1
00:00:03,160 --> 00:00:07,200
Speaker 1: This is Bloomberg Surveillance. European politics are very fractioned, very

2
00:00:07,200 --> 00:00:09,080
Speaker 1: febrol at the moment, and the UK vote to leave

3
00:00:09,119 --> 00:00:11,399
Speaker 1: that's going to make all of those problems much much worse.

4
00:00:11,480 --> 00:00:14,120
Speaker 1: When the Fed rises, right, it has a huge impact

5
00:00:14,120 --> 00:00:15,840
Speaker 1: on the rest of the world. It's actually very negative

6
00:00:15,880 --> 00:00:18,720
Speaker 1: for emerging markets. When the dollar goes up, the rest

7
00:00:18,720 --> 00:00:22,560
Speaker 1: of the world's indebtedness effectively goes up. That means it's

8
00:00:22,600 --> 00:00:25,880
Speaker 1: that much harder to pay back their debt. Bloomberg Surveillance

9
00:00:26,120 --> 00:00:29,639
Speaker 1: your link to the world of economics, finance and investment

10
00:00:29,920 --> 00:00:33,839
Speaker 1: on Bloomberg Radio. Good morning. It is seven am on

11
00:00:33,920 --> 00:00:36,919
Speaker 1: Wall Street twelve noon in the North Sea off the

12
00:00:37,080 --> 00:00:39,639
Speaker 1: UK coast where the red crude they're pumping is now

13
00:00:39,640 --> 00:00:42,400
Speaker 1: at a six month high. Rent right now going for

14
00:00:42,560 --> 00:00:47,160
Speaker 1: forty eight eighty two percent higher on the day West

15
00:00:47,159 --> 00:00:51,440
Speaker 1: Texas twelve. That is a two percent gain as well

16
00:00:51,479 --> 00:00:53,840
Speaker 1: on the day. Goldman upgrading its outlook. Phil Burliger on

17
00:00:53,920 --> 00:00:56,960
Speaker 1: Surveillance TV earlier saying Goldman is getting its numbers wrong.

18
00:00:57,360 --> 00:00:59,880
Speaker 1: A deal in the oil business today to e MP

19
00:01:00,040 --> 00:01:03,400
Speaker 1: Companies combining Range Resources to buy Memorial Resource and All Stock.

20
00:01:03,440 --> 00:01:07,520
Speaker 1: Deal valued at four point four billion dollars, and we

21
00:01:07,600 --> 00:01:11,800
Speaker 1: have just had a headline crossing the Bloomberg terminal. Ghanett

22
00:01:12,120 --> 00:01:15,440
Speaker 1: is boosting it's all cash offer for Tribune Publishing to

23
00:01:15,840 --> 00:01:20,480
Speaker 1: fifteen dollars a share. Tribune has not been enthusiastic about

24
00:01:20,760 --> 00:01:26,199
Speaker 1: that offer. Earlier. Fiser acquiring Anacore Pharmaceuticals today five point

25
00:01:26,240 --> 00:01:29,520
Speaker 1: two billions, so merger Monday. That's the news event of

26
00:01:29,560 --> 00:01:33,680
Speaker 1: the day, but so far unable to boost shares. SMP

27
00:01:34,400 --> 00:01:37,679
Speaker 1: futures in the US are flat down. Futures are flat down.

28
00:01:38,120 --> 00:01:42,360
Speaker 1: NASDAK E MANI futures now down to points on the day.

29
00:01:42,400 --> 00:01:46,040
Speaker 1: That's just under a tenth of a percent. Uh. Many

30
00:01:46,160 --> 00:01:49,640
Speaker 1: markets closed in Europe today for whit Monday, but encompassing

31
00:01:49,680 --> 00:01:53,160
Speaker 1: those that are open, the stock six D is down

32
00:01:53,240 --> 00:01:57,880
Speaker 1: two points half a percent on the day. The curve

33
00:01:58,080 --> 00:02:01,920
Speaker 1: continues to flatten in the treasury market. Here the two

34
00:02:02,000 --> 00:02:05,279
Speaker 1: year NO yield is up to seventy seven basis points,

35
00:02:05,280 --> 00:02:09,000
Speaker 1: the ten year up but less one point seven one.

