Transcripts For BLOOMBERG Whatd You Miss 20240713 : vimarsan

BLOOMBERG Whatd You Miss July 13, 2024

Go, it is the only index that is higher for the year. Lets bring back our investment strategist at allie on global advisors. Something romaine mentioned, the low volume. They, down about 14 versus average. In may and gosell away. How much can we rely on these doesnal trends to work, or that go out the window because we are in unprecedented times . Coincidentally, we are at a point where markets are at a bit of a crossroads here. We are just beginning this reopening process. Very much the coast of the country, where the High Economic stillnancial hubs are, largely closed. There is a lot of uncertainty on what lies on the others of this process. I think the market move does put us at a point where we may be priced to a very positive or at least the baseline stable scenario. You is interesting, and probably noticed this as well, but the dichotomy in the market from a sector by sector perspective is striking. Financials, energy, industrials. These are sectors you would expect to start moving if the market does indeed believe in the narrative of the reopening and the stabilization. We started to see energy move a little bit last month despite oil prices collapsing, which could be a good sign. Perhaps they were oversold. Is lessmind, energy than 3 of the s p overall. Romaine that is a great point. There has been a big sort of fracture here in terms of the sector performance. I want to get your thoughts, one thing that sort of crept into this market last week and yesterday was a little bit of concerned about the u. S. Chinese relationship and whether the rhetoric could read. I am wondering, how do you think the market is going to react to that if the president decides to pursue a tougher stance and we start to see a little bit of a break down between these countries . Think it is not the right time to add a tariff war. Generally speaking, last week, the u. S. And chinese negotiating team did have a discussion around the status of phase one. They did confirm the deal would remain on track. President trump remains disappointed with the chinese handling of the pandemic. This could be a theme that we continue to hear as we had more and more into election season. This message does play well with different population, perhaps part of his base as well. Scarlet House Democrats are hard at work to put together a new stimulus bill. They have unveiled this new 2 trillion bill which probably has little hope of getting to President Trumps desk. But what do you think the market is pricing in when it comes to around fade . Another round of eight another round of aid . When it comes to it, you would probably need another market meltdown to get there. I will say that the amount of durings we have received this crisis has been unprecedented. Of gdpnts to about 40 already. Certainly from a fed and monetary perspective, they have been speedy, but quite innovative in their solutions. Intoare really putting risk assets, and that has been reflected both in credit spreads is al side, there spreads and markets. From a fiscal side, something has to be done to support state and local governments, which have clearly been very hit on a revenue perspective. The other one we are watching for is the infrastructure package. Byt has been talked about both sides of the aisle as well. That could be a way to not only get people back to work but support some of the Industrial Companies that we were talking about earlier. Of course, President Trump is consistently talking about a payroll tax cut and i think that is not well received as of now either. Clearly, like we saw with the cares act, both sides of the aisle have to come together. Perhaps that tends to happen more went there is urgency, there is more of a crisis. Willne it obviously require a lot of Cooperation Among a lot of people in washington who do not normally cooperate. I want to get your thoughts on some of the moves we have seen in the credit market. I am wondering, as you sort of cap out your strategy and outlook, how much importance are you putting on the current yield . Nvironment it is a great point. Part of the reason investors get pushed out of the risk spectrum, rates are low, but when the 10 year yield is close to 65 basis points and much of the world is near zero or negative, i think, longerterm, our view remains that u. S. Treasury yields are too low here. We think with potential growth dothe u. S. At 1. 5 2 , we see yields ultimately coming back to that level. In the near term, we are probably looking at sub1 environment. We dont see the fed actively taking rates to negative. They have been pretty clear. They have also seen the evidence of what has happened in europe, and japan. Low negative rates have not really supported growth or inflation. It could happen in the short end, that the market itself takes the rates negative, fed itself fund rates probably will not have, as we get to this more steadystate 21, even, we are looking at rates normalizing somewhat. Scarlet thank you so much. That does it for the closing bell. Whatd you miss . Is next, where we will dig into the Federal Reserves repurchases of etfs. This is bloomberg. Zer romaine broadcasting live from our viewers new york, this is whatd you miss . Aarlet u. S. Stocks, kind of swoon into the close. The s p closed down 2 , as did the nasdaq. The nasdaq cutting your today losses by just one third of 1 as dr. Fauci warned an early reopening of the economy may lead to setbacks and perhaps a second wave of infections. Of course, washington is where the action is. The Federal Reserve officially began its foray into credit markets, lodging purchases of etfs as part of the coronavirus lending program. Joining us, Bloomberg Economics senior economist. You could argue that this program was so effective that the fed did not even have to buy anything until today. Now that it has begun this program, give us some numbers to put it into context. It has been seven weeks between the announcement of