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

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Speaker 1: dot com, the Radio plus mobile and on your radio.

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

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Speaker 1: The Bloomberg Futures are port brought to you by Interactive

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Speaker 1: Brokers and CIMI Group. If you're looking for global futures

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Speaker 1: is the industry leader. Learn more at Interactive Brokers dot com, Slash,

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Speaker 1: c m E Group and U SAW Index futures are

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Speaker 1: a little changed after the SNP five hundred captive second

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Speaker 1: straight weekly decline, and as investors await the final batch

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Speaker 1: of Earnie's reports this season and further clues on the

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Speaker 1: health of the economy. Check the markets every fifteen minutes

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Speaker 1: throughout the trading day on Bloomberg. SNP E many Future

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Speaker 1: is now down a point they were up for most

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Speaker 1: of the morning. Dowie Many futures down seven nas, DOCU

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Speaker 1: many futures that will change The acts in Germany's up

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Speaker 1: one point four percent. Can your treasury up four thirty seconds,

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Speaker 1: the yield one point seven six percent. Nim X Scrude

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Speaker 1: oil down one or fifty three cents to forty fourteen

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Speaker 1: of Arrol call my scold is down one point six

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Speaker 1: per cent, or twenty dollars forty cents at twelve seventy

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Speaker 1: the euro at other thirteen ninety nine. Again when oh

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Speaker 1: eight point three thought that's a little berg business flash

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Speaker 1: Tom and mind Karen, thanks so much, Michael McKee. Surveillance

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Speaker 1: correction right now. We're doing surveillance astronomy. Earlier and I

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Speaker 1: sort of said, like, you know, women are from Venus

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Speaker 1: bow tizer from Mercury. John was a little confusing what

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Speaker 1: I was saying there. Yeah, everything you say is confusing.

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Speaker 1: Thank you please. It's the transit of Mercury. It's not

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Speaker 1: all I got Venus in there. But this is very cool.

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Speaker 1: But seriously, folks, Mercury's between us and the sun. So

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Speaker 1: it's like particularly dramatic with great resolution, except you'll hurt

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Speaker 1: your eyes if you look at the sun. Don't do that.

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Speaker 1: And the last time Mercury transited the the sun, they

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Speaker 1: fed raised interest something like that Jevans and sun spots

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Speaker 1: and all that might pick it up here with his warrants. Well,

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Speaker 1: something happened over the last hour or so. I blame

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Speaker 1: Karen Moscow. I mean, because she's the one the reports

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Speaker 1: on where the markets are. But we've we've gone negative

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Speaker 1: here in futures. Not sure exactly what the sentiment in

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Speaker 1: the market these days. He is, Kate Warren is supposed

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Speaker 1: to know, so we'll ask her. She's with Edwin Jones,

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Speaker 1: investment strategist, Kate uh And the reason I care about

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Speaker 1: it but there doesn't seem to be any kind of

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Speaker 1: firm feeling these days about where we're going and what

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Speaker 1: might happen. And you ask why, people say the FED

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Speaker 1: or external events, and there's no firm feeling about those either.

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Speaker 1: This seems to be one of the most confusing, least

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Speaker 1: anchored at times for investment strategy that I have seen.

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Speaker 1: I would agree with that, but I think the thing

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Speaker 1: to keep in mind is that the economy is growing,

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Speaker 1: earnings have been really hit by low oil prices and

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Speaker 1: the strong dollar, and both of those seemed to be reversing,

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Speaker 1: and so well, it seems confusing short term. It's really

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Speaker 1: not that confusing at least in my view longer term.

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Speaker 1: But it's not likely to be a return to the

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Speaker 1: bullmarket we saw earlier. It's like letting be a market

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Speaker 1: that grinds higher. So I would say, yes, confusing short term,

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Speaker 1: but that's sort of creating some opportunities for investors as

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Speaker 1: they don't know what to do. And I think you

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Speaker 1: know that that's a time where you put money to

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Speaker 1: work because the underlying trends are still positive. Grind higher,

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Speaker 1: but at least higher. Right, You've got a lot of signal. Yeah,

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Speaker 1: Doue cass an hour ago on our air saying he

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Speaker 1: sees a recession ahead. You've got a recession in corporate earnings.

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Speaker 1: So what is it that? Uh? And he's also talking

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Speaker 1: about very high multiple, So what is it that I'm

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Speaker 1: going to again out putting money to work here? So well,

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Speaker 1: I'd take a couple of things. We know there's always

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Speaker 1: a recession ahead. I don't think this went ahead short term,

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Speaker 1: and that's truly what the market worries about. So well

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Speaker 1: we know that, uh, you know, nobody's repeat the business cycle.

