1 00:00:03,240 --> 00:00:07,560 Speaker 1: Broadcasting live to New York Bloomberg eleventh wo to Washington, 2 00:00:07,640 --> 00:00:11,160 Speaker 1: d C, Bloomberg ninety nine one to Boston, Bloomberg twelve 3 00:00:11,200 --> 00:00:14,880 Speaker 1: one to San Francisco, Bloomberg nine sixteen, to the Country 4 00:00:15,040 --> 00:00:18,600 Speaker 1: Series Exam Channel one nineteen and around the globe the 5 00:00:18,600 --> 00:00:22,480 Speaker 1: Bloomberg Radio bus Apen Bloomberg dot com. This is Bloomberg 6 00:00:22,560 --> 00:00:26,439 Speaker 1: Surveillance and good morning. I'm Karen Moscow along with Tom 7 00:00:26,520 --> 00:00:28,680 Speaker 1: Keene and Michael McKee. The opening dale brought to you 8 00:00:28,800 --> 00:00:32,280 Speaker 1: by s E. I imagine when usset management servicing is 9 00:00:32,360 --> 00:00:36,440 Speaker 1: unconstrained by infrastructure. See how SCS Global Operating Platform can 10 00:00:36,440 --> 00:00:39,840 Speaker 1: be your catalyst for business expansion at se S dot com. 11 00:00:39,920 --> 00:00:43,040 Speaker 1: Slash imagine stocks lower at the open, the S and 12 00:00:43,080 --> 00:00:45,199 Speaker 1: P five hundred down a tenth of upper center two 13 00:00:45,200 --> 00:00:47,840 Speaker 1: and a half points to twenty sixty one down. John's 14 00:00:47,880 --> 00:00:51,000 Speaker 1: Industrial Average down a tenth of upper center seventeen points 15 00:00:51,000 --> 00:00:54,040 Speaker 1: to seventeen thousand, seven hundred two. The nasdags down a 16 00:00:54,120 --> 00:00:56,600 Speaker 1: tenth of upper center six points to forty seven thirty 17 00:00:56,600 --> 00:00:59,520 Speaker 1: one tenure treasury of three thirty seconds. The YELD one 18 00:00:59,520 --> 00:01:02,040 Speaker 1: point seven four percent yield done a two year point 19 00:01:02,040 --> 00:01:05,280 Speaker 1: seven seven percent. Nine x s crude oil down one 20 00:01:05,319 --> 00:01:07,679 Speaker 1: percent or sixty one cents to forty six O nine 21 00:01:07,680 --> 00:01:10,200 Speaker 1: a barrel comex goal down to tens per cent or 22 00:01:10,200 --> 00:01:13,240 Speaker 1: two dollar sixty cents to twelve sixty eight seventy. Announced 23 00:01:13,560 --> 00:01:15,800 Speaker 1: the Euro at other thirteen twenty three the N one 24 00:01:15,880 --> 00:01:19,240 Speaker 1: oh nine point one one, Tom and Mike Karen, thanks 25 00:01:19,400 --> 00:01:23,080 Speaker 1: so much, Michael McKee, Um, this is a really important 26 00:01:23,319 --> 00:01:25,160 Speaker 1: UM screen or let me get it up. You get 27 00:01:25,200 --> 00:01:27,679 Speaker 1: all the research and j more like at FTN with 28 00:01:27,800 --> 00:01:32,200 Speaker 1: Chris Lowe was channeling me. Later today, the Atlanta FEDS GDP, 29 00:01:32,440 --> 00:01:37,160 Speaker 1: now cast already at two point two percent, is likely 30 00:01:37,200 --> 00:01:41,080 Speaker 1: to be revised higher. And that's the import of this 31 00:01:41,200 --> 00:01:45,319 Speaker 1: retail sales. We're gonna go into the weekend with, oh, 32 00:01:46,080 --> 00:01:49,120 Speaker 1: it's really not that bad. Maybe this is the tipping point, 33 00:01:49,240 --> 00:01:54,160 Speaker 1: and don't forget the previous The March number was revised higher, 34 00:01:54,480 --> 00:01:58,160 Speaker 1: which will imply a higher first quarter GDP when the 35 00:01:58,160 --> 00:02:01,160 Speaker 1: world was in theory coming to an end. One of 36 00:02:01,160 --> 00:02:04,760 Speaker 1: the things that's been keeping the economy afloat has been 37 00:02:05,280 --> 00:02:09,560 Speaker 1: home sales. UH. They've been relatively strong, UH and under 38 00:02:09,560 --> 00:02:11,840 Speaker 1: the radar they have been