00:31:24,680 --> 00:31:28,200 Speaker 1: interest checking with three NYCB online and mobile banking earned more. 537 00:31:28,240 --> 00:31:30,680 Speaker 1: Getting more of is an NYCB family dot Com for 538 00:31:30,840 --> 00:31:40,479 Speaker 1: details global business news twenty four hours a day at 539 00:31:40,520 --> 00:31:43,560 Speaker 1: Bloomberg dot Com, the Radio, Plust mobile app, and on 540 00:31:43,600 --> 00:31:47,600 Speaker 1: your radio. This is a Bloomberg Business Flash and I'm 541 00:31:47,640 --> 00:31:51,360 Speaker 1: Karen Moscow. The number of Americans applying for unemployment benefits 542 00:31:51,440 --> 00:31:53,880 Speaker 1: rose last week to a level that's consistent with steady 543 00:31:53,880 --> 00:31:57,600 Speaker 1: improvement in the labor market, while Jova's claims unexpectedly climbed 544 00:31:57,560 --> 00:31:59,960 Speaker 1: to buy six thousand to two hundred seventy eight thousand. 545 00:32:00,040 --> 00:32:02,640 Speaker 1: The week that ended February twenty seven, the four week 546 00:32:02,680 --> 00:32:05,400 Speaker 1: average dropped to the lowest since the end of November, 547 00:32:05,880 --> 00:32:10,040 Speaker 1: European stocks halting their longest rally since October, oil falling 548 00:32:10,080 --> 00:32:12,000 Speaker 1: from an eight week high, and bonds in the region 549 00:32:12,160 --> 00:32:15,400 Speaker 1: rising as investors await fresh indications of the strength of 550 00:32:15,400 --> 00:32:18,040 Speaker 1: the U S economy. We checked the markets every fifteen 551 00:32:18,040 --> 00:32:21,080 Speaker 1: minutes throughout the trading day on Bloomberg. Snp E mini 552 00:32:21,160 --> 00:32:23,560 Speaker 1: futures are little changed to lower down one and a 553 00:32:23,600 --> 00:32:27,240 Speaker 1: half points, DOWI mini futures down ten NASDAKI Many futures 554 00:32:27,280 --> 00:32:29,840 Speaker 1: down less than a point, the decks in Germany's down 555 00:32:29,840 --> 00:32:32,560 Speaker 1: two tenths per cent, the tenure treasuries down one thirty 556 00:32:32,640 --> 00:32:35,280 Speaker 1: second the yield one point eight four percent yelled on 557 00:32:35,360 --> 00:32:38,280 Speaker 1: the two year point eight four percent. Nimex screwed oil 558 00:32:38,360 --> 00:32:40,640 Speaker 1: down six tenths per cent or twenty cents to thirty 559 00:32:40,640 --> 00:32:43,400 Speaker 1: four or forty seven A barrel comes Gold is little 560 00:32:43,480 --> 00:32:46,520 Speaker 1: changed of fifty cents to twelve forty two thirty announced 561 00:32:46,680 --> 00:32:48,920 Speaker 1: the euro a dollar oh nine oh four. The N 562 00:32:49,000 --> 00:32:52,840 Speaker 1: one thirteen point eight five Kroger down almost eight percent 563 00:32:52,920 --> 00:32:55,760 Speaker 1: in early trading after a fourth quarter comps store sales 564 00:32:56,160 --> 00:32:59,680 Speaker 1: missed analysts estimates, and Urban Life is down six percent. 565 00:32:59,720 --> 00:33:03,000 Speaker 1: The New Christian Company, under federal investigation for allegations of 566 00:33:03,040 --> 00:33:06,520 Speaker 1: fostering a pyramid scheme, said it overstated growth of new 567 00:33:06,560 --> 00:33:10,400 Speaker 1: customers and distributors last year because of database errors. That's 568 00:33:10,400 --> 00:33:15,080 Speaker 1: a Bloomberg business flash. Tom and Mike Karen, thanks so much, 569 00:33:15,120 --> 00:33:20,360 Speaker 1: greatly appreciated Bloomberg surveillance folks