Bank Earnings Breakdown: Bloomberg Surveillance | April 12, 2024

[Music] this is Bloomberg surveillance with Tom Keane and Paul S why are we upset if we're creating jobs inflation is still a thing out there for the everyday consumer with Lisa Mato on markets the economic calendar jam-packed today and Michael bar with news tensions between the US and China have eated up even more the best in economics Finance investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone the Master's on which means Damen sassar has to be here yeah we'll talk golf this morning think Jamie Diamond goes 18 holes this weekend yeah I do actually uh well actually no he's probably going to be in the tent enjoying all the lobster and crack crab down at August the Pento the Pento sandwiches it's Bank earnings time Wells Fargo out JP Morgan out I'll talk to Damian about JP Morgan it's a startup firm they're doing okay for the last uh 90 days Lots going on in the list of guests this morning is the best look ahead I've ever seen on this uh project the team has just done a fabulous job to stagger through April and into May David blanchflower of Dartmouth College will join us I requested Terrence Haynes of Pangia on Iran and all the emotion in the lavant Michael pvis on the equity markets Kelvin say Leland Miller on China we're going to talk to Daman about Yen week and all that that a conversation with Susan Collins of the Boston fed in a real special tree Chris whan to stop by after the banking earnings to talk about some of the risks on the balance sheet I want to make a special program note good morning Boston a legend with us today Chuck CLA is Iconic at maril Lynch he invented what strategists do we are honored that Chuck CLA uh will darken the surveillance door uh this morning we're out on Apple carplay on YouTube what a week for our YouTube Celebration got all sorts of other digital stuff we're trying to get into the digital age just like Jamie Diamond and Brian moan of course the Interactive Broker Studios Daman 30 seconds I think JP Morgan's sandbagging it they don't want people to know what they're making off of 2019 stashing for a later day now I don't disagree with that I mean things are looking a little bit Bleak here though I mean we got JP Morgan shares down 4% in the pre-market I think down well stren on City I mean we're going to talk to Alison Williams she's going to tell us what net interest margins mean to some of the big bags with our Bloomberg business flash Lisa Mato good morning and Equity Futures taking a turn after big Bank earnings starting to trickle in we have the NASDAQ right now Nasdaq futures down about half a percent S&P futures down 4/10 of a percent we have Dow futures down 3/10 of a percent so I want to start there we'll start with JP Morgan Chase down nearly 4% right now we're reped adjusted revenue for the first qu quar beat estimates and that was the same news over at Wells Fargo those shares they're down about 2% right now then we have black rock they're up 2% long-term investment funds they took in76 billion of net inflow is in the first quarter pushing it to a record 10.5 trillion dollars of client assets now we're also waiting results State Street and City group we will keep you posted right here we'll head over to the bond market the 2ear yield at 4.92% that's down about four basis points the 10-year yield at 4.53 % and that's down about five basis points to Commodities gold hit another record we have spot uh comx gold at 2,414 an ounce but spot gold at 2397 an ounce and then we have uh Commodities like silver hit the highest in more than three years Copper Rose to its highest level since June 2022 yes all right that is your Bloomberg business flash Tom and Paul at leastone tell thanks so much daman's got like 4 Ines of notes Sweeny and I we just show up you know we have a coffee like water sassar is going to jump in with some smart Bloomberg intelligence stuff with his colleague Allison Williams Allison the six in a new one from James Diamond in his annual letter we must be a source of strength I'm sorry they're sandbagging it I look at some of the numbers 2019 and the growth of this Juggernaut out to expected 2024 I know there's this it's all 4% and that is this the most profitable Institute tion on the planet it's it's definitely the most profitable and large banking World um and I'll say two things so first on the annual letter you know it's interesting you make the point that they added this this new uh sort of important principle but they're kind of acknowledging what's already been there so they talked about being a source of strength um you know they they were a source of strength uh in the bank turmoil I will call it they were source of strength in the pandemic which was more of a crisis they were a source of strength in the global is acknowledging what's happening so terrible terrible Damian Damien assets well you know no wait wait a mar a assets up 19% Daman hold my hand Daman please on YouTube sassa and I are holding hands and it's not over produce loss return on Equity 177% return on tangible 21% it's terrible all my buddies at JP Morgan all the MDS over there I mean they're just look I mean you know remember they have a window where they can't sell their shares right so they're looking for actually JP more going to maybe hide it up a little bit because you know they want they want the share price to go up to 200 so quickly right I mean they're going to get stopped out they they want a nice slow upward grind a smart question and and you know the disappointment today may be that they're keeping the headline net interest income Outlook stable but look underneath the surface thank you number one the core net interest income guidance is up that's what we care about the core because the the overall number includes some trading that interest income it's a wash with fees it doesn't matter it's coming out of it's coming out of another bucket so let's you know focus on uh the drivers thank and I think that investors everybody can see that we you know had expected six or seven hikes last time now it's three so I think in you know maybe there was a little bit more hype about about a change in this ENT net interest income Outlook but look we're we're early in the quarter these are Risk Managers they're also managing expectations Wells Fargo has been very conservative in their management of expectations JP Morgan the same right like they beat and raised on that interest income got into all last year you know this quarter the banks are coming in in line with the guidance Allison when you and I studied this and let's be sure let's make it clear folks Allison Pro Tom amateur someone with a 21% rooc are you kidding me in banking land I me we didn't read about that Daman jum no Allison please we're cutting you off but I mean I look I know it's not JP Morgan JP Morgan provisioning doesn't even matter to J Morgan right I mean forget about it but what I mean credit card delinquencies are going up you know talk to us about in which is it Wells is it City where should we be looking for for provisioning for npls that sort of thing what we should be looking at is these Provisions coming in much lower than we thought despite everything you just said right so the card business that's on fire at these Banks card loan growth is a standout you're going to hear from all these Regional Banks you're going to see squishy loans you know you see JP Morgan and City benefiting from this car growth they are seeing Provisions but look home lending residential home lending a reserve release and this can only explain that to M Mortals explain what that is that means we thought losses were going to be super bad but now we look at what's happening with home prices we look at what's happening with delinquencies and you know what it's just not that bad they're moving money back onto the accounting statements they're they're saying things are not as bad as we thought Daman ask a smart question trading and banking any take away from that trading and banking I mean surprising to the upside at JP Morgan they are the leader in this business better on F uh better on equities trading I Elson I'm sorry I think it's the biggest Bunch you're you're phenomenal at this and you're you're really good to go turning purple the headline I'm turning purple folks because and with all great collegiality to my good friend James Diamond they're sandbag they don't want The Regulators they don't want Senator Warren of the UN of the Commonwealth of Boston to know how much they're making I looked down Park Avenue yesterday at their beautiful building they're starting to put the skin on it yeah they're spending three billion plus this according to Reuters on 270 Park Avenue that's completely the opposite of work from a home isn't it it is and we know that Jamie Diamond has been one of the most vocal people about bringing back to work bringing people back to work and having people uh back in the office a lot of people in their you know core headquarters they were back in May of 2020 uh 5 days a week so uh putting us all to shame and you know what I I will say the biggest thing about JP Morgan they you got to spend money to make money investors have really he said that in his annual his letter danan get one more question one more question here big versus small Banks you know I know the value trade is is not really there in this market it's all magnificent 7 but you know if you are going to allocate to the banking sector where do you want to put your money here so you know we don't make recommendations but I can talk fundamentals right I could talk fundamentals and and again the big Banks card that's benefiting the biggest banks it is not benefiting the smaller Banks the smaller you go the more pressure you have from commercial real estate that's a long drawn out story so we think that the fundamentals are really uh definitely for for this quarter and the Outlook you guys your date calendar is mental please I'm begging can I get Allison Williams and Gina Martin Adams together in the studio in the coming 10 or 15 days sure if your calendars align Gina was just just come on down to uh the fourth floor we do a remote down there think of the food opportunities Allison Williams thank you so much there on the banks I hope folks that was a better conversation to learn about these ginormous entities rather than this Ratio or that rich where's JP Morgan right now help me down 4% Thank you Rich uh TR and four rich is not the same the Rangers lost last night he's not on his game always on his game with our news in New York City Michael bar Tom Daman Lisa thank you very much the US spy Community is waiting to hear if Congress will renew a portion of the foreign intelligence surveillance act the house may vote later today on renewing 702 the section in fisa US intelligence officials call 702 crucial to doing their jobs because it gives them the power to collect Communications of non-americans located outside the country without a warrant FBI director Christopher Ray pleaded with a congressional panel to end the stalemate in the Appropriations Committee and allow it to reach the house floor on a vote it helps us find out who these terrorists are working with and what they're targeting and we made and it's what we need to stop them before they kill Americans critics say the surveillance program is a violation of civil liberties and Americans who might get caught up in the Spy scheme deserve Prime this week 19 Republicans vote with their party uh broke with their party to prevent the bill from coming up for a vote the measure expires a week from to day vice president Kamala Harris is traveling to Arizona today it comes after the Battleground State Supreme Court ruling putting a strict abortion ban from 1864 into effect the Biden Harris campaign has launched a multi-million dollar ad campaign in Arizona Democratic governor Katie Hobbs I'm ready to do whatever it takes to get the 1864 ban repealed earlier this week Democrats in the states legislature planning to repeal the law were shut down by Republicans the Arizona house Speaker says Democrats are eager to enshrine in our state constitution a right to kill unborn children President Joe Biden has added more Chinese companies and individuals to an export Blacklist than any us Administration the Commerce Department added six Chinese companies to its entity list yesterday bringing theal of new targets during the Biden Administration to 319 after round one at the Masters Bryson D Shambo leads at seven under Tiger Woods is one under after 13 before play was suspended Global News 24 hours a day and whenever you want it with the Bloomberg News now I'm Michael bar this is Bloomberg Tom Damen Michael bar thanks so much I haven't even had time yet to get out on live chat on YouTube I'll do that here in a moment Damen says I want to go to two things Feliz morans writes it up for Bloomberg News and to be serious here stock down 4% disappointing results from JP Morgan missing on loans expenses including 725 uh million for parking fees I guess over in Park Avenue I don't know whatever I get it Damien the scale here and I go back to when you were at Leman is 309,000 employees the operating margin there I am yeah from pandemic 39% pre pandemic out to 43% the margin expansion alone is an act of God yeah know I I guess I guess you're right there I'm I'm I think uh you know I think JP Morgan's they are the King of the Road man I mean as as go they so go the US economy 195 on JP Morgan a close right now let's round it up 189 on YouTube search Bloomberg podcast I'll get on on live chat on a break stay with us worldwide Bloomberg surveillance from Jamie diamonds New York City [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Mato Futures taking a hit and this is following gains from yesterday when the NASDAQ actually hit a record came after us producer prices in March increased less than forecast and that followed Consumer Price growth that exceeded forecast now that latest econom IC data changing the views on interest rates Economist Deutsche Bank Bank of America say the FED will ease policy just once this year in December the FED Susan Collins said there could be fewer Cuts this year so now we have Nasdaq futures down half a percent S&P futures down 410 of a percent down Futures down 3/10 of a percent over to the 2-year yield at 4.91% that's down about five basis points the 10-year yield at 4.52% and that's down about six basis points to currencies want to point out the pound drops below 125 it's the lowest since November the Euro dropped to the weakest level against the dollar in five months Bank earnings they were trickling in I want to point