Transcripts For BLOOMBERG Whatd You Miss 20160810 : vimarsan

BLOOMBERG Whatd You Miss August 10, 2016

Laggards, wti declines 3 . Joe Consumer Staples and telecom leading the way, classic defensive sectors. Matt some individual stocks moving down. Bank stocks taking a hit. Pretty decent losses for heavily weighted stocks. Right aid rose the most this year, up 6 . Point 25 after earnings yesterday, initially down, then coming back today. Up, at 13 , massive move least four analysts have upgraded yelp. Some interesting things in the Government Bond market, particularly u. K. , new lows on the 10 year yield, but action as the boe has trouble with its reverse auctions, not enough bids. Better, but all time lows in 10 year yields. I want to go into the bloomberg to talk about mongolia. Bondis a mongolian euro that matures in 2022. That is higher rates on a Government Bond. They said we are running out of money, major crisis. I think investors have forgotten that Interest Rates can go up and there is sovereign risk. Matt other governments would just print more money, right . Joe the problem is they cant euros print print euros. Scarlet i am keeping and i on the korean won, strengthening. Now approaching 1000. A Government Official says if the rate falls below 1000, korean exports will be bashed. 8 against gained the dollar, 7 against the yen. The new Zealand Dollar rose as much as one point 4 against the dollar, coming before the Central Bank Interest rate decision. Ecting to cut rate tonight rates tonight, and once more before the end of the year. Joe the aussie dollar has also been strengthening sense that rate cut. Looke commodity markets, at Saudi Arabian Oil Production, new highs. There was talk about wanting to squeeze producers out. They are continuing to pump oil. Oil prices tumbled. Matt internal use, right . Speaking of consumption and palladium futures, surging over 4 on the back of a sales,chinese auto palladium used in catalytic converters. Scarlet those are todays market minutes. Get more insight into todays trading and some moves ,n the energy sector, tobias head of u. S. Equity strategy for citigroup. Into into a bear market, hovering in the low 40s. Where is that going next . Our Commodity Research team thinks that end of year, early wti,year, a low 50s on low 60s by the end of next year. Relative tois soft expectations, but not seeing surge in inventories we saw a year ago, so people suggest similar to last year, probably overstating. Nigeria, reduction problems not likely to be resolved. Want tohappens, you take advantage of weakness in Energy Stocks. Oillet if you look at prices and how Energy Stocks outperformed, they have decoupled. If you look at it as a ratio to the broader market, they have moved in line with oil prices, so what does that mean for where these Energy Stocks are headed . Oil prices go up, historically stocks also go up. People look at the absolute phenomenon. Can get disconnects because all stocks are correlated to some degree if markets are going up even if Energy Prices pullback. On a relative basis, joined hand in glove. If Energy Prices move higher, then we will see this. We are not anticipating strong moves in the dollar either. Commodities are priced in dollars, stronger dollar, weaker commodities. Scarlet shake shack has just reported earnings. Sales up 66. 5 uplion, comparable sales 4. 5 when analysts were looking for 5. 4 , so a miss. Adjusted earnings per share, . 14, versus . 13 consensus estimate. ,bsolute number quarter revenue 66. 5 million. Stock tumbling, down 8 , despite fullyear revenue outlook appears to be higher than previously thought, but it saleslike comcast store are what investors are not liking. Store sales are what investors are not liking. Scarlet it trades at 117 times revenue. The average should be 37 times. Great storywas a this morning saying will be short play work on shack after earnings again this time as for the last three quarters of 2015 since it has become a publicly traded company, traded down even though earnings beat. It looks like it was getting set up for that. Back andnt to go rejoin the bias of citigroup. Rejoined tobias of citigroup. Since june 27, postgregs it postbrexit low, this market is on momentum and value stocks. Does this represent a shift . Does that strategy of piling into low volatility is over for now . Our sense is that there is a shift going on. Worst point,at the bond yields at lowes and people searching for yield. They are willing to overpay in our opinion for these defensive, save stocks with dividend yields. They stop being defensive when you overpay and dont have the safety requirement. As yields move up, income from the treasury market as opposed to dividend driven stocks, then they think about what is a better set up. If the curve steep ands, maybe financials make sense. Lets go beyond that. Eepens, maybe financials make sense. Lets go beyond that. Get 20 ,ot going to 30 , 40 Earnings Growth in these companies. You may get this in deep cyclicals like energy. They are higher than they were at the worst point last year at 26, 27. When you get to the fourth quarter, you will get positive Energy Earnings factor you will not get in defensives. High in energybe relative to these names valuation can be high in Energy Relative to these names. Four months trading left in the year, your s p target is 2150, below where we are now. You are looking for 124 in earnings. Let me interrupt. That is a mistake on the bloomberg data. 122. 