Transcripts For BLOOMBERG Whatd You Miss 20160805 : vimarsan

BLOOMBERG Whatd You Miss August 5, 2016

Should mention, volume in the dow is 21 above the 10 day average. This was again on better than average volume. Down ones, the super safe ones, bonds got hit on this but a solid jobs report. Matt especially for tech stocks. The nasdaq came back up making an intraday high. In eight ofas risen the last nine days. Risen aq has since november of last year. The big tech stocks are widely held. Apple added almost six points the nasdaq. Microsoft added almost half as much. This just shows you how well represented apple is, 4 . We dig to a sellout in the Government Bond market as people perceive the economy to be doing better and Interest Rate hike to be pulling ahead. Mp, sensitived ju to expectations of fed policy, and an equivalent jump in the 10 year. The shape of the curve did not change much. Scarlet it lifted the dollar higher versus the euro and pound. You mentioned the other jobs report out of canada, a second straight month of job losses. The number of people employed dropped the most since november. You can see the move there. Up. Dollar is moving this could pressure the bank of canada to cut rates. If Oil Prices Continue to slide that could add to the pressure. Joe we will talk about more about canada later in the show. We continue to get the upward trend, production and drilling coming online in the u. S. That is up for several weeks in late may. We have a selloff in oil, it ended flat on the day. You can see down a nickel on the day, essentially flat. Lile Everything Else rallied, oil did nothing. Scarlet lets take a deep dive into the bloomberg. Im looking at our favorite function, world Interest Rate probability. Odds for aer, the rate increase are at 24. 2 . The jobs report it was at 17 . A big move up. If you take it out to next year, more than 50 odds for march of 2017. Mohammed was on earlier saying bond traders are underestimating. He likelihood of a rate hike he would put it at 40 to 45 percent. Matt they are underestimating the odds of a september rate hike. With the jobs number this good and things quiet internationally he could make a strong case. Scarlet janet yellen speaks in late august. Bond traders are actually in control of whether the fed raise rates. Do you want to go . I want to look at economic indicators. Im intrigued by it. The chemical activity barometer index of the u. S. Chemical industry. Prices, employment commissions in the u. S. Chemical employment, shipments in the u. S. Chemical industry. If we zoom in and the last year you can see how it has taken off. I saw in a Hedge Fund Letter someone pointing to this is evidence the u. S. Is gathering steam. The jobs report is evidence of that. Y should be taking out checking out this indicator more. Economy ise a commo doing better. Exactly. Check it out. Highest levels. Scarlet the sources the american chemistry council. Listen, i have a chart that is also a tease for a segment we are going to do later. We are going to do a segment where you send us your favorite charts. We picked those that we think are best and add them to the library. Someone was sending me charts earlier. This is one of them. Debtgn holdings of u. S. You see here in white have come down. The trend has gone on for the last couple of years. Yield oft pushed the u. S. Treasuries up. Sellers, think more these are big Central Banks around the world getting rid of u. S. Treasuries would push the price down. But it hasnt been happening until recently. I thought it was a cool chart. Scarlet private buyers are picking up the slack . That is what is going on . Matt i actually dont know why. Scarlet this lends itself to a lot of questions. Is here with more analysis catherine, the head of resources and chief global strategist he joins us now from miami. He joins us now from miami. What is next . Emerging markets generally do well. We have seen emerging markets outperform developed markets and inequities. A lot has to do with what the fed does, and how oil develops, and the u. S. Dollar. Those have been the pillars of long emerging markets going into this year which has played out to our favor. Scarlet if that is the case in the jobs report bolsters the argument for the Federal Reserve to raise Interest Rates in september or december, once we get higher rates, it grinds to a halt . Guest depends on the pace of the tightening cycle which i contend will be glacial. I think its going to depend on how we see the Economic Activity involved youve all. Olve. Tivity eva apart from that, if we get a i dont thinker, that changes the trajectory. The fed is likely going to sound more dovish than hawkish. The fed is going to lay the groundwork war a slow pace of for a slow pace. The dollar index could be part of the answer to the see gdp, why dont we growth . If the consumer is 70 of the u. S. Economy and we continually see more jobs added, we see more hours worked in a week, employees are getting a 2. 6 raise, plus the savings rate is they are spending it, why isnt gdp bigger . Guest bill gross said it better. Apart from consumption the u. S. Is in recession. Investment, companies are hiring but they are not building out their investment. That is a testimony to the questions that surround this economic expansion. Growth is going to be subpar in the United States which is going to keep the fed dovish. That has been our contention, that a low developed market rates which are going to stay yearor a long time, 10 will in and below 1. 5 this year. Its going to hike may be wants. It is going to hike maybe once. It will keep appetite for emerging markets which we have seen outperform. This year will be the year we see Economic Growth and market sentiment. Joe what would it take to get the treasury bull market to turn the other way . Guest we would have to see impressive Economic Growth numbers, real wages not be at 2. 6 but 3. 5. Goodwages at 2. 5 , it is off of 1. 