WEBVTT - Investors Digest Jackson Hole Message; Raimondo Begins China Trip

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm John Tucker and I'm Karen Moscow.

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<v Speaker 3>Here are the stories we're following today with Jackson.

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<v Speaker 1>Hole in the rear View mirror. One constant theme emerged.

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<v Speaker 1>The world's top central bankers stress the need to keep

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<v Speaker 1>interest rates high until inflation is contained. Here's FED Shair J. Powell.

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<v Speaker 4>We are prepared to raise rates further if appropriate, and

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<v Speaker 4>intend to hold policy at a restrictive level until we

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<v Speaker 4>are confident that inflation is moving sustainably down toward our objective.

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<v Speaker 5>Like J.

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<v Speaker 1>Powell, the European Central Banks Christine Lagard, in an exclusive

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<v Speaker 1>interview at Bloomberg's Tom Keane, says the goal is to

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<v Speaker 1>bring inflation back to its goal.

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<v Speaker 6>It's critically important that inflation expectations remain anchored at two percent.

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<v Speaker 6>If trade unions and business associations appreciate that in relatively

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<v Speaker 6>short order inflation will be back to two percent, they

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<v Speaker 6>will not want to fuel more inflation by having wage

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<v Speaker 6>or margin increases that would not be consistent with don.

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<v Speaker 1>Both Christine Legarn's, the ECB and FED make polities policy

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<v Speaker 1>decisions next month, Well.

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<v Speaker 3>John, both central banks will have a lot of data

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<v Speaker 3>to digest before those decisions. The first big one in

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<v Speaker 3>the US comes on Friday with the youngest jobs report,

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<v Speaker 3>and we get a preview from Bloomberg's of any down.

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<v Speaker 7>Judaie US job growth probably slowed in August, says the

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<v Speaker 7>shutdown at yellow freight lines led to the end of

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<v Speaker 7>thousands of jobs. At the same time, Bloomberg Economics as

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<v Speaker 7>temporary job supporting concerts and movies, Taylor, Swift, Barbie and

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<v Speaker 7>Oppenheimer probably provided a cushion. The report is set for Friday.

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<v Speaker 7>Also in this week's data agenda, ism figures on American manufacturing,

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<v Speaker 7>which will probably signal more weakness. Finny Dell Junice, Bloomberg

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<v Speaker 7>Day Break.

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<v Speaker 1>All right, thanks Finny. In addition to the jobs report,

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<v Speaker 1>we get some more earnings this week. That's good a

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<v Speaker 1>preview from Bloomberg's Charlie Pellett.

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<v Speaker 8>We will hear from a number of tech companies this

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<v Speaker 8>week amid a buzz around artificial intelligence and concern about

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<v Speaker 8>higher interest rates. Diana Almoa is chief investment Officer for

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<v Speaker 8>long based Strategies at Kirkerswald Asset Management.

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<v Speaker 9>So I think what's been supporting equities despite the higher

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<v Speaker 9>rates that we're seeing is actually the earnings I think

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<v Speaker 9>this last earning season especially surprised. We've seen significant revisions

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<v Speaker 9>in some of the key sectors that are big components

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<v Speaker 9>of the indices, such as in the tech sector.

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<v Speaker 8>Among the tech names reporting this week crowd Strike, Dell Technologies, HP, VMware,

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<v Speaker 8>and Sales Force in New York Charlie Bloomberg daybreak, All.

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<v Speaker 3>Right, Charlie, thanks well. In Asia, after initially searching more

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<v Speaker 3>than five percent, Chinese stocks paired most of their early

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<v Speaker 3>gains to end the session up just over one percent.

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<v Speaker 3>Beijing's recent efforts to boost markets are falling flat in

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<v Speaker 3>the finish of economic worries. Bloomberg's Joanne Wong has more

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<v Speaker 3>from Hong Kong.

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<v Speaker 10>China's Ministry of Finance that will have the one tenth

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<v Speaker 10>of one percent levy as of today. The nation has

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<v Speaker 10>also pledged to slow the pace of initial public offerings.

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<v Speaker 10>That's among US lieu of new measures to wool investors

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<v Speaker 10>back to US flagging equities markets. Regulators have also cut

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<v Speaker 10>handling fees on stock transactions. They brought up usual fund

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<v Speaker 10>managers to increase purchases of their own equity funds, and

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<v Speaker 10>encouraged companies to do more share buybacks.

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<v Speaker 3>And bloombergs Joanne Wong says Chinese authorities have asked some

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<v Speaker 3>mutual funds to avoid selling equities on a net basis

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<v Speaker 3>and more proof.