volatible. But under the radar 39 00:02:11,880 --> 00:02:14,480 Speaker 1: for a while. Dave Stevens is the CEO of the 40 00:02:14,480 --> 00:02:17,480 Speaker 1: Mortgage Bankers Association, and if you want to get a 41 00:02:17,520 --> 00:02:20,880 Speaker 1: handle on where mortgages are going and home sales are going, 42 00:02:20,919 --> 00:02:22,360 Speaker 1: that's the guy to talk to. You Can I say 43 00:02:22,400 --> 00:02:25,160 Speaker 1: that they're an industry group and he's always talking to 44 00:02:25,240 --> 00:02:30,280 Speaker 1: the angle. But they have the clearest literature of these 45 00:02:30,320 --> 00:02:34,000 Speaker 1: Beltway organism. They've got the numbers. They published The Mortgage 46 00:02:34,040 --> 00:02:39,120 Speaker 1: Bankers Applications Index shows you mortgage applications, refinance applications, all 47 00:02:39,200 --> 00:02:43,960 Speaker 1: kinds of things every week. So Dave, to quote the 48 00:02:44,000 --> 00:02:46,520 Speaker 1: immortal Ed Cotch, former mayor of New York, how are 49 00:02:46,520 --> 00:02:51,400 Speaker 1: we doing, hey, Tom and Mike. It's uh, you know, 50 00:02:51,440 --> 00:02:53,320 Speaker 1: it's an interesting story. To your point, it is kind 51 00:02:53,320 --> 00:02:56,440 Speaker 1: of the sleeper story. Um, I think what people just 52 00:02:56,880 --> 00:03:01,399 Speaker 1: are the data. You can't deny demographics of what they are. 53 00:03:01,440 --> 00:03:03,560 Speaker 1: And as you know, we went to a very sluggish 54 00:03:03,560 --> 00:03:06,639 Speaker 1: period with household formation during the recession and we're now 55 00:03:06,680 --> 00:03:09,600 Speaker 1: forming you know, about one point for million households annually. 56 00:03:10,240 --> 00:03:13,400 Speaker 1: This millennial generation is a real deal. It's not a story. 57 00:03:13,480 --> 00:03:18,320 Speaker 1: It's eight plus million young people who the oldest cohorts 58 00:03:18,320 --> 00:03:22,280 Speaker 1: are now moving into homebuying and the demand for both 59 00:03:22,360 --> 00:03:27,760 Speaker 1: rental units and owned units is a positive story across 60 00:03:27,840 --> 00:03:31,560 Speaker 1: the boards. You're seeing demand for apartment units and single 61 00:03:31,560 --> 00:03:36,000 Speaker 1: family rental extremely strong. But we're also seeing continued growth 62 00:03:36,120 --> 00:03:40,200 Speaker 1: in the purchase sector of new homes up about on 63 00:03:40,280 --> 00:03:43,720 Speaker 1: average over a year ago. UM. So this last month, 64 00:03:43,760 --> 00:03:48,400 Speaker 1: it it dipped a little bit over March. UM. April's 65 00:03:48,440 --> 00:03:51,640 Speaker 1: numbers were down a bit, but that's sort of seasonally typical. 66 00:03:51,720 --> 00:03:54,520 Speaker 1: We usually peak for the year either March or April. 67 00:03:54,520 --> 00:03:56,760 Speaker 1: It sort of shifted back and forth over previous year's. 68 00:03:56,760 --> 00:04:00,640 Speaker 1: March was the stronger month of the two. Well, you 69 00:04:00,640 --> 00:04:03,920 Speaker 1: you look at the mortgage applicate the amount of money 70 00:04:03,920 --> 00:04:06,560 Speaker 1: people are borrowing and gives you a hint just to 71 00:04:06,640 --> 00:04:09,400 Speaker 1: what size house they're borrowing. To try to get an 72 00:04:09,440 --> 00:04:12,119 Speaker 1: idea of whether the starter home people are coming into 73 00:04:12,160 --> 00:04:15,160 Speaker 1: the market. Yeah, if they buy, then other people are 74 00:04:15,160 --> 00:04:18,479 Speaker 1: moving up. How's how's that going? Well, that's you know, 75 00:04:18,560 --> 00:04:23,440 Speaker 1: that's the story of the disincentives, particularly in the housing 