8 but it is not what we have seen in the past. We would have to see real wages up and businesses investing capital. Strongerneed to see a economic recovery and better real wage growth. Scarlet we talked about the emerging markets and the rally they have been saying. With brazil kicking off the olympic Opening Ceremony tonight, i want to talk about their debt and their stocks. Does that mean they will start faltering before the rest of the emerging markets . There is are still a lot of value in emerging markets, even more so in brazil. There are certain bonds i like if you want to search for that and take that currency risk. July, itird week of was a record week. 4. 5 billion flowed into the sector. Searching for yield. Brazil is going to continue to be a chief beneficiary because we are seeing a change in terms of policy. The market is loving the new administration and the advancement of some reforms. What has grown from a fall from grace in the market has now become more interesting for investors. Joe thank you for joining us. Sheglobal strategist is a global strategist. Scarlet the charge that break down, next. This is bloomberg. Lets get to first world news. Donald trumps running mate is brushing off republican concerns of turmoil in their campaign. He appeared on the today show. All that matters is election day. , we arerump and florida seeing tremendous crowds, tremendous enthusiasm. I believe it is because Donald Trumps message, a stronger america at home is resonating with millions of people. He has angered republicans by criticizing parents of a soldier killed in iraq and refusing to endorse paul ryan, and others for reelection. Criticism ofdowed Hillary Clinton. Hillary clinton says president obama is not getting the credit he deserves for leading the country out of a recession. She says she wants to invest more in infrastructure, generate more jobs for young people and help black entrepreneurs start businesses. The war of words between turkey austria is increasing. It started after the austrian chancellor said turkey was headed to a dictatorship and question whether the eu should continue membership negotiations. Health. S his poor help lighting the from lighting the elephant torch. He says i have got to bless all i hope god will bless all who participate in this event. Im mark crumpton, this is bloomberg. Scarlet economists appear to be on the same page. To the sharpest economic minds about the job report and everyone seemed to agree on one thing. Todays numbers are strong all around. That his good job growth. That is what i would hope for when i was working at the white house. It shows some good gains in jobs. We thought it would be on and around expectations. The labor Market Recovery continues, and the weakness we are concerned about in may looks like it was a blip. The equity market is treating good news as good news. The markets are behaving as you would expect. Is enough for janet yellen, i dont think so. She is focused on global conditions. She is still worried about a strong dollar relative to emerging markets and other developing markets. There is a high probability they may hike rates. Going odds of the fed lower are very low. I think it is still too low. I would put it at 40 or 45 . May in december if this continues but not for now. Scarlet four a look of the jobs charts you cant miss, everyone is fixated on the headline number. Lets dig beyond that. Wage numbers, what did you find . Guest for production and nonsupervisory workers, hourly growth, that group wage hit the fastest pace. That is exciting. That is one of those numbers on the Wage Inflation front that has been slow to catch up. We are saying this unified message wage growth is accelerating for real. Showing had other data the same thing. Guest it is. The one caviar is these numbers are well below where they were in previous cycles. We are headed in the right direction and picking up momentum. That should support Consumer Spending which is one of the only Things Holding up Economic Growth in the United States right now. Numberse the absolute below what they were . Guest the growth figures. We are at record highs for wages in nominal terms but not growing as fast as we were. Matt we continue to grow. Month after month we are growing. We havent fallen. Guest absolutely. It has been a steady gain. Joe more people are finding jobs. What specifically are you identifying . Guest for the last 78 years one of the big stories has been all of the Unemployed People who have dropped out of the labor force. That is the big death. More people dropping out of the labor force every month than finding work. In july for the first time we beenore people find work drop out of the labor force over the previous 12 months. We have a lot of improvement to continue making their but that story of Unemployment Rate is low because they are dropping out is starting to go away. You. Thank we have breaking news out of Berkshire Hathaway. Scarlet secondquarter operating earnings per share of 2803. 2911miss the estimate of dollars. Profit overall as insurance units improved. Coming up, audience participation. We have charts from our bloomberg viewers. Stick around to see if yours was picked. This is bloomberg. Scarlet joined the bloomberg g chart library. We picked three charts from users to parse through. I will kick things off from mine. Hold on one second. Let me hold this up again. It is economic surprises, and that is in white. It shows what economists say data is topping estimates. The blue line is a 10 year yield. What is interesting here if the data gets better the yield should be going up as well. The divergence begin this year. If you look at a fiveyear chart it looks like it move in the same direction although at different rates. The split came this year. What would cause it to go back to what we have seen . The world needs to change, right . You would need better global growth. We are not there yet. , he sentt sent a chart this, going back through the beginning