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Speaker 1: Broadcasting live to New York, Bloomberg to Washington, d C,

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Speaker 1: bloomber to Boston, Bloomberg twelve Honors, to San Francisco, Bloomberg

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Speaker 1: to the Country, Channel one, and around the globe the

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Speaker 1: Bloomberg Radio plus Habit Bloomberg dot Com. This is Bloomberk Surveillance.

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Speaker 1: Good morning, and it's say thirty on Wall Street. And

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Speaker 1: Michael McKee along with Tom Keen, are economic indicators brought

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Speaker 1: to you by Commonwealth Financial Network. When it's time to

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Speaker 1: change the conversation, talk with the broker dealer r A

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Speaker 1: A that's ready to listen call eight six six four

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Speaker 1: six two three six three eight or is it Commonwealth

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Speaker 1: dot com to learn more? Already people are expecting a

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Speaker 1: disappointing first quarter GDP number and Vitey l Judas the

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Speaker 1: trade numbers out right now aren't going to help now, Michael,

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Speaker 1: they'll lead them more disappointment. The trade deficit widening in

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Speaker 1: February to forty seven point one billion dollars more than

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Speaker 1: forecast of prior month January revised a bit wider. Here's

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Speaker 1: one thing that stands out and filters in the GDP

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Speaker 1: capital goods exports basically business investment dropping to the lowest

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Speaker 1: since November eleven. Again, the Commerce Department reporting the trade

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Speaker 1: deficit February widening to forty seven point one billion dollars,

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Speaker 1: more than forecast at the first Word Desk Company delt Judice.

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Speaker 1: Let's go back to New York. Of anything so much,

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Speaker 1: it is a jumble. An investment is one of the

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Speaker 1: themes to speak to Abby Joseph Cohen about. She is

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Speaker 1: with Goldman Sachs, and there is of course the idea

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Speaker 1: of her framing the equity markets, but the economic backdrop

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Speaker 1: to the equity markets is just as important. Michael. Somebody

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Speaker 1: who has been maybe more visible than I've seen in

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Speaker 1: ages out of Carnegie Mellon and Temper is when c

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Speaker 1: Evans of Chicago, Charles Evans speaking last night talking about

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Speaker 1: the difficulty of making policy and the difficulty for markets

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Speaker 1: given all of the uncertainty in the world right now.

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Speaker 1: It's it's it's hard to know what risk might be

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Speaker 1: hitting us. That's why you know. I just that we're

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Speaker 1: in a period where there are more uncertainties than you

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Speaker 1: would normally expected. I think the UH, the EU, I

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Speaker 1: think UH refugees coming into the EU. I think the

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Speaker 1: Brexit question, decelerating growth in China? How how you know

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Speaker 1: comfortably is that kind of take place? Just a whole

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Speaker 1: host of issues. If Andy stool so this the U

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Speaker 1: S election, let's and I'll get away from that. So

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Speaker 1: how does that fix to you? How does that figure

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Speaker 1: out and figure in your thinking? I think it's a

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Speaker 1: large uncertainty around that too. Um. You know there's a

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Speaker 1: lot of different candidates positions there, and I think businesses

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Speaker 1: are probably weighing what that means for growth going forward,

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Speaker 1: and you know how the administrations would play out. So

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Speaker 1: it's just natural uncertainty that comes with elections. Charles Evans

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Speaker 1: interviewed on Bloomberg Television Asia by Rashad Salomon. Tom, Well,

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Speaker 1: there it is, and that brings in Emmy Joseph Cohen

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Speaker 1: from Abby have you ever seen it like this? It's

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Speaker 1: if we all assume it's not in the textbooks, negative

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Speaker 1: interest rates and what you've heard from Cherry yelling at

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Speaker 1: the Economic Club of New York from President Evans, there,

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Speaker 1: have you ever seen a jumble as we are now

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Speaker 1: in our theory? Now, Tom, I very much like the

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Speaker 1: expression you just used, which is a jumble for those

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Speaker 1: of us who start out as being counters, you know,

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Speaker 1: actually looking at the data and so on. We get

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Speaker 1: a story of a picture narrative in the United States

