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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: This is a Bloomberg Business Flash and I'm Verra in Moscow.

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Speaker 1: This updates brought to you by Eisener Amper, Hedge Week,

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Speaker 1: Institutional Investor, All Credit Intelligence. Fund managers reading these publications

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Speaker 1: rank Eisner Amper high for excellence in clients service. Find

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Speaker 1: out why eisener Amper dot Com slash excellence Stalks jumping

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Speaker 1: around the world after Federal reserved. Here Jenny Yellen reasserted

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Speaker 1: the central banks gradual approach to raising interest rates. Commodities

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Speaker 1: are climbing. Is the dollar extended its worst month in

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Speaker 1: more than five years. Check the markets every fifteen minutes

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Speaker 1: throughout the trading day. On Bloomberg SNP EVENI future is

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Speaker 1: up eleven and a half points now eveny futures up

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Speaker 1: a hundred NASDACUMNY futures up thirty one That action. Germany's

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Speaker 1: up one point seven percent, Ten year treasury down three

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Speaker 1: thirty seconds, the yield one point at one percent. NIMEX

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Speaker 1: screent oil up one point seven percent or sixty one cents.

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Speaker 1: Call Mike's Gold little changed. At twelve thirty seven announced

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Speaker 1: and the euro A dollar thirteen twenty eight, then one

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Speaker 1: twelve point to eight. That's a Bloomberg business flash, Tom

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Speaker 1: and Barry Karena. Thanks so much, Berry, Ridholdson, Tom Keen,

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Speaker 1: morning must read. And this is really cool. Vice President

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Speaker 1: Biden has many of you know, um has really taken

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Speaker 1: the initiative on jump starting cancer research in America. He

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Speaker 1: and Michael Bloomberg, of course majority owner of this of

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Speaker 1: Bloomberg LP and of course Bloomberg Radio worldwide. Michael Bloomberg

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Speaker 1: and Joe Biden writing today an essay on the announcement

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Speaker 1: of the Bloomberg Sydney Kimmel Institute for Cancer Immunotherapy at

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Speaker 1: Mike's Johns Hopkins University. This is fabulous. Sidney Kimmel, you

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Speaker 1: will know from Jones Apparel from years ago, and he's

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Speaker 1: been truly one of the great donors for cancer research,

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Speaker 1: not only with this announcement of a five million to

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Speaker 1: Johns Hopkins University, but Sydney Kimmel's contribution to phil Alphia

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Speaker 1: into all of cancer research nationwide. Uh So, it's wonderful

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Speaker 1: to see a further commitment with Mike to Johns Hopkins

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Speaker 1: University look for curing cancer is within reach. The vice

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Speaker 1: president and Mike look for that Bloomberg view. Uh this

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Speaker 1: morning features up twelve down, features up one hundred. Barry Redoltson,

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Speaker 1: Tom Keene, we look at volatility with Dean current. Dean,

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Speaker 1: I thought what you did with us this morning, I

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Speaker 1: was just brilliant. I do want to revisit one thing,

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Speaker 1: which is this belief out there that the market is

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Speaker 1: forever changed. It's the market not of the big short.

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Speaker 1: Maybe it's the small long. I don't know what it is,

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Speaker 1: but it's not the little guy. It's et F hedge

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Speaker 1: funds in and out, in and out playing your world

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Speaker 1: of volatility. Is that an accurate view? I think it is.

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Speaker 1: Think about the days from long long ago when you

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Speaker 1: have people with a presence in the pit of the

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Speaker 1: New York Stock Exchange or in Chicago some of the

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Speaker 1: futures and options pits. That physical presence has change, and

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Speaker 1: now you've got a vast electronification of markets, even treasury markets,

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Speaker 1: which have one of the latest markets to become much

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Speaker 1: more electronic and its orientation. What you have is impulses,

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Speaker 1: you know, competing for liquidity. There's a lot of this

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Speaker 1: kind of spoofing going on where you're you're really not

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Speaker 1: sure if the screen looks spoofing. I mean, when I

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Speaker 1: want to buy a hundred forty two shares of amalgamated

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Speaker 1: chin strap, I'm not spoofing. Am I know you're going

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Speaker 1: in there trying to take liquidity, But the providing of

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Speaker 1: liquidity is not really a human being that has got

