1
00:00:03,080 --> 00:00:07,400
Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

2
00:00:07,480 --> 00:00:12,520
Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,

3
00:00:12,640 --> 00:00:16,760
Speaker 1: Bloomberg nine to the Country Series Exam Channel one ninety

4
00:00:16,960 --> 00:00:20,440
Speaker 1: and around the globe the Bloomberg Radio Plus Appen Bloomberg

5
00:00:20,520 --> 00:00:25,000
Speaker 1: dot Com. This is Bloomberg Surveillance. Good morning, It is

6
00:00:25,400 --> 00:00:28,240
Speaker 1: a thirty on Wall Street. I'm Michael McKee along with

7
00:00:28,520 --> 00:00:32,600
Speaker 1: Tom Keane. Economic indicators brought you by Commonwealth Financial Network.

8
00:00:32,600 --> 00:00:34,600
Speaker 1: When it's time to change the conversation, talk with a

9
00:00:34,600 --> 00:00:37,040
Speaker 1: Brooker dealer. R I A that's ready to listen, Call

10
00:00:37,159 --> 00:00:39,680
Speaker 1: eight six six six two three six three eight or

11
00:00:39,760 --> 00:00:42,880
Speaker 1: visit Commonwealth dot com to learn more. Here's Vinet l

12
00:00:42,960 --> 00:00:45,800
Speaker 1: jedis at the first Word Desk. Michael, we start with

13
00:00:45,840 --> 00:00:48,440
Speaker 1: a glimpse this week of manufacturing. Just out from the

14
00:00:48,479 --> 00:00:51,840
Speaker 1: Federal Reserve Bank of New York. It's Regional Manufacturing Index,

15
00:00:51,880 --> 00:00:55,560
Speaker 1: the Empire State Index coming in at negative nine. This

16
00:00:55,720 --> 00:00:58,520
Speaker 1: is a main number of economists had expected an increase

17
00:00:58,600 --> 00:01:02,240
Speaker 1: of surprise. That sets the stage for two key FED

18
00:01:02,360 --> 00:01:06,959
Speaker 1: reports this week, industrial production and capacity utilization and the

19
00:01:07,000 --> 00:01:10,800
Speaker 1: Federal Reserves Minutes of its prior policy meeting. That meeting

20
00:01:10,800 --> 00:01:14,520
Speaker 1: officials seem to be tilting toward perhaps a rate increase

21
00:01:14,600 --> 00:01:17,520
Speaker 1: this year. Also on the calendar, figures on housing starts,

22
00:01:17,560 --> 00:01:21,440
Speaker 1: building permits, the consumer price Index, and existing home sales.

23
00:01:21,600 --> 00:01:23,800
Speaker 1: At the Blueberg First Work Desk on vid Dell Juda,

24
00:01:24,000 --> 00:01:26,200
Speaker 1: let's go back to New York. Thank you any well,

25
00:01:26,280 --> 00:01:28,319
Speaker 1: then he brings up a very good point. We're gonna

26
00:01:28,319 --> 00:01:31,880
Speaker 1: have a lot of data this week. Last week's concluded

27
00:01:31,920 --> 00:01:34,920
Speaker 1: with the retail sales report coming in much stronger than expected,

28
00:01:34,959 --> 00:01:37,960
Speaker 1: and you start this week with a down number on manufacturing.

29
00:01:38,040 --> 00:01:41,320
Speaker 1: Where is the US economy? Let's ask Simon Frenchi's chief

30
00:01:41,319 --> 00:01:45,800
Speaker 1: economist at Pamir Gordon based in London. The world looks

31
00:01:45,880 --> 00:01:50,240
Speaker 1: to the US, Simon, uh, at this point, how do

32
00:01:50,280 --> 00:01:53,720
Speaker 1: you decide whether the US economy is getting better or

33
00:01:53,800 --> 00:01:56,560
Speaker 1: just sort of treading water? Because then that leads us

34
00:01:56,600 --> 00:01:58,880
Speaker 1: to the questions about what the Fed's gonna do. Yeah,

35
00:01:58,960 --> 00:02:02,320
Speaker 1: good morning, Mike. Well, the Empire State number that has

36
00:02:02,440 --> 00:02:07,160
Speaker 1: just hit the wires, that that sends a somewhat conflicting

37
00:02:07,200 --> 00:02:09,800
Speaker 1: message to very up bid retail sales numbers that we

38
00:02:09,840 --> 00:02:12,359
Speaker 1: had just at the back end of last week. Very

39
00:02:12,360 --> 00:02:18,040
Speaker 1: difficult for a overtly data dependent federal reserve to to

40
00:02:18,160 --> 00:02:20,040
Speaker 1: make sense of all of this, and I think it

41
00:02:20,200 --> 00:02:24,440
Speaker 1: strongly points towards the status quo. There is I unchanged

42
00:02:24,520 --> 00:02:28,560
Speaker 1: interest rates in the US. Why why move policy risk?

43
00:02:28,639 --> 00:02:32,560
Speaker 1: The policy mistake in a world where aggregate demand world

44
00:02:32,600 --> 00:02:37,040
Speaker 1: trade is soft and softening. Further, I think it's uh

45
00:02:37,760 --> 00:02:41,040
Speaker 1: that you need all those lights on the dashboard to

46
00:02:41,120 --> 00:02:44,040
Speaker 1: be flashing green, and to be honest, it's quite a

47
00:02:44,080 --> 00:02:47,280
Speaker 1: mix of green, amber and red right now. And that's

48
00:02:47,360 --> 00:02:50,239
Speaker 1: that's very difficult for policy makers to justify and indeed

49
00:02:50,240 --> 00:02:54,160
Speaker 1: give the confidence into markets when they change policy stance. Well,

50
00:02:54,200 --> 00:02:58,400
Speaker 1: to Wow, we get uh CPI numbers, how important is

51
00:02:58,440 --> 00:03:00,920
Speaker 1: that going to be in your mind? To the markets?

