Speaker 1: You're listening to Taking Stock with Pim Fox and Kathleen
Speaker 1: Hayes on Bloomberg Radio. Mondaliz no longer pursuing a combination
Speaker 1: with her. She what a day for breaking news we
Speaker 1: have had today from Apple and Caesar's Entertainment to now
Speaker 1: Mondaliz can she joins us Bloomberg News Bloomberg Intelligence to
Speaker 1: tell us we don't know too much yet. Can we
Speaker 1: know that it was down at least ten percent? As
Speaker 1: soon as that news came out postmarket, uh, mondely saying
Speaker 1: it's discipplined with the outcome. What's going to happen in
Speaker 1: this case? Yeah, Hi, Kathleen, Um, Yeah, today's news certainly
Speaker 1: was a disappointment, certainly for investors who thought that combination
Speaker 1: of her, she and Mondalez as powerful brands, would um,
Speaker 1: you know, be a strong investment um. And they may
Speaker 1: have had a good case there. I mean, they would
Speaker 1: have a leading US share and a very attractive high
Speaker 1: margin grocery category. Um. Without getting into the gory details,
Speaker 1: I mean, we know that her, she is closely controlled
Speaker 1: by the board and they were cool to the to
Speaker 1: the bid her. She's got a strange uh characteristic about it.
Speaker 1: Also in that a deal has to be approved by
Speaker 1: the Attorney General of Pennsylvania. So there's really it's really
Speaker 1: a tough company to acquire, and Mondale's I guess felt that,
Speaker 1: you know, it had enough ways to to get around it. Um.
Speaker 1: But investors, we're thinking that the deal was going to
Speaker 1: get done based on how hers She was trading. So yeah,
Speaker 1: it certainly could be a disappointment to hold as a Hershey, yeah,
Speaker 1: what happens? I mean, but can anybody step in on
Speaker 1: either side? Right? I mean, I know there's a lot
Speaker 1: of technical, technical and difficult things with hershe Will anybody
Speaker 1: else step up? Now? You know that's such a million
Speaker 1: out of question with her She. I think they you
Speaker 1: know that they think they've probably scared some people off
Speaker 1: in terms of you know, trying to acquire it um
Speaker 1: with Mondale. You know, I think it underscores its need
Speaker 1: to pursue acquisitions to row. You know, it's it's it's
Speaker 1: an emerging markets like China and some attractive markets, but
Speaker 1: they're slowing down, and so it feels that it needs
Speaker 1: to diversify better. UM. And it's signaled that by by
Speaker 1: looking at a company with who's essentially US based company
Speaker 1: like hershey, but for her, she it's hard to say
Speaker 1: if anyone's going to take a run out of here. Well,
Speaker 1: I'm sure if anybody does, you'll be the first to
Speaker 1: let us know. Ken sh Senior Allies or Food and
Speaker 1: Beverage at Bloomberg Intelligence. Let's get right to Ward McCarthy,
Speaker 1: chief financial economist at Jeffreys a ball market rally today, Ward,
Speaker 1: we had consumers spending looking reasonably healthy. Inflation, you're over
Speaker 1: here still lagging the Fed's target by a long shot.
Speaker 1: What's going on? Well, I think what we saw today
Speaker 1: was a couple of things. First of all, UH, the
Speaker 1: three hours fell off that we saw on Friday afternoon,
Speaker 1: UH created some yield levels that looked to be a
Speaker 1: little bit attractive. And keep in mind we're right on
Speaker 1: the threshold of the end of the month as well,
Speaker 1: so UH, there was some institutional investors that were involved
Speaker 1: with extension trades. So I think that's really primarily what
Speaker 1: we're looking at. But when you take a bigger step
Speaker 1: back and you look at last week's big development, which
Speaker 1: of course was Jackson Home, it was really kind of
Speaker 1: a friendly message from the Fed, even though they were
Speaker 1: telling us that they expect to raise short term rates
Speaker 1: UM in the not too distant future. Uh. They also
Speaker 1: said we're not going to raise them a lot, and
Speaker 1: we're going to leave the balance sheet enormous for a
Speaker 1: long time to come. So I think these were probably
Speaker 1: um some company messages as well. So what do you
Speaker 1: take away from Jackson Hole ward? Uh? I think I
Speaker 1: guess you just summed up what you you take away,
Speaker 1: Uh do the bone recompenning attention to governor crota boj
Speaker 1: Governor reiterating and maybe even saying more firmly he's ready
Speaker 1: to do whatever it takes to uh, you know, we
Speaker 1: can the end boost inflation, etcetera. Because it seems like
Speaker 1: get one other big benchro bank, central banks sanking, we're
Speaker 1: gonna have lots of lots of liquidity coming out there,
Speaker 1: lots of stimulus. Well, you know, there were a lot
Speaker 1: of messages coming from Jackson Hall, and in fact there
Speaker 1: was so many that it's you know, makes it difficult
Speaker 1: to um, you know, get a very clear picture. But
Speaker 1: it's one thing is quite clear that uh central banks
Speaker 1: still want to provide uh stimulus to the economies to
Speaker 1: do what they can, although a lot of them seem
Speaker 1: to think that they may be near the end of
Speaker 1: their rope. There's only so much central banks can do.
Speaker 1: And one of the important themes out of the Jackson
Speaker 1: Hall Symposium as well is that it's time for the
Speaker 1: politicians to start carrying some of the load UM and
Speaker 1: with some physical policy changes that will promote growth. Okay, word,
Speaker 1: So I guess the question is, then, what does this
Speaker 1: mean for the bond market. We've got okay, got a
Speaker 1: kind of a bounce back rally, some nice looking yield levels,
Speaker 1: But if it FEDS near the end of its rope,
Speaker 1: of it's not going to raise my that would seem
Speaker 1: to be bullish. On the other hand, to the physical
Speaker 1: side were to step up, what does that mean? Well,
Speaker 1: I'm not going to hold my breath waiting for the
Speaker 1: physical side to UH to step up. And first of all,
Speaker 1: we have to get through what I think is UM
Speaker 1: an election that very few people expected. When you look
Speaker 1: at the UH, the two parties both seem like they
Speaker 1: want to spend more money, especially on infrastructure, so that
Speaker 1: would fit all the type of actions that central banks
Speaker 1: would like. But on the other hand, the two parties
Speaker 1: go in opposite directions on tax policy. The Republicans wanting
Speaker 1: to cut taxes, and uh, the Democrats are going in
Speaker 1: the other direction, especially on corporate tax I think, which
Speaker 1: is um, you know, a really significant issue for this country. Um,
Speaker 1: because of the inversion issue. UM. And that's really just
Speaker 1: a function of the fact that the lad of time
Speaker 1: we changed tactics is thirty years ago and we're high now.
Speaker 1: Oh boy, all right, where McCarthy summing up so much?
Speaker 1: What lies ahead from Jackson Hall as we head toward
Speaker 1: that September twenty one Federal Reserve meeting and in September
Speaker 1: twenty one Bank of Japan meeting. And I want to
Speaker 1: thank John Lauder, our technical director today of course, our
Speaker 1: producer Sam Linga. I'm Kathleen Hayes, and this is Bloomberg