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Speaker 1: an opinion on whether the stock or going is going

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Speaker 1: up or down. It's just all about trying to trade

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Speaker 1: in and out of markets in in, you know, almost

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Speaker 1: light speed, and that's really it begs the question of

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Speaker 1: whether the liquidity will truly be there when the market

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Speaker 1: is potentially I just got it. Spoofing barriers with the

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Speaker 1: New York Knicks have done to us for fifteen years. Well,

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Speaker 1: if the New York Knicks would put up fifty shots

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Speaker 1: in the spa and of a few micro seconds and

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Speaker 1: then cancel all of them, but as to fool the defenders,

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Speaker 1: that would be spoofing. But let me ask a more

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Speaker 1: serious question of our guest. How much of the change

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Speaker 1: in in character of trading in the markets is just

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Speaker 1: human psychology? And what's changing on the side of retail

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Speaker 1: investors and how much of it is it really the

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Speaker 1: h F T al go driven electronification of markets. There's

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Speaker 1: a little of each, isn't there? Yeah, I certainly think

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Speaker 1: that the electronification is very much a real trend. You know.

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Speaker 1: I keep going back to the flash crash in two

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Speaker 1: thousand and ten, and there were a number of things

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Speaker 1: happening at that time. There was clearly a the Greek

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Speaker 1: potential for big risk off was starting to occur. Uh

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Speaker 1: that there were many reasons that the economy was still

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Speaker 1: very fragile. But to see what actually ultimately occurred in

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Speaker 1: terms of the liquidity vacuum prices falling, you know, so tremendously,

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Speaker 1: and all the research that went into trying to investigate

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Speaker 1: what exactly happened. I think that there's still uh many

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Speaker 1: questions that are left unanswered in terms of market structure.

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Speaker 1: And we've got this again, this structure for liquidity for

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Speaker 1: providing liquidity that is so electronic, uh and so high

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Speaker 1: frequency and its orientation um and I think it works,

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Speaker 1: but it potentially doesn't work in a in a in

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Speaker 1: a market where all of the liquidity gets turned off

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Speaker 1: based on signals, uh that too many of the liquidity

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Speaker 1: providers are using that are very similar. So I think

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Speaker 1: that's again it's a risk that might not be active

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Speaker 1: right now here and now as as volatility comes in

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Speaker 1: d chair chairwoman yelling, But it's still a risk I

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Speaker 1: think out there. So so let's stay with the issue

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Speaker 1: of market structure and and changes that create additional risk.

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Speaker 1: In the bed old day is we would have specialists

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Speaker 1: on the n Y s C. And some people complain

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Speaker 1: that was a license to steal, a license to print money.

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Speaker 1: And to some degrees, if if you ever made the

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Speaker 1: mistake of putting in a a limit order far away

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Speaker 1: from the market and watch the market move down, execute

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Speaker 1: the limit, and then move right back up, you knew

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Speaker 1: that there was some shenanigans going on. But the bottom

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Speaker 1: line was you didn't get days like the flash crash

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Speaker 1: because market makers and specialists always had to be ready, willing,

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Speaker 1: and able, even with their own capital, to create and

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Speaker 1: maintain an orderly market. Is that what's missing from the

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Speaker 1: h f T structure? Do we do we not have

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Speaker 1: that social good of Hey, regardless of what else happens

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Speaker 1: when everything gets there, you have to be able to

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Speaker 1: make a make a market. Yeah, I think in some

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Speaker 1: ways it's you can make the argument that electronic liquid

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Speaker 1: the uh kind of algorithmically driven trading strategies are additive

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Speaker 1: to liquidity in the marketplace. You know, there's this big

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Speaker 1: question mark now around the I X is registering in exchange.