52
00:03:00,960 --> 00:03:06,400
Speaker 1: And then to Jenny Yarn, Yes, So inflation repassed throughs

53
00:03:06,440 --> 00:03:09,680
Speaker 1: from currency fluctuations are really the key aspect that we're

54
00:03:09,680 --> 00:03:12,440
Speaker 1: looking at. In the last six months, we've been looking

55
00:03:12,440 --> 00:03:17,959
Speaker 1: at core inflationary prints because you know, policymakers in Europe,

56
00:03:18,240 --> 00:03:20,799
Speaker 1: in the US and the UK have been saying, okay,

57
00:03:20,800 --> 00:03:25,560
Speaker 1: we're looking through the transitory impacts of commodities of oil,

58
00:03:25,919 --> 00:03:28,400
Speaker 1: and we're wanting to look what core inflationary pressures are

59
00:03:28,400 --> 00:03:30,680
Speaker 1: happening in wage settlements, trying to get to the bottom

60
00:03:30,720 --> 00:03:33,440
Speaker 1: of these things, and therefore the inflation print is helpful

61
00:03:33,440 --> 00:03:36,880
Speaker 1: from that perspective. But given some of those trends that

62
00:03:36,920 --> 00:03:40,880
Speaker 1: have driven um sterling lower in the US due to

63
00:03:40,960 --> 00:03:43,440
Speaker 1: a strong dollar have started to reverse really since the

64
00:03:43,480 --> 00:03:46,520
Speaker 1: start of the year, which starts to be inflationary through

65
00:03:46,560 --> 00:03:51,080
Speaker 1: the important goods route and stops to be as deflationary domestically,

66
00:03:51,640 --> 00:03:54,680
Speaker 1: You're starting to see a narrative having to shift, And

67
00:03:54,720 --> 00:03:57,200
Speaker 1: therefore I wouldn't put a lot of weight on what

68
00:03:57,480 --> 00:03:59,880
Speaker 1: comes later in the week in terms of the Fed minutes,

69
00:04:00,240 --> 00:04:03,520
Speaker 1: because there's so much behind the current events. Is it

70
00:04:03,800 --> 00:04:08,240
Speaker 1: a monetary debate, simon, or are we finally over after

71
00:04:08,280 --> 00:04:10,720
Speaker 1: a sluggish first quarter and waiting for it to click

72
00:04:10,800 --> 00:04:13,480
Speaker 1: in that it's actually going to be what everybody wants

73
00:04:13,520 --> 00:04:16,760
Speaker 1: to hear about, which is a real economy debate. Well,

74
00:04:16,800 --> 00:04:19,200
Speaker 1: I really hope it moves to a real economy debate

75
00:04:19,320 --> 00:04:25,400
Speaker 1: because um I sense a a global consensus is starting

76
00:04:25,400 --> 00:04:28,320
Speaker 1: to emerge, and probably not in a formal setting, but

77
00:04:28,360 --> 00:04:33,120
Speaker 1: an informal setting between the major central banks recognizing and

78
00:04:33,160 --> 00:04:34,760
Speaker 1: they've been saying this for a long time, but I

79
00:04:34,760 --> 00:04:37,840
Speaker 1: send some of their action is beginning to to to

80
00:04:38,279 --> 00:04:42,840
Speaker 1: knit together that beg of their neighbor currency economics, monetary policy,

81
00:04:42,880 --> 00:04:46,040
Speaker 1: competition is not the way to be to get us

82
00:04:46,080 --> 00:04:49,839
Speaker 1: out of the low growth environment. And therefore, I really

83
00:04:49,839 --> 00:04:54,200
Speaker 1: do hope we start to focus in on capacity utilization numbers. Um,

84
00:04:54,360 --> 00:04:56,719
Speaker 1: we start to look at productivity in a real sense

85
00:04:56,760 --> 00:05:00,240
Speaker 1: and look at the synchronization between monetary policy. See in

86
00:05:00,240 --> 00:05:03,320
Speaker 1: fiscal policy that being that has been sadly, sadly missing

87
00:05:03,680 --> 00:05:07,960
Speaker 1: for most of the time since the financial crisis. What

88
00:05:08,240 --> 00:05:14,640
Speaker 1: the value to leaving interest rates unchanged? There is a

89
00:05:14,680 --> 00:05:18,880
Speaker 1: possibility that the FED is distroying the markets. Now, well

90
00:05:18,920 --> 00:05:22,119
Speaker 1: this this is where the macropodential tool kit comes into play.

91
00:05:22,120 --> 00:05:24,880
Speaker 1: And I think we if we look at the what

92
00:05:25,040 --> 00:05:27,440
Speaker 1: is different you know those famous words in markets? What's

93
00:05:27,440 --> 00:05:29,640
Speaker 1: different this time? Is it ever different this time? Well?