76 00:04:23,480 --> 00:04:29,839 Speaker 1: market to build entry level units. UM. You know, the regulations, 77 00:04:29,960 --> 00:04:34,560 Speaker 1: land costs and labor costs to bring a unit to market. UH, 78 00:04:34,760 --> 00:04:38,839 Speaker 1: as well as concerns about whether credit availability or for 79 00:04:38,880 --> 00:04:41,760 Speaker 1: first time homebuyers is going to be there for that 80 00:04:41,839 --> 00:04:45,760 Speaker 1: marketplace has forced UM many of the new home builders 81 00:04:45,800 --> 00:04:47,440 Speaker 1: to stay at the upper end of the market. So 82 00:04:47,480 --> 00:04:50,760 Speaker 1: it's improven slightly. The average loan size dropped a few 83 00:04:50,760 --> 00:04:52,920 Speaker 1: thousand dollars in April from the previous month, but it's 84 00:04:52,920 --> 00:04:58,599 Speaker 1: still three dollars on average per unit that's been built. 85 00:04:58,960 --> 00:05:01,240 Speaker 1: If you if you look at resale market, you well 86 00:05:01,240 --> 00:05:05,000 Speaker 1: below three hundred thousand in terms of average sales price. So, um, 87 00:05:05,040 --> 00:05:07,320 Speaker 1: we aren't building the kind of housing stock yet. I 88 00:05:07,320 --> 00:05:10,680 Speaker 1: think that's going to appeal to the millennial generation and 89 00:05:10,680 --> 00:05:12,479 Speaker 1: that's where we really need to be thinking about going. 90 00:05:12,800 --> 00:05:16,880 Speaker 1: Percolating in London, in New York and other major cities, 91 00:05:17,680 --> 00:05:22,000 Speaker 1: is this hopelessness about housing. The summary seems to be 92 00:05:22,120 --> 00:05:24,480 Speaker 1: we've got to build up. There's got to be a 93 00:05:24,560 --> 00:05:29,359 Speaker 1: vertical rise. Where do we stand in this country on 94 00:05:29,440 --> 00:05:32,560 Speaker 1: the dichotomy between the numbers you're giving, which are a 95 00:05:32,560 --> 00:05:35,320 Speaker 1: fantasy to anybody living in New York and San Francisco, 96 00:05:36,000 --> 00:05:40,839 Speaker 1: and the need to build vertically. Are we gonna build vertically? Well, 97 00:05:41,279 --> 00:05:45,880 Speaker 1: vertical units are You'll see that development going right now? Um, Tom, 98 00:05:45,960 --> 00:05:48,679 Speaker 1: the the you know, going to Washington, d C. And 99 00:05:49,120 --> 00:05:52,080 Speaker 1: you're seeing you know, all of this new uh, multi 100 00:05:52,120 --> 00:05:55,520 Speaker 1: family construction occurring, both with condos that are for ownership 101 00:05:55,640 --> 00:05:58,440 Speaker 1: as well as rental. It is more higher end. So 102 00:05:58,520 --> 00:06:01,440 Speaker 1: we sort of break down the market based on luxury 103 00:06:01,640 --> 00:06:06,640 Speaker 1: market and affordable, and clearly the lean is towards the 104 00:06:06,720 --> 00:06:10,200 Speaker 1: upper end of the market rents and purchase price range 105 00:06:10,200 --> 00:06:12,200 Speaker 1: as well as the luxury and we're not we're still 106 00:06:12,279 --> 00:06:15,120 Speaker 1: not at the point right now where we're building affordable 107 00:06:15,200 --> 00:06:19,159 Speaker 1: entry level units, particularly in the high employment markets, because 108 00:06:19,560 --> 00:06:22,480 Speaker 1: it's these urban communities and their suburbs where you really 109 00:06:22,480 --> 00:06:24,520 Speaker 1: need to create the housing stocks you can recruit a 110 00:06:24,600 --> 00:06:27,120 Speaker 1: workforce and especially if you want to retain them. And 111 00:06:27,120 --> 00:06:29,880 Speaker 1: that's that's where the shortages right now. What's happening with 112 00:06:30,120 --> 00:06:33,080 Speaker 1: the suburbs, I mean in in big