out JP Morgan Chase down nearly 4% well as Fargo down about three tens of a percent black rock is up 2% we're also waiting results from State Street and City Group um and since we're talking Banks one check Morgan Stanley we had that report that us Regulators scrutinizing the firm's efforts to prevent potential money money laundering by those wealthy clients we'll have an update on that that is your Bloomberg business flash Tom and Damen yeah thanks so much Elisa greatly appreciate it Damen says IR in for Paul Sweeney uh this morning Bank earnings out we'll Contin to focus on this Juggernaut JP Morgan Down 4% underwriting bad huge beat huge I mean Bond ISS translate that for people well I mean look we're looking for fixed income primary Market activity to be you know relatively tight here but we're just not seeing it Financial conditions are loose it doesn't matter that the fed's not going to ease in June they got a better nominal GDP to work in I get like Feliz has this great article there's this problem there's that problem where are they in 3 years yeah three years I don't know we're with the 10 largest S&P constituents three years ago I can tell you this if you add it up their market cap is the size of China this is a joy we're going to get this out of the way right now it's a seasonal tradition here we go to David blanchflower he is in Hover New Hampshire or he's in Florida or he's in wherever he's traveling in Wales or that David Danny blanchflower describe as we get to the job economy describe the black fly season in Hover New Hampshire it's like worst on the planet isn't it it is we uh we're now in mud season and we've had uh frozen ground for a very long time um I came back here from Florida we've had two snow storms since and then what happens eventually is the Frozen stuff in the ground eventually melts and uh water flows down and the black flies appear so this is this is not not the greatest month to be in Hana New Hampshire but it's great to be with the students and it's been gray and when it stops snowing it's been raining every day so it makes you yearn for Florida and yearn for New York City but you know you do what you do right David I I want to go back to the wage curve and your iconic study of the agony the pain of wage Dynamics in the labor economy the biggest single debate that I get in mail is people with bow ties saying the economy is pretty good and thousands of people are telling me Tom you don't know what you're talking about in three ZIP codes in Manhattan the labor economy is really weak Professor Blan flower which is it well obviously there's there's kind of Two Worlds but I think the story actually if you go back to the wage curve and subsequent stuff the unemployment rate actually no longer tells you much of anything about the economy just to put it technically it's unrelated to wages so I think people give you the wrong steer from that the right thing to look at is is basically employment and the US has a really big puzzle unlike every other country in the world in the employment rate in the US today is below what it was in 2008 and Below what it was in 2000 so that's an element of weakness the other thing to say in basically to back to the conversation that you just had if you look at what's happened on the employment on the house old account the decline in jobs in the last eight months or so is greater than it was in in the months from from February 2008 through 2007 so there's conflicting evidence some people are really feeling weakness other people are seeing strength and I was just looking to think about that question Tom obviously you you look at the non-farm pays and it looks really good and and obviously the economy has been pretty resilient but I was just looking at in front of me at the the conference board consumer confidence surveys the expectations index which basically predicts recession is essentially saying we're in recession have been in recession for quite a long time so there's this conflict and obviously part of it is a political conflict Republicans say the economy is doing pretty badly and the Democrats say it's doing pretty well so it's a really pretty confusing picture uh I think the answer is the economy has been more resilient but we've had to put up with with an inflation shock so it's a kind of poised answer but I think and I have a new paper that people can go and see in economica where Phillips published his original paper showing you that there's much more weakness here than you would have thought for the strength of the economy Professor blancha are casting shade on the household survey Tom I mean it's clear he's an establishment survey kind of guy but no in all serious he's cruel and unusual cruel it's a big question facing markets Professor blanch for me anyway isn't you know whether the FED will cut rates but why talk to us a little bit about whether or not you feel below Target inflation is enough of a case for the FED to justify rate Cuts this year well it's probably not enough I mean the analogy I was like to give is go back to think where you were in say April May June July 2008 and the discussion was much like this one saying you know our rate the cuts coming inflation is 5% you know it's going to be 8% in the future well that story was clearly wrong um so so the answer is well what is what is the Fed going to do I mean I think the answer answer is we're waiting for some data I mean I think the really important data is spend despite the consumer confidence there I've just talked about people have continued to spend on Services they cons contined to go to Broadway shows the question is is there anything that's going to prevent that uh the other thing I would say um Daman and to tomman is that it always strikes me as kind of funny I mean I always thought when you set interest rates your job was to think about what inflation was going to be in 18 months time so what what the inflation print was this month or next month or the month after was only relevant if it was a surprise so I just find it really hard to understand for someone who's set interest rates 36 times why people think that a single data point is going to impact what the FED does the FED should be thinking about what inflation is going to be in 18 months and as far as I can tell all the indicators are that it's going to be well below the target which actually says you should be doing rate cut so that's the really big debate why does the FED think that inflation print next month is going to severely change their view about what interest rates will be in 18 months I mean the reason being that it takes 18 months for anything for you to do to have an impact so I find this discussion wholly disheartening and and in a sense it's like well well why do they think changing interest rates will affect inflation in a week's time doesn't make any sense we got to go don't be a stranger thank you so much there but I really wanted to get professor for blanchot around with this huge response to Tom you don't know what you're talking about the job economies out there I mean Daman we're going to do lots of technical stuff today dive into JP look at the sassar world what Yen's doing and em and you know like copper up to a record high just gets my attention 8.8% year today but there's there's no other issue that I get mail on Damian from people out on YouTube on Apple car play Then Tom you guys are nuts the job economy is terrible so you go to the leading guy and it must feel that way I mean and look that's why I look at the household survey right because that shows you what the size of the labor force is so I think your average household there probably is feeling like unemployment is rising right because despite a bigger labor force you know there are just more unemployed people there's that migrant issue we've talked about in the past but truthfully payrolls have been blowout 300,000 plus and it looks like there's no end to it I failed there I I didn't have a time to talk to Professor blanch FL about mil wall Cardiff City's visiting mil wall this weekend oh is that right in the Champions League yeah Pharaoh talk me this stuff I have no idea what I'm talking about Yen what's the level for you on dollar Yen where the institutions of Japan Panic they got to wait till their fearless leader gets home we knew we were going to cut through 152 and now it's just a matter of when not if they got get in and starts theend you go to the steak dinner no I missed it you know next week is IMF week so you know I was invited to a few steak dinners down in Washington are you going no I have to work yeah you know it's tough I'm not going this year either I mean you know it's it's kind of it's but you know what there's a lot you have to get on the Bank of America uh guest list because they have all the great meetings according to my people are all going down there they just got their agendas they're really excited did you get the El Sal did you get the Ecuador which meeting you in which meeting you in that's what they're all talking about you're going to get Tom Kean on the Bank of America guest list I I I'm not moan Brian would just say no lose the bow tie we have danan sassar it's a really interesting Friday as we look ahead into the end of April towards at fed meeting JP going out with earnings [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Mato Futures pointing to a lower open right now we have Nasdaq futures down about half a percent S&P futures down 3/10 of a% Dow futures down 210 of a%c the 2-year yield at 4.91% % that's down about five basis points the 10-year yield at 4.52% and that's down about six basis points on the economic calendar for today we have a report on import prices for March that comes out at 8:30 Wall Street time we also have a read on sentiment from the University of Michigan but the big focus on earnings from Big Banks we've already heard from some of them with disappointing results from JP Morgan Wells Fargo we have JP Morgan Down 3% well as Fargo down about 310% Black Rock is up about 2% I want to turn to Tech now Intel down 2% AMD down nearly 2% this is after that report from The Wall Street Journal that China telling its Telecom carriers to phase out forign ships by 2027 and then you have Samsung sourcer saying it's preparing to take the wraps off by 44 billion doll investment in US chip making as soon as next week that is your Bloomberg business flash Tom and Daman Lisa Mato thank you so much there's always an intelligence and force to the notes and the conversations with Terry of Pangia policy in the last 48 hours it has changed there is an urgency and immediacy to what he says of how Washington must look to Tyran in by car through Baghdad across Iraq through Jordan to tell aiv a distance of 1300 miles Terry Haynes on this weekend in the Levant Terry how Grim is it well Tom it's uh I think it's Grim but uh it depends on a word that's being bandied around a lot here and elsewhere proportionality what I'm afraid of is that markets tend to think a westerners tend to think that uh the Iranian response either through itself or its proxies will end up being what uh an Iranian official told the the German official that their response would be proportional well proportional to Iran and proportional to us are probably two different things so I think that as we've talked before there's a lack of appreciation for just how big the potential geopolitical shocks can be here are the political shocks Iran and Iraq 20 30 years ago in that horrific war that they fought almost you know Caris as a med a medieval war or is this about Guerilla efforts localized efforts by Iran to retaliate uh well it's probably both uh you know there's a there's a very wide range of potential options uh at least 10 to 12 from what I can count and uh and you know they they could happen individually or in some combination but uh my my concern is from a Market's perspective is that you know markets haven't had to assess anything like this really uh for a couple of decades and there aren't aren't many people who have been around and can assess those things uh so I tend to think that there might be a disproportionate Market reaction if there's anything but the usual Tit for Tat in the Middle East and I don't think that's what we're looking at here Terry you mentioned those dozen or so options and I think about them you know uh you know foreign embassies you know is Iran going to go direct are they going to go through Hezbollah or the houthis but you know talk to us a little bit about you know what the most likely outcome in your view is um well I I'm not going to be able to put myself completely in the uh the minds of the Iranian government Damian but uh you know I tend to think that there might be a uh uh you know embassy attacks that there might well be uh or stepped up activity uh both from Hamas and uh and and kind of from the Lebanon Syria uh Frontier uh I do not think that there's likely to be a direct attack on uh on Israel only because uh that would violate kind of the informal uh Arrangements that that are known over there as the envelope the uh the informal kind of uh rules of the game that tend to govern Israel versus non-israeli uh combatants uh you know it's in neither party's interest to completely blow those up but I do but I do think there's greater than a trailing risk that something like that might happen uh yeah at some point this is going to get uh irresistible to the Iranians Terry let's cut to the chase here Israel's relationship with the Middle East is in utter disarray its relationship with another uh a number of of other major foreign players I'm thinking turkey Colombia Brazil even the UN continues to deteriorate at this stage what if anything can Israel do to repair some of these relationships well I think one one of the things that's going to happen is is that they're going to finish their uh their Gaza operation uh the United States has not proved or anybody else has proved to be uh able to broker a different result uh but you know we're going to be and I don't want to be polanish about this at all uh but there was a an existing peace process with the Saudis and others that predated all this and that that's going to get pick picked back up a lot of the delicacy that you see right now in the relationship has to do with the ability to pick that up uh postwar and uh and Israel remains very interested in that and I think that's largely what's going to happen Terry one final question we got to run onto the markets here Futures folks negative 18 Terry Haynes I I'm just at Lisa Matteo had this in my bar and I'm not briefed on it there's going to be a meeting a Love Fest in Marl Lago this afternoon this