Transcripts For BLOOMBERG Bloomberg Surveillance 20240712 :

Transcripts For BLOOMBERG Bloomberg Surveillance 20240712

Jon ferro in london, tom keene and Lisa Abramowicz in new york. It is a Fourth Quarter with an election in it. I love what Kevin Cirilli said. Is it going to be not election day, but election month . We will have to see, harkening bush gore. Tower hudsonf looking for a melt up. Jonathan right now i think we are playing headline roulette around fiscal talks. There is still a gap that is apparently narrowing a little bit. One thing we dont know, one thing we cant figure out, is whether this is just posturing ahead of the election, or whether both parties actually want to nail down a deal this week. House democrats delaying a vote on that plan to see if talks today actually generate something positive. Tom we will have to see as well. Opening up here with the markets, futures up 32, dow futures up to 34 in a nicer lift up 234 in a nicer lift. Ive got to go to a conversation with Speaker Pelosi that david westin will have in the noon hour, and i wonder if she will want to negotiate. Jonathan jonathan it really sets the stage for the talks ahead. Who has the biggest incentive to move the dial . The democrats to come down, or the republicans to come up . I think the headlines of the last 24 hours, for anyone in government, are not pretty first of the pretty from some of the Biggest Companies in america. What we had months ago was a shock to this income market. The fiscal assistance, and the minds of many, still very much needed. Tom we need a one hour conversation with our guest to open this. Bloomberg across the state of new jersey. He is a financier with a career at goldman sachs. He is a diplomat, with his Public Service to the nation as ambassador to germany. But now he is in the trenches as the governor of new jersey. We are thrilled phil murphy could join us this morning. What do you need from President Biden when he shows up in january . Gov. Murphy good morning to you all. We need it before january. I cant say enough good things about Speaker Pelosi. I think Stephen Mnuchin is a smart guy and interlocutory. We need a deal before january, and that has to include state aid. Obviously, extending unemployment, help for small businesses, all the needs we know about, but we need a big jolt of state aid. I think if it becomes President Biden, and that is where my support is, i would suspect we will still need more of that. My guess is whatever deal we get may not fit the bill, and big investment is not just talk in infrastructure. Things like the gateway project, the most important Infrastructure Project be done in the United States. Tom you grew up in massachusetts, where you learned the marginal value of a red sox victory. You went to harvard and dead economic, were you learned marginal ash and did economics and did economics, where you learned marginal dynamics of economics. 10. 7 above one million. You got the 2. 44 property tax, and a lovely sales tax as well. Theres no incentive. What are you going to say to the millionaires that watch Lisa Abramowicz every morning . Gov. Murphy you will appreciate i dont see it that way, and i have been holding my breath on the marginal value of many red sox wins this year, given the season they had. We were successful in asking the wealthiest in our state, the biggest corporations to pay a few more pennies on their top dollar to help us continue and historic reinvestment in our middleclass. That is good for everybody. People inthat chokes new jersey, the thing we lose are the retirees whose kids have graduated from our number one , hisl system in america property taxes. That is why our budget has a direct dose of property tax relief. New jersey is the state to raise a family. We want to keep it that way. We are also a quintessential middleclass state, and asking the wealthiest among us to help make those investments is good for the middle class. Tom governor, the movers are moving out. They are not moving to massachusetts. They are not moving to connecticut. They are moving to the nine states with no sales tax. What will you do to turn those moving vans around . Ov. Murphy its very simple it is the best state in america to raise a family. If you have kids who are schoolage, if you care about health care about health care, we have the Number One Health care system in america. If you care about talent for your business, theres no better state in america. You get what you pay for in new jersey. Jonathan in 2015, you will remer the you will remer the headlines. Is he coming home . Gov. Murphy ive not spoken to him personally, but i have heard the same as you have. We welcome them back. Our number of millionaires over the past number of years is growing, not thinking, notwithstanding the noise around moving vans. Our state is actually growing, including among the wealthiest. Jonathan where else will you be able to raise taxes . Weve heard again and again about the prospect around doing something around cannabis. Is that just a low hanging fruit for you now . Gov. Murphy it is on the ballot on november 3 as a referendum item. I wish we could have gotten it done through a legislative process. We just couldnt find the last few votes, so it is on the referendum. First and foremost, for social justice reasons, lowend drug crimes are the biggest reason by far that we have Young Persons of color, especially young men of color, in our criminal justice system. Beyond that, this is a potential significant overtime revenue item for the state, and a source of job growth, which is also positive. I hope we will see it pass in november. Lisa for the tax on electronic trading, are you going ahead with that . Gov. Murphy we are taking it seriously. We did not score it in the budget because there is too much uncertainty around it. It is something we are taking very seriously and studying very seriously. Lisa the virus is continuing to spread, and we are seeing worsening numbers in new jersey. What is the threshold