36
00:02:09,560 --> 00:02:11,119
Speaker 1: The five year in the belly of the carve comes

37
00:02:11,120 --> 00:02:14,680
Speaker 1: in at one point to two. The dollar trading lower

38
00:02:14,720 --> 00:02:19,400
Speaker 1: today sixty one, the year O going for one t

39
00:02:19,560 --> 00:02:23,359
Speaker 1: the endight six not a lot of change in that

40
00:02:23,440 --> 00:02:27,480
Speaker 1: whole area. What's interesting is that nothing in Western markets

41
00:02:27,520 --> 00:02:32,320
Speaker 1: reflecting what happened in China over the weekend. Lending, industrial production,

42
00:02:32,360 --> 00:02:37,799
Speaker 1: retail sales all missing estimates. Yet Shanghai finished up twenty

43
00:02:37,800 --> 00:02:41,160
Speaker 1: four points eight tens of eight percent today. Pablo Goldberger's

44
00:02:41,160 --> 00:02:44,880
Speaker 1: senior strategist for Black Rocks Emerging Markets Dead Team, Pablo,

45
00:02:45,120 --> 00:02:47,720
Speaker 1: where's the panic over the Chinese economy? The panic we

46
00:02:47,760 --> 00:02:52,679
Speaker 1: saw in January, the panic we saw last August. No, well,

47
00:02:52,720 --> 00:02:56,080
Speaker 1: the panic is no longer there because the Chinese policy

48
00:02:56,120 --> 00:03:01,000
Speaker 1: makers has been stimulating the economy U and generated UM

49
00:03:01,360 --> 00:03:05,400
Speaker 1: better buy around the ability of the economy to growth

50
00:03:05,480 --> 00:03:09,160
Speaker 1: and spelling some of the fears of hard landing. UM,

51
00:03:09,280 --> 00:03:11,600
Speaker 1: I mean said that would get you know, as you

52
00:03:11,840 --> 00:03:16,160
Speaker 1: as you know, some compressed reports about UM, maybe some

53
00:03:16,480 --> 00:03:20,079
Speaker 1: disconnections between the different parts of the policy making in China.

54
00:03:20,240 --> 00:03:23,400
Speaker 1: Someone's look looking for a little less stimulus than was

55
00:03:23,480 --> 00:03:25,720
Speaker 1: written in a vision. Um, We've got a little bit

56
00:03:25,720 --> 00:03:29,120
Speaker 1: of a softer April data, But I think the risks

57
00:03:29,200 --> 00:03:31,799
Speaker 1: of hard landing in China are not longer with us.

58
00:03:32,639 --> 00:03:37,920
Speaker 1: So does that take one of the things holding the

59
00:03:38,000 --> 00:03:40,640
Speaker 1: fedback off the table and make it more likely that

60
00:03:40,680 --> 00:03:43,680
Speaker 1: the FED will raise interest rates. Well, I think that

61
00:03:43,760 --> 00:03:46,120
Speaker 1: takes one of the things that was holding the said.

62
00:03:46,560 --> 00:03:50,800
Speaker 1: But for sure there was basically volatility in international markets

63
00:03:50,800 --> 00:03:54,760
Speaker 1: and particularly volatility around the currency in China. But other

64
00:03:54,840 --> 00:03:57,880
Speaker 1: things have been added to the said, like the continuous

65
00:03:57,920 --> 00:04:00,960
Speaker 1: witness of the of the U S economy me UM

66
00:04:01,400 --> 00:04:05,680
Speaker 1: and a lack of inflation in the US. So maybe

67
00:04:06,240 --> 00:04:09,440
Speaker 1: the factor's hole in the FET behind or the FED

68
00:04:09,880 --> 00:04:14,360
Speaker 1: put have change, but not necessarily UM. The willingness for

69
00:04:14,480 --> 00:04:17,320
Speaker 1: the FED to raise rates in the short term have increased.