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<v Speaker 1>This spring, global investors have little confidence that China will

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<v Speaker 1>succeed in suring up its financial markets. There's a new

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<v Speaker 1>poll of investors by Bloomberg. He predicts that mounting economic

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<v Speaker 1>stress will drive the yuan's offshore exchange rate to historic lows.

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<v Speaker 1>According to the latest Markets Live pol survey, they one

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<v Speaker 1>is seen depreciating to seven point six per dollar before

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<v Speaker 1>the end of the year. That would be about a

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<v Speaker 1>four percent drop from the current levels.

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<v Speaker 3>Meanwhile, john US Commerce Secretary Gina Ramando is visiting China.

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<v Speaker 3>She stressed the importance of stable economic ties between the

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<v Speaker 3>world's biggest economies.

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<v Speaker 2>It's a complicated relationship, it's a challenging relationship.

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<v Speaker 3>We will, of course disagree on certain issues, but I

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<v Speaker 3>believe that we can make progress.

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<v Speaker 2>If we are direct, open and practical.

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<v Speaker 3>And Commerce Secretary Gina Ramando is the fourth high profile

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<v Speaker 3>US official to visit China in the past three months, and.

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<v Speaker 1>In corporate in his current Malincrot has gone bankrupt for

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<v Speaker 1>the second time less than three years Under a proposed

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<v Speaker 1>restructuring deal, the one hundred and fifty six year old

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<v Speaker 1>company plans to give opioid victims a final two hundred

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<v Speaker 1>and fifty million dollar one time payment, a move that

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<v Speaker 1>would leave them with a billion dollars less than they

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<v Speaker 1>were promised as last year. Malincrant first went bankrupt in

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<v Speaker 1>twenty twenty, overwhelmed by costly litigation tied to its role

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<v Speaker 1>in the opioid.

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<v Speaker 3>Crisis, and three M has tentatively agreed to pay more

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<v Speaker 3>than five and a half billion dollars to resolve lawsuits

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<v Speaker 3>over military ear plugs. We get more from Bloomberg's Doug Krisner.

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<v Speaker 2>We're told the settlement stems from over three high hundred

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<v Speaker 2>thousand lawsuits. They claimed the ear plugs were defective over

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<v Speaker 2>a twelve year period starting in two thousand and three.

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<v Speaker 2>Current and former service members alleged three M knew it's

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<v Speaker 2>air plugs were too short to work effectively. The company

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<v Speaker 2>was also accused of failing to warn the US government

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<v Speaker 2>or users, and of failing to take steps to fix

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<v Speaker 2>the product. The sum is about half the roughly ten

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<v Speaker 2>billion dollars some financial analysts predicted three M could end

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<v Speaker 2>up paying in New York. I'm Doug Prisoner Bloomberg Daybreak.

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<v Speaker 1>All right, thanks to Karen five oh seven Wall Street

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<v Speaker 1>Time down for a look at some of the other

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<v Speaker 1>stories making news in New York and around the world.

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<v Speaker 1>And for that we're joined by Bloomberg's Michael Parr. Michael,

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<v Speaker 1>good morning, Good morning John.

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<v Speaker 5>Friends and family in Jacksonville, Florida, are greeting as a

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<v Speaker 5>community after a racially motivated shooting by a white man

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<v Speaker 5>who killed three black people inside a Dollar General store

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<v Speaker 5>on Saturday before taking his own life. At a community

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<v Speaker 5>vigili yesterday, pastors offered prayers for healing to help Jacksonville

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<v Speaker 5>push past this tragedy. Sheriff TK Waters says, the tragedy

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<v Speaker 5>will not define Jacksonville.

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<v Speaker 11>One evil man who decides to take his hateful rhetoric

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<v Speaker 11>and his hateful thoughts and put those into action. They

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<v Speaker 11>cannot shake our resolve and we will not allow it

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<v Speaker 11>to do so.

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<v Speaker 5>Jacksonville Mayor don A.

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<v Speaker 10>Degan, the division has to stop, the hate has to stop,

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<v Speaker 10>the rhetoric has to stop.

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<v Speaker 5>Florida Governor Und Descant is canceled today at presidential campaign

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<v Speaker 5>appearances to deal with Jacksonville and prepares for what is

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<v Speaker 5>expected to be a hurricane to hit the state this week.

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<v Speaker 5>Tropical Storm at Dahlia is now forecast to become a

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<v Speaker 5>hurricane by late Tuesday afternoon, possibly hitting Florida's Big Ben

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<v Speaker 5>region as a category two on Wednesday. Right now, Donnie

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<v Speaker 5>Alli is near the coast of Cuba on a potential

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<v Speaker 5>track to come ashore as a hurricane in the southern US.