evening whatever of President Trump in the Speaker of House of the United States of America Congress Mr Johnson what's going to be accomplished uh what's going to be accomplished is a visual uh showing that Johnson has Trump's confidence uh and that that Trump has Johnson's back on the continued speakership so you're not going to see another disruption like you saw with McCarthy last fall that will enable the Johnson and the others to to finish up the few bits of remaining business that they have Terry thank you so much Terry H with penia there on Iran and uh we'll be watching that through the weekend Ethan Bronner leading our coverage in Tel Aviv can't say enough about the Israeli coverage in the Levant coverage we've seen out of Bloomberg at news what's on my screen I got equities bonds currencies commod Mato with the data check she's doing a great job the vix 15.39% there but you know it's like apple I hear Trump's remodeling his living room also so that may be get add a little bit of support to to the yellow metal yeah but the yellow metal 2400 how do you trade that within em I copper I guess no yes you do yeah absolutely do no you trade gold gold is sort of like a surate for cash it's a it's a tool for Capital preservation and it's one that quite frankly is getting a lot of attention in the uh in the circles that I talk okay so Suk auk and Dubai I get it they're moving bracelets yeah what does Indonesia as an example do do with gold um that's a good question the Boi has its own set of issues um you know for me Indonesia is all about you know they're trying to build a new capital they're trying to kind of move from Jakarta there's a lot of debt they've issued in order to fund that project and you know yields are it's one of the high yielders in Asia so you know up until maybe this last week I would have been a buyer of of of Indonesia I would have liked to hold IDR but I don't think you can hold anything but the dollar in this environment Tom and we can talk about that well we're going to have to talk about that we'll find some holes here across three hours of coverage today to Dr Damen Cesar about that Daman I want to then look at one currency pair which has moved overnight lagard was it was beautiful everything was fine we are the world oops a 108 down to 10657 what is Bloomberg intelligence or your sources on the street modeling out Euro I'm hearing 105 on the way to parody so so for our for our listeners that's a move of down 1.6% on the week that's a pretty big move in euro dollar which is arguably the most liquid cross that track here at Bloomberg I mean look let's be clear it's about cnh and and Euro I mean those are the two currencies that matter most if you're a US dollar investor that's looking to go offshore and my goodness if you do look at China Yuan here I mean the 10-year China us uh yield spread a record low of 225 basis point so I mean that tells you everything you need to know these low yielders are having a lot of trouble in this environment where the FED is expected to be on hold for longer for Global Wall Street the dxy the major trading currency through 10304 105.8 for can you imagine on this Friday a 106 dxy that changes the world of Damian sass hour right now the vi 15.38% [Music] a yes vote renews fisa for two more years instead of five it is a win for conservative Republicans who say two years allows Donald Trump if he wins the presidency to make his mark on fisa yesterday FBI director Christopher Ray told lawmakers that the US is facing more threats from foreign adversaries and appealed to Congress to renew it Bloomberg zamy Morris has details from Washington Ray appeared before the house appropriation subcommittee hearing on the fiscal year 2025 budget request for the FBI but he told the panel that failure to reauthorize fisa would be dangerous for the country as I look back over my career in law enforcement I would be hardpressed to think of a time where so many threats to our Public Safety and National Security were so elevated all at once Ray says threats to the US from foreign terrorists have been rising since Hamas attacked Israel on October 7th in Washington Amy Morris Bloomberg Radio former president Trump and speaker Mike Johnson are set to appear at a joint news conference later today at Mar Lago the presser about election Integrity comes as Johnson is facing pressure from a trump Ally in Congress to be removed as Speaker congresswoman Marjorie Taylor green threatens to activate a snap booat that could remove Johnson President Biden will forgive $7.4 billion in federal student debt in his latest push to provide reliefed borrowers about $277,000 Americans will have their loans cancelled round two is about to get underway soon at the Masters after round one Bryson dambo leads at seven under Tiger Woods is one under after 13 before play was suspended Global News 2 24 hours a day and whenever you want it with the Bloomberg News now I'm Michael bar this is Bloomberg Tom Damen Lisa audible take to Mets baseball here in the next hour we got it to the Masters now I love this guy he's a physics major tell me Damian about D Shambo all his clubs are the same length that's brilliant well I know look he makes it look so easy I mean he reaches on every par five he's there in two he's there in two so he's he's got a natural Advantage when he's coming off the tea like that and you know if he's putting the way he's been putting I mean 65 I mean that's seven under to lead but sheffler's right behind him I mean that was sleepy shuffler at his finest and he's always been a great sheffler at at Masters help us here I mean I mean Michael bar and I don't have a real life like you you're you're has been working on his putting how many times a week are you out on the green on the course uh you know I I try to get out there once a week oh he's lying times work from Golf Course Damien his bag D shambo's bag is absolutely original all the clubs are the same length y that it's it's like brilliant that makes total sense to me every time he pulls a club out he knows what the length is is that is that him alone or well I mean the underlying story here Tom from a business of sports perspective as Michael bar and I know is the fact that dbo is on live he is not on the PGA anymore so the fact that we have another live golfer leading the on the leaderboard here you know leading it all is a pretty big deal I mean let's just talk about Tiger Woods though we must right one under with five to play I mean if keep your eye on this because he has to play 23 holes now and he's just com off at surgery and and with the ankle I I'm just wondering and this you know we're going to find out if he makes the cut today after the end of the day so have Bloomberg Radio coverage of this nice updates of what's going on at the M this one of the biggest things I've ever been wrong on Al from New Jersey called me up he goes we're doing golf on radio I said what are you out of your minds and it was phenomenal I heard you guys talking yesterday about the Initiation fee at Paul sween's course yeah it's like amazing yeah it's unbelievable I mean it's it's like nothing compared to mine my course is you know North North North they want to my course wanted a case of Jenny creil that's what they wanted are the courses packed Daman not yet not yet I don't think I think it's still a little chilly out there but I bet you in the next few weeks you're going to see a lot of activity for sure nothing like the Detroit public golf course that I used to play on Municipal yes exactly nine holes man Masters coverage and of course we'll have the Masters for you some highlights and updates here as we get started with a lot of rain uh in Augusta it JP Morgan they're out with earnings trading off but nevertheless underneath the headlines Allison Williams saying some big numbers good morning [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Matteo Futures are falling right now we have Nasdaq futures down 3/10 of a percent S&P futures Down 2 t0 of a percent down Futures down a tenth of a percent or 62 points over to two-year yield at 4 4.90% that's uh down about five basis points a 10-year yield at 4.52% and that's down about six basis point to Commodities we go with Bren crew $90 a barrel Traders keeping an eye on how Iran might respond to an attack in Syria last week and then we go to Gold that hit a record right now comx gold above 24,000 we have spot gold at 2 2,394 over to Silver hit the highest in more than three years and then Copper Rose to its highest level since June of 201 22 Bank earning still in F Focus we've already heard from some of them with disappointing results JP Morgan Wells Fargo we have JP Morgan right now down about 2% Wells Fargo is up about half a percent right now we'll turn to Tech Apple sources saying it's getting ready to overhaul its entire Mac computer line a new set of In-House processors that are designed to H highlight Ai and speaking of AI sources saying xai looking to raise up to $4 billion in a deal that would value Elon Musk start up at $18 billion and finally Amazon trading at a record it's last of the five biggest US tech firms to reach an all-time high in that rebound from post-pandemic selloff that is your Bloomberg business flash Tom and Damen man de sing with us on Tech here in the 9:00 hour Damen sassor in for Paul Sweeney Daman I'm you know a classical believer Dr copper speaks volumes is copper up because China's doing better we're getting Whispers that China's doing better a little bit a little sorry about that blue button Blue Button sorry Detroit Lions Blue Button um well yeah I have to agree with you I think the fact that Copper's up 8.8% year to date I mean iron ores come back this week also so that's another kind of China signal but the China trade data overnight Tom weaker than expected and it's not that exports were down 7 and a half% it's that Imports are down another 1.9% which just shows that domestic demand in China it's just not good but I will say this you know China is one of just three countries within the Bloomberg Global aggregate Bond index that's actually up on the year so despite the weakness in the Yuan yeah China bonds are still a good investment and what's interesting out there folks crystalina gorg getting ready for the IMF meetings make clear she Refirm a global slowdown and there's a lot of Commodities really pushing against that including copper just off Valentine's Day I believe it's up 17 uh percent is it a coco moonshot no but it's you know it's it's it's it's not not I quote copper do you quote Chicago or LM I do LM I do LM cash too I Chicago because of my grandfather a million years ago she got Pharaoh took me to test HG HG hga right H H G1 whatever whatever hg1 first contract said wouldn't talk to me about copper unless I did lme so I had to learn to use lme I I use the lme I mean they made it a little bit easier on the terminal to do that now a look at the front pages what's making news around the world your daily Roundup of today's headlines from major Publications Bloomberg surveillance our daily newspaper segment the least Mato hour brought to you by interactive brokers interactive brokers they charge dollar margin load rates from 5.83% to 6.83% rates subject to change learn more at ibkr.com compared I thought the newspapers were thick with stories today what did you choose Lisa all right so we're starting with the Wall Street Journal have you noticed around the office we have them a lot here at Bloomberg couches right they're everywhere everyone loves the couches companies trying to make the offices seem a little bit less stuffy to get people to come back in okay so workers are saying they're more comfortable managers are saying it helps them think of these big Ideas you know but experts are saying it's actually bad for your back and this is the issue with you know you're balancing this laptop as you're trying to sit on the sofa and then you know that can be an issue and then it's also becoming more expensive in a way because people are not taking care of the sofas so they're spilling their coffee they're eating their food so now the companies have to make this expense and have the sofas clean every so often when I your pretzels are all over the place every day 10:05 and I'm on with the chees and you know I I I clean up after myself with the chees this is say Damian what do you think here opens his bag open my bag of chips oh look what a shot look I think I think companies have long tried to make the office a little bit less stuffy they do uh you know have restaurants outdoor Terraces they they have signature scents you know these little diffusers in the office to make it smell smell smell nice we have that in my house my wife loves that stuff yeah it smells beautiful in my house are you doing AES do you know what's the perfume no it's a um it's like that Hotel Collection I don't know I I got to ask my wife I meanes yeah I got to ask my interpreter you know she she controls my bank account so what do you think cuz I mean this is a huge debate where people are saying people are saying that we're we're coming back to the office and Paul and I were really pushing against that we're not sure we see it Monday Tuesday or Friday Mondays and Fridays it still seems kind of quiet around here but you know Tuesday through Thursday I I think everyone just needs to kind of come back I don't know I'm littley I have to do it so I feel like everybody else we're a little biased what do you got next okay the battle between Boomers and Millennials it's starting to see this shift because Millennials are now going to start competing with other Millennials here's a reason why okay so when they first entered the adult world 2010s right so they bonded they have this against adversity because it's harder for them to save for homes right so they bonded together Millennials yes they're going against the Boomers but now it's changing Boomers starting to fade in force the new competition here's a reason Millennials who have benefited from family wealth so you see the competition the tension there so now you have these Millennials who can't afford to buy buy their home but you have these other Millennials who can because their parents gave them the money for it so it's his tension I think the interesting statistic here I mean Lisa is the fact that the average millennial had 30 has 30% less wealth than the average Boomer by the age of 35 that's an amazing statistic and and I mean Boomers they owned homes they had you know home equity wealth whereas you know I mean today's uh Millennial I don't think owns all that much real estate this is the first time I've mentioned it we're going to feature this on Monday