worldwide. We say good morning, 570 00:33:21,160 --> 00:33:24,280 Speaker 1: Michael McKee and Tom Keane. It is eight forty nine 571 00:33:24,480 --> 00:33:29,280 Speaker 1: on Wall Street. The following is from Bloomberg View, opinions 572 00:33:29,280 --> 00:33:33,000 Speaker 1: and commentary from Bloomberg columnists. I'm Jonathan Bernstein, a columnist 573 00:33:33,040 --> 00:33:35,760 Speaker 1: for Bloomberg View. Ben Carson has finally dropped out of 574 00:33:35,760 --> 00:33:39,000 Speaker 1: the Republican presidential race. Ted Cruz is presumed most likely 575 00:33:39,040 --> 00:33:42,480 Speaker 1: to benefit, since he and Carson do best among Christian Conservatives. 576 00:33:42,520 --> 00:33:46,280 Speaker 1: Although Carson supporters may not have been a monolithic block. Still, 577 00:33:46,640 --> 00:33:49,320 Speaker 1: small shifts and votes can make a huge difference. In 578 00:33:49,360 --> 00:33:53,240 Speaker 1: Tuesday's Arkansas primary, for example, Carson received six percent of 579 00:33:53,240 --> 00:33:56,240 Speaker 1: the vote while Donald Trump beat Cruz by two percentage 580 00:33:56,240 --> 00:33:58,560 Speaker 1: points if Carson hadn't been in the race, with Cruise 581 00:33:58,600 --> 00:34:01,800 Speaker 1: of one. Perhaps true, a proportional allocation is rare on 582 00:34:01,840 --> 00:34:04,600 Speaker 1: the Republican side. Winning even if I just want to vote, 583 00:34:04,720 --> 00:34:08,400 Speaker 1: is disproportionately rewarded. That system of winner take more, winner 584 00:34:08,400 --> 00:34:12,120 Speaker 1: take most, and winner take all delegate distribution explains why 585 00:34:12,160 --> 00:34:15,759 Speaker 1: Cruz and Marco Rubio could still easily gather enough delegates 586 00:34:15,760 --> 00:34:18,879 Speaker 1: to win the nomination, even though both Rubio especially are 587 00:34:18,920 --> 00:34:21,000 Speaker 1: off to slow starts. All one of them has to 588 00:34:21,040 --> 00:34:24,319 Speaker 1: do now is win consistently. A four candidate field with 589 00:34:24,360 --> 00:34:27,080 Speaker 1: Ben Carson out doesn't hand Cruise or Rubio anything, but 590 00:34:27,160 --> 00:34:30,400 Speaker 1: Carson's exit gives both of them a slightly better fighting chance. 591 00:34:30,560 --> 00:34:33,240 Speaker 1: I'm Jonathan Bernstein. For more view, please go to Bloomberg 592 00:34:33,320 --> 00:34:35,880 Speaker 1: View dot com or View go on the Bloomberg terminal. 593 00:34:36,080 --> 00:34:39,560 Speaker 1: This has been Bloomberg View and Bloomberg View commentaries can 594 00:34:39,600 --> 00:34:43,160 Speaker 1: be heard hourly weekdays on Bloomberg Radio. Jonathan Burnstein has 595 00:34:43,200 --> 00:34:48,400 Speaker 1: been very strong recently. He's written short, pungent, immediate notes 596 00:34:48,520 --> 00:34:51,680 Speaker 1: out on Bloomberg View with all that we've seen. I'm 597 00:34:51,680 --> 00:34:53,840 Speaker 1: sure he'll do that. As we moved to Michigan and 598 00:34:53,920 --> 00:34:57,560 Speaker 1: onto Florida in less than two weeks, I write on it, Mike, 599 00:34:57,640 --> 00:35:02,800 Speaker 1: less than two weeks. I guess that's Tuesdays Michigan and 600 00:35:02,920 --> 00:35:05,840 Speaker 1: the Tuesday after that is it's not It's not just Florida, 601 00:35:05,880 --> 00:35:08,600 Speaker 1: it's Illinois and a whole bunch of other states as well. 602 00:35:08,760 --> 00:35:12,480 Speaker 1: Our next guest was smart on Tuesday. It sounds like 603 