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Speaker 1: And I find it so interesting to to see the

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Speaker 1: arguments about this electronic speed bump as they're calling it,

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Speaker 1: which is in the micro seconds. Uh So it's it's

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Speaker 1: so interesting that this notion of front running, which you're

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Speaker 1: referring to in the old days of the specialist, has

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Speaker 1: now become uh measured in in in micro seconds. And

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Speaker 1: so I think, you know, the markets are changing, they're

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Speaker 1: becoming more electronic, but I think that a lot of

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Speaker 1: the risks remain. I still like the time of a

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Speaker 1: Screenberg with the paper tickets on the left and right

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Speaker 1: by and sell. This is Bloomberg's surveillance. Savanillans brought to

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

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Speaker 1: Appen Bloomberg dot Com. This is Bloomberg Surveillance. Good Morning

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Speaker 1: Wall Street on John Tucker, two hours away from the

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Speaker 1: opening bell, and let's get you updated on the news

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Speaker 1: you need to know this hour. US features and stocks

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Speaker 1: and up rising treasuries are poised for their best quarter

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Speaker 1: in almost four years, and the dollar on traffer its

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Speaker 1: worst month since twenty tan Anthre Janet Yellen Dallas. Speculation

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Speaker 1: the Fed would pick up the pace of interest rates increases.

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Speaker 1: Boeing plans to cut about four thousand jobs from its

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Speaker 1: commercial airplanes division by mid year as part of a

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Speaker 1: broader effort to reduce costs amid fierce competition from Airbus.

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Speaker 1: Fox Gun Technology Growup has inched a deal to buy

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Speaker 1: Sharp and for years at pursuit, bringing together the main

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Speaker 1: assembler of Apple's iPhones with the electronics maker that built

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Speaker 1: Japan's first television sets. One Wall Streets and as time

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Speaker 1: for news from around the world, we say good morning

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Speaker 1: to Bloomberg's Michael Barner, Good morning, John. Republican presidential candidates

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Speaker 1: have pulled back to support the party's presidential nominee, Donald Trump,

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Speaker 1: Ted Cruz, and John Kasick during a talent hall in

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Speaker 1: Milwaukee last night, all said they no longer feel beholden

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Speaker 1: to the loyalty pledge by the sign as signed back

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Speaker 1: in September, President Obama called for aggressive action to fight

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Speaker 1: the opioid abuse epidemic. The Obama administration issued new regulations

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Speaker 1: that would make addiction treatment available to millions more people.

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Speaker 1: The President attended the National Prescription Drug Abuse and Heroin

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Speaker 1: Summit yesterday in Atlanta. Brazilian President dil Marusso has lost

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Speaker 1: key ally, just weeks before she faces an impeachment vote

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Speaker 1: in Congress. The Brazilian Democratic Movement Party has left the

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Speaker 1: governing coalition. Party members must leave Russef's cabinet posts. The

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Speaker 1: PMDB had controlled six ministries in her administration. Experts say

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Speaker 1: the PMDV leaving could make Russef's impeachment more likely. The

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Speaker 1: US plans to beef up its military presence in Eastern Europe,

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Speaker 1: depending on officials. Will announced today of the deployments of

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Speaker 1: an armored brigade combat team as Allies worry about threats

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Speaker 1: from Russia. Global News twenty four hours a day, powered

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Speaker 1: by our twenty four hundred journalists more than a hundred

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Speaker 1: fifty news bureaus from around the world. Michael bar John

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Speaker 1: a right thanks to Michael seven two well Street, ending

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Speaker 1: his time for sports The Bloomberg NBC Sports Update. Good Morning,

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Speaker 1: John Stesshower, Morning John. Sunday was Matt Harvey's twenty seventh

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Speaker 1: birthday and also the day he began to feel the

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Speaker 1: effects of a bladder infection that created a blood clot.

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Speaker 1: And I didn't really know what's going on. I was

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Speaker 1: having trouble using the restroom and it's not a great feeling,

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Speaker 1: so I didn't know what was going on with my stomach.

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Speaker 1: But we had some tests yesterday and everything's fine now.

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Speaker 1: Terry said, we'll be fine to go for Sunday. I'm

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Speaker 1: gonna probably throw a couple innings tomorrow, I believe, and

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Speaker 1: we'll be completely fine, fine to go. The season opener

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Speaker 1: in Kansas City, Islanders and Devils both at home. Both won,

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Speaker 1: both two to one Isisles and a shootout over Carolina

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Speaker 1: Kayla Posto. The shootouts only Gold Devils on a rick

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Speaker 1: Bluche power play goal third period top Boston to the

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Speaker 1: one in the next blown out at Orlando one oh

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Speaker 1: five at the Garden George Washington and Valparaso and i

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Speaker 1: T semifinal winners. They'll play tomorrow for the title. Columbia

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Speaker 1: became the first New York City school to win a

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Speaker 1: postseason tournament since St. John's when the n I T

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Speaker 1: in two thousand three. The Lions be Callervine seventy three

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Speaker 1: sixty seven. They are the champions of the c I T.