with bank earnings today and a really full schedule we going to slide it to Monday Bloomberg News has done the absolutely definitive research project on majors in colleges and to me the Divide Lisa is people that went to college like Damen sassau and got a real degree versus a lot of other people that just sort of slid through and they got this degree or that degree and to me that's the millennial divide yeah is people with you know a legit stem a high energy degree and the Bloomberg research Paulina coo has this the the Bloomberg research is absolutely definitive we'll feature that on Monday next and it's tough cuz colleges are so expensive too so that's she folds that into it with her te pay $400,000 to be a major in sociology that's fun yeah that works work you there you go you'll love radio speaking of colleges this where I want to shift to a lot more Elite Schools they're returning to those standardized tests so now Harvard Caltech they're starting to bring back the SATs um Harvard kind of did this backtrack they were going to make it optional for a few more years but they changed their mind Caltech did the same thing um so they're starting to bring it back but the shift started to happen which is interesting after the Supreme Court ruling that schools can't consider race and Admissions and this is where things started to shift a little bit that's what the article say damen's living this in real time oh yeah I mean I look I mean all I know is um I'm a fan of standardized tests I do I think he need that number to kind of differentiate you know the cream from the crop and you know so I'm a fan of it but at the end of the day if I had a weaker uh a student who a son or daughter who wasn't a great test taker I I understand that it's it can be a pretty big ass Tas and to sit down SP hundreds of dollars on tutors for the for the on granted was in the way but I've had too many professors tell me it's been an unmitigated disaster they they you know finally Harvard's catching up with Dartmouth and brown and and all the and there'll be a zillion other school like MIT and Georgetown leading the way on this day yeah absolutely but the bottom line is professors say they got kids in class they just can't do the work that's the BM Well did you see is donating money to the public school system down in Miami to address just this issue because the covid kids ages were in grade six to eight you know are suffering that Lisa Matteo thank you just really strong newspapers all through the week there Lisa Mato uh with one of our most popular uh efforts we are out on Apple carplay uh just thrilled with that we're out on YouTube and we're jaw-dropped over the performance thank you so much you search Bloomberg podcast look for Le Lisa Mato gorgios that's on the new uh chicklet there as well so we're looking for uh YouTube uh Bloomberg podcast and of course Daman CES are with us today um as uh well it is a Friday we're staggering on through to the weekend and into a very busy week before a Fed meeting we're going to do a lot more on that Michael pervis scheduled uh to be with us among other worries it's Friday Damian's in love is in love vet bills in love Friday I'm in Love th the wall instead it's Frid in love satday suay always com to [Music] [Music] [Music] [Music] this is Bloomberg surveillance with Tom Kean and Paul Sweeney why are we upset if we're creating Jobs inflation's still a thing out there for the everyday consumer with Lisa Mato on markets the economic calendar jam-packed today and Michael bar with news tensions between the US and China have heated up even more the best in economics fin investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone Paul S and Tom Keem Bloomberg surveillance Sweeney On Assignment got the golf stream somewhere grield was schedule Gus came down with the flu so she's you know yeah out hanging out with Gus the horse Short Straw Damen sassar are in today on an eventful Friday thank you Terry Haynes on Iran that's what we're watching in international relations this morning what are we watching in the markets here on Apple carplay on YouTube search Bloomberg podcast I'm sorry Damian into the weekend in Monday morning in Japan is 700 p.m. Sunday evening in America will they act they're going to get their leader back from the state dinner how was the state dinner I you know I miss that one you know I I've heard it was delicious actually and had like a tuna tartar a little appetizer cocktail I used Mary Lincoln's uh Mary Todd Lincoln's China right um Daman what are we going to see from the the institutions in Japan once they get kashida back to uh Tokyo again as we broke through that 152 level in dollar Yen you know there's a lot of speculation that the boj is going to have to come in there and support the currency I expect it to do that the question is when and just how much do they sterilize this is way too much for the top of the show but there's there's two ways to do uh interventions here do they get fancy or do they just do it well I I think they just do it I mean look I don't expect them to start buying ETFs all over again I think they're going to try and be tactical and strategic about it but they're going to have to provide support in some way just to get some of these uh Market moves off its back we digress quickly here we got to keep the show going to get to Michael pervis City group is out with erings City group is not JP Morgan is it Damen Cesar uh no but it's still a pretty big Bank you got to pay attention to it and certainly you know some of the stuff for me and EM that's going on in Mexico I think they're trying to devest of their exposure there I'm interested to hear what's going on on that front I mean it's going to be uh re Reven we're getting some comparison right now the headlines are roosing out the goes up 1.2% versus what we saw pulling back a little bit on JP Morgan I haven't even had time to look at Wells Fargo total loans uh came in a little light that will be interesting the FI trading came in pretty much on target yeah oh that's that's that's Wall Street talk right on the screws net interest income 13.5 billion I don't have an estimate for that but that seems It's a movable it's a Movable Feast we'll dive into that but let's keep the show uh rolling here from the the Interactive Broker studio with our Bloomberg business flash Lisa Mato good morning Equity features lower after big Bank earnings you talked about it starting to trickle in let's start there so we've already heard from some of them we have disappointing results from JP Morgan Wells Fargo JP Morgan missing on loans expenses right now JP Morgan down about 2% we have Wells Fargo up about half a percent Black Rock they're up 2% long-term investment funds took in 76 billion of net inflows in the first quarter that's pushing it to a record 10 and5 trillion dollar of client assets you have State Street they're up 2% right now adjusted earnings per share net interest income that first quarter that beat estimates and then you have City Group they're up about 2% right now over to the 2-year yield at 4.89% that's down about six basis points you have the 10-year yield at 4.52% and that's down about six basis points on the currency front want to point out the pound drops below 125 the lowest level since uh November then you had the Euro dropped to the weakest level against a dollar in five months that is your Bloomberg business flash Tom and Damen Bloomberg surance this morning brought you by con Resnik advisory Assurance tax con resx Enterprise Risk Management Solutions can help your company Drive value through stronger compliance and reporting procedures visit conn. major shout out thank you con Resnik for enduring support of of what we do there's what I wanted to see City Group return on average common Equity 6.6% JP Morgan I believe the compare was 15% I'm making that up but it's still better than estimate I think they were the Roe was supposed to be 5% so I I my major message folks is these are not all banks bundled together they each have their own character their own profitability we're going to digress now we do this with Dow 38,600 5200 SPX with Michael pervis syn the izing this all together I think about like three years ago you wrote two paragraphs in Asia dxy were like poetry about the Pacific Rim and and in that what's that three paragraph poetry you're going to write for Monday morning what's the thing you're focus on uh well you know just broadly I think you know one of the things that you know I've been very constructive on risk assets like equities here right coming into this year it's I I call it the Dual Goldilocks condition where yeah the Fed pivoting December it's it's a pivot with a whole bunch of footnotes but it's a pivot nonetheless um combined with a strong worker consumer right you know to have that is is a risk on thing that said I think your colleague uh Gina Martin Adams Point uh she was on fire yesterday yeah and she she also posted a great chart on Twitter I believe just showing the technicals in the S&P 500 starting to get a little bit over done the upward momentum there and this is a signal that I've been focused on as well it looks like we're kind of due for some sell and may go away some consolidation in Q2 so um you know I don't have a good earnings be case broadly speaking to articulate right now um you know we've had some higher than expected inflation reports and I expect some higher than inflation uh some inflationary push on the earning side as well certainly the top line and if they can continue to defend their margins then we might see earnings be okay there but I do think that um the the the sort of the big risk I'm worried about Tom is is and I'm not saying this is a base case here but we've had a push higher in yields and if if we just start seeing Traders jump on this we've had a slow motion treasury sell off and if that is goes from second gear to fourth gear like we saw last September combined with sort of a commodity surge or or an extension of this commodity surge that could be the recipe for some risk off but again it doesn't have to be a massive derailing of the entire uh Market but but but the cause for you know maybe a 5 to 10% pullback Michael you mentioned the move and yields driven by break evens driven by inflation expectations we know what that means that's good for gold and you're a little bit of a closet gold but I mean do you know that Michael's a CL the gold but he is recommending that you buy GDX call spreads here I mean talk to us a little bit September by the way we have till September so you think there's still some legs to this rally in Gold eh well you know it's interesting you were talking about gold earlier uh in the show uh there has you know squeaked out fresh lifetime highs again one of the interesting things here is that gold volatility here usually you see gold volatility Flame up with these kinds of rallies it's not right and so it gets to this point about what's been the backbone of this rally it's you were it's what you were talking about it's the bank of it's official sector buying ETF oun held if you look at all the ounces held in the in the go that's been plummeting here so it's not a Wall Street driven rally and what I'm wondering is is you know whether this rally starts pivoting to a different type of rally more of a Wall Street rally well now that's what I wanted to ask I mean talk to me about the other precious metals that really have not participated Silver Platinum padium Etc talk to us a little bit about some of those other sort of surrogates for gold do you see any value there yeah well certainly I mean look silver you know think about it this way you know in in uh 2011 gold made a lifetime Hive 1921 in September of that year silver had reached as high as 50 um there and then both Metals went into a bare market right now silver has struggled to get through 30 over the last three years and gold has made you know new lifetime highs here um that are that are substanti higher than where they were in 2011 here so gold silver ratio has been rolling over here you know could get a lot lower here the key level to watching silver is 30 if it breaks there then you have an air pocket to 35 36 we digress Lisa we're talking medals here platinum gold which do you like better I mean if I look at a Tiffany wedding ring are you thinking platinum or you thinking gold no I'm going regular gold I can't do the Platinum you got to go you got to go Ros Ros rose gold you got to go the tougher carot you don't go this 14 carat you got to go like you you know the the gold whichever gold is the one that's tougher I got to I got you can scratch it in the dishwasher I that's other is I want to go to the both you I'm interviewing both of you right now I got a massive strong Ren mby move against this ridiculous week Yen Michael bis you've been brilliant on the Pacific Rim Damen you bread and potatoes every day give me a link here between Ren mby and in Yen Japanese Yen you Dam sure I mean look both companies have company sorry goodness both economies have very very low yields they are low yielders meaning you know if you want to take risk in other parts of the market and use the Yuan or the Japanese Yen as your funding currency that's what a lot of investors have been doing especially given the low volatility but do you think Michael perous is a jump condition coming I mean I'm looking at the chart back 30 years of of uh Yuan strength something's got to give yeah well certainly you know there are some inklings I mean you didn't see it I think Damien pointed out earlier this in the morning that this the economic data we just got doesn't doesn't spell like you know massive Chinese Resurgence here but certainly a lot of the bad has been priced in here and a little bit will go a long way um uh you know there but I I think the overarching theme Here is that the dollar you know all these currency pairs we're talking about you you were you know the Euro you know has got a 106 and change here right now right I mean the dollar is really sort of the central thing and I think a lot of these emerging economies they're sort of like you know what's going on in your currency what's going on in your economy what's going on in your elections Michael per come back for two blocks got to got to go longer dxy is going to print 106 before pervis leaves uh the Michael Bar Studios as we say uh Futures improve off JP Morgan -22 has become -5 City group with a modest lift with our news in New York City here's Michael bar thank you very much Tom Damen at Lisa a Us official says it is expecting a major attack by Iran against Israel as soon as today the official told CBS the attack could