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<v Speaker 5>It is more than one hundred miles off the western

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<v Speaker 5>tip of Cuba, with maximum sustained winds of sixty miles

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<v Speaker 5>per hour. Governor round DeSantis in Tallahassee is warning people

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<v Speaker 5>in its path to prepare for power outages and possibly more.

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<v Speaker 12>We have mobilized eleven hundred National guardsmen and they have

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<v Speaker 12>at their disposal twenty four hundred high water vehicles as

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<v Speaker 12>well as twelve aircraft that can be used for rescue

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<v Speaker 12>and recovery efforts.

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<v Speaker 5>Governor DeSantis says power companies will start pre staging linemen today.

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<v Speaker 5>Military investigators are trying to find out what caused an

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<v Speaker 5>Osprey aircraft to crash on Melville Island in Australia Sunday,

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<v Speaker 5>killing three Marines five more US troops of the twenty

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<v Speaker 5>three on board were injured and are hospitalized in serious condition.

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<v Speaker 5>Dozens of heated demonstrators were in front of Gracie Mansion

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<v Speaker 5>over the migrant crisis in New York City. Protesters and

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<v Speaker 5>counter demonstrators clashed. At one point they got physical and

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<v Speaker 5>the NYPD had to step in to separate both sides.

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<v Speaker 5>Bus loads of asylum seekers continue to come into the

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<v Speaker 5>city daily. Mayor Adam says New York has run out

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<v Speaker 5>of beds and money. Global News twenty four hours a day,

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<v Speaker 5>powered by more than twenty seven hundred journalist and analyst

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<v Speaker 5>over one hundred and twenty countries. I'm Michael Barr.

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<v Speaker 1>This is Bloomberg, John, Michael, thank you, and time down

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<v Speaker 1>for a Bloomberg Sports update, Tam for the Let's bring

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<v Speaker 1>in John Stasher.

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<v Speaker 13>John, Good morning, r Good morning John. It is opening

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<v Speaker 13>day at the US Open. Plus he met of the

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<v Speaker 13>women's top seed, eaganstry Untech plays the first match at

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<v Speaker 13>Ash Stadium, followed by Francis Tafo. He made that great

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<v Speaker 13>run of the semi finals last year before he fell

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<v Speaker 13>in five sets to the ventral champ Carlos Alcaraztiapo seated

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<v Speaker 13>ten fellow American Taylor Fritz seeded ninth. He plays this

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<v Speaker 13>afternoon at Armstrong Stadium. Novak Djokovic and Coco Goff both

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<v Speaker 13>played tonight. Golf comes to the Open having won her

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<v Speaker 13>last two tournaments. Victor Hoblin, the twenty four year old Norwegian,

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<v Speaker 13>won the Tour Championship in Atlanta, going away by five Johnts.

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<v Speaker 13>He won the FedEx Cup and the eighteen million dollar

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<v Speaker 13>Bonus Yankee in Tampa had a four to two lead,

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<v Speaker 13>then lost to the Rays seven to four. Yanks had

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<v Speaker 13>three home runs but had only one other hit, and

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<v Speaker 13>they have now failed to win any of their last

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<v Speaker 13>ten series. They'll start one tonight in Detroit, the Mets

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<v Speaker 13>home for Texas. They salvaged one with the Angels at

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<v Speaker 13>City Field, scored bottom of the ninth to win three

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<v Speaker 13>to two. The X met Noah Cindergard released by Cleveland.

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<v Speaker 13>He had earlier been with the Dodgers. He was two

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<v Speaker 13>and six with a six and a half e ra

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<v Speaker 13>Hi Drama and williams Ford Pennsylvania finals of the Little

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<v Speaker 13>League World Series. Curasau tied the game with a grand

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<v Speaker 13>slam in the fifth innings, so it was five to five.

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<v Speaker 13>El Segundo California, then up bottom of the sixth.

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<v Speaker 8>Dozin World Series Chess.

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<v Speaker 13>Come on ABC. Simone Files won the US Gymnastics Championship

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<v Speaker 13>for the eighth time. John stash Away, Bloomberg Sports.

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<v Speaker 5>Host to coast from New York to San Francisco, Boston

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<v Speaker 5>to Washington, DC, nationwide on Syrias Exam the Bloomberg Business

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<v Speaker 5>Appen Bloomberg dot Com.

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<v Speaker 8>This is Bloomberg Daybreak and good morning.