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Speaker 1: With Bloomberg NBC Sports Update, I'm John Stash. All right,

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Speaker 1: thanks John Hanna. Ahead of the market, open ball Street.

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Speaker 1: We have futures right now the US. They are higher

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Speaker 1: SMP futures although about six tenths of a percent at

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Speaker 1: eleven points, the DAL futures that one hood at three,

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Speaker 1: and the nasdack Emitate futures thirty two points higher. That

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Speaker 1: is up seven tense of a percent. After a Janet

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Speaker 1: at Young's address yesterday, the year a one thirteen six

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Speaker 1: the end right now one twelve thirty two. You're listening

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Speaker 1: to Bloomberg Surveillance on Bloomberg RADIOAM. Good morning, I'm John Tucker.

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Speaker 1: It is seven, five Wall Street. There's Bloomberg n G

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Speaker 1: I S T T STEM Report now being brought to

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Speaker 1: you by New Jersey Institute of Technology, investing more than

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Speaker 1: one ten billion dollars a year and applied research to

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Speaker 1: solve problems and improved life. Learn more at Stories of

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Speaker 1: Innovation dot n J I T, DOT E d U.

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Speaker 1: Say good morning to Bob Moon, and good morning to

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Speaker 1: you John. Here's what's making news in science. Good morning

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Speaker 1: to you, John. Here's what's making news in science, technology, engineering,

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Speaker 1: and math. Missilemaker Mitsubishi is taking another look at components

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Speaker 1: had developed to guide those weapons milliliter wave radar, sonar

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Speaker 1: sensors and cameras, and hoping to repurpose the technologies to

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Speaker 1: help autonomous driving cars detect obstacles and avoid collisions. Engineers

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Speaker 1: of the company's automotive division say the missile guidance components

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Speaker 1: are being adapted for use in self driving vehicles that

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Speaker 1: will hit the roads by While its competitors have a

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Speaker 1: head start, Mitsubishi engineers say they'll be able to offer

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Speaker 1: superior systems next year that will benefit from the company's

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Speaker 1: existing expertise. China is moving to tighten its grip over

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Speaker 1: the Internet through draft rules that effectively ban web addresses

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Speaker 1: not approved by local authorities, including possibly the most widely

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Speaker 1: used dot com and dot org addresses. China already employs

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Speaker 1: one of the world's most exhaustive Internet censorship regimes to

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Speaker 1: support suppress descent and information deemed dangerous by the Communist Party.

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Speaker 1: And the operator of the popular social messaging app, Snapchat,

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Speaker 1: released an update that steps up competition with Facebook, owner

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Speaker 1: of the rival mobile communication services Messenger, Instagram, and What'sapp.

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Speaker 1: Los Angeles based Snapchat bolstered its chat function with multimedia features,

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Speaker 1: including voice and video calling and digital stickers. And that's

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Speaker 1: this morning is Bloomberg and g I t Stem Report, John, I,

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Speaker 1: I know you've been waiting for those digital stickers. Just

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Speaker 1: what I need. Right you're listening to Bloomberg Surveillance, Bob

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Speaker 1: Boom thanks a lot, and Bloomberg Surveilmance continues. Tom Keene

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Speaker 1: and Barry Ritholds in this week for Michael McKee. Barry

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Speaker 1: are gonna tell you'm very tempted. Tom went off to

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Speaker 1: do television and look what he left behind is wallet.