00:35:12,480 --> 00:35:16,160 Speaker 1: that old what were the Cure their song? Monday Tuesday 604 00:35:16,200 --> 00:35:22,000 Speaker 1: Wednesday Data Data. Stephen Stanley has been just outstanding on 605 00:35:22,080 --> 00:35:26,560 Speaker 1: a centrist, cautious tendency on American GDP. He works with 606 00:35:26,640 --> 00:35:29,800 Speaker 1: Robert Sinch and Amer's Pierpont and joins us. Now, Steve, 607 00:35:29,880 --> 00:35:33,240 Speaker 1: you've been dead on on a more muted yet okay 608 00:35:33,360 --> 00:35:37,759 Speaker 1: economic growth. Can you move the vector up? No? I 609 00:35:37,760 --> 00:35:40,319 Speaker 1: don't think so. I mean and I think The productivity 610 00:35:40,400 --> 00:35:42,719 Speaker 1: numbers this morning speak to that as well. Even though 611 00:35:42,760 --> 00:35:46,239 Speaker 1: it was upward division in the fourth quarter, productivity for 612 00:35:46,280 --> 00:35:49,680 Speaker 1: the year last year was a half percent. So you're 613 00:35:49,719 --> 00:35:53,640 Speaker 1: just with population growth slowing down and productivity not really 614 00:35:53,680 --> 00:35:55,600 Speaker 1: doing much, you're not going to get a ton of 615 00:35:56,120 --> 00:36:01,600 Speaker 1: trend growth. What what does that lie for the longer 616 00:36:02,080 --> 00:36:04,520 Speaker 1: for for the I want say longer run, but for 617 00:36:04,560 --> 00:36:08,560 Speaker 1: the this year, well, I think you know, from the 618 00:36:08,560 --> 00:36:11,640 Speaker 1: fence perspective, it's it's a mixed bag, right, because the 619 00:36:11,640 --> 00:36:14,920 Speaker 1: economy doesn't look as strong, But at the same time, 620 00:36:15,160 --> 00:36:17,520 Speaker 1: if if potential is lower than we thought it was, 621 00:36:17,600 --> 00:36:20,240 Speaker 1: then we've probably made more progress in terms of taking 622 00:36:20,280 --> 00:36:22,759 Speaker 1: up slack than we thought. And that's exactly what we're 623 00:36:22,760 --> 00:36:25,680 Speaker 1: seeing in the economy now. The labor markets have gotten 624 00:36:25,680 --> 00:36:28,839 Speaker 1: pretty tight, even though growth has been at a pace 625 00:36:28,920 --> 00:36:32,320 Speaker 1: that we would have considered very mediocre throughout this expansion. 626 00:36:33,719 --> 00:36:38,840 Speaker 1: What's the then, the forecast for your forecast for the 627 00:36:38,880 --> 00:36:42,359 Speaker 1: pace of expansion at this point, Well, you know, we've 628 00:36:42,400 --> 00:36:44,319 Speaker 1: been growing at her a little bit two percent for 629 00:36:44,360 --> 00:36:47,000 Speaker 1: several years, and I think we may kick up a 630 00:36:47,080 --> 00:36:49,560 Speaker 1: little bit from there. In two thousand and sixteen. I 631 00:36:49,560 --> 00:36:51,719 Speaker 1: think there are a couple of things that were drags 632 00:36:52,000 --> 00:36:54,600 Speaker 1: last year that are not going to be quite as 633 00:36:54,640 --> 00:36:56,799 Speaker 1: as big a deal. I think once we get past 634 00:36:56,840 --> 00:36:59,800 Speaker 1: the early part of the year, this inventory correction is 635 00:36:59,800 --> 00:37:02,120 Speaker 1: probably going to be mostly behind us. So I don't 636 00:37:02,120 --> 00:37:04,360 Speaker 1: think inventories are going to continue to drag on growth 637 00:37:04,360 --> 00:37:07,560 Speaker 1: as they have over the last few quarters. Um. And 638 00:37:07,600 --> 00:37:10,359 Speaker 1: I think the other thing is