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Speaker 1: I wouldn't be worrying about a recession short term because

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Speaker 1: we're not seeing any of the normal finds. And typically

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Speaker 1: recessions are figgered by spikes and oil prices or they

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Speaker 1: fed rapidly raising interest rates, and we all know we're

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Speaker 1: not seeing either of those, I would say. The second

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Speaker 1: thing is, yes, we have our recession and earnings, but

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Speaker 1: keep in mind that that truly does that drop in

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Speaker 1: oil prices as well as the strong dollar. And we

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Speaker 1: heard from companies when they were reporting first quarter earnings

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Speaker 1: that while the dollars not reversing course dramatically, it's not

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Speaker 1: quite as bad a problem as it was before. And

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Speaker 1: this is what we love, folks, And I don't want

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Speaker 1: to conflate. It would be aaron erroneous to both to

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Speaker 1: conflate Doug Cass's views into that of Kate Warren of

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Speaker 1: Edward Jones. They have two different mandates, two different structures

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Speaker 1: that they work under. Kate, I just did a fitted

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Speaker 1: total return of the SMP, and this is just an eyeball,

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Speaker 1: folks that if you go back to July of two

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Speaker 1: thousand thirteen, it's a single digit world. That's an approximation

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Speaker 1: nine and your return you said earlier, Kate, it is

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Speaker 1: a low return world. How do you do how do

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Speaker 1: you mix stocks and bonds? For eating about the fed malarchy?

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Speaker 1: How do you mix stocks and bonds in a single

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Speaker 1: digit world given double digit equity returns? Well, I think

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Speaker 1: that you still want to own both stocks and bonds.

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Speaker 1: And part of that is even in the single digit world,

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Speaker 1: even with low interest rates, most investors can't stomach the

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Speaker 1: volatility in the stock market. And if inflation just goes

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Speaker 1: back to normal levels, bonds already priced a lot of

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Speaker 1: that in. So we think that bond returns will be

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Speaker 1: low but okay, and bonds provide that stability that most

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Speaker 1: people need in their portfolio. Now, the actual mix depends

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Speaker 1: on a lot of different things. But in a world

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Speaker 1: where a pretty returns also aren't really high, we're thinking

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Speaker 1: six to eight percent long term, then you want to

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Speaker 1: own this mix of stacks and bonds, but you also

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Speaker 1: want to be sure that you're saving enough, investing enough,

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Speaker 1: spending less, because this really is a tough environment for

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Speaker 1: investors to feel super good about. So you know, you prepare,

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Speaker 1: but it's still okay, and you can still reach long

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Speaker 1: term goals like putting your kids through school and saving

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Speaker 1: for retirement. And I think that is extremely challenging given

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Speaker 1: the environment we're in right now. Very quickly here, Kate Warren,

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Speaker 1: If I'm a yield hog, where do I go? Well,

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Speaker 1: I think you go to dividend paying stacks to have

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Speaker 1: the potential to increase dividends. And I think you also

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Speaker 1: owned some high yield but in a little part of

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Speaker 1: your bond portfolio to get a bit of the additional

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Speaker 1: return with an our view, uh, enough compensation for the

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Speaker 1: additional risk you're taking, especially if the economy continues to grow,

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Speaker 1: because most of those high yield companies, those ones issuing

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Speaker 1: junk debt are going to be able to continue to

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Speaker 1: make the payments as long as the economy doesn't slow dramatically.

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Speaker 1: And that's what you're concerned about, getting compensated for the

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Speaker 1: additional risk. But it's it's a challenging environment. You're absolutely right,

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Speaker 1: and that's why it makes sense that people get started earlier.

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Speaker 1: Make sure you're not leaving it to the last minute

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Speaker 1: thinking you're going to catch up with high return. No, no,

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Speaker 1: not not that any of us would do that. Kate

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Speaker 1: Warren is with Edward Jones research that was brilliant. We've

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Speaker 1: got to get around for a longer period here, Uh,

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Speaker 1: next time, Kate Warren with Edward Jones. As Mike mentioned,

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Speaker 1: green on the screen has become red negative two on futures. Uh.

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Speaker 1: The VIX trading before the opening fifteen point zero seven

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Speaker 1: This is Bloomberg's surveillance for cutting down to the opening bell.

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