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Speaker 1: Just make a quick photo of the credit card numbers,

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Speaker 1: and well we still have Dean car sitting with us

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Speaker 1: from Macro Risk Advisors, and earlier we were discussing volatility

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Speaker 1: and what it means for for various markets, and let's

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Speaker 1: move beyond the question market structure and talk about a

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Speaker 1: handful of things that are are fairly significant. Yesterday we

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Speaker 1: had the big speech from Janet yelling, uh, markets seem

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Speaker 1: to like what they hear. What does this mean in

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Speaker 1: terms of near term volatility and what does this mean

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Speaker 1: for the market looking forward? Well, it certainly underscores the

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Speaker 1: impact of central banks on risk taking. You know, the

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Speaker 1: the Fed can really dictate outcomes from markets. They can

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Speaker 1: impose on markets, UH what I like to call premium fatigue,

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Speaker 1: which is, you know, for all the uh negative surprises

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Speaker 1: that market participants battle with and try to handicap, whether

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Speaker 1: it's overseas or geopolitical events or an earning surprise. UM,

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Speaker 1: the reality is that hedging is costly. It costs money

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Speaker 1: to buy puts. And for all the fear that investors

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Speaker 1: have in confronted markets, UM, there hasn't been a lot

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Speaker 1: of realization. There was some realization of of down markets

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Speaker 1: in the past couple months, but Yellen has essentially reasserted

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Speaker 1: the devishness of the FED. One of the metrics that

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Speaker 1: we like to look at at macro risk advisors is

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Speaker 1: the implied probabilities of the Fed UH moving UM. It's

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Speaker 1: it's the Bloomberg page w I r P. And what's

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Speaker 1: very interesting is that even as the market has rallied UH,

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Speaker 1: the probability of the FED moving in June, which is

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Speaker 1: the next UH conference call or the next press release

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Speaker 1: UM has come down quite a bit. I think it's

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Speaker 1: really says something about the FEDS communication to the market,

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Speaker 1: which is we're gonna take it really, really, really slow.

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Speaker 1: We'll probably let inflation run above trend um. And we're

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Speaker 1: very concerned about global developments, things like China. We're concerned

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Speaker 1: about the impact of the dollar and what that means

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Speaker 1: for inflation and corporate profits in the United States. And

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Speaker 1: you know, this is really good news if you're if

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Speaker 1: you're a risk taker, doesn't mean that there's not a

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Speaker 1: significant number of risks still out there in the marketplace.

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Speaker 1: But if you're in the business of trying to manager portfolio, UH,

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Speaker 1: yelling is is essentially providing some some glide path right now.

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Speaker 1: UH So, let me let me push back against the

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Speaker 1: idea how important the FED is within the context of

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Speaker 1: what's going on. Rates are really low, and they've been

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Speaker 1: really low zero for seven years. Now. Is it really

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Speaker 1: all that much of a difference as far as the

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Speaker 1: US economy or markets are concerned between twenty five basis

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Speaker 1: points or fifty basis But is that really all that relevant?

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Speaker 1: I totally agree it It can't really matter that much.

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Speaker 1: But I do think what matters is the FED communicating

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Speaker 1: almost in a forward guidance like fashion, which is trying

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Speaker 1: to provide some degree of certainty uh to the market

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Speaker 1: that market participants are are forced to lean against. Remember,

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Speaker 1: by keeping the base rate, uh, let's say, treasury rates

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Speaker 1: so low. Uh. Through this what the FED likes to

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Speaker 1: call the portfolio balance channel, they're forcing investors to find alternatives.

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Speaker 1: And those alternatives are in things like credit bearing instruments,

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Speaker 1: which again don't provide a lot of yield, but at

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Speaker 1: least provide some yield stocks, provide the opportunity for upside,

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Speaker 1: and also uh, some dividends. So they're they're effectively by

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Speaker 1: making the opportunity cost of not getting involved so so painful,

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Speaker 1: they forced people back into the market. You know, yesterday

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Speaker 1: we spoke with Doug cass He talked about Tina. There

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Speaker 1: is no alternative, and that seems to be the case.

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Speaker 1: Let's let's take a quick look at the market. I

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Speaker 1: wanted to bring this up since Dean brought up the

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Speaker 1: function WORP w RP and the Bloomberg. The probability of

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Speaker 1: a FED hike according to the FED futures zero percent

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Speaker 1: for the April seventh meeting, twenty percent for the June

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Speaker 1: fifteenth meeting. After that specie yesterday by Yemen SMP futures,

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Speaker 1: the head of the market open up twelve points high.

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Speaker 1: Right now, Barry up six tenths of p percent. The

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Speaker 1: NASDAIC futures up thirty four points. That's seven tenths of

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Speaker 1: a percent higher. You're listening to Bloomberg Surveillance. Surveillance brought

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Speaker 1: you by Mercedes Vans this month or Mercedes Vans Trisity

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