Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
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Speaker 1: your top story. It is ECB decision Day. In the
Speaker 1: next hour, Presidents Drag and the ECB set to announce
Speaker 1: cuts the growth and inflation forecast. Investors waiting to see
Speaker 1: what policy options the Governing Council reaches for. Here in
Speaker 1: New York to discuss is David Rosenberg, Gluskin Chef, chief
Speaker 1: economist and strategist. Good morning to David. The first job
Speaker 1: of President dr KEI today is to do one well.
Speaker 1: The question is going to be, um, whether he's going
Speaker 1: to be incremental and wait till the April ECB meeting
Speaker 1: UH truly sound more forceful, or whether he will do
Speaker 1: it today. Um. There's no question that there will be
Speaker 1: some sort of shift in the rates guidance, uh, in
Speaker 1: terms of you know, well known leave rates on hold,
Speaker 1: you know right now it's through the summer. I expect
Speaker 1: that he's going to say that rates will be on
Speaker 1: hold through the end of UH the year UH. And
Speaker 1: the question is really going to be, um, what he
Speaker 1: says about the t l TROP program to help both
Speaker 1: the belieguered banks, especially in Italy. And so the question
Speaker 1: is really going to be not whether he's going to
Speaker 1: be dovish every central banks to any more dovish right now,
Speaker 1: but the question is going to be is he gonna
Speaker 1: wait till April to be more forceful or is he
Speaker 1: going to choose to be more incremental. So we're gonna
Speaker 1: hear a lot about tel trips. I imagined in the
Speaker 1: next couple of hour they targeted long term refinancing operations.
Speaker 1: This to me doesn't sound too stimulative. This seems to
Speaker 1: be about preventing a credit crunch from materializing more than
Speaker 1: stimulating the Eurozone economy. Absolutely. I mean, this would be
Speaker 1: just a pure and simple insurance policy against back stopping
Speaker 1: the banking system. I think the other issue is going
Speaker 1: to be what and this is really what's going to
Speaker 1: be critical, because certainly what the Eurozone could also use
Speaker 1: from a stimulus standpoint, considering how weak the manufacturing sector
Speaker 1: has been everywhere and especially even in Germany, UM is
Speaker 1: that they need a weaker euro, they need to shift
Speaker 1: their rates guidance. You see, this is what's happened, is
Speaker 1: that the Fed has already taken out whatever rate hikes
Speaker 1: were priced in several months ago. I think that the
Speaker 1: ECB has to change its rates guidance that um that
Speaker 1: there are really no increases coming for the resueable future,
Speaker 1: and not even put a time stamp on it like
Speaker 1: they've already done. The present rate guidance is to redundant,
Speaker 1: isn't it, David Well, I think that what you want
Speaker 1: to start doing is is reinforced the notion that you
Speaker 1: know that the next move could actually even be an
Speaker 1: ease uh. Interesting, And so I think that I think
Speaker 1: that that's something that we have to consider. You've got
Speaker 1: to say, draw bank here. There's no doubt they're going
Speaker 1: to cut their growth forecast, and not just a growth forecast.
Speaker 1: Remember it's a central bank of the inflation mandate, uh.
Speaker 1: And they're going to cut the inflation forecast before they've
Speaker 1: even reached their target. That actually says to me, as
Speaker 1: you know, as bizarre as it might sound, looking at
Speaker 1: how stimulative ECB policy is that when the benchmarket against
Speaker 1: where we are in the cycle, the level of the
Speaker 1: up book gap and disinflationary pressures that that perhaps the
Speaker 1: easing cycle there shouldn't be ending as quickly as it did.