70
00:04:17,880 --> 00:04:21,640
Speaker 1: Good morning everyone, Michael McKee and Tom King Bloomer Surveillance

71
00:04:21,640 --> 00:04:25,599
Speaker 1: this morning brought you by Investo looking for investment views,

72
00:04:26,360 --> 00:04:29,080
Speaker 1: experience experts of just to click away, go to investco

73
00:04:29,600 --> 00:04:33,680
Speaker 1: dot com slash us to subscribe to the investco blog

74
00:04:34,720 --> 00:04:38,280
Speaker 1: and follow at Investo US on Twitter at I m

75
00:04:38,400 --> 00:04:42,680
Speaker 1: V E. S c O at Investo US on Twitter,

76
00:04:42,839 --> 00:04:46,920
Speaker 1: Public Goldberg with US with black Rock Publo. Should we

77
00:04:47,040 --> 00:04:50,839
Speaker 1: invest in e M. I'm confused by this interview, the

78
00:04:50,920 --> 00:04:53,520
Speaker 1: interview and that there's a lot of economics, but I

79
00:04:53,520 --> 00:04:55,359
Speaker 1: want to know what to do with my money. What

80
00:04:55,400 --> 00:04:58,400
Speaker 1: do I actually do with my money in emerging markets.

81
00:04:59,279 --> 00:05:01,800
Speaker 1: I think that at this point fixing come is a

82
00:05:01,920 --> 00:05:06,320
Speaker 1: very good opportunity. We have very low yields around the world,

83
00:05:06,360 --> 00:05:08,680
Speaker 1: with the prospect that this very low yields will continutely

84
00:05:08,760 --> 00:05:12,520
Speaker 1: very low UM. When we discussed, you know a few

85
00:05:12,560 --> 00:05:15,920
Speaker 1: times in the last few months, I was insisted in

86
00:05:15,960 --> 00:05:18,799
Speaker 1: the idea that the search for yield towards emerging market

87
00:05:18,920 --> 00:05:21,320
Speaker 1: was going to continue. But what we needed to have

88
00:05:21,640 --> 00:05:25,039
Speaker 1: was a little bit of reaction, the reduction of the

89
00:05:25,279 --> 00:05:28,320
Speaker 1: volatility that we had around these markets. And as was

90
00:05:28,560 --> 00:05:32,640
Speaker 1: coming before in this interview, uh steamless in China, UM,

91
00:05:32,960 --> 00:05:37,839
Speaker 1: the finish of Chinese, change in the effectual regime towards

92
00:05:37,800 --> 00:05:42,039
Speaker 1: a more um, a clear kind of afectual regime, the

93
00:05:42,160 --> 00:05:44,560
Speaker 1: risks of processor in the US movement away. Those are

94
00:05:44,600 --> 00:05:51,479
Speaker 1: all good factors bringing investors towards emerging markets. Emerging markets

95
00:05:51,760 --> 00:05:55,080
Speaker 1: have been so responsive to what the central banks of

96
00:05:55,120 --> 00:05:58,599
Speaker 1: the world have been doing. How much confidence can you

97
00:05:58,680 --> 00:06:02,240
Speaker 1: have in what the are fixed income markets are going

98
00:06:02,320 --> 00:06:04,640
Speaker 1: to be like? If we're clear yet what the FEND

99
00:06:04,680 --> 00:06:06,599
Speaker 1: is going to do, what the ECB is going to do,

100
00:06:06,680 --> 00:06:09,280
Speaker 1: And of course there's always the Bank of Japan risk

101
00:06:10,360 --> 00:06:15,120
Speaker 1: well clearly, Um, you know, the whatever the CV the

102
00:06:15,120 --> 00:06:17,280
Speaker 1: Bank of Japan do is not going to be tightening

103
00:06:17,360 --> 00:06:19,800
Speaker 1: monetary policy. They're going to be even easy and more