at which you will shut down in person schooling and go back to all remote. Gov. Murphy one of the blessings we have in new jersey is got hundreds of school districts. We reviewed each and every one of their plans when we shot in march, and each and every one of them when we when we shut in march, and each and every one of them when we reopened. The backtoschool for us so far has been very successful. We had only 11 outbreaks in schools, out of over 3000 touching students and educators. But that is well within any expectation. I hope we never get back to the point where we were in march, when we have to make a statewide move to shut everything down. Tom one final question, if i could. It is a question of delicacy within this pandemic, as you have confronted it, and Governor Cuomo confronted it earlier on. We now have a touch point of a new pandemic which crosses over to religion, where you need to work with these small communities, and this case with orthodox judaism. How are you going to dovetail your Pandemic Response with the need for religious freedom . How do you execute that in the coming days in lakewood, new jersey . Gov. Murphy i think we have been able to do that from the getgo. We clearly had a period beginning in midmarch where we had to shut everything down. When we did that, we were in close contact with the leadership across the whole spectrum of religions, including the leadership in lakewood. As we have been able to reopen and get back to worshiping first upside, and now inside, it has been done under strict limits. Capacity limits, face masks, social distancing, all of the stuff we all know. We have been in very close contact with the leadership of the community over the past couple of weeks. I am going to be in ocean county tomorrow, where liquid sits. I cant say enough good things about the cooperation of the elected leaders and faith leaders there. But we are having issue with cooperation down to the man on the street. Weve got to be aggressive about it. Tom i am not going to mince words. This comes in from michael barr in Bloomberg Business sports. Is it your fault the giants, jets are as bad as they are . What are you going to do . This is a state embarrassment. First of all, they are the new york jets, new york giants. You on them, god love you you owned them, god love you, but they are in new jersey. They are terrible. What are you going to do . Gov. Murphy they are owned by great families and great organizations, but they are off to a tough start. Theres no other way to put it. Tom the governor doing the math. He is the governor of new jersey, phil murphy. We are thrilled he could join us this morning. Jonathan just for the record, the governor prefers english football over american football, and if he were still with us, he could confirm that. Tom i find that unamerican. Lisa with the way the jets and the giants are playing, it is not unamerican. Tom you nailed that, lisa. Lisa nailing it every day. Jonathan price shaping up as follows. Tom this thing with the taxes im sorry, 10 point percent is way bigger than nine1 point 10. X is way bigger than 9. 1 . If youve got to pay taxes, guess what . Tom is jon bon jovi going to leave new jersey . Jonathan probably. Tom John Bon Jovi cant leave. Jonathan my favorite part of this show is when you and i just talk past each other for several minutes and dont listen to each other. Lisa thats everyday. The mute button, there it goes. Jonathan everyday. Seriously, i am going to get a mute button for christmas. If someone can send me a new button, i would love one to use right here on bloomberg surveillance. Ritika with the first word news, im ritika gupta. President trump signed stopped legislation stopgap that will keep the government operating at current spending levels. The governments current Spending Authority expired at midnight. Neither democrats nor republicans want today shut down weeks before an election. Nancy pelosi and Steven Mnuchin say they made progress on a compromise stimulus bill. They plan to continue negotiations. Mnuchin says he sees an agreement costing as much as two. Extended as much as 2. 2 trillion. Of has extended its halt buybacks. It says the banks need to preserve capital. Jp morgan had already indicated it wanted to resume buybacks. Actionhas started legal against the u. K. Over brexit, accused of breaching the terms of the agreement and breaking international law. It is the first step in a process that could end up in a lawsuit at the european court. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. They are positive numbers still, but if you look at total payrolls, they were 4. 8 million in june, 1. 4 million in august. So if you get Something Like 400,000, people will extrapolate about the possibility that we get a double dip in the Fourth Quarter. Jonathan payrolls one hour and 12 minutes away. That was jim osullivan, Td Securities chief macro strategist. The were report is about 24 hours away. Equity futures shaping up as follows, shifting higher on the s p 500. Futures up by around 1 this morning. In the bond market, yields to 0. 6988 . Foreign exchange, eurodollar breaching 1. 20 very briefly off the back of the happy talk in europe. Happy talk came to an end last week. Aboutollar advancing by 0. 6 . Even sterling catching a bid with the brexit mess. First time i have mentioned the word brexit this morning. That will be the last time, too. Look at new york crude, 39. 