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<v Speaker 1>I'm John Tucker. Equity futures again edging higher this morning,

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<v Speaker 1>stocks rose and treasury yields jumped on Friday. That came

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<v Speaker 1>after FED shair Jerome Palce stuck to the script and

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<v Speaker 1>is jackson Holes speech saying that the Fed is prepared

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<v Speaker 1>to raise rates further if appropriate. Right now, let's get

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<v Speaker 1>you set up for the trading day ahead with economist

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<v Speaker 1>Dennis Carment Share at the University of Akron Endowment Committee.

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<v Speaker 1>Always a pleasure. Dennis. Did the meeting of the Central

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<v Speaker 1>bankers and Jackson Hole in any way alter your outlook

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<v Speaker 1>for markets?

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<v Speaker 14>No, not really, John, It was very boring, to be

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<v Speaker 14>quite honest. And the only comment I would make is

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<v Speaker 14>that the chairman Todell, rather than saying higher for longer

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<v Speaker 14>said Hi for longer. No big deal. The fact that

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<v Speaker 14>we will probably see one last increase in the in

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<v Speaker 14>the overnight Fed funds rate. Maybe it'll happen at the

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<v Speaker 14>September meeting. They might take the overnight Fed funds rate

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<v Speaker 14>another twenty five basis points higher in September. If not September,

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<v Speaker 14>then November. But I think we're probably done with raising

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<v Speaker 14>the overnight Fed funds rate. However, it shall be a

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<v Speaker 14>long period of time before they begin the process of

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<v Speaker 14>easy monetary policy, at least well into twenty twenty four,

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<v Speaker 14>maybe into twenty twenty five before we see the Fed

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<v Speaker 14>changes direction of policy. So it's high for longer, not

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<v Speaker 14>higher for longer. That's probably the biggest thing that I

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<v Speaker 14>can say about the the meeting last week in Jackson Hall.

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<v Speaker 1>Will this rate regime lead to a sell off in stocks?

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<v Speaker 1>What does it do for the equity markets?

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<v Speaker 14>I think stocks have been overpriced for six months. It's been,

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<v Speaker 14>to me an egregiously overpriced stock market. We got the

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<v Speaker 14>CNN and Fear and Greed Index got to high of

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<v Speaker 14>eighty five, which is characteristically that's when markets begin to

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<v Speaker 14>turn down. That's when the public has been too egregiously

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<v Speaker 14>involved to abundantly long, and that turned lower about five

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<v Speaker 14>weeks ago. We had technically an unusual circumstance midweek last week,

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<v Speaker 14>when we opened higher on the on the Nvidia excuse me,

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<v Speaker 14>on the Nvidia earnings, then you close lower upon the day.

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<v Speaker 1>Well, let me just just interrupt theres after we got

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<v Speaker 1>those blowout numbers from in Vidia, there wasn't the rally

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<v Speaker 1>that some had expected to lift all boats if you would,

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<v Speaker 1>Does that indicate some degree of fatigue on the part

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<v Speaker 1>of equity investors?

0:12:38.280 --> 0:12:40.640
<v Speaker 14>Exactly, That's exactly what happened. The fact that you had

0:12:40.679 --> 0:12:44.240
<v Speaker 14>blowout earnings, you open the market demonstrably higher and close

0:12:44.320 --> 0:12:47.439
<v Speaker 14>lower upon the day. That's a very rare circumstance called

0:12:47.440 --> 0:12:50.440
<v Speaker 14>an outside reversal day. I tend to pay attention to

0:12:50.440 --> 0:12:54.240
<v Speaker 14>a few technical circumstances other than the reversal days. They're

0:12:54.360 --> 0:12:57.760
<v Speaker 14>very rare, they're very meaningful, they're very telling, and they

0:12:58.120 --> 0:13:01.280
<v Speaker 14>happened very infrequently, and when they do, you should pay

0:13:01.280 --> 0:13:03.240
<v Speaker 14>attention to them. The other thing that I find interesting

0:13:03.320 --> 0:13:06.040
<v Speaker 14>is that we tend to go down on big volume

0:13:06.080 --> 0:13:08.480
<v Speaker 14>and up on lighter volume, which is also indicative of

0:13:08.480 --> 0:13:11.079
<v Speaker 14>a market that's over extended to the upside and do

0:13:11.240 --> 0:13:14.560
<v Speaker 14>for correction. So I'm in this school of thought that

0:13:14.600 --> 0:13:17.400
<v Speaker 14>thinks that stock prices are going to go at least

0:13:17.400 --> 0:13:20.280
<v Speaker 14>five to ten percent lower from recent highs, maybe even

0:13:20.320 --> 0:13:23.240
<v Speaker 14>a bit lower than that, over the next three to

0:13:23.280 --> 0:13:24.520
<v Speaker 14>four to five to six months.