include more than 100 drones dozens of cruise missiles and perhaps ballistic missiles as well as will be aimed at military Targets in Israel the official went on to say it's going to be challenging for the Israelis to defend against an attack of that magnitude it would be in retaliation for last week's attack on an Iranian Consulate in Syria that ton blames on Israel Secretary of State Anthony blinkin has been making calls to foreign counterparts in Turkey China and Saudi Arabia asking them to urge Iran to deescalate State Department spokesman Matthew Miller says those aren't the only countries they've contacted we have also engaged with European allies and partners over the past few days and urg them as well to send a clear message to Iran that escalation is not in Iran's interest it's not in the Region's interest and it's not in the world's interest spokesman Matthew Miller the Spy Community is waiting to hear if Congress will renew the foreign intelligence surveillance act Republicans emerg from a meeting last night confident they can pass a revised version of fisa President Biden is chipping away at student debt once again we get the details on the latest move from Bloomberg government Zack Cohen in Washington the B Administration did uh say it will forgive another 7.4 billion dollar uh in debt under its current save program sort of the income driv repayment program that is moving forward um and has helped hundreds of thousands of Americans get their debts even even erased at this point Bloomberg government Zack Cohen reports this latest move will cover about 277,000 Americans round one of the Masters is finishing up this morning Bryson D Shambo leads at 7 under Global News 24 hours a day and whenever you want it with Bloomberg News now I'm Michael bar this is Bloomberg Tom Dam and Lisa 162 games in the season have a cardinal rule I don't think about the Major League base till they get 10% of the games in I'm going to break the rule right now it the hitting power machine known as the New York Mets this weekend has the almost first place win eight in a row Kansas City Royals in how how can we even predict that the Royals Mets would be the best pairing of the weekend I mean could you see that score of the Mets Braves game I mean all the Mets the Braves the Mets beat the Braves 16 to four yesterday I mean that is some that is a touchdown in three field goals and can I say how happy I am for Bobby Wht Jr who had the gumption to sign a mega deal in Kansas and stay there every other agent would have said move to New York right well look I mean I I I I imagine he's not having an argument with his interpreter either but you know I I guess you know I I I had to check my bank accounts after this whole sh Otani thing and I realized that my interpreter was taking out that's my wife sorry she was in there I had to talk yesterday Jason Kelly thank you so much it was great to chat up A-Rod yesterday [Music] he [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lis Matteo Futures still pointing to a lower open after big Bank earnings but also the latest economic data changing views on interest rates you have economists at Deutsche Bank Bank of America saying that the FED will ease policy just once this year that'll be in December and then the FED Susan Collins saying that there could be fewer Cuts this year for today we'll get a report on import prices for March and also a read on sentiment right now we have Nasdaq futures down 4/10 of a percent S&P futures down 310% down Futures down 2/10 of per or 78 points the 2-year yield at 4.89% that's down about seven basis points the 10year yield at 4.51% and that's down about seven basis points points a quick check on banks with earning season kicking off we have JP Morgan Down 2% whilst Fargo down nearly a%c Black Rock and state trade both up about 2% City Group 1% we got to hit Tech right now Intel AMD they're both down by about 2% here's the reason why there was a report from The Wall Street Journal China telling its Telecom carriers to phase out foreign chips by 2027 that is your Bloomberg business flash Tom and Dam Lisa mono thank you so much uh the team really works for me to try to bring you voices from another time and place I've been calling the two Octobers ago bull market lift the Ralph Anora Edward yardeni bull market those two legends uh were way out front of this in different ways Technical and fundamental and I this week is a rich week to do this because with a solar eclipse so many of you were mentioning to me the Pioneer group's founder in Legend Philip Kare who loves solar eclipses is uh had a a nice relationship with my father and far more was a legend in value investing some would say he and John Templeton uh Damian pretty much invented how we do this I saw that picture of the total eclipse that your father very cool Chu it was long it was 1979 Chuck CLA invented what you think Equity strategy is he was at marinch before that he was a colonial adjacent Pioneer in bond and he literally singlehandedly invented what we take for granted today we are honored that Mr CLA will join us this morning Chuck CLA is there too much Equity strategy now what you rought is there just too much people guessing and gaming the market well that's a uh uh that's a subjective question um there's a lot more of it and um I think most everybody's understood the how the credit Cycle Works um I I I do think trying to predict when the FED will first reduce interest rates is kind of a frustrating and unproductive effort so you know we we we try to look at long-term uh Credit Credit factors in in productivity gains and um that that's always still been a pretty useful way of looking at things but yeah there's a lot of folks trying to work the credit the credit Market check CL I've been saying to people that there's Whispers here of coming out of 74 75 the first big lift and then 77 a second second big lift are we in the second leg of a bull market I think we are um I I think there's two things that um that really prop up equities as we look through the rest of the decade and of course I'm looking beyond beyond this week uh one is productivity productivity is clearly driving profits um and disinflation which has been going on for 40 years it was interrupted a bit by the covid response and and the that was thrown into the economy from that standpoint um but I I think when you look at uh how how things looked longer term remember interest rates in inflation came down for 40 years and then of course Co interrupted so the question is what were the reasons they came down and are those reasons still good and I think the reasons are largely demographics uh what balance sheets look like in the private sector which are still pretty large and heavily liability oriented and thirdly productivity those uh those are still there so we we think that long process of uh disinflation and interest rates um continues looking forward so to us it looks like a pretty positive environment for Equity so Chuck you're bullish on equities but I really want to know is are you bullish on Boston colleges chances to take on Denver in the div one men's ice hockey national championship on Saturday you are a BC no I'm just kidding but yeah I'd love to talk about that with you after the fact but talk to me a little bit about utilities some some of these rate sensitive Equity sectors that have just not participated in the move it's been all Magnificent Seven talk to us about some of these other sectors are they going to participate in this move well I I I think they can um there productivity drives profits as as I suggested and one of the things that U is first of all I don't think the fangs are done I I I think large cap Tech um will will continue to perform well and the reason is simple never in the history of the world has an industry and especially the major ones generated the kind of cash flow margins that they do and and the other thing um is is you have to realize there are only two survivors from the dot bust of 24 years ago uh Intel and Microsoft but the ones the companies that grew up in the internet Amazon Google Microsoft in particular every time technology changed they were dominant uh when the cloud came they were the dominant factors and now that AI is coming they're the dominant Factor but I do think that a broad portfolio makes a lot more sense today I I think value will do better um and I think that largely because interest rates are coming down and and productivity is so good so I I think a balanc portfolio matters but I wouldn't I wouldn't move away from Texas check Cloud long going far away and you know good morning Gerard Cassidy we hope to get him on from Tucker Anthony and RL day we're talking ancient history here you knew Chuck cla a young whipper snapper at Fidelity he was in the coiles of Peter Lynch by the name of Will danoff and he's done better than good running a contra fun at Fidelity how do you respond to someone like will danoff who at gunpoint is forced to have 54% of his Fund in his top 10 Holdings is that a Topsy Turvy world to Chuck CLA well the market has been you know very narrow and that's been the right strategy as long as your top 10 Holdings were in the tech area um I think there are other industries that can participate I I I like Aerospace defense I think natural gas has a good uh a good outlook so um we let's see we're not quite that uh that intensively focused but um uh it's it's if you you do it right it's it's a good strategy and Will's the best at it Damian get one more in here no I mean Chuck you know for me it's all mag 7 right and if I look at those stocks and their outperformance it's been largely an interest rate story right I mean expectations that the fed's going to cut that those long duration assets those equities are going to are going to Rally off the back of it but I mean that just doesn't seem to be the case this time right I mean talk to us why equities and certainly the mag 7 are diverging from what we're seeing in the interest rate Market here um I I I I don't think the mag 7 will will will fall behind here uh and it's more than than interest rates here I mean interest rates have gone up and they they've continue to outperform uh and and I think the reason is never in the history of the world have we seen this kind of of of cash flow generation they're platform companies um they low Capital costs uh they already have a dominant position in in in what they do that's uh virtually impregnable so I I I don't I don't think that um that game is over at all and if interest rates come down I I think that's another uh that certainly creates a better backdrop for what I do think though is that if we're right and and and productivity continues to drive products there will be other sectors so we we just think taking a balanced view is is the right way to do you don't have quite the extremes of either excessive growth stock or excessive value um stock out performance that to work with it it's kind of an equal it's kind of an equal draw right now so uh we we do think the fangs will continue to outperform but others will come on Chu CLA thank you so much greatly appreciate it Chu CLA forever with Mira Lynch among others I'm like how you mentioned Frozen 4 I mean Denver went through by overtime yes 43 in OCT but I was Thunderstruck that Boston College what they they tore apart Michigan I mean I just didn't expect that freshman Will Smith extended his National lead on points with two goals he has 71 goals on the season I mean we were being po you know Boston College Boston University final four but you know du Boston College is Classic this is like original six in the NHL absolutely this is serious stuff it's a I should I not watch the Masters and watch Frozen 4 inste well Satur 6 p.m. so you'll probably I mean M yeah you know get a bit we'll see what an honor to have Chuck CLA and that's what Bloomberg surveillance is like Eric thank you thank you for uh getting Mr CLA in he is truly a legend so is Damen sassar we're going to continue here I don't even know if we have economic data in four minutes we tell you about it what we got is Bank earnings and to reset the look ahead towards fed meeting on Apple carplay on YouTube search Bloomberg podcast there's a very live chat Bloomberg surveillance good morning [Music] he [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lis Matteo Futures falling we have Nasdaq futures leading the losses right now down about half a percent S&P futures down 310 of a percent down future is down about 2/10 of a percent the 2-year yield is lower at 4.90 91% and that's down about five basis points the 10-year yield at 4.53% and that's down about six basis points to Commodities we have Brent crw at $90 a barrel and over to gold comx gold more than 2,400 an ounce we have spot gold at 2395 an ounce Amazon trading at a record it's the last of the five biggest US tech firms to reach an all alltime high in that rebound from that post pandemic selloff and then sourcer saying Samsung getting ready to take the wraps off a $44 billion investment in us chipm as soon as next week want to make a quick check on banks JP Morgan Down 2% Wells Fargo down about half a%c black rock up 2% same for State Street City Group up more than a percent as well that is your Bloomberg business flash Tom and Dav they are perfect there in Samsung to me the headline of the week was Taiwan semiconductor with a first look at earnings which were better than good Chris out on live chat Nails it I will quote Chris in entirety apple is coming off the bench and getting ready to play hard what a shock Damen sassau by our Mark German yesterday definitive on the new M4 machine Apple was being Apple you know the dregs as it's been for six months it went up 4% on a German moonshot you know what came some other stories in Tech I mean China's telling its own Telecom character barriers domestically they need to phase out foreign chips I mean Intel AMD forget about it they cannot chips China yeah exactly two nanom in the same bre president she's trying to draw in you know us companies bring Jamie Diamond over you know tell them it's great over here well we're going to have to see our economic indicator is at 8:30 okay not on Friday but you know CPI PPI they lead our coverage economic indicators always brought by Common Wealth supporting more than 2,000 independent financial advisors with the solutions they need to grow thriving business Commonwealth go where you grow visit commonwealth.com to learn more Kelvin C joins us right now he's with BMP perrya the giant Paris bank and what you've got to know is the heritage of BMP perrya in China and across the Pacific Rim is second uh To None Kelvin I I just want