cities, certainly there's 113 00:06:33,120 --> 00:06:36,159 Speaker 1: a cross trend to urbanization, but I've I've read from 114 00:06:36,160 --> 00:06:40,360 Speaker 1: other people that people are starting to the younger generation 115 00:06:40,440 --> 00:06:42,400 Speaker 1: doesn't want to live in the suburbs. They don't want 116 00:06:42,440 --> 00:06:46,200 Speaker 1: the long commute, the traffic jams. Uh. Is that true 117 00:06:46,279 --> 00:06:48,839 Speaker 1: outside of the big cities like New York, Well, we 118 00:06:49,040 --> 00:06:51,919 Speaker 1: you know, there's been a there's been a significant policy focus, 119 00:06:52,000 --> 00:06:55,760 Speaker 1: particularly in this administration as well as you know, planners 120 00:06:55,800 --> 00:07:00,760 Speaker 1: to think about building residential housing units are places of 121 00:07:00,800 --> 00:07:04,839 Speaker 1: work or near mass transit um. And yeah, there's absolutely 122 00:07:04,839 --> 00:07:09,520 Speaker 1: no doubt that. Uh, you know, this younger generation is 123 00:07:09,560 --> 00:07:12,840 Speaker 1: more urbanized. We're not certain how that's going to stick 124 00:07:12,920 --> 00:07:15,440 Speaker 1: long term. I mean, let's be real, as as you 125 00:07:15,840 --> 00:07:19,280 Speaker 1: once you get married, you have children, you start making 126 00:07:19,320 --> 00:07:22,160 Speaker 1: your location decisions based on other factors that I don't 127 00:07:22,160 --> 00:07:25,040 Speaker 1: think are being considered right now. School quality of schools, 128 00:07:25,280 --> 00:07:28,160 Speaker 1: other activities for your kids, size of home you can 129 00:07:28,200 --> 00:07:31,520 Speaker 1: have to house your family. And so when people often 130 00:07:31,560 --> 00:07:34,600 Speaker 1: tell me, well, this generation is different than the last one, 131 00:07:35,120 --> 00:07:38,440 Speaker 1: the only thing we're seeing different about this generation is 132 00:07:38,520 --> 00:07:41,800 Speaker 1: there delaying the decision to buy till later. But other 133 00:07:41,800 --> 00:07:43,640 Speaker 1: than that, we see the trend line of you know, 134 00:07:43,720 --> 00:07:45,960 Speaker 1: the initial home might be a condo or small home 135 00:07:46,000 --> 00:07:49,560 Speaker 1: near near an urban location, but as they expand their families, 136 00:07:49,840 --> 00:07:52,040 Speaker 1: they're certainly going to venture into some of the more 137 00:07:52,480 --> 00:07:56,640 Speaker 1: suburban markets, which is Tom moved to the suburbs. Oh, 138 00:07:56,680 --> 00:08:02,960 Speaker 1: there is a good question get a dog defense. Hey, 139 00:08:03,000 --> 00:08:05,280 Speaker 1: you know that the reality is, well, we are seeing 140 00:08:05,480 --> 00:08:08,960 Speaker 1: the baby boomers who are retiring. There there's an trend 141 00:08:09,000 --> 00:08:13,080 Speaker 1: coming back into cities. Um, but that's a whole another discussion. 142 00:08:14,000 --> 00:08:16,000 Speaker 1: Yes it is, and we'll have that with you, Sird 143 00:08:16,080 --> 00:08:23,560 Speaker 1: another time. David Stephens, thank you. Mike Rachel from Brazil, Indiana. 144 00:08:23,640 --> 00:08:28,800 Speaker 1: This is out I seld I fort Rachel from Brazil, Indiana. 145 00:08:29,040 --> 00:08:34,319 Speaker 1: It's south, it's southwest, sort of west southwest of Indianapolis. 146 00:08:34,600 --> 00:08:39,080 Speaker 1: Notes that Mr Strayhan is at his final day with 147 00:08:39,320 --> 00:08:46,360 Speaker 1: Ms Rippa. I'm not dying. I'm not gone. Mr Strayhan suggests. 