Speaker 1: I mean, remember they ended quantitative easing at the end
Speaker 1: of last year. Look, it may have been just a
Speaker 1: little bit too premature, David. Some people have said the
Speaker 1: ECB and the Government Council over the last few quarters
Speaker 1: has been incredibly complacent. We heard through the back half
Speaker 1: of last year that the slowdown would be temporary, that
Speaker 1: it would fade, that things would bottom out. The slowdown
Speaker 1: bled into quite clearly. There are some signs in services
Speaker 1: and the labor market that things are stabilizing. Is there
Speaker 1: a chance that the ECB focuses on that today and
Speaker 1: actually sees a reason to be patient and not do
Speaker 1: anything just yet. I think that would be a big mistake. UH,
Speaker 1: And even people who are focusing on the service sector
Speaker 1: p MHIG data in the United States, UH, services are
Speaker 1: inherently sticky. They're not nearly a cyclical as the goods
Speaker 1: producing sector is manufacturing globally and including Europe, is in
Speaker 1: various stages of disarray. UH. Services ultimately, and you talk
Speaker 1: about the labor market, everything ultimately, services the goods producing sector. Uh,
Speaker 1: and it's extremely weak. And I think that's what we
Speaker 1: be focused on right now. And I said before, let's
Speaker 1: leave the economy aside. Uh. The truth is always in
Speaker 1: the price. If you're cutting your inflation targets, your inflation forecast,
Speaker 1: and if inflation is below your objectives, uh, the price
Speaker 1: numbers are telling you about the state of domestic demand.
Speaker 1: And so right there, I think that deserves a shift,
Speaker 1: a big shift in the tone by the central banks.
Speaker 1: David Rosenberg, No one but you owns the slicing and
Speaker 1: dicing of inflation. You've absolutely killed it, maybe along with
Speaker 1: Gary Shilling on a low interest rate regime, a low
Speaker 1: inflation regime is well, what do you say to the
Speaker 1: inflation optimus, not the inflation eastas, but people that say
Speaker 1: we'll get a bid to price? Can we do that
Speaker 1: in an age of oversupply? Well, look, we we just
Speaker 1: got the most up to date anecdotal information on one
Speaker 1: inflation looks like in the US, what's it looking yesterday's basebook? Well, look,
Speaker 1: we are seeing some cost pressures, uh, partly from the tariffs,
Speaker 1: partly from labor in the terms of tight labor markets.
Speaker 1: Of course, that's a lagging indicator. What are the base
Speaker 1: book tellers yesterday that companies increasingly are having trouble passing
Speaker 1: on their cost increases in the final prices. That tells
Speaker 1: me that there's a concern about inflation. It's more on
Speaker 1: costs and it is on final prices. That tells me
Speaker 1: that we're going to have margin pressure. Maybe that's more
Speaker 1: of a problem for the stock market than it is
Speaker 1: for anything else. But look big picture. Um, you know,
Speaker 1: we we did have a modest inflation cycle this time.
Speaker 1: Core inflation bottomed at point six percent. It peaked at
Speaker 1: two point four percent. I don't think most people realize
Speaker 1: that this was the lowest peak and core inflation in
Speaker 1: the United States in the post World War two experience.
Speaker 1: And that includes the UH, the the the Clever Family
Speaker 1: of the nineteen fifties. We've never seen cor inflation peak
Speaker 1: at such a low level despite everything we threw at it. Like,
Speaker 1: I'm still surprised people are talking about inflation. Uh. We
Speaker 1: threw two rounds of huge fiscal stimulus at the situation
Speaker 1: zero percent interest rates for the better part of seven
Speaker 1: or eight years, relentless quantitative easings, and and that the
Speaker 1: peak and cor inflation was two point four. You know
Speaker 1: there's no inflation for New York Islanders tickets. I mean
Speaker 1: you and I could go see Canadians Islanders March fourteen
Speaker 1: for half the price. We'd see it at the Forum
Speaker 1: or the Madison Square Guard. Well that's half the price
Speaker 1: to you. But I'm playing it in Canadian dollars. So
Speaker 1: you've got attack from me. Okay, Well, what's gonna happen there?
Speaker 1: Unless you're treating? Can you know why I'm treating? Can
Speaker 1: we do that? John? I don't know if we can.
Speaker 1: Maybe if we take you it's called a mercy mission,
Speaker 1: that would be a great place for you. That would
Speaker 1: be a great place for you to see a first
Speaker 1: hockey game. Seriously, Yeah, it's a it's a dump of
Speaker 1: an arena. They've redone it like the old expense it
Speaker 1: Reddo will pick it up, red O, Keeper of the
Speaker 1: m X David give us an update at the time
Speaker 1: we've got left with you on the chaos politically in
Speaker 1: your Canada. Well, look, I would say that it's a
Speaker 1: little overblown. Um and uh uh. You know the situation
Speaker 1: with Lavlin from something that happened a decade ago, and
Speaker 1: you know the extent to which the Prime Minister in
Speaker 1: his office, you know, pressure the Attorney general. I mean
Speaker 1: this is actually in many respects um part for the course,
Speaker 1: as far as UH Government Canada is concerned, it was basically, um,
Speaker 1: you know, the Attorney General claiming that there was a
Speaker 1: lot of undue pressure on so on and so forth. UM.