94
00:05:29,680 --> 00:05:32,359
Speaker 1: I think what is different from the perspective of independent

95
00:05:32,400 --> 00:05:36,800
Speaker 1: central banks? Is there readiness to use the macropodential tool kit,

96
00:05:36,920 --> 00:05:40,680
Speaker 1: the regulatory tool kit rather than simply monetary policy in

97
00:05:40,760 --> 00:05:44,360
Speaker 1: terms of demand management and sectual risks that are emerging

98
00:05:44,920 --> 00:05:48,039
Speaker 1: in terms of financial stability, in terms of real estate

99
00:05:48,120 --> 00:05:51,159
Speaker 1: in terms of the reaction to very very low nominal yields,

100
00:05:51,240 --> 00:05:54,480
Speaker 1: and therefore, from from my perspective, the more interesting action

101
00:05:54,560 --> 00:05:57,840
Speaker 1: will be in macropodential interventions. In twenty sixteen, very very

102
00:05:57,839 --> 00:06:02,520
Speaker 1: little action work is really foreseeable in the in Monty

103
00:06:02,520 --> 00:06:05,840
Speaker 1: policy and core traditional interest rate variation. But then then

104
00:06:05,839 --> 00:06:09,400
Speaker 1: they quickly here that gets back to real economy analysis,

105
00:06:09,720 --> 00:06:14,160
Speaker 1: are just going to push that by the wayside, while wait, wait, wait, well,

106
00:06:15,440 --> 00:06:17,640
Speaker 1: I guess it depends you know what is real for you,

107
00:06:17,760 --> 00:06:19,919
Speaker 1: Tom is different for what is real for me is

108
00:06:19,920 --> 00:06:21,600
Speaker 1: what is real for the guy on the high street

109
00:06:21,680 --> 00:06:24,680
Speaker 1: in in and then a also on main street, and

110
00:06:24,760 --> 00:06:30,640
Speaker 1: you very hard to understand the interconnectivity right now between

111
00:06:31,040 --> 00:06:35,599
Speaker 1: dramatically lower nominal yields and what is happening in terms

112
00:06:35,600 --> 00:06:39,680
Speaker 1: of business formation, business creation, zombie for the zombie firm

113
00:06:39,720 --> 00:06:43,400
Speaker 1: debate and the feedback into productivity levels, that's interesting. Simon

114
00:06:43,880 --> 00:06:47,200
Speaker 1: Um Simon French with us for the paymer Gordon, we're

115
00:06:47,200 --> 00:06:49,960
Speaker 1: going to come back. Well, it's a fascinating idea of

116
00:06:50,000 --> 00:06:52,800
Speaker 1: folks about what do we actually focus on as we

117
00:06:52,880 --> 00:06:54,880
Speaker 1: moved to Brexit and as we moved to the June

118
00:06:55,240 --> 00:06:59,400
Speaker 1: fifteen Fed meeting. Is Mike mentioned economic data back and

119
00:06:59,600 --> 00:07:03,920
Speaker 1: for the like, what was your quick interpretation the data? Second,

120
00:07:04,480 --> 00:07:07,960
Speaker 1: nobody really cares about the empire number. That's good, that's

121
00:07:08,040 --> 00:07:10,400
Speaker 1: valuable to know. No one cares. We like that on

122
00:07:10,680 --> 00:07:18,680
Speaker 1: Vinnie Dell Judas Economic Data. This Hour of Surveillance brought

123
00:07:18,680 --> 00:07:21,560
Speaker 1: to you by BMW Kisco is a BMW mot Kisco

124
00:07:21,960 --> 00:07:24,600
Speaker 1: dot com. Here's Michael Barr with his headline, My Tom,

125
00:07:24,680 --> 00:07:27,560
Speaker 1: thank you very much. Donald Trump's latest remarks about Britain's

126
00:07:27,560 --> 00:07:31,600
Speaker 1: Prime minister and the mayor of London raising eyebrows in

127
00:07:31,640 --> 00:07:35,160
Speaker 1: the UK. Appearing on i t v s Good Morning Britain,

128
00:07:35,480 --> 00:07:39,320
Speaker 1: the presumptive Republican presidential nominee said he may have a

129
00:07:39,320 --> 00:07:42,680
Speaker 1: poor relationship with British Prime Minister David Cameron. It comes

130
00:07:42,720 --> 00:07:46,400
Speaker 1: after Cameron's criticism of Trump for calling for Muslims to

131
00:07:46,440 --> 00:07:50,040
Speaker 1: be temporarily banned from entering the US. Trump also calls

132
00:07:50,160 --> 00:07:54,280
Speaker 1: London's new Muslim mayor, City Khan Rude, for calling an ignorant.

133
00:07:54,760 --> 00:07:57,000
Speaker 1: Hillary Clinton and Bernie Sanders are trying to get in

134
00:07:57,080 --> 00:08:00,560
Speaker 1: some last minute campaigning before tomorrow's primaries in Kentucky and

135
00:08:00,720 --> 00:08:04,120
Speaker 1: in Oregon. Here's a sentence that can make parents nervous

136
00:08:04,120 --> 00:08:07,240
Speaker 1: with teen drivers, can I borrow the keys? According to

137
00:08:07,280 --> 00:08:10,360
Speaker 1: a new report, teen drivers can drastically reduce their risk

138
00:08:10,720 --> 00:08:13,400
Speaker 1: of getting into a car crash just by agreeing to

139
00:08:13,480 --> 00:08:17,320
Speaker 1: a few simple rules with their parents. Say Kids Worldwide

140
00:08:17,320 --> 00:08:20,480
Speaker 1: says these kinds of grimmits can have a measurable effect

141
00:08:20,960 --> 00:08:24,720
Speaker 1: on how much risky behavior that the teams are engaging

142
00:08:24,800 --> 00:08:27,920
Speaker 1: behind the wheel. Global News twenty four hours a day,

143
00:08:27,960 --> 00:08:31,040
Speaker 1: powered by our twenty four hundred journalists and more than

144
00:08:31,080 --> 00:08:33,880
Speaker 1: a hundred fifty news bureaus around the world at Michael Barr,

145
00:08:34,000 --> 00:08:37,400
Speaker 1: Mike Tom Thank you, Michael. Time now for the Landroverer

146
00:08:37,440 --> 00:08:42,040
Speaker 1: participanate Bloomberg NBC Sports Update with John Stsha, Thanks Mike.