50 on wti. Tom that is when i really loaded the boat on triple leveraged allcash. Jon did you do in march, what did you do in march, jon . Jonathan didnt go outside. What did you do in march . Tom that is what we have done. Jonathan quarantined, took some time off. Tom come on, 2020. We are all worried about realworld pandemic things, and the markets move on and on. Gaurav mallik is with us, of state street global. Were you as lousy as me . Bad. V not that [applause] [laughter] not that bad. [laughter] toward certainly biased gold assets. We did Start Building incremental hedges, and our economist, i know she has been , theoomberg a few times portfolio did better than expectations with a bias towards growth assets, although i will say that has come in. As we get into the election sayon, still i would overweight equity, still spread to corporate bonds, high yields, and amd as well. In andk growth came continues to towards q4. Lisa lets go to toms mainstay. Lets talk about cash. What is the appropriate amount of cash to hold . Gaurav it depends a bit on where you are in terms of your aggregate growth assets, how much you want to build around that. I think as we get through the we deal withhs, if covid, you want to make sure you can shift in your portfolio, make sure supplement to assets can be added on. So i think holding cash is important. I would think many of our active funds are probably somewhere near the higher end on cash, keeping in mind that we do want some dry powder. Lisa it seems like the consensus right now is trying to thread this very narrow needle or people are looking at nearterm volatility and a lot of uncertainty, but longer term, a lot of people think we are at the beginning of a bull market. Is that your view as well . If that is the case, are you barbellling it . More cash, but also riskier assets on the credit side . Gaurav yes, we do take a view that investors should be biased in assets. I think earnings will drive that direction, and one thing we should keep in mind is you can ask anybody, and they tell you valuations on the s p right now are at high levels. We normally tend to take the perspective on valuations that , and thenpe spikes up you wait and see until the earnings catch up to that. So i think equities is a good place to be, but we do need to see how 2021 earnings shape up, because that will tell us if earnings are catching up to the pe are not. Tom with where we are with the nominal yield across fixed income, does that lead you to a more or less diversified approach . Gaurav i think that one question that is always on the mind, one thing we have observed is that the u. S. Dollar and u. S. Rates have been a big factor in driving a whole range of assets. Growthtake a look at assets, anything in the cyclical space, anything in the value space, there is high rates areon with what doing and how they are behaving. So it does make sense to diversify another assets. At em looking incrementally, trying to find pockets within that universe with the not be dollar. Those things are good for investors as you look to build out a more diversified portfolio. Jonathan just a quick one from me, if i may. Is the dollar at the mercy of Risk Appetite, or is Risk Appetite at the mercy of the dollar . To somei think dollar, extent, is at the mercy of Risk Appetite. I think what you are looking at isht now, one thing for sure things that were holding the dollar up, yield schemes as an example of that, the expectation perhaps that u. S. Is going to do better, those supports are gone now. On a longterm basis, you dont have a yield support, which is a bit of a Risk Appetite in some ways. You will see investors rushed to the dollar. I think on a longterm basis, we do see it cutting into the dollar. Jonathan you can come back anytime. Mallik of state street Global Advisors outperforming tom keene. Lisa honestly, these are the Big Questions here as we go forward. The question you asked about the dollar is key. A lot of people looking at it as the driver, but i think it is a haven right now. Tom you make jokes about it, in the way you to beat up on me. I get it. But it is just amazing, the missed opportunities of not per dissipating in the market. Lisa he is not participating in the market. Lisa he is just waking up to this now. [laughter] tom it is one lifetime event, another lifetime event. Jonathan do you know the kind of messages i get from people feeling sorry for you, asking why i am being mean to you . ,isa for the people on radio tom has a mute button on him, and he is just a killing wildly. Tom there it is he is gesticulating wildly. Tom there is. I dont have the mute button. Ferro has the me button has the mute button. Jonathan this is bloomberg. Jonathan equity futures positive. Initial jobless claims just second away. From new york and london, good morning to all. With your economic data, here is michael mckee. Michael good morning. Looking at initial jobless claims a little bit lower than forecast. These are the seasonally adjusted numbers. They change the way they calculated it. Last week. Onth a big decline. 850,000 was the forecast. The number we really want to see to get a better, more accurate description of what is happening with unemployment claims is nonseasonally adjusted. 786,842 from 827 205. The headline number from the seasonally adjusted is a decline of 36,000. Good news in both cases. Pandemic employment assurance insistence insurance assistance, the stuff put in place by the cares act, that rises by 35,000 to 650,000. Still issues with that according ,o the analyst who look at this whether it is completely accurate. The number of people getting 485,000 toes up by 26,529,000. What you would say about this report is it status quo. Awful lotll seeing an of declines overall. One other number this morning, personal income down 2. 7 but spending rises 1 . Both of those much weaker than the prior month. Tom i took some fancy math on your study. We have the correct chart up on bloomberg television. On Bloomberg Radio, all you have to know is if you take claims log you get a gorgeous Straight Line from june 5. Why is that . Whys it so well behaved from early june . Michael i think it has been a consistent decline in the jobless numbers. If youre using the seasonally adjusted numbers, it is difficult because you did get a break about a month ago. The nonseasonally adjusted numbers show we have seen steady declines for the most part. A couple of weeks were up but we are still well above the 800,000 numbers and we stay in that range. A lot of analy

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