Speaker 1: I just think that the problem is more of that
Speaker 1: the Prime minister, that Prime Minister Trudeau you know, came
Speaker 1: in um with a really squeaky clean image and um
Speaker 1: and portrayed that on it and and you know, and
Speaker 1: so look you go back to Stephen Harper. His big
Speaker 1: scandal was was, if you remember, it was the Mike
Speaker 1: Duffy affair, which was a bit of a joke. You
Speaker 1: know when you take a look at the US and
Speaker 1: the stuff happening, um, you know in Washington, what's happening
Speaker 1: in Ottawa now is actually pales in comparison. But you know,
Speaker 1: when you benchmarket once again against you know, UM, a
Speaker 1: squeaky clean image and all of a sudden, there's a
Speaker 1: chink in the armor and next thing you know, it's
Speaker 1: making front page news. But it's it's it's it's I
Speaker 1: would say, overblown. You're montro Canadians fans, somehow you get
Speaker 1: the Ottawa Senators worst in the world into it. David Rosenberg,
Speaker 1: thank you so much, greatly appreciated this morning with Guskin
Speaker 1: chef important comments there is we go to what I
Speaker 1: thought it would be a joke, John, and all of
Speaker 1: a sudden the ECB meeting is like the real deal
Speaker 1: right now. William Lee with his Billy of Milk and Institute,
Speaker 1: with his tour duty at the International Monitor Very Fund
Speaker 1: and was City Group. Of course, we can only speak
Speaker 1: about a record trade deficit back of solid ten even
Speaker 1: eleven years, Billy, I want to talk about the terroriffs
Speaker 1: in the short time we've got with you this morning.
Speaker 1: Can we just eliminate the terroiffs? Can China pull back tariffs?
Speaker 1: Can we pull back tariffs and basically start all over.
Speaker 1: We have to because China desperately needs to boost its
Speaker 1: economy and the only way they're going to be able
Speaker 1: to do that is to restore trade to where it
Speaker 1: was before, because their experiment of trying to do fiscal
Speaker 1: policy right now may or may not work because they've
Speaker 1: never done fiscal policy without a lot of critic growth.
Speaker 1: So tariffs have to go down as far as we're concerned, Uh,
Speaker 1: the farmers are suffering, and I think Trump's political base
Speaker 1: is one where the farmers and manufacturers have to reassured
Speaker 1: that job growth is there. I asked this of our covins,
Speaker 1: A really let me ask it of you. Do you
Speaker 1: see any indication in Washington that Mr Trump and his
Speaker 1: political team will listen to Mr Lightheiser, Mr Cudlow and
Speaker 1: the rest. Well, He's gonna listen in a very careful
Speaker 1: sort of way, because look at the sequence of negotiations
Speaker 1: he's done. He's allowed the farmers to get their deals.
Speaker 1: He's allowed the manufacturers to have their deals with some
Speaker 1: of the terrorists protecting them. But as far as intellectual
Speaker 1: property protection and and and and other more nasty parts
Speaker 1: of the trade discussion, he's letting that go. He's letting
Speaker 1: that slide. Why is that because that benefits Silicon Valley
Speaker 1: and let's face it, he's not going to get the
Speaker 1: California electoral votes. So as far as helping his basis
Speaker 1: concern Trump, President Trump has done exactly the right thing
Speaker 1: in terms of sequencing what's important for them and allowing
Speaker 1: the rest of the deal to to gather momentum later on.
Speaker 1: But this really concerns me. I think the administration has
Speaker 1: done a terrific job of getting the Chinese to come
Speaker 1: to the table. We're so close to getting some real concessions.