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Speaker 1: which is reasonably good. US domestic economy showing sustainable economic growth,

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Speaker 1: which is terrific. We're seeing improvements in the labor markets

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Speaker 1: and so on. The biggest jumble right now does appear

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Speaker 1: to be, let's call it, the geopolitical environment, uh, specifically

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Speaker 1: outside the United States. I'll come to the US in

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Speaker 1: just a moment. But the time that you spent this

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Speaker 1: morning on Greece, for example, and Brexit UM and negative

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Speaker 1: interest rates at the top of my list of things

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Speaker 1: that we don't quite know how they work out really

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Speaker 1: do represent um some new UH and something that investors

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Speaker 1: are dramatically puzzling through. The good news about the United

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Speaker 1: States is that our central bank made a very conscious

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Speaker 1: decision during the financial crisis and the severe recession to

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Speaker 1: stay away from negative interest rates for very good reasons.

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Speaker 1: But you know, at the top of the list here

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Speaker 1: of things that we can't count and we can't calculate

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Speaker 1: and we can't model terribly well, of course, UH, the

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Speaker 1: impact of the current political scene domestically surrounding the presidential election.

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Speaker 1: What do you think is most likely to prove of

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Speaker 1: those things to be something that has a lasting effect. Uh,

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Speaker 1: if you could tell me today how the election was

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Speaker 1: going to turn out, then we might be able to

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Speaker 1: judge that. UM. I was very interested in the discussion

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Speaker 1: you had earlier this morning about how the Republican nomination

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Speaker 1: process may turn out. UM. I'd in an interview first

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Speaker 1: week of January in which I was asked who are

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Speaker 1: the who are the nominee is going to be? And

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Speaker 1: I indicated I thought it would be Mrs Clinton, but

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Speaker 1: also Paul Ryan UM trying to give the sense of

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Speaker 1: a contested convention. UM. That does now seem to be

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Speaker 1: an increasingly likely scenario. From an economic standpoint, the thing

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Speaker 1: that I am concerned about, particularly outside the United States,

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Speaker 1: are negative interest rates. You know that that made the

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Speaker 1: decision to stay away from negative rates here because they

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Speaker 1: thought it would be very disruptive. They were concerned about

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Speaker 1: the impact on contracts, for example, and on money market

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Speaker 1: mutual funds and so on, and so one of the

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Speaker 1: things we're all watching carefully is whether the move to

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Speaker 1: negative interest rates in Europe and Japan has actually been effective.

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Speaker 1: And I would say the jury is still owed. Uh,

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Speaker 1: negative interest rates have um something that occurs with him,

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Speaker 1: and that is movement lower in the currency of those

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Speaker 1: nations UM. And one question is whether the somewhat better

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Speaker 1: pace of economic growth in Europe now is that related

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Speaker 1: to the decline in the euro relative to the dollar

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Speaker 1: over the last several quarters or is it something else.

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Speaker 1: The other case to watch, of course, as Japan, where

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Speaker 1: the focus of Albynamics in terms of moving to negative

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Speaker 1: interest rates was to push up the rate of inflation.

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Speaker 1: They're very concerned about ongoing disinflation. And one of the

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Speaker 1: interesting anecdotes over the last couple of weeks is that

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Speaker 1: the group of labor unions that represent workers in Japan

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Speaker 1: actually lowered their wage requests UM and cited negative interest

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Speaker 1: rates is the reason for it. So in this particular case,

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Speaker 1: it had the opposite impact. UH. Clearly, if they're asking

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Speaker 1: for for lower wage increase, that's not inflationary. Let's come back.

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Speaker 1: It'd be Joseph Cohen calling the Republican and Democratic race

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Speaker 1: in January, I might point out MS Cohen called the

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Speaker 1: Washington Capitals to be the best team in hockey. She

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Speaker 1: did that in August of last year. We are in

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Speaker 1: awe and out of the news. In New York, Michael Barr, Tom, Mike,

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Speaker 1: thank you very much. Donald Trump says he would make

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Speaker 1: Mexico pay for a border wall by blocking billions of

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Speaker 1: dollars in payments and immigrants sent back to Mexico. According

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Speaker 1: to a report in The Washington Post, the Republican front

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Speaker 1: runner would force Mexico to pay for the ball by

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Speaker 1: threatening to stop remittances until the nation made a one

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Speaker 1: time payment of five to ten billion dollars to the US.