to get to Yen here I'm going to ask one question because Damian's got like you know he's got a value line of notes for you where where does Yen go given dollar resilience how does Yen appreciate even if they change institutional policy thanks so much for having me Tom and Damien we are still bullish on dollar Yen the fundamentals continue to point to the upside the combination of uh fed that's probably going to be finding it quite difficult to cut rates means that differential between the US and Japan will remain okay well give me a number here it's Friday I need a number give me a data point where is dollar Yen going our forecasts um suggest that dollar Yen um is uh is likely to remain at around these levels we're in the process of of updating such forecasts oh there we go with new information that we got this week when we're not can to hear it first here at Bloomberg surveillance Daman interiew don't listen to Tom he's he's throwing loaded questions at you let me throw you a softball here we've seen diverging price pressures between the US and the rest of the world is that going to actually fuel Central Bank Divergence mean is the ECB actually going to cut before the FED can Christine lagard pull that off and further to that point we've seen a lot of Emerging Market central banks cutting already just how much runway do they have to ease uh to ease monetary policy here that is exactly in line with what we are expecting I don't think that it's going to be that big of a surprise for the ECB to be cutting before the fed the data that we've gotten over the last few months has opened the door really for the ECB to begin cutting rates in June and the CPI number this week was a huge surprise we've now had three bad CPI prints in a row and with that we think the fed's going to find it very difficult to cut rates anytime soon so we've actually changed our forecast on the FED we're previously looking for a rate cut starting in June another cut in September another cut in December and we've changed that to only expecting two cuts this year looking for the first to come in July and the next to come in December so that monetary policy Divergence as you highlight we think will continue to underpin the US dollar C can carry continue to deliver I mean look let's be clear G10 carry is up 5.3% year-to date I mean that's a pretty nice number considering we're only three three and a half months into the Year talk to us a little bit about carry and talk to us about what funding currencies stand out for you in this environment we mentioned China Yuan is that one of them we continue to like carry carry is measured not just on the absolute amount of carry you earn but also how that carry looks from a volatility adjusted perspective and the first few weeks of April seasonally tend to be quite dampening for FX volatility So based on our metrics FX carry continues to look very attractive we continue to like the dollar especially against the majors we like the dollar against the Euro against the Yen the fundamentals are poin in that direction and you earn carry in that as well as you suggest we think that the Yen uh is going to be one of the primary currencies that we like funding with as well as the R&B in terms of Longs side we continue to like the dollar as I mentioned and we really like Mexico as well okay you know this is like Nerd Patrol I got Damen Cesar in kelvin SE they're going at it folks for those of you that was half in Greek but you know you know we we'll play Kansas Carrie on my wayward son here so we figure out what carry is Kelvin let's go prosaic here the Olympics are in four weeks am I going to see a persistently persistently weak Euro so when Mrs Kean at you know the games goes to lwis vuon to buy a bag she's going to be able to do it am I going to see a 104 Euro we think the Euro will remain weak we think the Euro will remain weak for three primary reasons the first is as we just highlighted monetary policy Divergence between the fed and ECB we think will continue to be a key theme in the markets with the ECB cutting earlier and more than the fed this year secondly uh as well um the fundamentals are beginning to weigh increase inre inly on the Euro area with higher commodity prices the Euro area being a net commodity importer as opposed to the US that is a net commodity exporter is going to weigh on Europe's fundamentals and then third uh last but not least again this theme of uh of of carry we do believe that investors are going to by and large find it quite difficult to want to beong the euro when you have to pay to beong this is the difference folks this is the real world for those of you out on YouTube Mato and I we're in the same Planet here I'm just trying to figure out with a 104 Euro how bad I get taken at 30 Montana uh with Dior like you know a new Dior bag you guys are talking Carrie what is Carrie explain Damen sassau to M Mortals what carry is well in it's in truest sense if you're a US dollar investor it's carry over and above whatever you know rate you're getting here in the US any sort of incremental up we have high rates now and we have high rates so you're not getting a lot of carry over and above us but you know here's what I Calvin and correct me if I'm wrong we saw a lot of CPI prints this week and from what I can tell Chile Mexico Brazil China Taiwan all came in soft we just saw soft CPI out of France right now shout out to Michael Bachman B&P powera talk to us about all this soft inflation there where is it coming from what is driving inflation down when here in the US we're experiencing something that's exactly the opposite of it the United States is in a very interesting situation right now where what we're exper experiencing around the world is an environment where inflation is moderating quite significantly from its highs uh a couple of years ago and that inflation moderation is happening in large part because we are seeing um some very significant supply chain healing and lower Goods prices in the United States however the economy is still very very hot we just added over 300,000 jobs to the economy last Friday as you saw and with that what we're seeing in the US right now is that core Services inflation things like getting a haircut things that you don't physically buy uh Still Remains quite hot and that we think is a worry for the FED because that Services inflation tends to be stickier which is another reason why we think the FED is going to have to wait a bit longer before it could begin its easing cycle Kelvin C thank you so much with BMP PR that was a real primer folks seriously for Global Wall Street Damen I want to take one minute here I think it's so so important dollar Mech level was a 19 pre pandemic ugly world's coming to an end 26 and we've had a oneway move from 26 pesos per dollar down to a stunning strong Mexican peso how is Mexico different now from my stereotype of Mexico do you know what the policy rate in Mexico is today it's 11% what is it here in the US it's 5 and a half perc so look at all that cushion we talk about carry over and above the US well Mexico's one I want to buy Mexican peso to pick up that six percentage Point differential that's right if you were to move your money out of dollars into Mexican peso and then reinvest in deposit rates which should be around 11% you would think in Mexico if you just deposit it in a local bank you know that's what you're that's what I'm talking about that's it that's the trick when you want to get carry on Emerging Markets that's that's the whole trck what we tried to do this been the Hallmark of Bloomberg surveillance for I don't know how long we've been doing this three four years uh the Hallmark here is we like explain the jargon as best we can I let Damien and Kelvin see there that was a pro discussion with some real Nuance to it speaking of pro news Futures in 25 with our news in New York City Michael bar thank you very much Tom Damen Lisa a Us official says he is expecting a major attack by Iran against Israel as soon as today the official says the attack could include more than 100 drones dozens of cruise missiles and perhaps ballistic missiles as well and will be aimed at military Targets in Israel General CQ Brown is the chairman of the Joint Chiefs of Staff we're really trying to avoid war and and this is part of the uh the dialogue that I have with my counterparts within the region to include the Israeli chief of Defense who I talked to yesterday um and we're doing uh things not only to uh prevent a war but at the same time one of my primary things is make sure that all of our forces in the region are are protected General CQ Brown spoke today on CBS mornings the house is expected to take up an extension of the expiring portion of the foreign intelligence surveillance act it is a 2-year extension that's now on the table rather than than the 5year extension blocked in the house earlier this week the Biden Administration is planning a sweeping effort to block Arctic oil drilling we get more from Bloomberg Zed bter a century ago the US set aside 23 million Acres of Alaska's North Slope to serve as an emergency oil supply now President Biden is moving to block any oil and gas Development Across roughly half of it the administration says the effort will boost land conservation and fight climate change the the oil industry says the plan is more expansive than initially thought and will make it almost impossible to build another Mega project in the region the companies say they have recently made large discoveries which would yield supplies for decades to come Ed Baxter Bloomberg Radio finally round one is wrapping up at the Masters this morning after being suspended last night Bryson dambo leads at 7 under meanwhile Tiger Woods has completed 14 and dropped back to even Global News 24 4 hourss a day and whenever you want it with Bloomberg News now I'm Michael bar this is Bloomberg Tom Damian Lisa great dollar peso conversation Omar good morning in guadalahara you know the whole International audience that's great I'm glad we're bring he says you did better than good ta you got the carry there let's talk some golf talk here I think we've got to Michael bar you said something smart with rain tiger got to play what 23 23 holes right well yeah and when he was suspended he completed 133 that means today he's got to play 23 and that's tough and he's got to walk it right let's be clear this isn't golf carts and and rainbows here yeah and it's a hilly course with the torque Damien that these Pros are working at what's it do to Tiger Woods or for frankly anybody else's KN oh my God I can't even imagine what his back his knees his elbows I can't even imagine what's going on inside that poor man but you know he still I mean look he's still just one over I mean one over it's unbelievable you know is he is he like in the game where if he has a good round today he's competing he is going for that he has to make the cut he makes the the record is 24 right he's at 23 he's tied for the record so all he has to do is make the cut after uh after what today right and play and he's back at even not one over sorry yeah even right okay unfair Bloomberg business Sports question what's he worth to livv live what would they pay Tiger Woods he wouldn't go because but they've tried to to entice him and we're talking like hundreds of millions of dollars and but he would not go well I mean thanks to arami our producer for uh letting me know and he's right I think the number was the high 100 Millions when Liv was really going six seven yeah something nuts like that tiny money okay okay we've done two rounds of golf talk we've proven that Lisa Mato and I have no clue what we're talking about Futures deteriorate 35 to vix 16.30 on YouTube good morning [Music] [Music] [Music] [Music] headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Mato Futures pointing to a lower open big banks open their books we'll hit two of them right now JP Morgan Chase are down about 3 % that's after its outlook for full year net interest income missed expectations and then you have City Group they're up 1% it's first quarter profit top estimates now we have Nasdaq futures down 8/ t0 of a percent S&P futures down 610 of percent down Futures down about half a percent the 2-year yield at 4.87% that's down about eight basis points the 10-year yield at 4.49% that's down about eight basis points as well so news on the AI front we have Kathy Wood getting in on open AI the founder AR Investments management has announced a stake in that chat GPT parent and then you have apple sources saying it's getting ready to overhaul its entire Mac computer line with a new set of In-House processors designed to highlight Ai and then finally sources say x aai they're looking to raise up to $4 billion in a deal that would value Elon must startup at $18 billion that is your Bloomberg business flash Tom and Daman Lisa thanks so much Damen sassar for Paul S Katherine grield was scheduled to be with and had something to do with Gus the horse you you know you were she was pushed aside by a horse so you got to keep your heels up we said either Gus the horse or Damien Cesar which should it be we're here on a really eventful Friday JP Morgan I'm with Allison Miller I'm looking below uh you know I'm looking below the headline data rich is is JP Morgan still down like 4% or something is it still like you know underperformance City group was up 1 2% as well we'll see it's that sort of a stew and Futures deteriorate negative at 34 the conversation of the day if not the week on China Leland Miller is definitive China bebook he's out of Darden Charlottesville absolutely a student of the micro dat of China Leland as simple as I can thumb up or thumb down on China nominal GDP well I think thumbs up but everything is relative what are we basing this off of I'd say look things things are going relatively well early in the year particularly compared to some of the disappointing data last year but remember their goal is not to to rocket GDP Skyward they're not trying to hit some some high figure they probably aren't even trying to hit the GDP growth Target this year what they're trying to do is establish some stability some upward momentum bring back a little bit of consumer confidence which have been crushed for the last several years if they can do that then this year will be a success even if they miss the GDP growth Target Leland dollar Yuan sold off this week it's rallied a bit but I mean it's now down 1.7% this year I think 12.9% since 2021 it's been down in each of the last two years we have claims of outright fraud at China everr now you know I think uh China Bank of communicate they're trying to go after sh