we're probably getting much 639 00:37:10,400 --> 00:37:13,360 Speaker 1: closer to the bottom in terms of UH oil and 640 00:37:13,400 --> 00:37:15,960 Speaker 1: gas drilling activity. That's been a huge drag on GDP 641 00:37:16,080 --> 00:37:19,040 Speaker 1: over the last several quarters, and and certainly not done yet. 642 00:37:19,080 --> 00:37:21,440 Speaker 1: But I think, you know, certainly as the year progressist 643 00:37:21,480 --> 00:37:25,319 Speaker 1: will probably um see less of a drag there as well. 644 00:37:26,560 --> 00:37:29,120 Speaker 1: Is the markets in tune. We had a little bit 645 00:37:29,160 --> 00:37:31,000 Speaker 1: of a recipe here the last two weeks or so 646 00:37:31,480 --> 00:37:33,680 Speaker 1: for you as an economist, when you argue with Bob 647 00:37:33,719 --> 00:37:36,960 Speaker 1: Sinch and throw coffee cups at him, is Bob Sinch's 648 00:37:37,040 --> 00:37:42,239 Speaker 1: world more in tune with Steven Stanley's world. Um, we're 649 00:37:42,280 --> 00:37:44,840 Speaker 1: coming into somewhat better alignment. I think if you go 650 00:37:44,920 --> 00:37:48,000 Speaker 1: back a month, the markets were thinking that the U. 651 00:37:48,040 --> 00:37:52,160 Speaker 1: S economy was absolutely positively headed right into a recession, 652 00:37:52,480 --> 00:37:55,080 Speaker 1: and you know, I think that was a gross over reaction, 653 00:37:55,280 --> 00:37:58,279 Speaker 1: and people are kind of stepping back from the precipice 654 00:37:58,320 --> 00:38:01,040 Speaker 1: a little bit on that. UM And as a result 655 00:38:01,080 --> 00:38:04,440 Speaker 1: of that, UM feed expectations have moved up a little 656 00:38:04,440 --> 00:38:09,040 Speaker 1: bit and the markets are almost pricing one whole for 657 00:38:09,040 --> 00:38:11,680 Speaker 1: the entire year now, whereas there was a brief period 658 00:38:11,680 --> 00:38:15,240 Speaker 1: of time UM last month where there was basically nothing 659 00:38:15,800 --> 00:38:19,160 Speaker 1: baked into the cake. So we're moving in that direction. 660 00:38:19,480 --> 00:38:21,839 Speaker 1: Um My guesses there's still more to go to get 661 00:38:21,920 --> 00:38:25,200 Speaker 1: us into better alignment, but you know, we're at least 662 00:38:25,239 --> 00:38:29,839 Speaker 1: not quite as divergent as we were UM a month ago. Well. 663 00:38:29,920 --> 00:38:32,400 Speaker 1: It's interesting because there have been a lot of people 664 00:38:32,400 --> 00:38:34,719 Speaker 1: in the bond markets who have suggested that maybe the 665 00:38:34,760 --> 00:38:36,759 Speaker 1: markets are not prepared for what the FED is going 666 00:38:36,800 --> 00:38:40,839 Speaker 1: to have to actually do. Are you in that camp? Yeah, 667 00:38:40,880 --> 00:38:43,120 Speaker 1: I mean that's a that's a theme UM and and 668 00:38:43,560 --> 00:38:46,600 Speaker 1: certainly have been very early on that, unfortunately. But I 669 00:38:46,600 --> 00:38:50,040 Speaker 1: think that's that's something that I've talked about for several years, 670 00:38:50,040 --> 00:38:52,520 Speaker 1: that once the FED finally did get going, they're likely 671 00:38:52,600 --> 00:38:55,560 Speaker 1: to have to move faster and buy more than the 672 00:38:55,600 --> 00:38:59,279 Speaker 1: markets are are expecting. I think the first inkling of 673 00:38:59,360 --> 00:39:02,640 Speaker 1: that really was the was the inflation data for January 674 00:39:02,719 --> 00:39:04,960 Speaker 1: where