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Speaker 1: Voters had to polls today in Wisconsin's primaries. Republican Ted

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Speaker 1: Cruz leads in polling in the state. Cruz had a

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Speaker 1: rally last night in Wacasha. All across Wisconsin, all across

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Speaker 1: this country, people are waking up and help is on

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Speaker 1: the way. Cruis and Marca Shaw for the Democrats. Bernie

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Speaker 1: Sanders leads and polling in Wisconsin. Villanova University students are

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Speaker 1: getting a holiday today after their team when the n

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Speaker 1: C double a men's basketball tournament. The university canceled classes

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Speaker 1: as students celebrated in Many fans behaved and they were

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Speaker 1: full of joy. Some fans celebrated on Knucklehead Street police

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Speaker 1: say six people were arrested, twenty five were injured in

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Speaker 1: the celebrations, and one of those arrested was accused of

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Speaker 1: assaulting a state police horse. Global News twenty You know

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Speaker 1: it's nowhere to go after that. Back to you, guys, Chris.

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Speaker 1: Chris Whalen was out on Central Park South last night

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Speaker 1: riding one of those carriacters out the horse, riding one

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Speaker 1: of those carriages around. Why can't we say, from the

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Speaker 1: Vaca Sports let's bring in John's talking about the game,

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Speaker 1: not the horse. Well a should be the one guy

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Speaker 1: who should be forced to go to class today. All right,

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Speaker 1: we made the Finnish to last night's n C Double

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Speaker 1: A Final in Houston. So stunning. Wasn't just the championship

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Speaker 1: winning three pointer at the buzzer by Villanova's Chris Jenkins.

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Speaker 1: It's what happened to get to that point. North Carolina

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Speaker 1: was down ten with under five minutes ago. They got

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Speaker 1: even in remarkable fashion. Heye talking to three here all

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Speaker 1: have hey, just this answer from funny Free here rights

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Speaker 1: at home four point seven seconds to go. Mark this

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Speaker 1: page ties the title game. That's somebody call it was

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Speaker 1: the first Tyson's forty six all Westwood one on the call,

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Speaker 1: but the turning most outstanding player, Ryan rchi Diakano, handed

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Speaker 1: off to Jenkins. He hit the shot that we replayed forever.

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Speaker 1: Noba won seventy seven seventy four. Jenkins will probably never

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Speaker 1: have to pay for him another meal in Philadelphia, so

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Speaker 1: to the Third Tribe, but the Rangers nailed down a

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Speaker 1: playoff birth Port two at Columbus. However, captain Ryan mccuttough

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Speaker 1: left the game locked the shot. Upper body injury will

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Speaker 1: be reevaluated. Today Islanders won five two over Tampa Bay.

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Speaker 1: It'll be cold but a day late. Yankees and Astros

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Speaker 1: set to start the season today at the Stadium in

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Speaker 1: game two for the matches this afternoon in Kansas City

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Speaker 1: with the Bloomberg NBC Sports Update. I'm John's John, Thanks

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Speaker 1: so much, Mike. Did you watch any of the swarry

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Speaker 1: last night? Yes, we know one had to had to

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Speaker 1: tune in. It was It was quite an any I mean,

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Speaker 1: twenty two seconds left Villanova up by three and then

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Speaker 1: uh North Carolina ties it on that amazing three point

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Speaker 1: shot and then who who could have figured what happened

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Speaker 1: at the end? Marvell Technology. We covered this this morning

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Speaker 1: because Mike they they've shown the CEO the door. Thanks

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Speaker 1: to zero Heads for bringing up to Bloomberg headline. We

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Speaker 1: missed things here. Folks were so busy and there's so

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Speaker 1: much news flow. Seven thousand Tuner employees domiciled out of

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Speaker 1: Hamilton's Bermuda in Marvell Technology uh the CEO president employment

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Speaker 1: terminated by board Bloomberg Surveillance. Bloomberg's aveillance brought you by Untucked.