104
00:06:20,400 --> 00:06:23,200
Speaker 1: or staying put. And in the case of the said

105
00:06:23,200 --> 00:06:25,839
Speaker 1: it's going to be staying put or tighten a little

106
00:06:25,839 --> 00:06:29,440
Speaker 1: bit monetary policy, or the course of this year. Any

107
00:06:29,440 --> 00:06:32,560
Speaker 1: of these configurations of scenarios are benign for the search

108
00:06:32,680 --> 00:06:35,560
Speaker 1: for yield. Um. What we needed to be sure is

109
00:06:35,600 --> 00:06:37,800
Speaker 1: that we were reducing stead of the terror risks that

110
00:06:37,839 --> 00:06:41,880
Speaker 1: were affecting appetite for emerging markets, particularly in the last

111
00:06:41,960 --> 00:06:44,680
Speaker 1: quarter of last year and in January of this year.

112
00:06:44,760 --> 00:06:48,280
Speaker 1: And and we're pretty confident that these risks have participated

113
00:06:48,320 --> 00:06:51,599
Speaker 1: to a large extent. We're not saying that, you know,

114
00:06:51,640 --> 00:06:55,000
Speaker 1: the markets are not might not become volatile again, but

115
00:06:55,160 --> 00:06:57,960
Speaker 1: the levels of pricing that we have in this some

116
00:06:58,080 --> 00:07:01,479
Speaker 1: of these situities, given uh the kind of income that

117
00:07:01,560 --> 00:07:04,080
Speaker 1: is presented in other alternatives in the fixing comp world,

118
00:07:04,080 --> 00:07:07,839
Speaker 1: make emerging market a very good risk reward opportunity. What

119
00:07:08,360 --> 00:07:11,040
Speaker 1: go ahead, Please go ahead. I'm just gonna ask what's

120
00:07:11,080 --> 00:07:14,760
Speaker 1: the risk underlying that? The economic fundamental risk in emerging

121
00:07:14,800 --> 00:07:18,239
Speaker 1: market countries underlying this, Yes, you can search for Yale,

122
00:07:18,280 --> 00:07:20,360
Speaker 1: but is there any danger you'll have the rug pulled

123
00:07:20,360 --> 00:07:24,400
Speaker 1: out from you locally? That is a very good point.

124
00:07:24,600 --> 00:07:27,080
Speaker 1: And and and here is where we are also a

125
00:07:27,120 --> 00:07:29,560
Speaker 1: little bit more confident that we were in the past.

126
00:07:29,560 --> 00:07:34,400
Speaker 1: There's two to three important drivers in the fundamental side

127
00:07:33,840 --> 00:07:39,280
Speaker 1: and emerging market. One UH is commodity prices. And you know,

128
00:07:39,320 --> 00:07:42,480
Speaker 1: we can discuss exactly where all should go UM, but

129
00:07:42,600 --> 00:07:44,840
Speaker 1: we might agree that the chances of all going below

130
00:07:44,880 --> 00:07:47,920
Speaker 1: thirty dollars of arrel are various swam right now because

131
00:07:47,960 --> 00:07:50,120
Speaker 1: everything that has happened on the supply side, So we

132
00:07:50,200 --> 00:07:53,480
Speaker 1: are a little bit more comforted by a firmer range

133
00:07:54,080 --> 00:07:59,000
Speaker 1: for UM oil prices. UM. Second, I think this China

134
00:07:59,080 --> 00:08:03,600
Speaker 1: stimulus takes one important risk that is harleming in China

135
00:08:03,640 --> 00:08:06,120
Speaker 1: transmitted to the rest of emerging markets. And this will

136
00:08:06,160 --> 00:08:10,440
Speaker 1: allow evirgin markets central banks current rates when they were

137
00:08:10,480 --> 00:08:14,120
Speaker 1: actually more in the defensive. We're not saying that we're

138
00:08:14,120 --> 00:08:17,560
Speaker 1: not saying that all the troubles are away for for

139
00:08:17,600 --> 00:08:19,400
Speaker 1: emerging markets and they're going to go back to the