we got point three increases for both of the 675 00:39:04,960 --> 00:39:08,480 Speaker 1: core measures. Um, that's the one thing that could press 676 00:39:08,520 --> 00:39:11,360 Speaker 1: the FED, I think, into acting more aggraphically than what 677 00:39:11,400 --> 00:39:13,440 Speaker 1: they'd like to do. Along that line, I'm glad you 678 00:39:13,440 --> 00:39:16,759 Speaker 1: bring it up. If there's twenty in flavors of measuring inflation, Mike, 679 00:39:16,880 --> 00:39:19,960 Speaker 1: I have a tendency to the Cleveland CPI, which is 680 00:39:20,040 --> 00:39:24,160 Speaker 1: core like but with the adjustable outliers every month months 681 00:39:24,200 --> 00:39:27,640 Speaker 1: and month a month, the mixed changes that's elevated above 682 00:39:27,760 --> 00:39:31,120 Speaker 1: some of the measures are the Are the other measures 683 00:39:31,160 --> 00:39:35,880 Speaker 1: catching up? It's more elevated, more malleable measures. Well, I 684 00:39:35,920 --> 00:39:38,080 Speaker 1: think you're going to see that. Um, we we have. 685 00:39:38,400 --> 00:39:40,640 Speaker 1: The one that's been the outlier to the downside is 686 00:39:40,640 --> 00:39:42,160 Speaker 1: the one that the FED, of course pays the most 687 00:39:42,160 --> 00:39:44,799 Speaker 1: attention to, the core PC deflator, and that one has 688 00:39:44,880 --> 00:39:46,960 Speaker 1: moved in the last three months from one point three 689 00:39:46,960 --> 00:39:49,000 Speaker 1: to one point seven. So we're starting to see a 690 00:39:49,040 --> 00:39:52,520 Speaker 1: little bit of convergence there. The gap between the CPI 691 00:39:52,640 --> 00:39:54,840 Speaker 1: measures and the and the PC two flator measures have 692 00:39:54,880 --> 00:39:58,319 Speaker 1: been unusually large, and I think those will close begin 693 00:39:58,400 --> 00:40:01,319 Speaker 1: to close this year, and more than likely closed by 694 00:40:01,400 --> 00:40:05,080 Speaker 1: the PC deflator measures creeping a little higher. Um, But 695 00:40:05,160 --> 00:40:08,120 Speaker 1: you're right. I mean there's an analogous measure for the 696 00:40:08,200 --> 00:40:09,880 Speaker 1: for the PC to flatter day that comes out of 697 00:40:09,880 --> 00:40:12,839 Speaker 1: the Dallas FED, and that measure has been running. You know, 698 00:40:12,920 --> 00:40:16,319 Speaker 1: twenty five basis points are so higher than the than 699 00:40:16,360 --> 00:40:19,360 Speaker 1: the core PC numbers. So um. And I think a 700 00:40:19,400 --> 00:40:22,000 Speaker 1: lot of people the FET have started to emphasize that 701 00:40:22,080 --> 00:40:24,880 Speaker 1: alternative measures, so I think they're they're understanding of it. 702 00:40:24,920 --> 00:40:27,279 Speaker 1: I think what's interesting is just at the point where 703 00:40:27,280 --> 00:40:30,040 Speaker 1: it seems like inflation might be ticking higher, all of 704 00:40:30,120 --> 00:40:32,480 Speaker 1: a sudden, people to FED are starting to, you know, 705 00:40:32,600 --> 00:40:34,239 Speaker 1: play the shell game again. And now we're going to 706 00:40:34,320 --> 00:40:38,200 Speaker 1: talk about inflation expectations, which stay fear may be moving lower. 