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Speaker 1: a day. If Bloomberg dot Com the Radio plus Mobile

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Speaker 1: act and on your radio. This is a Bloomberg business

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Speaker 1: flash and I'm car in Moscow. This update has brought

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Speaker 1: to you by Bentley Universities. Prepared You project or Millennials

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Speaker 1: ready for the workplace that prepared you research study has

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Speaker 1: answers that might surprise you. Visit Bentley dot E d

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Speaker 1: U slash prepared to download an infographic overview. America's trade

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Speaker 1: deficit widen in February to s six month high as

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Speaker 1: an increase in imports exceeded a more modest pickup and

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Speaker 1: shipments overseas. The gap increased two point six percent to

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Speaker 1: forty seven point one billion dollars from a revised forty

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Speaker 1: five point nine billion in January at ten o'clock Wall

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Speaker 1: Street time to get the Jolts Jobs reports the end

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Speaker 1: jumping to a seventeen month high. Government bonds are climbing

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Speaker 1: is increasing. Concern that global economic growth is faltering stokes

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Speaker 1: demand for haven assets. Stocks are falling around the world.

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Speaker 1: To check the markets every fifteen minutes throughout the trading

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Speaker 1: day on Bloomberg SNP EVENI futures down eighteen points downie

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Speaker 1: Many futures down a hundred twenty nine and Nasdaki many

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Speaker 1: futures down thirty four decks. In Germany's down two point

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Speaker 1: or two and a half percent. Ten Your treasury up

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Speaker 1: twelve thirty seconds, the yield one point seven two percent. Now,

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Speaker 1: I'm ex scrude oil down eight tenths per cent or

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Speaker 1: twenty nine cents to thirty five forty one A barrel

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Speaker 1: comes gold is up one point four percent, or seventeen

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Speaker 1: dollars fifty cents at twelve thirty six eighty announced the

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Speaker 1: euro a dollar thirteen seventy seven, the yen one ten

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Speaker 1: point five nine. That's a Bloomberg Business Flash, Tom and

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Speaker 1: Mike Karen, thanks so much. It is on Wall Street.

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Speaker 1: The following is from Bloomberg View. Opinions and commentary from

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Speaker 1: Bloomberg columnists. I'm Justin Fox, columnist for Bloomberg View. We've

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Speaker 1: been hearing a lot about the growth of the gig economy.

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Speaker 1: Now we actually have some numbers. Two economists, replicating a

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Speaker 1: survey that the government stopped doing in two thousand five

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Speaker 1: due to funding constraints, have found that the share of

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Speaker 1: US workers in alternative work arrangements rose from ten point

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Speaker 1: one percent and two thousand five to fifteen point eight

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Speaker 1: percent and two thousand fifteen. This accounted for all the

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Speaker 1: net employment growth in the US over those years. These

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Speaker 1: alternative workers are independent contractors, on call workers, and workers

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Speaker 1: provided by contract firms and temporary help agencies. Few are

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Speaker 1: getting their gigs via online platforms such as Uber or

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Speaker 1: task Grabbit. That shouldn't be too surprising. This survey aimed

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Speaker 1: to identify people with alternative work arrangements in their main jobs,

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Speaker 1: and other studies have found that most people selling services

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Speaker 1: in the online gig economy are moonlighting. What is a

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Speaker 1: little surprising is that workers fifty five and older and

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Speaker 1: those with college educations are much more likely to be

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Speaker 1: in alternative work arrangements than others. The growth of the

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Speaker 1: gay economy is being driven not so much by struggling

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Speaker 1: millennials as by well educated sixty year olds. I'm justin Fox,

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Speaker 1: a columnist for Bloomberg View. For more Bloomberg opinion and commentary,

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Speaker 1: please got a Bloomberg View dot com or view, go

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Speaker 1: on the Bloomberg terminal. This has been Bloomberg View and

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Speaker 1: Bloomerview commentaries come here in hourly weekdays. I'm Bloomberg Radio.