0:13:24.679 --> 0:13:28.760
<v Speaker 1>What is your cash position right now? For the University

0:13:28.760 --> 0:13:30.120
<v Speaker 1>of acron endowment.

0:13:31.040 --> 0:13:34.160
<v Speaker 14>We raised about a year and a half ago. We

0:13:34.280 --> 0:13:37.080
<v Speaker 14>raised one year's worth of spending, took it out of

0:13:37.080 --> 0:13:39.520
<v Speaker 14>the stock market, which is about eight percent of our portfolio,

0:13:39.840 --> 0:13:43.040
<v Speaker 14>which turned out to be a very wise, and let's

0:13:43.080 --> 0:13:46.000
<v Speaker 14>be blunting, a lucky decision, because we sold the market

0:13:46.360 --> 0:13:48.440
<v Speaker 14>two days from the highs, which is nothing other than

0:13:49.000 --> 0:13:53.480
<v Speaker 14>unintended and glamorous luck. But we got very fortunate, and

0:13:53.520 --> 0:13:55.960
<v Speaker 14>we're continuing to hold that two years worth of spending

0:13:55.960 --> 0:14:01.560
<v Speaker 14>on the sidelines. As an endowment, we have to a

0:14:01.559 --> 0:14:03.920
<v Speaker 14>certain amount of an abundant amount of position in the

0:14:03.920 --> 0:14:06.440
<v Speaker 14>stock market, but to reduce it by two years worth

0:14:06.440 --> 0:14:10.000
<v Speaker 14>of spending is by most standards, a very aggressive position.

0:14:10.120 --> 0:14:12.599
<v Speaker 14>So we're comfortable with that position, and we're holding a

0:14:12.640 --> 0:14:15.040
<v Speaker 14>fair amount of cash, a lot of two year notes,

0:14:15.440 --> 0:14:19.640
<v Speaker 14>a lot of tips in a reduced amount of equities.

0:14:19.640 --> 0:14:20.960
<v Speaker 14>But that's been the year and a half to two

0:14:21.000 --> 0:14:22.720
<v Speaker 14>years that we've made that decision.

0:14:22.560 --> 0:14:25.880
<v Speaker 1>To return to monetary policy. For a moment, the two

0:14:25.960 --> 0:14:30.120
<v Speaker 1>percent target, that almost sounds like somebody found that on

0:14:30.240 --> 0:14:33.040
<v Speaker 1>their secret decoder ring. Where does that come from? Does

0:14:33.080 --> 0:14:34.000
<v Speaker 1>that change?

0:14:35.040 --> 0:14:37.880
<v Speaker 14>I think it doesn't change. I think that mister Powers

0:14:37.920 --> 0:14:41.120
<v Speaker 14>made it abundantly clear that it's going to be two percent,

0:14:41.200 --> 0:14:43.000
<v Speaker 14>and he's going to have to hit the two percent number.

0:14:43.120 --> 0:14:45.080
<v Speaker 14>Not two point nine, not two point eight, not two

0:14:45.120 --> 0:14:47.720
<v Speaker 14>point seven, but two point zero. It's going to be

0:14:48.160 --> 0:14:50.800
<v Speaker 14>a long period of time before we get there. We

0:14:50.920 --> 0:14:54.640
<v Speaker 14>see commodity prices have been under some pressure. We prices,

0:14:54.680 --> 0:14:58.280
<v Speaker 14>corn prices, soybean prices have been under pressure. Cotton prices

0:14:58.280 --> 0:15:00.720
<v Speaker 14>have been under pressure. About the only area the commodity

0:15:00.720 --> 0:15:03.600
<v Speaker 14>markets that have been to the upside in recent months

0:15:03.640 --> 0:15:06.680
<v Speaker 14>have been crude oil prices, which the public pays a

0:15:06.680 --> 0:15:10.200
<v Speaker 14>great good deal of attention to. But the inflationary numbers

0:15:10.200 --> 0:15:14.680
<v Speaker 14>have been demonstrably less than people had anticipated, demosterly less

0:15:14.680 --> 0:15:19.800
<v Speaker 14>than the market had thought likely. And two percent inflation

0:15:19.960 --> 0:15:22.240
<v Speaker 14>is the target. They're going to get there. It's just

0:15:22.280 --> 0:15:23.040
<v Speaker 14>a matter of time.

0:15:24.600 --> 0:15:27.760
<v Speaker 1>You're listening to Bloomberg Daybreak Today, your morning brief the

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