707 00:40:38,320 --> 00:40:40,760 Speaker 1: So there's always a reason to be devilished, I guess 708 00:40:40,760 --> 00:40:43,080 Speaker 1: and uh And we'll see how it goes. But if 709 00:40:43,080 --> 00:40:45,480 Speaker 1: these inflation numbers continue to be firmer, I think they're 710 00:40:45,520 --> 00:40:49,000 Speaker 1: going to be forced to uh to to respond talk 711 00:40:49,040 --> 00:40:51,360 Speaker 1: to us from an economic point of view, leaving the 712 00:40:51,360 --> 00:40:54,480 Speaker 1: FED out of it. But how inflation expectations relate to 713 00:40:54,840 --> 00:40:59,040 Speaker 1: inflation forecasts, Well, you know, I think what we've learned 714 00:40:59,040 --> 00:41:01,400 Speaker 1: in economics of the last twenty or thirty years is 715 00:41:01,440 --> 00:41:04,920 Speaker 1: that inflation expectations are very important. I still don't think 716 00:41:04,920 --> 00:41:07,920 Speaker 1: economists have a very good handle on how exactly inflation 717 00:41:08,440 --> 00:41:10,799 Speaker 1: UH develops. But I think one thing that people will 718 00:41:10,840 --> 00:41:14,880 Speaker 1: agree on is that UM one important input is what 719 00:41:14,920 --> 00:41:18,600 Speaker 1: people expect inflation to be. Because there's a certain inertia there. 720 00:41:18,760 --> 00:41:21,759 Speaker 1: People expect too percent inflation and you're you're kind of 721 00:41:21,760 --> 00:41:24,680 Speaker 1: presposed to get that in the absence of some sort 722 00:41:24,680 --> 00:41:28,719 Speaker 1: of a shock. UM. I think for me, I don't 723 00:41:28,719 --> 00:41:32,000 Speaker 1: think that the average person out there is so sophisticated 724 00:41:32,040 --> 00:41:34,120 Speaker 1: that they you know, that they can give you a 725 00:41:34,160 --> 00:41:37,480 Speaker 1: ten basis point swing in their inflation expectations that it's 726 00:41:37,600 --> 00:41:42,960 Speaker 1: very meaningful. So I take the numbers more qualitatively than quantitatively. 727 00:41:43,000 --> 00:41:45,840 Speaker 1: But but I certainly think that when the FED runs 728 00:41:45,840 --> 00:41:48,480 Speaker 1: policy is easy as it's run for several years, that's 729 00:41:48,520 --> 00:41:51,760 Speaker 1: one example where people may be surprised, but the fact 730 00:41:51,840 --> 00:41:53,960 Speaker 1: is that that should leave a market in terms of 731 00:41:54,000 --> 00:41:57,080 Speaker 1: inflation over time. Steve, if you have a chance to 732 00:41:57,120 --> 00:41:59,920 Speaker 1: get in the Manhattan sometime in the next three or 733 00:42:00,040 --> 00:42:03,480 Speaker 1: four years, can your people talk to our people. We 734 00:42:03,520 --> 00:42:08,840 Speaker 1: would love to get you into the studio, Steve, we 735 00:42:08,880 --> 00:42:11,800 Speaker 1: could do, Mike, the nirvana of a one hour Steve 736 00:42:11,840 --> 00:42:18,000 Speaker 1: Stanley Robert Cinch extravaganza. That would be extraordinary. Stephen Stanley 737 00:42:18,000 --> 00:42:20,880 Speaker 1: with Amer's pierrepont, having to put up with Bob Sinch's 738 00:42:20,920 --> 00:42:23,920 Speaker 1: discussions on end and the rest of it. I Mike, 739 00:42:23,960 --> 00:42:27,120 Speaker 1: I can't you know, somebody gets it right, and uh, 740 00:42:27,360 --> 00:42:31,680 Speaker 1: it's pretty pretty impressive how they took Morning in America 741 00:42:31,719 --> 00:42:35,799 Speaker 1: and brought it down a little bit. Futures negative, one down, 742 00:42:35,840 --> 00:42:38,719 Speaker 1: Futures negative. A bonus round, Mike, McKie and I in 743 00:42:38,800 --> 00:42:43,000 Speaker 1: New York City in one piece after Super Tuesday, Your 744 00:42:43,040 --> 00:42:46,279 Speaker 1: bonus another hour of Bloomberg surveillance