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Speaker 1: Abbe Joseph Cohen with us with Golden Sachs obviously uh.

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Speaker 1: She is institute president and senior investment strategist for them.

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Speaker 1: Abbey um, let's cut through the mathematics of the c

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Speaker 1: f A institute. Let's cut through the reaction functions. I

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Speaker 1: love Glenn Hubbard's question to chere yelling on reaction functions

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Speaker 1: the other day, and let's talk about common sense. Would

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Speaker 1: you please explain how I can retain ownership of shares

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Speaker 1: or acquire shares this morning? And an iconic American blue

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Speaker 1: chip seventeen billion in revenues, trading at twenty five times earnings,

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Speaker 1: with a two percent yield, two point two percent yield,

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Speaker 1: and it's dividend growth to seven point five Yet everybody

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Speaker 1: loves it. Why are we buying these consumer stocks and

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Speaker 1: pricing them to perfection? We're doing that, Tom, and that's

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Speaker 1: a wonderful question because people are nervous. You know, as

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Speaker 1: we spoke about earlier, there's a whole long list of

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Speaker 1: things that are troubling people. Some of it related to

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Speaker 1: the economy, some of it related to the political environment,

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Speaker 1: and some of it related to the rest of the world.

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Speaker 1: But the valuation work that we do, which we think

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Speaker 1: is an important part of industry selection and stock selection,

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Speaker 1: shows that there is now there's very wide diversions before

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Speaker 1: between the so called safe names and the ones that

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Speaker 1: depend upon some economic growth UM, and our feeling is

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Speaker 1: that that's where you go for the opportunity UM. You know,

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Speaker 1: there's a way to use evaluation model to reverse engineer it.

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Speaker 1: If you assume, for example, that today's price is correct,

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Speaker 1: you can then solve it and say, okay, what is

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Speaker 1: the five year earnings growth number that would make today's

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Speaker 1: price the right number. And by the way, in March

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Speaker 1: two thousand nine, which turned out to be the bottom

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Speaker 1: of the bearer market, the overall SMP five hundred was

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Speaker 1: trading as if five year earnings growth each and every

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Speaker 1: year would be a minus eight to minus ten. So,

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Speaker 1: if you use the same sort of analysis today, which

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Speaker 1: of the industries and sectors that look most attractive because

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Speaker 1: what's being priced in is negative earnings growth And at

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Speaker 1: the top of the list would be names like financials, industrials, UH, telecom,

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Speaker 1: and healthcare. Well, if you're looking at those, how long

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Speaker 1: is it going to take to get to, you know,

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Speaker 1: the point where it's worthwhile? UM? Also very interesting question,

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Speaker 1: and I will turn it back to you and say

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Speaker 1: when will people being nervous about item number one the

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Speaker 1: presidential election? And with history basically shows is that as

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Speaker 1: you approach November and as it becomes increasingly clear who's

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Speaker 1: going to win, markets tend to calm down, and they

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Speaker 1: tend to take on a longer time horizon. By the way, UM, usually,

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Speaker 1: but not all the time, in the United States, the

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Speaker 1: candidate with the most popular support becomes president UM, and

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Speaker 1: so most people feel increasingly good about the environment because

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Speaker 1: most people are supporting the winner. UM. The other thing,

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Speaker 1: of course, that is very much up in the air

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Speaker 1: is the global economy. UM. We are UM a bulwark

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Speaker 1: of strong growth in the United States. It's on a

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Speaker 1: relative basis UM. And the concerns that we have really

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Speaker 1: related to Europe UM, Latin America and some parts of Asia.

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Speaker 1: But there's a hard matter. Have you one more question

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Speaker 1: and will let you go. I just created a chart

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Speaker 1: for tomorrow's television show which shows the miracle of US

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Speaker 1: nominal GDP since the ugliness of OH eight, as compared

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Speaker 1: to the animal spirit nominal GDP of the Eurozone. Do

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Speaker 1: you buy the value of these troubled economies or do

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Speaker 1: you go with the creative destruction of the United States

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Speaker 1: where yeah, it's recovered, but there's further to go. Which

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Speaker 1: way is it? My preference, UM is the US, And

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Speaker 1: some of my Goldman SAX colleagues may disagree with me.