Speaker 1: Wouldn't be be a massive wasted opportunity to focus on
Speaker 1: the trade balance and not address these bigger issues. Boy, Johnny,
Speaker 1: I can't agree with you more. And and you know,
Speaker 1: all this discussion about whahwih that's just the opening rounds
Speaker 1: in the war of intellectual property protection, because let's face it,
Speaker 1: no one has faith in corporate governance in China. CTE
Speaker 1: is a great example of of of having a company
Speaker 1: pay fines, put in uh changes, in structural changes in
Speaker 1: the board, and we don't believe them. What's gonna happen
Speaker 1: with Yahwei? Especially in the world of five G where
Speaker 1: everything is equipment related and and and the the probability
Speaker 1: of their sticking and spying material into those equipment in
Speaker 1: the Europe and every place else, even here in rural
Speaker 1: US is very, very high. And those are the issues
Speaker 1: that need to be discussed. And Lightheiser is saying that
Speaker 1: maybe enforcement mechanism comes along with more frequent discussions, Well,
Speaker 1: good luck on that. But I think many people find
Speaker 1: this absolutely infuriating, the idea that Huawei is suing the
Speaker 1: US government for barring its equipment from certain networks. If
Speaker 1: the US had the same ability to do the same
Speaker 1: in China, can you imagine how many US companies would
Speaker 1: be lining up suing the Chinese government to get access
Speaker 1: into China. Try getting it, Try getting a judicial reward
Speaker 1: in China for US company. But but you're absolutely right there.
Speaker 1: But this whole, as I said, this is just the
Speaker 1: opening rounds of that screw miss that we're gonna see
Speaker 1: for years and years on how it is that we
Speaker 1: can protect intellectual property and security at the same time
Speaker 1: lower the cost and and and let's not forget Yahwei
Speaker 1: and Ztes. Supply chain is intimately linked to the US
Speaker 1: because when we shut off our suppliers to to those companies,
Speaker 1: they almost went bankrupt. It's a John's insight that we're
Speaker 1: close to some kind of deal. From where you sit, Bill,
Speaker 1: is that true? Are we close to some kind of
Speaker 1: deal or are we gonna do another Hannoy? That's the key, Tom,
Speaker 1: I'm ask I think he can very well walk away
Speaker 1: right now because he's gonna show he's gotta solid he's
Speaker 1: gotta have a solid political base, and he's got to
Speaker 1: show that he's tough and he's willing to walk away
Speaker 1: from a bad deal. What happens when he walks away?
Speaker 1: The markets are gonna collapse. I think everyone has priced
Speaker 1: in some kind of a deal that that if he
Speaker 1: were to actually walk away, I think he's better have
Speaker 1: some plan be in mind to be able to restot markets,
Speaker 1: because otherwise I think we could have a massive crash
Speaker 1: in the all the global equity markets and and other markets.
Speaker 1: I just think that way I thinks are lined up
Speaker 1: to go full circle. To Bill's earlier comments, you hear
Speaker 1: more and more about the American farmer. It looks like
Speaker 1: a deal that's going to be centered around the trade balance,
Speaker 1: perhaps the purchase of more agricultural goods. And to your
Speaker 1: great point, Bill, it's going to be very very difficult
Speaker 1: if you want a quick deal, it's going to be
Speaker 1: very very difficult to get the stuff that really matters,
Speaker 1: the structural issues technology transfer, I p theft. What happens
Speaker 1: with Trade Representative Lighthiser if he doesn't get the deal
Speaker 1: that he wants. I assume that there's going to be
Speaker 1: some people that walks away. Well, unless Trump starts to
Speaker 1: wave the flag of we have put in place of
Speaker 1: mechanism for enforcement, and that is yet to be done.
Speaker 1: I think if he starts waving that around, Lighthouser will
Speaker 1: stay to try to make that work. Billy, thank you
Speaker 1: so much. Thanks Institute today on our international economics joining
Speaker 1: us on the phone. Jeffrey's international chief financial economist is
Speaker 1: joining us right now. Great to have you with us,
Speaker 1: Sir David. David walked me through your first tape. Please. Well,
Speaker 1: I mean, the surprise to us is that they unveiled
Speaker 1: the series of measures today. We were expecting something either
Speaker 1: in April or June. Obviously we knew that the ECB
Speaker 1: was going to be dubbish, but we expected the announcement
Speaker 1: of the package the announced today to actually have been
Speaker 1: delayed to a future meets at meeting, but the good
Speaker 1: thing is it's it's all wrapped in together, and as
Speaker 1: you were saying a moment ago, it does rather tie
Speaker 1: the hand of marrow drags. It's quite clear they're trying
Speaker 1: to engineer um a much stronger Eurozone economy going forward.