140
00:08:19,400 --> 00:08:21,560
Speaker 1: same growth that we have ten years ago. But I

141
00:08:21,560 --> 00:08:23,840
Speaker 1: think that we might start to turn the corner on

142
00:08:23,960 --> 00:08:28,400
Speaker 1: this continuous slowdown in this economy, just very quickly. Last

143
00:08:28,440 --> 00:08:32,120
Speaker 1: point is policy risk. We have had a couple of

144
00:08:32,200 --> 00:08:35,400
Speaker 1: these idiosocratic events and emerging market making has more positive

145
00:08:35,440 --> 00:08:37,960
Speaker 1: events in Argentina, events in Brazil, a little bit of

146
00:08:37,960 --> 00:08:41,480
Speaker 1: the title of monetary policy preventive in nature in Mexico,

147
00:08:42,160 --> 00:08:43,960
Speaker 1: a little bit of improvements that we've see in terms

148
00:08:43,960 --> 00:08:48,880
Speaker 1: of growth in Turkey and in Russia. Again, it does

149
00:08:48,920 --> 00:08:52,160
Speaker 1: not necessarily need to get a perfect world for this

150
00:08:52,320 --> 00:08:56,280
Speaker 1: ASCLA to perform given what we're seeing in the public.

151
00:08:56,400 --> 00:08:59,199
Speaker 1: Thank you so much. Public over with black Rock this

152
00:08:59,320 --> 00:09:03,200
Speaker 1: morning might just out in the last hour and it's interesting.

153
00:09:03,280 --> 00:09:06,720
Speaker 1: And also money where Mouth is donating seven point five

154
00:09:06,760 --> 00:09:10,760
Speaker 1: million dollars to New Orleans into the children, the students

155
00:09:10,840 --> 00:09:14,240
Speaker 1: of New Orleans. This is JP Morgan Chase and Bloomberg LP.

156
00:09:14,440 --> 00:09:18,000
Speaker 1: This is Michael Bloomberg and James Diamond writing in Bloomberg

157
00:09:18,080 --> 00:09:22,320
Speaker 1: View today on this amazing conundrum which Mike is is

158
00:09:22,400 --> 00:09:27,000
Speaker 1: actually almost a follow onto the community college debate of

159
00:09:27,200 --> 00:09:31,440
Speaker 1: thirty and forty years ago, which is educating kids and

160
00:09:31,520 --> 00:09:36,760
Speaker 1: jump starting kids education on the right track, on a

161
00:09:36,960 --> 00:09:41,800
Speaker 1: skills school track. You know, the jobs are there for

162
00:09:42,000 --> 00:09:44,640
Speaker 1: people at the friend and the education is there, but

163
00:09:44,720 --> 00:09:46,960
Speaker 1: it's the skills in the middle that aren't being taught

164
00:09:47,000 --> 00:09:49,880
Speaker 1: to blue collar kids who who may not go to

165
00:09:49,960 --> 00:09:53,360
Speaker 1: college or or or may not um you know, or

166
00:09:53,880 --> 00:09:56,319
Speaker 1: but would be above the level of entry level you know,

167
00:09:56,760 --> 00:10:01,360
Speaker 1: uh jobs. They're they're being taught what they needed to

168
00:10:01,400 --> 00:10:05,040
Speaker 1: know there. And Jeff Sex, Yeah, Jeff Sex with an

169
00:10:05,160 --> 00:10:08,160
Speaker 1: entire book on this from Columbia University, which is so

170
00:10:08,280 --> 00:10:11,120
Speaker 1: many of us, particularly older, are used to the uh,

171
00:10:11,240 --> 00:10:15,600
Speaker 1: the the community college skills set debate. And here we

172
00:10:15,640 --> 00:10:17,960
Speaker 1: have JP Morgan and Bloomberg trying to take it further.