50. Een at scarlet we need a correction. Matt maybe it is a mistake in the numbers. It isnt. We have tried to reach out to you guys on this. Matt i will deal with that as soon as we are done. My question is about valuations. Earnings nexted year, all wall street consensus, is that too rich for next year . Does that multiple need to come down . The fun aspect of this. It is a question i kind of hate. What is the right multiple for the market is not up to me. Its up to millions of investors to decide. You the multiples are already reflecting 4 inflation looking at history, but we look at which metrics have been best indicators for performance. We look at the cyclically adjusted pe against normalized bond yields, still suggesting it could be up another 6 over the next 12 months. Me theot about you and finding if the market is expensive or cheap. We look back objectively and see which metrics have been successful in determining stock outcomes. Joe what is your read on sentiment . A lot of people talk about market rallying despite no one likes it. Our people starting to like the market more or are they negative on it . We measure sentiment in various ways. Models proprietary thats a just april to a week and a half ago, we have lost that sentiment driver. We also track correlation by top 50 names in the s p, and that under 20 ,om 86 to warning signal, and people have given up on macro fears. , 30 billionin july dollars went into u. S. Equity oriented etfs, the biggest number and a long time, so you are saying people coming back, chasing the market to a degree, and that is taken has taken the out of the sentiment market. Scarlet coming up, the boe thousand to carry on with its bond buying program. We have the breakdown. A quick check on shares of shake after falling, down 8. 5 missing estimates for comparable sales in the Second Quarter after the company Beat Estimates for revenue, earnings per share, and forecast. The comparable sales number of weighing on the stock. This is bloomberg. Mark lets get to first word news. Donald trump held a roundtable today with coal Mining Executives in virginia. Difficultiesut the facing the industry a with other energy issues. Donald trump attacked Hillary Clinton, who is advocating a move towards renewable fuel forces. He says clinton wants the mines close. The secret service has spoken to Donald Trumps Campaign Staff about common some say were a threat to mrs. Clinton. The remarks came yesterday and north carolina, where donald trump suggested gun owners could stop a clinton agenda. He denies of violence and was referring to political power. Says a Justice Department report accusing the department of this committing against blacks is not an indictment of every officer. Revealed a pattern of Excessive Force and unlawful arrests. There are officers right now just as offended as we are to see the details that are laid out in this report. Why . Because they wear this uniform proudly and serve the citizens of baltimore honorably each and every day. Mark congressman elijah says the report validates the concerns that residents have been expressing for years. Russian president Vladimir Putin is promising a response to an alleged terror plot and crimea. By ukraine move special forces to carry out what he calls subversive actions was criminal, stupid, and an attempt by ukraine to distract its people from economic problems. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. I am mark crumpton. Scarlet thank you, mark. Whatd you miss . U. K. Yields on the rise after falling to record lows. The boe says it has enough ons in bonds in a reverse auction. Here now to sort out what is , executive dan maes editor of global economics. What changed between yesterday and today . The boe was, hunting in the 15 year maturity. Today, they went down to the 715. Amongstear bracket is the higheryielding groups of u. K. Bonds. They have been at this since 20082009. Other Central Banks as well. There is not a lot of yield to be chasing. Offers quitewindow a nice thing, so why give it to the central bank . Matt if they offer you enough money. Isnt it an issue of price, i will sell my bond if you pay me enough, right . Boe will know that come back looking to fill a quota with a different maturity, why not keep the yield and sell to the bank next day . Investor. E spoke to to sell it to the boe put take a listen. Trying to buy 15 your bonds is difficult. Ear bonds isonds difficult. Is not the only place where we are seeing the central bank running into these issues. Japanese 10 year yields jumped up on concerns over concerns about running out of bonds to buy, germany, ecb. Is this all the same story or it is august and not a lot of people showing up to these reverse auctions . , how muchs technical idiosyncratic . A bit of both. The Central Banks are not going away. You will run occasionally into these mechanical issues. August has not been august since 2007. Would the boe have preferred to do this another time . Sure. They did not vote for brexit. If theyic was warned chose to leave. Guess what . They chose to leave. The boe pledged to respond. Here we are in august. They cannot do anything about the timing of it. How therelked about is a subtle shift in fiscal policy, the central bank may not have to go entirely alone, but that does not mean they will step back either. Boj officials could say there are other things we could buy. People have heard speculate that other Central Banks may even buy into treasuries. Does that seem a little too crazy . Again, if you go back to 2007, probably nothing seems that crazy now. Matt good point. Inconceivablet be for Central Banks to run into difficulties if they are buying assets outside their own country. Matt they have been reducing anyway. Foreign holders of treasuries have been reducing. Boe,et going back to the how does this experiment with the failed reverse auction