sho uh you know talk to us about the property sector talk to us about Chinese deflation what is going on there and how can investors take advantage well first point is deflation everyone's been talking about Chinese deflation China is not in Broad deflation uh you know there's there have been uh you know there there's been close calls at the end of last year there is deflationary pressure uh but there is not broad deflation in China you're still seeing gains even though they've been much much slower than everywhere else in the world so you know that's a reflection of the fact that Chinese economy hasn't been doing particularly well so you've got problems there but you don't yet have this you know deflationary wave that's being exported out like a lot of people are claiming you know property is interesting because it was a disaster last year it's it's not going to be great anytime soon but they have stabilized it in the first quarter and I think the most important thing to take uh into consideration when you're talking about property is this is not a onee twoe threeyear battle this is a decade plus long battle and what they need to do is essentially make sure that they're you know lessening the impact of property as a growth driver they want to take it down from 25% of the economy or so down to much lower but at the same time not do it so precipitously that they shock the rest of the economy that they sent it into a doom Loop of confidence this is really really tough to do so they're being you know they're tightening they're tightening they're tightening credit and then and then when things get bad and cash flow freezes up contagion is threatened then they step in and ease conditions a little bit then they start over so this is a long cycle and it's a really difficult one Leland president shei hosted you know business execs out of the US SE Suite Executives just last week trying to entice them tell them hey China's open for business then just today China's telling Telco carriers to phase out the use of foreign chips Intel AMD you know what should we believe here I mean is China really open for business from the perspective of a foreign investor no of course not like always watch what they do not what they say you know we we joke about that on the stimulus front they talk about stimulus every day of the week but they're not stimulating in a big way you know so this you know it's the same thing applies to foreign investment 2023 was the year of foreign investment in China and how did they celebrate it by backing down on foreign businesses by shutting down external data sources by shutting down internal data sources you know this is this is the incoherence that that that characterizes China policy these days Le you know Daman and I we like to talk oh we went to China we're experts on China we go to the Mandarin in Hong Kong we go to the peace hotel in in Shanghai and you know sometimes the St reg just in Beijing and we say we went deep into China Leland Miller What's China's consumer like right now A away from The Madness of global Wall Street going to three ZIP codes in mainland China that's that's exactly the right way to characterize it uh cyclically March the first quarter looked better than it has been for a while we were seeing retail pickup Services pick up so cyclically speaking you know the the consumer uh was better off in the first quarter you know spent more than they had in a long time so it's it's it's it's it's bullish psychically but the most important backdrop is always the structural backrop consump there is no consumer wave there is no consumption push there is no shift from investment to consumption happening in China because the Chinese economic model disincentivizes households it disincentivizes consumer spending so you're not going to see any big- time shift structurally speaking China's slowing down massively there's enormous pressure on consumption uh but look cyclically speaking we have we had a nice month in March and we had a a solid first quarter well we got some pretty weak data on the trade front overnight T but I'm looking ahead to Tuesday of next week property prices activity data retail sales IP you get your GDP print what are you looking for there what data what data point is most important to you well most of these things we're ignoring know like the the trade for instance you know the numbers are weak but it's off a pretty high base from last year uh this makes it somewhat difficult I think the most important thing to to to keep in mind is how how are how are retail and services doing how's the consumption side of the economy doing uh compared to last year the answer is it's doing better so far has property stable property has stabilized so far this year how's manufacturing doing manufacturing did well in March it didn't do well in January February but everyone thought it was collapsing last year and I think we were the only people in the world saying no it's actually doing fine and it is doing fine so the the economy's up from last year and I think that's positive you just have to have mild expectations in ter in terms of where that's going Leland thank you so much never enough time we've got to get John for three hours at some point the Leland Miller Show Leland Miller with China beige book as well Mand Singh will be with us about an hour from now maybe 15 minutes from now on Apple and one of the hearts of the matter here is the Gloom over Apple in China I'm not sure I buy it well Tom you know I mean what I wanted to ask Leland about I mean ICBC the largest bank in China is telling its staff it won't blame them if they extend you know bad money to developers that are going under I mean basically that's unbelievable they're just saying you know what they're saying is that staff are afraid to loan money to extend credit to to its clients but don't worry about it we're not going to slap you on the wrist if you if you happen to lose our money it's amazing to me it's a huge question for like you know forget about trading for the next three years we could say Mexico seems to be vibrant you mentioned the Carrie early for but wither China 36 months out is a huge mystery yeah no I mean look I mean and it's been that way for a while and I guess at the end of the day you know Leland said it right you just can't really trust what's coming out of Beijing these days and and that goes for the data and it goes for what um what signaling uh president she is sending long ago and far away there was a moment where you first heard Carlos Santana and you said to yourself what is he doing and what he did is the the scale he used was called Dorian so in the KSC instead of playing a minor you play D Minor you go up to step the first note up CDE e you play D Minor so you say well that worked out for car Santana who else could that work out for and I'll never forget the first time I heard the song Shannon Shannon Shannon out on live chat on YouTube thank you so much for mentioning Chris Isaac I heard this song off a David Lynch movie and I said this is completely twisted and it's Chris Isaac in the Dorian mode it's just great what a wicked thing to say you never felt this way what a wicked thing to do to make me dream of you and I want to fall in [Music] love no I want to fall in love [Music] [Music] [Music] [Music] [Music] 3 [Music] [Music] sense realistic about those risks and uncertainties but still for lots of reasons very optimistic that we will see inflation uh come back down and that labor markets will remain healthy well how unconvinced are you that inflation is not going to come down as rapidly as you might have thought um so I do think that we're going to uh have to be patient and it may take more time that is one of my takeaways from some of the data that we've seen you know at the same time the data are mixed Mike so yes the most recent inflation numbers have been elevated compared to what I might have hoped for but at the same time if you look at things like wage rates so wage growth has been faster than it was pre pandemic but once you factor in the past price increases and importantly the productivity gains we've seen the wage growth that we're seeing is consistent with that trajectory back down to 2% inflation um and I think that's good news for workers as well but my point is that you need to look at the range of data and not focus too much on on one piece and take the time to really see uh what the takeaway should be well you said yesterday that the danger of overtightening is kind of moved out of the picture at this point growth is strong unemployment remains low inflation is at least sticky if nothing else why cut rates at all so I wouldn't say that the uh that there is no risk of us of you know uh waiting too long I do think that it's uh two-sided but to your point I certainly do see more reason to focus on um making sure that we don't uh start easing too quickly we're Resolute I'm certainly Resolute about that commitment to bring inflation back down to 2% you know I do see policy as being moderately restrictive at this point and it in my view will be appropriate as we get closer uh to that trajectory it will be appropriate to begin easing but we're not there yet so I don't think that we would indefinitely certainly want to to stay where we are um I my Baseline would still have us starting to ease later this year but when I see as likely to be later then I had been previously thinking I have to ask because everybody's going to bring up the question is uh does the election interfere with timing absolutely not um you know the as I've said a number of times focusing holistically on the data is really what determines appropriate policy and I have to say there's enough of that to keep us very busy so uh that is my focus and that's the focus of the committee you mentioned policy is moderately restrictive what tells you that and how do you know what level of restrictiveness you need so uh in terms of the last piece that's where watching the data comes from are we seeing the balance of performance that we're looking for over time um you know certainly there's evidence of some restriction uh we've seen housing market reactions we've seen um some increase in delinquencies we've seen some declines in uh Capital spending and so there clearly is evidence in a variety of places labor markets are coming into better balance and that's a really important one at the same time consumption and demand have remained uh perhaps surprisingly strong given uh where interest rates are and what we might have thought based on history but you know we've seen in a lot of cont context ways that the current context is somewhat different so I would characterize where we are as policy is having a restrictive effect which is what we want but it's perhaps moderately restrictive and that calls again for patience and being methodical as we look at all of the data we've now got uh pricing basically for a December rate cut uh as markets move back and forth but my nerdy Economist friends have spent the last two days putting PPI and CPI into the pce calculations and everybody is saying pce is going to come in much milder than both of those if that's the case can we say June might be back on the table so I don't want to speculate again you know not a preset path and I think we have to wait to see what the data tell us um but to my earlier point the data had been mixed and CPI and pce don't always move in lock step they certainly are know very closely related and so I think we have to wait and let the data tell us uh what's happening and again um it's not just the pce although that is certainly the preferred me measure that we uh that we are focusing on when we look at our 2% Target it's all of it and how it comes together collectively so wage data will be important um when I look at the price data I also want to disaggregate and look at what's happening to the different components because the Dynamics there are different and that's informative for trying to understand uh where might be going not just where we've been key question is where are we going and uh what's that Outlook like and uh trying to get to Greater confidence before we change the policy stance uh former St Louis fed president Jim Bullard once said during the aftermath of the financial crisis whatever you think the right rate for the country is this isn't it uh are you anxious to cut do you want to cut do we need a cut or can we live with rates at this level well in the you know in the near- term I don't see urgency um I had uh been a bit concerned earlier uh in the year very early in the year that there might be some signs of labor market fragility um I'm seeing much less reason for concern but that again is why I see the risks as being two-sided so I don't see urgency and I see lots of reasons for patients and over the longer term I think we'll uh my expectation is that we will ease and that over the longer term inflation uh interest rates will be at lower levels but exactly what uh that looks like it's really premature to be too too specific the data may be mixed but what are CEOs in your District saying about both uh employment growth and also about whether or not they're still having to raise salaries and whether they're going to have to raise prices yeah so uh and we do have many conversations with um people throughout our district large firms small firms um throughout New England and what I'm hearing is a couple of things one is quite a bit of optimism in terms of the economy's performance overall um I'm hearing uh information consistent with labor markets really coming into better balance being easier to hire except in a couple of sectors like healthcare where that can still be quite a challenge um so you know it's uh there differences across different sectors and localities um but that uh firms have not been expecting the same kinds of wage increases that they had need needed before to retain workers quit rates are way down um much less turnover and and that helps with productivity right because if you are focused continually on having to fill those gaps because people are leaving and then you have to train people to come up to speed it's hard to maintain that productivity that firms really need and that's part of the good productivity story that we've seen that has helped with economic growth and helped us to bring inflation down uh as much as we did 2023 despite the fact that um growth has been continued to be so robust so there's a strong Supply Side Story there as well well productivity is one half of potential growth and you're talking about productivity being good a lot of argument these days that we're seeing more immigration than we're really accounting