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Speaker 1: But when I take a look at some of these

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Speaker 1: other nations, I say, you know what, they're dealing with

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Speaker 1: some longer term structural issues. Their potential economic growth has

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Speaker 1: been hurt by their failure to invest in the future.

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Speaker 1: They have very slow population growth, UM, and they they're

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Speaker 1: not as innovative as as is the United States, So

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Speaker 1: I I always come back UM to the US. The

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Speaker 1: other thing I would point to is that we have

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Speaker 1: had much more effective government policy. Our FED and other

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Speaker 1: regulators really took a tough love approach during the financial

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Speaker 1: crisis in early stages of the recession. That's just now

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Speaker 1: happening in some of these other countries, and that does

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Speaker 1: have a problem. What I would love to see in

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Speaker 1: the US, though, is more effective use of fiscal policy.

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Speaker 1: Let's take advantage of these low interestrates to do things

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Speaker 1: like build and rebuild our infrastructure. And it's not just

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Speaker 1: the roads and the bridges, it's also high speed broadband

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Speaker 1: access for everyone. Here Abby Joseph Cohen on tough love.

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Speaker 1: She learned all that from Barry Trots of the Washington Capitals.

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Speaker 1: We know she did that. We'll have her back on

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Speaker 1: as the Stanley Cup comes through, and uh get her

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Speaker 1: hockey update here on the Hockey Network. Ms Cohn is

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Speaker 1: with Goldman Sex Mike Valiant headlines which are like so

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Speaker 1: what except the stock moves nice up plus move Valiant

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Speaker 1: shares at the moment of since it wasn't as much

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Speaker 1: as sevented immediate reaction to a release from Valiant and

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Speaker 1: saying a special board committee found no additional accounting issues

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Speaker 1: at the company that would require more restatements. It plans

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Speaker 1: to file its annual report. Remember it had been delayed

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Speaker 1: on or before. It is a rounding era after the

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Speaker 1: drop in the middle of March from seventy down to

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Speaker 1: six and the last oh a couple of weeks. Then

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Speaker 1: excuse me, the last ten trading days have really been

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Speaker 1: ugly for Valiant. Not dramatic. Nevertheless, this is a stock

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Speaker 1: that couldn't find a bid. It does this morning because

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Speaker 1: Mike mentions up over TENET one is the active pre marketing.

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Speaker 1: We'll see where that goes twenty nine. Excuse me. That

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Speaker 1: gets it back to evaluation of Oh, I'm gonna call

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Speaker 1: it marche. We'll see once the stock opens and it's

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Speaker 1: about we've got Abbie Joseph Cohen on Love or Hater.

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Speaker 1: Everybody loves to hear from Ms Joseph Cohen. You go,

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Speaker 1: should we cut off amby Joseph to talk about Valiant?

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Speaker 1: But this time we make the decision because we did

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Speaker 1: get a Valiant stock move in the stock. It has

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Speaker 1: been a big news the NFL is apparently confirming the

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Speaker 1: Twitter deal, but they're still not telling us what is it,

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Speaker 1: what they're going to pay for this. They're not going

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Speaker 1: to pay, but what is it little tweets? He has

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Speaker 1: no They're going to on the moment apparently on the

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Speaker 1: moments uh part of the app, they're going to stream

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Speaker 1: the game and then side by side you can watch

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Speaker 1: tweets about the game. Um, we know that NBC paide

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Speaker 1: billion dollars for rights for the next five years or

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Speaker 1: so too to carry this, So I mean this is

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Speaker 1: a this is an expensive game to get into million

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Speaker 1: a game NBC InCom CBS. You wonder where all this

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Speaker 1: million again five years because like in hockey, NBC Sports

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Speaker 1: has the game or MSG or this, that or the

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Speaker 1: other thing. And you want to get an Apple TV

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Speaker 1: and you can Bloomberg surveillance on Twitter. We're actually we're there.

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Speaker 1: We're streaming on streaming. I say on Twitter, we pay them.

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Speaker 1: It's Bloomberg surveillance.