Speaker 1: In particular, obviously the Ford guidance on rates has been
Speaker 1: moved back that they're going to keep rates at these
Speaker 1: levels until at least through the end of this year,
Speaker 1: from the end of the Studdler previously. Secondly, they're obviously
Speaker 1: introducing these under tel throws for two years, which is
Speaker 1: targeted to lending to numberlancal corporations as the households, but
Speaker 1: in particular as well. These are at variable rates, so
Speaker 1: they're giving a clear here that they do expect over
Speaker 1: the next two years or so rates to start rising.
Speaker 1: But David, this is important. You were Jefferies, a wonderful
Speaker 1: and international firm. You were Dressner Kleinwood before, so you
Speaker 1: understand continental banking and continental central banking. Can they be
Speaker 1: optimistically preemptive? Is there any history that they can get
Speaker 1: out front of a slowdown in Europe? I observe no
Speaker 1: history where they've been able to do that. You're quite right,
Speaker 1: some in the sense they had over the years tending
Speaker 1: to lack developments. But I think in terms of the
Speaker 1: slowdown that we saw in the latter stages of last year,
Speaker 1: in particular whose reign met much led by the slowdown
Speaker 1: that we saw more generally in trade, also trade within
Speaker 1: the Aurozona itself, UM and also particular issues like autos
Speaker 1: in Germany and the weakness more generally consumer durable spending.
Speaker 1: If you look as other evidence of domestic demand, though
Speaker 1: they've actually been picking up reasonably uh strongly, and employment
Speaker 1: to games up in the fourth quarter of last year.
Speaker 1: Wage inflation continues picking up. Wage inflation around the arizonas
Speaker 1: picked up early decisively, and even bank lending has picked
Speaker 1: up pretty decisively in most countries. Of the exceptional course
Speaker 1: of Italy and Spain, and the Teltro's were very much targets.
Speaker 1: I think that those two are sort of countries particularly
Speaker 1: trying to foster greater loone growth going forward. So now
Speaker 1: the interesting thing I've also add is the incoming ECB
Speaker 1: Chief economists as of as of mays ear Fini Lane
Speaker 1: currently the Central Bank Governor of Ireland, and he's very
Speaker 1: much focused on imbalances, macrovidential policies, um and income. In
Speaker 1: this environment, he there will be much more focused on
Speaker 1: actually heading off in balances in a world where the
Speaker 1: ECB is still anchoring rates very much at the floor
Speaker 1: and trying to get bank lending growth going in all
Speaker 1: these other countries, You've got a situation at the moment
Speaker 1: where bank lending growth in Belgium to another tactrical rations
Speaker 1: is growing at almost ten percent year on year UM.
Speaker 1: It's also very strong in Germany, it's pretty strong in
Speaker 1: France UM. And you know ECB will be aware of
Speaker 1: these imbalances they start developing. David, you mentioned the successor
Speaker 1: to Peter Pratt as the chief economist of the ECB.
Speaker 1: Let's talk about the successor of the president. The president
Speaker 1: dragon just tie the hands of his successor a little bit,
Speaker 1: at least for the first few quarters. Yeah, you're absolutely right.