173
00:10:18,440 --> 00:10:21,320
Speaker 1: And the incubator for this is New Orleans. What Mitch

174
00:10:21,400 --> 00:10:23,760
Speaker 1: Landrow is doing down there as well, I'll get that

175
00:10:23,800 --> 00:10:26,520
Speaker 1: out on social here Michael R. Bloomberg and James Diamond

176
00:10:27,160 --> 00:10:30,680
Speaker 1: writing for Bloomberg view on the school skills schools aren't

177
00:10:30,679 --> 00:10:33,600
Speaker 1: teaching button must We should course point out that Mr

178
00:10:33,640 --> 00:10:37,600
Speaker 1: Bloomberg is the majority owner of Bloomberg Gulp, that which

179
00:10:37,640 --> 00:10:42,760
Speaker 1: I believe replaces the tubes that make Bloomberg Radio go

180
00:10:43,320 --> 00:10:48,760
Speaker 1: so well. Futures up one NAZAC, futures go the other way.

181
00:10:48,800 --> 00:10:55,760
Speaker 1: This Monday, alright, this hour is brought to you by

182
00:10:55,800 --> 00:10:59,120
Speaker 1: Mount Kisco Volvo. Visit Mount Kisco Volvo dot com. Here's

183
00:10:59,120 --> 00:11:01,600
Speaker 1: Michael Barr with head My Tom, thank you very much.

184
00:11:01,679 --> 00:11:05,200
Speaker 1: Hillary Clinton is making a big final push for support

185
00:11:05,240 --> 00:11:08,480
Speaker 1: in Kentucky ahead of tomorrow's primary in the state. Bernie

186
00:11:08,520 --> 00:11:12,600
Speaker 1: Sanders hopes to block Clinton's clinching the nomination by adding

187
00:11:12,640 --> 00:11:15,120
Speaker 1: Kentucky to a string of recent wins. Or you can

188
00:11:15,160 --> 00:11:19,880
Speaker 1: also votes tomorrow. Presumptive Republican presidential nominee Donald Trump says

189
00:11:19,920 --> 00:11:23,000
Speaker 1: he probably won't name a running made until July. However,

190
00:11:23,360 --> 00:11:26,600
Speaker 1: some of the people being discussed are talking. Former House

191
00:11:26,600 --> 00:11:29,600
Speaker 1: Speaker Nude Gangridge says he wouldn't give an automatic yes

192
00:11:29,679 --> 00:11:33,200
Speaker 1: if approached. In an interview with The Washington Post, former

193
00:11:33,200 --> 00:11:37,320
Speaker 1: presidential candidate Benna Carson, who now supports Trump, says Ted Cruz,

194
00:11:37,440 --> 00:11:41,240
Speaker 1: Marco Rubio, Chris Christie and Sarah Palin are all people

195
00:11:41,679 --> 00:11:44,560
Speaker 1: on our list. Global News twenty four hours a day,

196
00:11:44,559 --> 00:11:47,480
Speaker 1: powered by our twenty four hundred journalists and more than

197
00:11:47,480 --> 00:11:50,160
Speaker 1: a hundred fifty news bureaus around the world. Michael Barr,

198
00:11:50,440 --> 00:11:53,040
Speaker 1: Tom and Michael, thanks so much. Two stones spread ninety

199
00:11:53,080 --> 00:11:55,280
Speaker 1: four point five basis points. All you need to know

200
00:11:55,400 --> 00:11:59,440
Speaker 1: is curve flattening over the last ten days. It'll be

201
00:11:59,440 --> 00:12:02,800
Speaker 1: one of our three through the week. Here, I'm Bloomberg Surveillance.

202
00:12:06,720 --> 00:12:09,760
Speaker 1: Bloomberg Surveillance is brought to by Fordham University the Gabentley

203
00:12:09,800 --> 00:12:12,520
Speaker 1: School of Business Executive NBA, top ranked with the renowned

204
00:12:12,520 --> 00:12:15,959
Speaker 1: professional network. Classes in Columbus Circle or Westchester. Learn more

205
00:12:16,000 --> 00:12:18,240
Speaker 1: at Fordham dot e U slash e m b A