the program and the day when they started to make these purchases. I think all the action has already happened in the market reaction. That is exactly what the fed wanted to achieve. Andexecutive Vice President he had of the markets group from the new york fed, he spoke recently on one of the webinars. Usage isly said that not the right metric for success. It is about providing a backstop to boost confidence in the market. That is exactly what has happened. After the fed announced its program. The purchases themselves dont really matter that much. These twosly, programs are aimed to provide liquidity to the Corporate Credit orchids. Toy are both levered like 10 one, so the fed can purchase up billion of these securities. That will substantially increase balance of these sheets. The market is working much more moberly much more mobily. Market the equities took a move lower on some comments from dr. Fauci about the potential slowness in the reopening of our economy. That,is potential concern if out of those jobs lost, how many folks from those jobs can be reestablished once we get past the Health Crisis here . Byena what really took us such big surprise last friday when we saw this huge number in terms of job losses is why the markets are reacting so optimistically. Obviously, there are challenges of unlocking the economy. It will not just be overnight. It will be ups and downs. It will not be a vshaped recovery. It will take time. And it will depend on the nature of the jobs. Affected were most during the pandemic, they will be open less. Look at what new York Governor Andrew Cuomo laid out last week. He said that those restaurants and entertainment businesses will only open up last. So, where will all these people go and look for jobs . It is just a matter of the fact right now that some industries are hiring. So a lot of these jobs that were most hardly hit during the pandemic, leisure and hospitality, they do not require much formal training. These people will probably look up to finding a job in delivery services, Retail Companies that are still open. There is a lot of shortages of labor in those. We will get some data this friday when the jobs survey will will show some official data on vacancies among different industries. Scarlet so the potential to bring them back online and back into their jobs is certainly there. But, you would have to see demand recover first for the companies to commit to that kind of spending, wouldnt you . Yelena absolutely. A lot will depend on how fast personal Income Growth is recovering. With unemployment rates at such a high level, probably heading even higher than we saw on friday, we will not see much growth in personal income. That means personal spending cannot grow fast, at least as fast as it was before the crisis. That is why we do not anticipate a vshaped recovery. It will be a prolonged recovery. When we see growth in the third and Fourth Quarter this year, it will not be as strong as we were used to we were used to. Romaine yelena shulyatyeva, she economicergs senior senior economist. I recommend you check out Bloomberg Economics because the data and the charts they used to lead out is second to none. Next, we will talk about some states deferring eviction. They haveton, d. C. , yet to offer cashstrapped landlords relief to do that. That is coming up next. This is bloomberg. Romaine we have been talking about the covid19 Health Crisis and potential economic crisis. Now, a lot of folks saying we already have a housing crisis on our hands, and it involves rental properties. Our next guest wrote a piece on the bloomberg terminal that really laid out the case of a really the trouble that a lot of in dealingre having with a lot of the relief measures states are laying out for renters. At the federal level, those landlords have got of not gotten relief themselves. Can you like out the issue of the can you lay out the issue of the needs of the landlords and renters . It is a basic thing. Our economy, in many ways, shut down. As a result, unemployment skyrocketed. Tenants are unable to pay their rent or their full rent. A lot landlords, most of them small landlords, who depend on this income to pay mortgages, property taxes, maintenance, they are not getting a lot of their income coming in. Then they start to get into trouble. Pointlandlords at this are not getting any help. Scarlet one thing your story does a really good job of is putting out this misperception that a lot of landlords are big private Equity Companies that have a lot of cushion. Is there any group working together on behalf the landlords to lobby for some protection or forbearance . Prashant there is no group, no lobby representing small landlords. A lot of them are like your local neighbor. Large landlords that are part of trade groups that money and relief that would go to landlords. It is nothing that the trade arehad really supporting currently. Highlightsur story some of those small landlords. I am curious, during the housing crisis, one of the outgrowths was that we saw a much bigger role amongst wall street in the rental market itself. I am wondering if what we are going through now will lead to an additional acceleration of that trend . Prashant you think about it, you banned evictions, it is likely that a lot of people will not immediately get their jobs back. Those bands will be extended. When you banned evictions and you have small landlords who may be do not have the deep pockets to withstand this and no leverage to make tenants pay, a lot of those folks will get into trouble. When they get into trouble but they might sell their property at a distressed price. If that happens, the private equity firms might be the likely buyers. And taket jump in advantage of the situation. Is what they did last time. Scarlet really interesting story here. Again, this is something that really shines a light on a part of the market that people tend to overlook. Gettinge, tenants are extensions but the landlords need to make their payments as well. Lets turn to your business