147
00:08:42,080 --> 00:08:44,080
Speaker 1: Another Yankee win of the met loss and a big

148
00:08:44,080 --> 00:08:46,920
Speaker 1: time brawl In Sunday baseball, the Yanks, who started the

149
00:08:46,960 --> 00:08:50,040
Speaker 1: season nine and seventeen, completed a seven and three homestand

150
00:08:50,080 --> 00:08:51,920
Speaker 1: they want all three series. They beat the first place

151
00:08:51,920 --> 00:08:54,959
Speaker 1: White Sox seven to five, Carlos Beltran with a milestone

152
00:08:55,000 --> 00:08:57,680
Speaker 1: home run. Beltro and again only the fourth switch hitter

153
00:08:57,720 --> 00:08:59,920
Speaker 1: in the four hundred home run club, joining Mickey Man,

154
00:09:00,240 --> 00:09:03,480
Speaker 1: Eddie Murray and Chipper Jones Yanks at Arizona tonight. Mets

155
00:09:03,480 --> 00:09:06,560
Speaker 1: are off before hosting Washington, now in third place after

156
00:09:06,559 --> 00:09:09,880
Speaker 1: only nine losses in their first twenty six games, seven

157
00:09:09,880 --> 00:09:12,600
Speaker 1: defeats on this road trip. Swept at Colorado, losing four

158
00:09:12,760 --> 00:09:15,720
Speaker 1: three on Ryan Rayburn's two run pinch at homer seventh

159
00:09:15,760 --> 00:09:18,199
Speaker 1: inning un Assessmitis hit his twelfth homer of the year.

160
00:09:18,240 --> 00:09:19,840
Speaker 1: It was the mets fourth loss in a row. As

161
00:09:19,920 --> 00:09:23,560
Speaker 1: for that brawl, Texas still upset by Jose Bautista's backflip

162
00:09:23,600 --> 00:09:25,960
Speaker 1: in last year's playoffs. Bautista got hit by a pitch,

163
00:09:26,360 --> 00:09:29,040
Speaker 1: then went into second base with a hard late slide,

164
00:09:29,040 --> 00:09:31,520
Speaker 1: and rug net o'door reacted with a shove and then

165
00:09:31,840 --> 00:09:34,559
Speaker 1: landed a punch to Bautista's jaw. I had a hard

166
00:09:34,600 --> 00:09:36,560
Speaker 1: slide at second base. I could have I could have

167
00:09:36,600 --> 00:09:39,400
Speaker 1: injured him. I chose not to just try to send

168
00:09:39,400 --> 00:09:42,000
Speaker 1: a message that I didn't appreciate getting hit. Um, you

169
00:09:42,040 --> 00:09:45,040
Speaker 1: know whatever. There were eight ejections. The two teams do

170
00:09:45,120 --> 00:09:47,960
Speaker 1: not play again this season. Speaking of Toronto, the Raptors

171
00:09:48,000 --> 00:09:49,920
Speaker 1: are into the NBA Zas Finals for the first time.

172
00:09:49,960 --> 00:09:53,080
Speaker 1: They won Game seven from Miami, won sixteen to eighty nine.

173
00:09:53,080 --> 00:09:55,240
Speaker 1: They'll play Game one at Cleveland tomorrow, Game one of

174
00:09:55,280 --> 00:09:58,199
Speaker 1: the NHL's West Finals. St. Louis over San Jose to one.

175
00:09:58,480 --> 00:10:00,439
Speaker 1: Jason Dale and all the way the World One took

176
00:10:00,440 --> 00:10:03,360
Speaker 1: the Players Championship by four shots and won one point

177
00:10:03,440 --> 00:10:06,800
Speaker 1: eight and nine million, the richest prize in golf. With

178
00:10:06,880 --> 00:10:11,040
Speaker 1: a Bloomberg NBC Sports Update, I'm John Stashell. John, thanks

179
00:10:11,040 --> 00:10:14,520
Speaker 1: so much. Appreciate that very much. Michael McKee, it was

180
00:10:14,640 --> 00:10:17,040
Speaker 1: interesting weekend, not much sports. We got the horse Rays

181
00:10:17,080 --> 00:10:20,160
Speaker 1: coming up here this week. You know what today is?

182
00:10:21,920 --> 00:10:26,680
Speaker 1: One years ago today, Mr Sikes and Mr Picos, Oh

183
00:10:26,840 --> 00:10:32,120
Speaker 1: my word, very interesting. Sikes Pico. It should divided up

184
00:10:32,120 --> 00:10:34,400
Speaker 1: the countries of the Middle East and led to what

185
00:10:34,440 --> 00:10:38,599
Speaker 1: we have today. Shout out to the Imperial Worm Museum

186
00:10:38,600 --> 00:10:41,360
Speaker 1: of London, England. I had a chance to see the T. E.