Speaker 1: I mean, he's he's he's I mean, but what they
Speaker 1: would argue is that their their guidance can change. So
Speaker 1: if we go through into the middle of this year,
Speaker 1: stay June, and you know, indicators are now pointing better
Speaker 1: and core inflation sees the picking up some traction, the
Speaker 1: guidance from the ECB can change. Obviously, these telt rows
Speaker 1: are going to be in play now until March of
Speaker 1: two thousand twenty three UM. Because you know, but in
Speaker 1: that period obviously between now and the end of two
Speaker 1: thousand and twelve, as two thousand trade two, they can
Speaker 1: opport raise interest rates UM. And you know rates could
Speaker 1: It's funny stifferently over the next two years anyway, But
Speaker 1: at the moment they're still in this environment where they
Speaker 1: just want the anchor expectations, get bank lending, going help
Speaker 1: out Italian banks, in Spanish banks to some degree, um,
Speaker 1: and achieve a state lusty in the way for the
Speaker 1: europe generally. Ask you this because you're the Jeffrey, so
Speaker 1: I think you're not going to be jeopardized by your
Speaker 1: General Council. Isn't all of this hinged unclearing commercial banking
Speaker 1: in Europe? And do you see any indication David on
Speaker 1: that ECB and other regulators actually wanted once and for
Speaker 1: all clear out troubled EU banking. Well, they certainly do,
Speaker 1: and obviously and the regulate the national level and the
Speaker 1: supernational level. They're trying to achieve that, um. But it's
Speaker 1: very to work in progress and they're they're working through
Speaker 1: all the issues in you know, every country has different issues. UM.
Speaker 1: The banking sector in general in the Eurozone, as you know,
Speaker 1: is is very large, it's very fragmented. Um. There's very
Speaker 1: different banking models that exists across country. So you've got
Speaker 1: very different um sort of profit margins um for the
Speaker 1: same bank operating in different regions of the Aurozone. Obviously
Speaker 1: they're trying to move it to you know, a one,
Speaker 1: one stop banking sector as you have in the US
Speaker 1: in a sense and we have here in the UK.
Speaker 1: But they're starting out from where they are and it's
Speaker 1: it's only work in progress, and obviously none performing loans
Speaker 1: remain an issue in some countries. Very large bounce sheets
Speaker 1: um still remain in others. Some of these banks all
Speaker 1: very large. Let's sleeve it there, David, and thank you
Speaker 1: so much. With Jeffreys, appreciate that. Actually, last wing and
Speaker 1: I are going to digress right now. We've been watching
Speaker 1: Europe blow up, and maybe we'll fold that into our discussion.
Speaker 1: But right now, the woman who gives us more mail
Speaker 1: and technical analys than anyone breathing, and that would be Louise.
Speaker 1: She is definitive and the courage to look at long
Speaker 1: term charts. Louise, I want to look back after this
Speaker 1: historic moment known as December January, in February, in November,
Speaker 1: what did your long term charts say about all that
Speaker 1: volatility coming Well, we had been cautious for several months
Speaker 1: before the December dropped. So the longer term monthly momentum
Speaker 1: went negative in October, so that was a warning among
Speaker 1: other indicators that suggested things weren't quite ready to continue
Speaker 1: to move up. Okay, and then you enjoyed Did you
Speaker 1: load the boat December? I mean you didn't know. We didn't.
Speaker 1: I'm sorry to say, but um, we we prefer to
Speaker 1: wait and see what the longer term indicators tell us.
Speaker 1: And to be honest with you, they're still on a sell,
Speaker 1: believe it or not. And now the daily momentum has
Speaker 1: moved into a cell. So that allowed us to at
Speaker 1: least suggest here that we're going to have some kind
Speaker 1: of a pullback. We did a schematic of a big
Speaker 1: w sort of similar to what happened in the fall
Speaker 1: of last year. Um, if we were to come down,
Speaker 1: maybe seven up and down, you'd have a consolidation that
Speaker 1: would give you a configuration that then might support new
Speaker 1: highs if in fact the market is going to choose
Speaker 1: to do that. But if we don't hold with a
Speaker 1: seven percent pullback, then we may be looking at something
Speaker 1: a little more severe. I think it's a very selective
Speaker 1: market out there, and a lot of the advancing statistics
Speaker 1: UM would be the same stocks going higher and higher
Speaker 1: I mean, look at his eye links that just keeps
Speaker 1: going up and up and up, and yet you have
Speaker 1: practically all the energy stocks that are nothing more than
Speaker 1: kickbacks into resistance. So, Luise, what are you know, given
Speaker 1: that you're still cautious, what are the main contributors to
Speaker 1: you look at the main charts, the main data points
Speaker 1: that you look at that keep you a little bit
Speaker 1: on the sidelines. It's mainly the monthly monthly momentum cell.
Speaker 1: If we go back to we got our cell signal
Speaker 1: prior to the actual declines, and it remain negative through
Speaker 1: the test of the low, and then until we were
Speaker 1: just about to lift through resistance, we got the buy signals.