flash update. Uber has made an offer to buy the food delivery startup grubhub. Bloomberg has learned that the companies could reach a deal this month. Huber shutting down its own food delivery service, uber eats, in seven countries where it has proved to be unpopular. Hertz is trying to stay out of bankruptcy. Expectthat they do not demand to rebound in the next year. Regulators will let struggling u. S. Airlines stop flying to some cities where there is little demand. That is a change that could result in some locations being served by only one carrier. The the past two months, Transportation Department has received eight times the normal amount of complaints. That is your business flash update. Hard to believe, but there are still people flying around these days. The pictures they are posting on social media are kind of stunning. People are wearing tasks and gloves, but the planes are as crowded as they seemed to be before covid19. Romaine this is about managing expectations. When you look at comments on social media, it is all about the same. They thought they would be like one of 10 people on the plane, be able to spread out and be safe, then it is packed because there are only so many flights out there right now. Only a coupleve hundred thousand people flying per day, it still means a backplane. Scarlet in terms of who is flying, it turns out it is a lot of people who are locked someplace because of the lockdown. Professionalsical. Then, there are people who are flying around to return to work as the economy slowly starts to reopen and they need to be somewhere in person. It is a mixed bag. The extent that you can do the work at home, i think a lot of people are rethinking that. This is bloomberg. Scarlet it is now time with leadership life leadership live with david rubenstein. Partly managing a workforce from home, what will the future look like . Rubinstein will get a view on all of this with his guest, nasdaq ceo Adena Friedman. David thank you very much for joining us. Adena it is great to be here. David you are in your home at the moment . Adena yes. I am not far from you, in chevy chase. Adena is a native of my hometown, baltimore, she did her graduate work at the owen school of management at vanderbilt. She graduated from vanderbilt i guess around 1992, 1993, joint nasdaq in 1993 and rose up to be the chief Strategy Officer when, carlisle,y group, recruited her to be ceo. Years. With us for three we went public on nasdaq. Be aas back by nasdaq to senior officer and now she is the ceo of the company. The market3. 5 years, capitalization is up 60 and the stock price is up 60 . ,o, i should have bought nasdaq is that right . You the question that is in that is on a lot of peoples minds. The stock market and nasdaq in particular has been blooming i think, for six days in a row, nasdaq. Nasdaq was up. Yet the economy does not seem to be in great shape. How do you explain the market economybust and the not being in great shape . Adena first, the composition of nasdaq, if you look at the companies that choose to list on nasdaq, we have the companies that are defining the economy of tomorrow. When you look at the companies that are doing well through this crisis, they tend to be whether they are Biotech Companies, we have 94 of all Biotech Companies listed on nasdaq. As well as technology companies. Those companies are demonstrating great resilience, which drives the values. I think the second key factor is the fed. The Federal Reserve in general, if you look at the over the hasnce, i think been muted by action by the fed, making sure that we have easy access to capital and that we can manage through this crisis moment. David the Biggest Companies on your exchange are which . Adena we have the Top Five Technology Companies in the world listed on nasdaq. Also, netflix and others that are really important companies, driving a lot of the services that we are getting used to in this crisis. David people who are not familiar with nasdaq, what does nasdaq stand for . Jeopardyat is a question. The National Association of securities dealers automated quotations. Which means that we were formed the971 as a subsidiary of National Association of securities dealers. Untiled as a subsidiary 1999, when we separated. Nasdaq, aq is just word in and of itself. David at the time, you did not have a lot of brokers running around on the floor. You basically were doing it all electronically. Is that correct . Adena our foundation is based on the principle that we dont have to be in the same place to succeed and offer eight robust trading environment. We were the first Electronic Exchange in the world. In 1971, it was a very relevant very revolutionary concept to have a network set of computers to raise and trade capital. Now, we are 49 years old. We continue to work very hard to disrupt to make sure we are bringing the best technology into the markets. We provide the technology to 120 other markets around the world. So we have been able to really propagate our model into the world economy. David for people who dont understand how this works, if somebody wants to go public, they can pick the New York Stock Exchange or they can pick nasdaq. That they pay you or do you pay them . Annual fee pay an and we trade securities for them. We also support services for their listings. We generate revenue from the trading. The trading generates an enormous amount of data, which is important for giving transparency in the market to every investor. Millions of people now have access to realtime data. Key revenue source, our indexes as long as as well as our Technology Business. Under covid19, the theory should be that you should be in pretty good shape because you can do everything electronically. Did you have to send people home . Adena we were pretty early in making decisions of sending people home. Then around the world. We have been working very hard over the years to enable our entire operation to be available to us in a work from home environ

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