187
00:10:41,600 --> 00:10:45,920
Speaker 1: Lawrence exhibit a decade ago and they had his map

188
00:10:46,760 --> 00:10:51,120
Speaker 1: of Sikes Pico which he used in fury with his

189
00:10:51,240 --> 00:10:56,520
Speaker 1: leadership long ago went fairly Simon French with us on

190
00:10:56,600 --> 00:11:01,880
Speaker 1: the English economy. It's Bloomberg surveillance. The sports rempart was

191
00:11:01,920 --> 00:11:04,160
Speaker 1: brought to you by land Over Parcipiti. The spring sales

192
00:11:04,160 --> 00:11:07,040
Speaker 1: event is happening now. Visit Landrover, Parcipi dot com, land

193
00:11:07,120 --> 00:11:19,880
Speaker 1: Rover above and beyond. Global business news twenty four hours

194
00:11:19,880 --> 00:11:23,240
Speaker 1: a day at Bloomberg dot com, the Radio plus mobile app,

195
00:11:23,320 --> 00:11:26,800
Speaker 1: and on your radio. This is a Bloomberg Business Flash

196
00:11:27,280 --> 00:11:29,560
Speaker 1: and I'm Karen Moscow. This updates brought to you by

197
00:11:29,600 --> 00:11:34,120
Speaker 1: American Arbitration Association. Business disputes are inevitable resolved faster with

198
00:11:34,200 --> 00:11:38,840
Speaker 1: the American Arbitration Association, the global leader in alternative dispute

199
00:11:38,880 --> 00:11:41,599
Speaker 1: resolution for over eighty five years. Learn more at a

200
00:11:41,720 --> 00:11:44,840
Speaker 1: d R dot org. Futures are a little change this

201
00:11:45,000 --> 00:11:48,200
Speaker 1: morning after a report showed manufacturing activity in the New

202
00:11:48,240 --> 00:11:52,400
Speaker 1: York region unexpectedly contracted this month. Engauge on home builders

203
00:11:52,400 --> 00:11:55,240
Speaker 1: sentiment is due later this morning. They check the markets

204
00:11:55,240 --> 00:11:58,680
Speaker 1: every fifteen minutes throughout the trading day on Bloomberg SNPE.

205
00:11:58,760 --> 00:12:01,280
Speaker 1: Many futures down to full like Dowey Miny futures down

206
00:12:01,280 --> 00:12:05,240
Speaker 1: twenty and nas vacumny futures up almost two. The tenuere

207
00:12:05,240 --> 00:12:07,760
Speaker 1: treasury is down eight thirty seconds, the yield one point

208
00:12:07,800 --> 00:12:10,920
Speaker 1: seven two percent. Nmex screwed oil up two point one

209
00:12:10,960 --> 00:12:14,920
Speaker 1: percent of ninety eight cents to eighteen of arrow comex

210
00:12:14,960 --> 00:12:17,720
Speaker 1: schoold of one point three percent or sixteen dollars forty

211
00:12:17,720 --> 00:12:20,280
Speaker 1: cents to twelve eighty nine and ounce the euro a

212
00:12:20,360 --> 00:12:22,839
Speaker 1: dollar thirty and thirty eight agen one oh eight point

213
00:12:22,920 --> 00:12:26,319
Speaker 1: seven six were in Buffett's Berkshire Hathaway just closing his

214
00:12:26,400 --> 00:12:30,400
Speaker 1: steak in at an Apple. A regulatory filing shows Berkshire

215
00:12:30,480 --> 00:12:33,679
Speaker 1: held nine point eight one million Apple shares as of

216
00:12:33,679 --> 00:12:36,320
Speaker 1: March thirty feet. The holding was valued at one point

217
00:12:36,320 --> 00:12:39,360
Speaker 1: oh seven billion dollars at the end of the first quarter,

218
00:12:39,760 --> 00:12:42,960
Speaker 1: and Apple shares rising this morning of one point seven percent.

219
00:12:43,320 --> 00:12:45,800
Speaker 1: And that's a Bloomberg business flash, Tom and Mike Karen,

220
00:12:46,080 --> 00:12:48,840
Speaker 1: Thanks so much, folks. It is eight forty eight on

221
00:12:48,960 --> 00:12:53,400
Speaker 1: Wall Street. The following is from Bloomberg View. Opinions and

222
00:12:53,480 --> 00:12:57,280
Speaker 1: commentary from Bloomberg columnists. I'm Jonathan Bernstein, a columnist for

223
00:12:57,280 --> 00:13:00,199
Speaker 1: Bloomberg View. Donald Trump's announcement that he won't really lease

224
00:13:00,280 --> 00:13:02,840
Speaker 1: his tax returns is just the latest example of what

225
00:13:02,880 --> 00:13:05,760
Speaker 1: a difficult challenge he presents to the press. The problem

226
00:13:05,800 --> 00:13:08,520
Speaker 1: for the media is that once Trump refuses, it rapidly

227
00:13:08,520 --> 00:13:11,480
Speaker 1: ceases to be news. It's just another thing that will

228
00:13:11,480 --> 00:13:15,120
Speaker 1: disappear from public view long before voters start tuning in

229
00:13:15,240 --> 00:13:18,120
Speaker 1: later this year. The challenge isn't limited to his refusal

230
00:13:18,160 --> 00:13:21,320
Speaker 1: to release his financial records. The well documented coverage of

231
00:13:21,400 --> 00:13:24,040
Speaker 1: his latent disregard for the truth hasn't deterred him from

232
00:13:24,080 --> 00:13:26,839
Speaker 1: continuing to repeat the same falsehoods. There are also his

233
00:13:26,920 --> 00:13:29,960
Speaker 1: outrageous statements, such as his insult that John McCain and

234
00:13:30,000 --> 00:13:33,199
Speaker 1: other US prisoners of war were not heroes. And then

235
00:13:33,200 --> 00:13:36,880
Speaker 1: there's Trump's demonstrated ignorance of government and public affairs. How

236
00:13:36,920 --> 00:13:39,920
Speaker 1: can reporters convey just how far from the norm Trump

237
00:13:40,040 --> 00:13:41,760
Speaker 1: is as part of their coverage of the day to

238
00:13:41,800 --> 00:13:45,079
Speaker 1: day campaign going forward, Normal cautions seem to me to

239
00:13:45,120 --> 00:13:47,640
Speaker 1: fall short of the challenge Trump poses. It's going to

240
00:13:47,679 --> 00:13:51,280
Speaker 1: take some innovative thinking to meet that challenge. I'm Jonathan Bernstein.