of 2008, showing in white the s p 500 and inbred in red, domestic equity cash flows. They have been entirely negative. Ak, just ignoree these. It is distracting. It is worse than noise. It would lead you in the wrong direction. Noise would at least the random. If you think money moving out of funds would be bearish with the market, that would be a dead wrong interpretation to take. Lets see what would happen. The data doesnt go back that far. It is basically always negative. Fer. Mine is a two , thanks,also from bob appreciate your help. He shows us new factory orders. Chartsly gets into the like us. Datave been saying this , if you look at new factory orders it doesnt look as good. New factory orders are important to people doing business. You can see u. S. Factory orders coming down, in january new factory orders as well taking a hit. Bob points out dont get too excited by this data. And you are looking at new factors it looks more bleak when you are looking at new factors it looks more bleak. Taken with a grain of salt. Is 2549. Ive been getting other people who are sending me charts. We love to see what you can do with the bloomberg. If you have any cool charts you made up yourself, send them to us and we will use them. Scarlet there is some editing going on here. Joe we are not going to use every chart. Matt it has to be good. We are exclusive. Thank you. Scarlet coming up, why less educated workers will lead the u. S. Jobs recovery. This is bloomberg. Lets get to first word use. Donald trumps classified briefingnce will begin in the next few weeks. Earlier this week the white house informed mr. Trump and Hillary Clinton their briefings can begin. Debbie Wasserman Schultz has lost her job as chair of the Democratic National convention, now she is trying to save her house seat. She is facing a law professor backed by bernie sanders. Almostised 2. 8 million, timerdof for a first candidate. Another victim of the attack in nice, france has died bringing the total to 85. He died in the hospital. His wife and son were also killed when a truck barreled down the street on bastille day. The Islamic State claimed responsibility. They have received reports Islamic State may have captured up to 3000 iraqis fleeing violence, 12 of them may have been killed. Officials said today they were trying to verify the information. Global news 24 hours a day powered by 2600 journalists in 100 countries. This is bloomberg. Acta here. A recap. Lets get the nasdaq closing at a record high for the first time this year. S p 500, also a record high. For the secondg time in nine days. All of this was sparked by the better than expected july jobs report. In the dow with 15 above the average. We saw yields rise as well. Increases in yields in the short and long hand. Matt i had a look at the nasdaq. We should note eight days in a row, eight out of nine trading days it is up. The longest rally since november. I put up a 13th month chart. It is a typical of course but the reason i did that is before this, july 17, you had to go back more. There you see it. The nasdaq coming back to a record, really lacking. Scarlet Berkshire Hathaway reporting earnings after the market closed. Missing the consensus 911 2911. 0 we do not intend to dispose of ibm shares. Matt no change in the afterhours trade there. This morning the u. S. Jobs report saw a pickup in the participation rate. Says this is part of the broader trend. , thehave not done so well professor of economics joins us now from boston. Thank you for joining us. Tell us why we will continue to see a solid labor Market Recovery for a group of workers that havent done so well in recent years. Guest a lot of these workers out there and a lot of hours. The labor market is becoming tighter and tighter. They are creating Job Opportunities for these last all of five workers. Hard time. A lot lost their jobs and many have been on the sidelines for quite a while. They have been coming back. They are beginning to look like a trend. Scarlet one thing that you note, that was a time in which there were less educated workers drawn into the workforce. What were the specific Economic Conditions during that . Guest a lot of opportunities for younger people, people dropped out of college, they dropped out of whatever they were doing to go into the labor markets. A lot went to Information Technology startups and things that were fairly insecure. When the boom of the late 1990s ended around the year 2000 these people took a hit. People who had a lot of experience and education, with College Degrees or higher stayed in their jobs by and large because employers anticipated there would be an opportunity for them in the future. That is what happened from 2000 2007. And ae stable employment little bit of growth. The people who were highly qualified stayed in their jobs and these people who were pushed opportunities by going back to college and finishing their degrees. It bifurcated due to a technological change and if you know how to use technology, if your job involves the internet or you are good doing very well but if you dont have those skills, there are fewer opportunities for you. What is wrong for that story . What is it people get wrong when they dismiss the possibility for lowend or low skilled workers to come back to the economy . Guest people are overlooking the fact that the largest part of employment in this economy is in the service sectors. A lot of those sectors use lots of people who have relatively lower skills and lower levels of education. Jobs are created for these people when the opportunity arises and that is going to rise as the economy continues to recover. We look at this mornings report 255,000,th of jobs of well above the trend that has prevailed for the last decade or so. That is something that is going to draw a lot of people back into the labor force as jobs are created. The story you tell is basically sound. There is a bifurcated labor market. We are not seei

© 2025 Vimarsana