Speaker 1: So basically, having sold and then bought at the same price,
Speaker 1: you you eliminated all that adda in the middle. Well, Luise,
Speaker 1: you take one to three and you get and you
Speaker 1: take level your mata. Right. So, Luis, if if I
Speaker 1: still want to buy stocks and you're you're telling me
Speaker 1: to be cautious here in the US, are there some
Speaker 1: international markets that maybe look better from from your perspective? Uh, Well,
Speaker 1: Switzerland certainly has been doing better than any of the
Speaker 1: other European area um markets, and of course you've gotten
Speaker 1: the lift in Shanghai in the China market. Um, most
Speaker 1: of the foreign markets that we follow have run into
Speaker 1: resistance here, and I think it's going to be a
Speaker 1: question of how they navigate it. Um. Most of them
Speaker 1: remain on monthly cell signals, so we watch carefully and
Speaker 1: it's very selective. What we've essentially said to clients is,
Speaker 1: if you're going to play a stock that breaks out,
Speaker 1: just crazing your trailing stop loss. Anytime Louise Yamada shows up,
Speaker 1: I get the email. Okay, all this chit chat's fine,
Speaker 1: just ask her about gold. Now we now have Louise
Speaker 1: fundamental types talking up gold. I'll cite Jeff Curry at
Speaker 1: goldban Sex. You are a gold bull, right, we have
Speaker 1: been more constructive on gold. I necessarily say a gold bull,
Speaker 1: but we did go more positive on gold over the
Speaker 1: past couple. Okay, what's the wire and go back to
Speaker 1: Yamada's speak. Is it because you're seeing distribution that's constructive? Uh? No,
Speaker 1: it's because we were seeing, um, what might have been
Speaker 1: defined as perhaps a five year base going back to
Speaker 1: let's see below, was probably fifteen and you've got a
Speaker 1: few years of consolidation on the downside to the left
Speaker 1: and a few years of consolidation on the upside to
Speaker 1: the right. Um. We would have liked to have seen
Speaker 1: this move closer to fourteen hundred, but it was through
Speaker 1: fourteen hundred that we would need to have seen. We
Speaker 1: haven't seen it yet, but you still was in the
Speaker 1: short term up trend. That's a classic Louisia Matta there
Speaker 1: with a five year base the day traders over TD
Speaker 1: ameritraty going weight right. I can't work with that. I
Speaker 1: can't are that today, So Louise, how about on the
Speaker 1: currency side, Tom and I? We continue to be amazed
Speaker 1: at the strength of the dollar. Ware. Where where do
Speaker 1: you think investor should be looking in the currency markets? Well,
Speaker 1: they've been pretty flat until today with droggy speech. Where
Speaker 1: the euro now looks like it's about to break down
Speaker 1: one new weakness if it closes here at the breakdown, UM,
Speaker 1: and the dollar has been you know, forwarding both the
Speaker 1: bulls and the bears UM and in a rather flat,
Speaker 1: slightly uptrending pattern. And that looks better and better. If
Speaker 1: you get out through you could probably see a hundred again.
Speaker 1: But we've been there before. We were there. We were
Speaker 1: there close to it, so it's all within the pattern
Speaker 1: of the last four years. Louise, one more question, I
Speaker 1: want to wrap this up for all of our audience.
Speaker 1: Are you suggesting, then, with the new weakness in a
Speaker 1: seven percent correction, that we are within a bull market
Speaker 1: or do you state that we've had a bull run
Speaker 1: within a longer term bear market? Which is it? We're
Speaker 1: on the fence. We want to see. We are definitely
Speaker 1: on the fence those long terms Rich whom Luisa on
Speaker 1: the fence right, it's we're on the fence. We are
Speaker 1: We want to see the monthly momentum turned to a
Speaker 1: bye signal and then will be a little bit more
Speaker 1: comfortable with what we're seeing. It's been too long, Luisia
Speaker 1: amount of thank you so much for being with us.
Speaker 1: And I think that all of you know with my
Speaker 1: technical analysis, Louise and I are decidedly on the same
Speaker 1: page Paul Sweeney, and that people do not look enough
Speaker 1: at weekly, monthly and quarterly choice. Thanks for listening to
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on
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