241
00:13:51,360 --> 00:13:53,920
Speaker 1: For more view, please go to Bloomberg View dot com

242
00:13:54,000 --> 00:13:56,800
Speaker 1: or view go on the Bloomberg terminal. This has been

243
00:13:56,800 --> 00:14:00,600
Speaker 1: Bloomberg View. In Bloomberg View. Commentary can be heard hourly

244
00:14:00,640 --> 00:14:05,160
Speaker 1: weekdays at Bloomberg Radio. Simon French, whether from growing We've

245
00:14:05,160 --> 00:14:07,760
Speaker 1: been looking at the US, looking abroad, Let's look at

246
00:14:07,760 --> 00:14:10,760
Speaker 1: the United Kingdom. Simon, give me a scope and scale

247
00:14:10,800 --> 00:14:15,480
Speaker 1: housing statistic for the wackleness the zaniness of the United

248
00:14:15,559 --> 00:14:22,040
Speaker 1: Kingdom housing economy. Some of the valuations tom are absolutely eyewatering.

249
00:14:22,120 --> 00:14:26,360
Speaker 1: It's one of the legacies of unchanged bankreit at norpoint

250
00:14:26,400 --> 00:14:30,000
Speaker 1: five for nine years is that that hunt for yield

251
00:14:30,000 --> 00:14:36,080
Speaker 1: has pushed the price wages ratio, particularly in prime London property,

252
00:14:36,120 --> 00:14:39,880
Speaker 1: but it's spread out wider across the country to ratios

253
00:14:39,920 --> 00:14:43,520
Speaker 1: that we it briefly saw in the Laws and Boom

254
00:14:43,560 --> 00:14:47,000
Speaker 1: of that was the previous chancellor of the Exchequo in

255
00:14:47,000 --> 00:14:49,880
Speaker 1: the UK in the late eighties and then again prior

256
00:14:49,920 --> 00:14:52,680
Speaker 1: to the financial crisis, and some of those ratios are

257
00:14:53,040 --> 00:14:56,480
Speaker 1: way in excess now of of both those two previous peaks.

258
00:14:56,960 --> 00:15:00,680
Speaker 1: What is sustainable, however, is the mortgage interest bird, which

259
00:15:00,680 --> 00:15:04,400
Speaker 1: remains of the order of twenty five to thirty percent

260
00:15:04,520 --> 00:15:07,720
Speaker 1: of net household income when those stress points previously at

261
00:15:07,760 --> 00:15:11,640
Speaker 1: cycles were north. So there's not an imminent pressure on

262
00:15:11,720 --> 00:15:15,480
Speaker 1: household finances, but it will not take much movement both

263
00:15:15,520 --> 00:15:18,200
Speaker 1: within the rates market and also within the labor market,

264
00:15:18,200 --> 00:15:21,520
Speaker 1: which is absolutely key here for being able to service mortgages.

265
00:15:21,800 --> 00:15:24,280
Speaker 1: That's the thing that we're watching to see whether those

266
00:15:24,320 --> 00:15:27,040
Speaker 1: valuations are sustainable over the medium too. It's a debate

267
00:15:27,120 --> 00:15:32,200
Speaker 1: and selected parts of America, the solution being built higher,

268
00:15:33,120 --> 00:15:37,960
Speaker 1: taller buildings for residential Where is that debate in London

269
00:15:39,240 --> 00:15:43,600
Speaker 1: or The debate in London has been fervent around building

270
00:15:43,600 --> 00:15:46,680
Speaker 1: more houses. The the recent mayoral election that source that

271
00:15:46,760 --> 00:15:49,320
Speaker 1: he can replace Boris Johnson as Mayor of London was

272
00:15:49,360 --> 00:15:53,760
Speaker 1: absolutely dominated around housing. And this off the backdrop of

273
00:15:53,800 --> 00:15:57,640
Speaker 1: about twenty six to twenty seven thousand units per per

274
00:15:57,720 --> 00:16:01,280
Speaker 1: year being built in London when wirements based on population

275
00:16:01,400 --> 00:16:04,280
Speaker 1: growth something of the order of fifty thous We need

276
00:16:04,280 --> 00:16:06,680
Speaker 1: a doubling and housing starts by the end of this

277
00:16:06,760 --> 00:16:10,040
Speaker 1: decade just to keep pace with population growth. So the

278
00:16:10,120 --> 00:16:15,080
Speaker 1: conversation undoubtedly shifts to higher and also a lot of infilling.

279
00:16:15,120 --> 00:16:18,760
Speaker 1: You compare London with a lot of other metropolitans centers

280
00:16:18,800 --> 00:16:21,640
Speaker 1: around the world, it's actually quite It's not as densely

281
00:16:21,680 --> 00:16:23,560
Speaker 1: populated as a lot of areas. There are a lot

282
00:16:23,640 --> 00:16:26,440
Speaker 1: of green spaces. Of course, there are the public interest

283
00:16:26,480 --> 00:16:30,920
Speaker 1: debates going on constantly to try and balance the requirement

284
00:16:31,040 --> 00:16:34,960
Speaker 1: for for green spaces versus the requirement for property. But

285
00:16:35,440 --> 00:16:37,840
Speaker 1: I mean planning law is at the very forefront of

286
00:16:37,840 --> 00:16:41,720
Speaker 1: this debate. How much is the Brexit debate contributing to that,

287
00:16:41,880 --> 00:16:45,480
Speaker 1: because there's talk that we're seeing process start to fill

288
00:16:45,920 --> 00:16:49,760
Speaker 1: in London as people may be anticipate decline in financial

289
00:16:49,800 --> 00:16:53,360
Speaker 1: sector employment, should people want to leave the EU? Yeah,

290
00:16:53,440 --> 00:16:56,080
Speaker 1: we spoke five six weeks ago, didn't we about the

291
00:16:56,120 --> 00:16:59,440
Speaker 1: Brexit debate? And I think it's important to not over

292
00:16:59,560 --> 00:17:02,560
Speaker 1: state what is going on right now, not just within housing,

293
00:17:02,600 --> 00:17:05,240
Speaker 1: but within the broader UK economy, which has been slowing

294
00:17:05,320 --> 00:17:09,600
Speaker 1: really since q on way before the referendum was announced.