change or prompted the boe to a just what it does next time . We will know more thursday when they publish a schedule of what they will buy next week. There is probably some recalibration going on here. Again, they did not ask for brexit. No one would argue with the contention that the brexit pushed the boe into this fresh round of stimulus. This is where we are. Joe one of the arguments for tenderple dont want to their bonds at these reverse is they have nowhere else to put them men, especially in countries where the official rate is negative. They would have to find some other negative yielding bond or hold cash at negative rates. How much does that create a problem . We live in an environment that has been characterized by next or bleat lower bond yields. There is a lot of cash sitting around. We have Global Growth between 2 and 3 . How do we get out of it . You tell me. Joe ill work on it. Thank you very much. Look at we are taking a the probability of a rate cut from the rbnz. This is bloomberg. Scarlet i am scarlet fu. Whatd you miss . Rateealand Central Bank Decision coming out tonight. I am looking at a chart that highlights what is going on. And the easing mode catalyst is a rise in the kiwi. Line, theur white trade weighted new Zealand Dollar, up, up, and. Theation is likely to hit target of 1. 3 , currently at 0. 4 . That is why people are expecting Interest Rates to be cut again to the lowest since going back to 2011. , probability of rate cut is 100 . Today hasurrency strengthened because people have price to that in and looking ahead. Y are also praising pricing and another rate cut before the end of the year. Yields all the way at the other side, remarkable. The latest jobs report, jobs opening Labor Turnover survey. Takes the number of job openings and divides by the number of hires happening, and then you get a proxy for the length of time it takes to fill a job. 1. 1 jobs per opening. Months for jobs opening. At thenot quite postcrisis high, but we are at high levels, speaking to the increased tightness in the market. There are lots of different factors. There are some structural changes going on. Matt i have a look at oil and gas. The Top Five Companies in america, we consolidated their debt. That is the blue column. Of oil and Gas Companies continues to climb into a drop in oil prices. Oil prices in white. The yellow i threw in their last last minute,re refining margins for the gulf coast. It continues to come down. Its not good when you have that rising as the underlying commodities are shrinking as well. Hopefully tobias is right. Macys setming up, to report earnings tomorrow. We will explain why this Department Store company is struggling, next. This is bloomberg. E to first wordt news. And new poll in the president ial race in wisconsin, and law survey has Hillary Clinton with 52 of likely voters, and donald trump 37 . In a fourway contest, clinton at 34 , johnson at 10 , jill stein has 4 . Shows mrs. Clinton has retained most of the bounce she received from the democratic convention. The Bloomberg Politics National Survey shows Hillary Clinton leading donald trump among likely voters. When the Third Party Candidates are included, clintons lead shrinks closer to the margin of error. 17 people dead and 40 injured after two buses collided head on near the Pacific Coast of peru. It took place in a province south of the capital. Traveledball fans who to canton, ohio for the hall of fame game plan to sue the nfl. The game was canceled sunday night because of poor field conditions. The ap says at least 20 people have approached an attorney about a classaction lawsuit. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. I am mark crumpton. Matt thank you very much. A recap of todays action, the indices falling from recordis highs, the s p 500 posting its worst loss in a week, 2175, not far off a record high. At 5204 the nasdaq down and the dow jones at 18 495. Oil fell today, one of the big drags on stocks. Joe shake shack, the burger chain plunging. Were ok, butevenue investors punishing the company p store sales, not as good as the 5. 4 expected. Not what you want to see in a growth restaurant like shake shack, down over 8 . Scarlet we are looking at macys, the incoming ceo has his work cut out for him when he assumes the job next year. He will replace terry lundgren. Sinces macys stock price named ceo. Ren was you can see the steady decline since last july, losing half of its value. The main challenge for macys is encapsulated in this chart. People are spending their money on Internet Sales and eating out. What they are not spending it on is Department Stores and paying for things there. It is not clear what would change that trend. Helpedrise that this has to drive down comparable sales. On top of slower traffic, the stronger u. S. Dollar is weighing on sales to Foreign Tourists. Been a bright spot, online sales providing momentum with brick locations on the decline. ,o combat these challenges macys is Closing Underperforming Stores and expanding its discount offerings. Announcements, macys estill has more locations now been 2006. Slowing sales profits have attracted activist investors, pushing the company to monetize its store portfolio. The firm values macys real estate at 21 billion, double cap right now. Macys is looking to capitalize through joint ventures. We will be looking for these numbers and any announcements on property thursday morning. Joe cap right now. Lets talk more about macys and look what the next ceo has to do to turn the company around. Shelly banjo covers retail. Thank you for joining us. What is they key thing we need to look for our needs to happen

© 2025 Vimarsana