148 00:08:46,800 --> 00:08:50,840 Speaker 1: Rachel from Brazil, Indiana says, you know there's a slot 149 00:08:50,920 --> 00:08:59,120 Speaker 1: there to for the thanking. Tom Keen, thank you Rachel 150 00:08:59,160 --> 00:09:04,040 Speaker 1: for that email. Greatly appreciate it. It was it was valuable. Yeah, 151 00:09:04,080 --> 00:09:10,240 Speaker 1: we say you got congratulations. Good morning America. Mr Rippa, 152 00:09:10,320 --> 00:09:13,920 Speaker 1: no doubt will endure and carry forward with her excellence. 153 00:09:17,559 --> 00:09:19,880 Speaker 1: This hour of surveillance brought to you by Volvo Cars 154 00:09:19,880 --> 00:09:22,960 Speaker 1: White Planes. Visit Volvo Cars White Planes dot Com. Here 155 00:09:23,480 --> 00:09:29,280 Speaker 1: is Jennell Crispin. Well close, Michael Bark. I'm jumping a 156 00:09:29,320 --> 00:09:36,040 Speaker 1: hand your voice. I've got to severb the traffic on 157 00:09:36,120 --> 00:09:40,920 Speaker 1: my mind. Michael bar Please, thank you very much. Mind 158 00:09:41,440 --> 00:09:46,080 Speaker 1: Bernie insist that he will stay in the race for 159 00:09:46,080 --> 00:09:50,079 Speaker 1: the Democratic presidential nomination, and that as some party leaders concerned, 160 00:09:50,440 --> 00:09:53,280 Speaker 1: if you hear that that will hurt Democratic front runner 161 00:09:53,320 --> 00:09:56,360 Speaker 1: Hillary Clinton, especially since Donald Trump has been meeting with 162 00:09:56,440 --> 00:09:59,720 Speaker 1: Republican leaders who are leary of him. Trump on Fox 163 00:09:59,760 --> 00:10:03,280 Speaker 1: News talked about yesterday's meeting without speaker Paul Ryan. I 164 00:10:03,280 --> 00:10:05,480 Speaker 1: thought it was a great meeting. We had a we 165 00:10:05,640 --> 00:10:07,960 Speaker 1: discussed a lot of things, a lot of very important things, 166 00:10:08,000 --> 00:10:10,520 Speaker 1: and I thought it was really a very very good meeting. 167 00:10:11,080 --> 00:10:13,880 Speaker 1: I think Paul felt the same way, and everybody else did. Also. 168 00:10:14,840 --> 00:10:17,439 Speaker 1: A New York politician convicted of using his position as 169 00:10:17,480 --> 00:10:20,079 Speaker 1: sentim majority of leader to help his stunt extort hundreds 170 00:10:20,120 --> 00:10:23,360 Speaker 1: of thousands of dollars was sentenced to five years. Former 171 00:10:23,400 --> 00:10:25,880 Speaker 1: Senate Majority to leader Dan Skelos and his son Adam 172 00:10:25,920 --> 00:10:29,839 Speaker 1: were convicted last year of extortion, conspiracy, and bribery. Adam 173 00:10:29,880 --> 00:10:32,959 Speaker 1: Skelos scot six and a half years. Global News twenty 174 00:10:32,960 --> 00:10:35,720 Speaker 1: four hours a day, powered by our twenty four hundred 175 00:10:35,760 --> 00:10:39,120 Speaker 1: journalists more than one hundred fifty news buraus from around 176 00:10:39,160 --> 00:10:42,000 Speaker 1: the world. Michael bar Mica and Michael, thank you so much. 177 00:10:42,000 --> 00:10:44,440 Speaker 1: Greatly appreciate that. We're gonna try to get the last 178 00:10:44,559 --> 00:10:47,600 Speaker 1: nineteen minutes of the show accurate and correct as we wander. 179 00:10:48,040 --> 00:10:50,880 Speaker 1: So this Friday, we're thrilled here with us what a 180 00:10:50,920 --> 00:10:53,160 Speaker 1: week it has been. We'll do that, we'll wrap it up. 181 00:10:53,679 --> 00:10:56,319 Speaker 1: Is best weekend to get you moving into the weekend 182 00:10:56,400 --> 00:11:04,280 Speaker 1: and on to Monday. Bloomberg surveillance, lots going on around 183 00:11:04,280 --> 00:11:06,440 Speaker 1: the world, and of course a lot of news out 184 00:11:06,440 --> 00:11:11,400 Speaker 1: of Brazil. Gabrielle Santos from JPMorgan Asset Management joins us 185 00:11:11,400 --> 00:11:13,520 Speaker 1: next to talk about how you can play it