295
00:17:10,000 --> 00:17:13,320
Speaker 1: Brexit is an additional factor, or additional risk off factor,

296
00:17:13,640 --> 00:17:17,120
Speaker 1: but it isn't the most material impact on what we've

297
00:17:17,119 --> 00:17:19,760
Speaker 1: seen in terms of weak housing prints. There's been a

298
00:17:19,800 --> 00:17:23,720
Speaker 1: significant amount of tax and regulatory burden added into UK housing,

299
00:17:24,040 --> 00:17:27,760
Speaker 1: an additional three percent stamp duty on on additional properties

300
00:17:27,840 --> 00:17:31,480
Speaker 1: for trying to address the bitallet sector which has got

301
00:17:31,520 --> 00:17:35,919
Speaker 1: carried away in recent years, and that government intervention to

302
00:17:35,960 --> 00:17:37,840
Speaker 1: try and cool the market is the type of thing

303
00:17:37,880 --> 00:17:40,640
Speaker 1: that is pushing back transactions and prices right now. Well,

304
00:17:40,640 --> 00:17:43,720
Speaker 1: that's what's valuable is the guy idea of what can

305
00:17:43,840 --> 00:17:46,320
Speaker 1: government do we're having that and a few geographers again

306
00:17:46,359 --> 00:17:49,639
Speaker 1: I think of San Francisco, New York and Washington. Is

307
00:17:49,720 --> 00:17:53,320
Speaker 1: any of it proving successful? Well, I would say that

308
00:17:53,400 --> 00:17:58,600
Speaker 1: the recent tax um changes established by the UK government

309
00:17:58,640 --> 00:18:00,639
Speaker 1: has actually taken a lot of the froth out of

310
00:18:00,680 --> 00:18:03,600
Speaker 1: the market. But you're absolutely right there is there is

311
00:18:03,640 --> 00:18:07,199
Speaker 1: a limit on which government or what government intervention can do,

312
00:18:07,320 --> 00:18:10,720
Speaker 1: given the prevailing demographics, given the rate of household formation,

313
00:18:10,800 --> 00:18:13,879
Speaker 1: given the fact that the UK has current net migration

314
00:18:14,040 --> 00:18:17,600
Speaker 1: levels at about three per annum, that's adding an awful

315
00:18:17,640 --> 00:18:22,320
Speaker 1: lot of demand in and ultimately government's most effective way

316
00:18:22,560 --> 00:18:25,760
Speaker 1: at ensuring that all those people have places to live

317
00:18:26,040 --> 00:18:29,840
Speaker 1: is to increase and actually accelerate the speed with which

318
00:18:30,080 --> 00:18:32,600
Speaker 1: homes are built. We need nationally about two hundred, two

319
00:18:32,680 --> 00:18:35,160
Speaker 1: hundred and fifty thousand. We're running in about a hundred

320
00:18:35,160 --> 00:18:40,399
Speaker 1: and forty thousand at the moment. So at this point,

321
00:18:40,400 --> 00:18:44,440
Speaker 1: how concern should we be about the UK economy and

322
00:18:44,680 --> 00:18:47,360
Speaker 1: what the Central Bank does it? Is there any way

323
00:18:47,400 --> 00:18:52,080
Speaker 1: to tell until June, Well, there'll be no action from

324
00:18:52,080 --> 00:18:54,080
Speaker 1: the Central Bank. So let's go back to what tom,

325
00:18:54,119 --> 00:18:55,720
Speaker 1: what we were talking about before the break in terms

326
00:18:55,720 --> 00:18:59,520
Speaker 1: of the real economy, here in the UK and the

327
00:18:59,800 --> 00:19:02,520
Speaker 1: I I've I've written quite extensively about the fading of

328
00:19:02,520 --> 00:19:05,480
Speaker 1: the E numbers, those E numbers that gave artificial stimulus

329
00:19:05,520 --> 00:19:08,239
Speaker 1: to the UK economy. The extrange rate sterling was very

330
00:19:08,280 --> 00:19:11,399
Speaker 1: strong in fourteen and early parts of fifteen. Energy costs

331
00:19:11,400 --> 00:19:14,320
Speaker 1: were falling the second E and then also earnings, real

332
00:19:14,320 --> 00:19:16,800
Speaker 1: earnings were recovering after six six and a half years

333
00:19:16,800 --> 00:19:20,320
Speaker 1: of internal deflation in the labor market. Actually we saw

334
00:19:20,440 --> 00:19:23,400
Speaker 1: wages started to return. Now all those three factors, those

335
00:19:23,440 --> 00:19:26,520
Speaker 1: E numbers have started to turn in the opposite direction.

336
00:19:26,640 --> 00:19:30,640
Speaker 1: Really since as I say, Q Q one and you're

337
00:19:30,680 --> 00:19:34,800
Speaker 1: seeing slowing p M eyes that are challenging whether the

338
00:19:34,840 --> 00:19:37,919
Speaker 1: government can deliver what is at the moment tend to

339
00:19:37,960 --> 00:19:42,640
Speaker 1: be the most significant austerity and fiscal consolidation program anywhere

340
00:19:42,680 --> 00:19:44,480
Speaker 1: in the G seven. Indeed you can widen that to

341
00:19:44,480 --> 00:19:47,200
Speaker 1: anywhere in the G twenty. It's quite a big task.

342
00:19:47,280 --> 00:19:51,560
Speaker 1: It's a significant headwind for the government. Governments, like like

343
00:19:51,640 --> 00:19:54,800
Speaker 1: Napoleon's generals, they need to be lucky, not necessarily bright.

344
00:19:55,240 --> 00:19:57,520
Speaker 1: Thus far, George jos Bonne has been a lucky chancellor.

345
00:19:57,560 --> 00:20:00,680
Speaker 1: Certainly in recent years he's had the broader macro economy

346
00:20:00,680 --> 00:20:03,119
Speaker 1: in his favor. That's starting to turn against him and

347
00:20:03,200 --> 00:20:05,399
Speaker 1: he therefore he needs to be responsive to that. Simon,

348
00:20:05,480 --> 00:20:07,560
Speaker 1: Thank you so much. Simon French with pamerg and what

349
00:20:07,600 --> 00:20:10,960
Speaker 1: a clinic that was on London real estate, Mike, I

350
00:20:11,000 --> 00:20:16,040
Speaker 1: am told from outstanding reports from our surveillance London team

351
00:20:16,359 --> 00:20:20,200
Speaker 1: expert on this. I think Breed Taylor said she's gonna

352
00:20:20,240 --> 00:20:26,200
Speaker 1: live in Dublin community something like you're you're not investing. Yeah,

353
00:20:27,280 --> 00:20:30,520
Speaker 1: I don't know. It's your weekend to get away play. Yeah,

354
00:20:30,880 --> 00:20:33,359
Speaker 1: I'm looking to time share. I get a place on

355
00:20:33,440 --> 00:20:39,160
Speaker 1: the Thames for four minutes, you know. But seriously, very

356
00:20:39,200 --> 00:20:42,560
Speaker 1: interesting and of course some huge social consequences within the

357
00:20:42,600 --> 00:20:44,320
Speaker 1: United Kingdom, and you can bring that over not to

358
00:20:44,359 --> 00:20:48,640
Speaker 1: all but parts of the United Certainty is just the

359
00:20:48,640 --> 00:20:53,600
Speaker 1: the overriding issue in all of um, every every G

360
00:20:53,800 --> 00:20:56,359
Speaker 1: four country. You know what with our abbeynomics in the

361
00:20:56,359 --> 00:20:58,440
Speaker 1: Bank of Japan, what's going to happen in the U

362
00:20:58,560 --> 00:21:02,560
Speaker 1: S presidential election? Uh? Is China going to you know

363
00:21:02,840 --> 00:21:05,600
Speaker 1: slow so much it hurts the rest of the world again, Yeah, well,

364
00:21:05,640 --> 00:21:07,760
Speaker 1: we're trying to do folks with a with a slow news,

365
00:21:07,800 --> 00:21:10,280
Speaker 1: slow to be perfectly honest, to stay abreast of what's

366
00:21:10,320 --> 00:21:13,240
Speaker 1: going on each and every day Venezuela over the weekends,

367
00:21:13,280 --> 00:21:20,200
Speaker 1: one example, but also brief you across economics, finance, investment,

368
00:21:20,280 --> 00:21:24,960
Speaker 1: and international relations on the themes that will get us there,

369
00:21:25,040 --> 00:21:29,440
Speaker 1: certainly to brexit. And before that the June meeting, Mike,

370
00:21:29,440 --> 00:21:31,960
Speaker 1: what is the July meeting? I don't even know you're

371
00:21:32,000 --> 00:21:35,399
Speaker 1: taking off the month of July, right. I think I

372
00:21:35,440 --> 00:21:37,919
Speaker 1: will have to be here for July. July is always

373
00:21:37,920 --> 00:21:42,120
Speaker 1: important meeting, which is July twenty seven, the decision days July.

374
00:21:43,240 --> 00:21:48,720
Speaker 1: Probably the week before that, you'll have um Janet Yellen

375
00:21:49,119 --> 00:21:53,720
Speaker 1: giving her Humphrey Hawkins test and that will be extraordinarily

376
00:21:53,720 --> 00:21:57,359
Speaker 1: widely um followed interestinging in around that will be GDP.

377
00:21:57,480 --> 00:22:02,160
Speaker 1: I think after July will probably see that. Is well,

378
00:22:02,280 --> 00:22:04,840
Speaker 1: the market this morning and one big churn yen one

379
00:22:04,880 --> 00:22:09,200
Speaker 1: O eight seventy nine euro one thirteen thirty nine euro

380
00:22:09,359 --> 00:22:12,760
Speaker 1: yen showing stronger Euro weaker again. That's a that's a

381
00:22:12,800 --> 00:22:15,359
Speaker 1: reversal from the recent days, but a churn all in all,

382
00:22:15,440 --> 00:22:18,520
Speaker 1: one twenty three thirty six futures are just flat. There's

383
00:22:18,520 --> 00:22:21,240
Speaker 1: no other way to put it. Equity Future Flat, Michael

384
00:22:21,280 --> 00:22:26,000
Speaker 1: McKee and Tom Keane bringing you another hour worldwide, coast

385
00:22:26,000 --> 00:22:28,159
Speaker 1: to coast Bloomberg surveillance