for and that uh basically potential growth is higher than we thought it was do you agree with that so I certainly have seen increases in labor Supply as being a key part of that um Supply Improvement story that has certainly benefited the economy um and the labor Supply increases have uh included immigration uh and there's been a lot of work um which has uh you know come from different uh people finding similar stories in terms of the increase in Immigration playing a role but we've also seen an increase in labor force participation uh particularly in prime age workers that was not anticipated and really notably among Prime AG women even though we know that the child care challenges continue and those are really quite Stark so there have been some surprising uh Supply Improvement news and uh we'll have to see the extent to which those continue but it's certainly been an important part of the story so far one last uh question for our money market desk friends and that is you had a staff briefing and a discussion of whether or not and when to taper uh quantitative tightening uh the agreement apparently according to the minutes was that you should announce it fairly soon can we expect something like that at the June meeting so no decisions were made the um minutes um Talk uh summarized the discussion that we had and it really draws from lessons from the past period of quantitative tightening from 2017 to 2019 and some of the key lessons from that experience are uh the importance of doing the um you know the tightening in other words runoff of the balance sheet in a way that is smooth and does not cause stresses you know that proverbial should be like watching paint dry right it shouldn't be uh unexpected and so the uh there was broad agreement that slowing the pace which is currently about twice as fast as it had been in that earlier period um and doing so sooner to ensure that it continues to be quiet and orderly and passive in the backgrounds broad agreement for that and also to start that uh sooner but no specific decisions have been made yet so we could get taper before we get a rate cut um those things are I see them as being independent so uh that could happen Susan Collins thank you very much for joining us today here at Bloomberg on Bloomberg radio and television worldwide we'll send it back to you Michael mcke thank you so much with a gentle lady from the Boston fed there are many economic headlines it's something to look at but Damen sassar and I here in our Studios with Michael bar looking at the news from the Levant there's just no other way to put it geopolitics front and center you look at equities bonds currencies in oil and oil has a different story J Damian let me do the exact data while you look at your screen please West Texas intermediate up 2.4% I have an 87 on American Oil Brent crude 9158 up a185 up 2.1% is well gold up $41 1.7% 2413 geopolitics Damian sasau front and center yeah you know it's so great that you get real-time pricing I mean they don't I I don't afford that they don't give me realtime pricing I'm a little delayed here but these numbers I mean looks like at 8 a.m. S&P Min just rolled over and now if you look at bond yields they're falling as well here this the first time we I think we 10 years back below 450 here so uh and currencies versus the dollar just about every single one of them is in the Reds so dollar stronger I'm working off two 2 year yield here we had a 5% watch there for a cup of coffee cup of Sanka I should say we've come in 12 basis points from a five level the 2-year yield 4.88% and I'm sorry there's a dollar resiliency here Daman those weak dollar having a painful Friday there's a few out there Hong Kong dollar but that's a dollar Peg actually your friends in Indonesia the rupia seems to be up but that's probably because it's not trading so yeah it looks like it's red across the board here in currency land relative to the dollar yeah and 15279 we'll have further data checks for you and Lisa Matteo with the The Flash as well Lisa what do you see yeah deteriorating fast we have Nasdaq futures down nearly a percent right now Dow and S&P futures down about 710 of a percent we'll head over to the 2-year yield at 4.88% that's down about seven basis points the 10-year yield at 4.5 1% that's down about eight basis points as well we have a few things we have Israel bracing for possible attack from Iran we have investors studying earnings from some of wall Street's biggest banks let's check in with a few of those now we have JP Morgan down more than 3% Wells Fargo down more than 1% and City Bank they're up about half a percent right now have to go to Commodities you have spot gold well comx gold at 2,413 an ounce spot gold at 2396 an ounce and oil rent crew $91 a barrel NX crewed $86 a barrel we'll take you over to Tech right now we have Intel and a MD they're both down 2% right now this is after that report from The Wall Street Journal China telling its telicom carriers to phase out foreign chips by 2027 that is your Bloomberg business flash Tom and Damen Lisa thanks so much Sterling a 124 handle 124 UH 60 Bloomberg surveillance brought you by interactive brokers discover the future of trading with our next Generation trading platforms ibkr desktop ibkr desktop download the ibkr desktop at ibkr.com desktop perfect guest right now for this turmoil of geopolitics into a Friday of what to do with your account with a lot of experience Thomas Martin joins us senior portfolio manager globaly Investments on the equity outlook here I I haven't asked this question in in quite some days here and I I think Damien had it earlier uh Thomas Martin where cash is there money market funds seem to be back back back in Vogue is cash a comfortable place to be given Global turmoil well cash um thanks for having me on the show and cash is definitely um a place to be for Global turmoil it's really the only thing that has sort of a no correlation um with any of the markets whether it's stocks or bonds or or what have you so if you really want to have some safety cash is the place to be and of course now you're getting a return on that so it's uh it's definitely positive to have that um you know with the equity markets having performed as well as they have so far uh you know there's there's reason to have a little bit of dry powder I look Daman at the dry powder question and somehow is oil launches I mean gold up $41 you I'm going to get a 9 to print on Brent cruden is going to be a new definition of dry powder yeah I mean I got to believe that you know Mr Martin when he's talking with his clients is talking about Capital preservation in this environment they are talking about cash but cash takes different forms Tom uh so Mr Martin I wonder if you could just you know educate me you know when you're talking to your clients and you're talking about cash and you're talking about getting defensive and protecting what you have there how do you do it um well a couple of ways uh one is in fact just cash cash and and you know there's really no substitute for 90day Te bills for real cash you can start going out a little bit on the maturity scale but once you start getting to a year or so uh you know you start taking a little bit more risk um but certainly the short end of the curve two years or less um is a place that could be considered cash like uh you know until you know rates start going up and we've we've seen that um in the last little bit here is that even 2-year rates uh have gone up and so you sort of lose money there whereas you don't lose it in cash you know another place where we um have been defensive is is in Gold uh and you know that defensive posture um comes from a lot of sources I mean what's it defensive against uh certainly everybody knows that inflation is is one of those things uh and then of course the geopolitical thermoil is another one um so we have a substantial position there too Thomas Martin with us here with goalt as well markets on the Move Damian moments ago dxy the Blended major trading indic pops through a 106 103 104 a cup of sank at 105 and now stronger dollar 106 well you know what's interesting I mean and then we were just talking about cash we're talking about cash arrogates I'm an em guy and one thing that has been just a risk-on trade is this carry trade we talk about this so and in a flight to Quality type of environment one would think that those carry trades get Unwound and so trades that we like to look at Tom and you know Mr Martin I'd love to have your opinion on this you know looking at for example dollar rail you know risk reversals or I'm just basically getting short Mexico versus the dollar here you know and talk to us a little bit about that are there trades that are a little bit more uh cyclical in nature a little bit more High beta that we can get into from a defensive posturing perspective well there's the you know one way to do it is to go for the things that have underperformed and particularly in value oriented stocks and just the things that are unrecognized um that's the place to go but as the markets tried to do that it hasn't panned out very well and yesterday was just sort of a poster child for that um is that the Dow and value indices did very poorly versus the growth and momentum which came back now that may be reversing a little bit today um but it's it's tough to get defensive in those kinds of names Mr Martin one last question I have for you is about credit spreads I mean let's just be Frank here usig and high yield spreads are up 7 and 11% respectively on the I mean talk to us a little bit I'm sorry down talk to us a little bit about the spread compression I mean how do we reconcile that I mean is that going to last and you know where do we go from here in credit markets yeah we have not been in favor of having any credit in our portfolio we've been strictly uh long on well not long in the duration but uh in treasuries and we don't think that you're getting paid to take the risk of having um credit at those spreads and especially as they continue to compress that that reach for yield is you're not having to reach very far um so if we're going to take that kind of risk we'd rather be inequities Thomas Martin thank you so much for joining us with goalt uh today on Apple carplay on YouTube search Bloomberg podcast there's a live chat out there Shannon driving the bus today on the live chat with some others as well real International conversation and these are international markets I mean this is not about oh JP Morgan they missed this or they missed that I've got oil moving 2.2% on Brent crude right now above 92 I'm not to a 92 print but I'm getting there getting there I'm getting there rapidly Damien I mean look you know for me when you look at Bren crude you can't look at front month you got to look at the one-year calendar spread and we are probably pushing now above 10% back radation what that means is that if you look at today's front month crude price and at one year from now we are completely flipped into back ration that means uh you know basically what it means is that you're seeing the front month ripped to the one element of the geopolitical risk as well and I got copper with a two-day pop I'm well out to over two standard deviations on copper Supply going back to February and can these are some of the trends folks that get us away from what's Apple doing what's Nvidia doing and that Futures ne42 the vix was out two big figures right now uh Damien 16.8 five on a vix look at equities here W yeah everything everything is basically coming out of and look I mean I I I take your point if you look at some of these other Commodities too if you look at LM copper if you're looking at iron ore you know they're I mean LM Copper's down too I mean so this is kind of a broad-based selloff and you know I can only imagine what yields are going to do by the end of today well by the end of the today we're going to have to see and I would say the end of today with Carol masser I should say she's like the whole end of the day thing Carol M I have no idea what you're going to hear from Carol masser on Apple carplay and YouTube uh today let me do the commodity complex again which does speak to the tensions Ethan Bron are leading our coverage in Israel as we look over to Persia and some real talk here about what Iran will do in response uh to what we saw days ago from uh Israel Western uh Texas Intermediate West Texas intermediate $87 a barrel up $222 Brent crude up $2 9169 and Brent crude I would suggest a 92 print is a big deal gold now with a bid further 1.8% up $42 thank you Dennis gartman and I I don't even want to look at the chart Damen sassa gold in Yen oh my goodness it's like Beyond Coco oh yeah no that's been a huge trade and you know what I'm actually going to be interested to see here is how Apple kind of performs here because you know Apple has basically for the first time been talking about artificial intelligence The Whole World's been waiting for this I mean you would think on a normal trading day that Apple shares would be ripping but with all that's going on right here Tom it'll be interesting to see how that stock responds Rich when do we have Mandy do we have Mand deep in five minutes or does this oh yeah has people said he can't make it in five minutes we have M deep singing 15 uh minutes Oro I mean I mean Apple went three standard deviations yesterday from like minus 1.5 cheap to plus 1.5 it was a moonshot through moving averages of this bare market we've seen in apple since the end of December I it was a shift yeah no this is this is a flight to Quality move you know I'm happy we get to share this moment together on a sleepy Friday Tom I mean this is everything to do with the Middle East attention with Iran and look I mean right now on the tape I mean Israel is basically planning at some point over the next few days uh for Iran to invade or or do something so yeah they they're they're they're preparing single item I'm watching folks Brent crude 9170 an ounce we're going to get out in front of a very strong half hour going to get the markets open that'll be important here with Futures uh -43 Mandy Singh will join us here on the technological future of Apple computer and before that ch Christopher whan on the linkage of commercial real estate to our banking system from New York City Bloomberg surveillance [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lis Mato alongside Tom Keane and Damen sassau with your opening bell report now we've had a lot going on before the Bell we had big Bank earnings we also learned import prices they Rose about a fourth of at Fourth 4% in March that was a rise in fuel prices drove that headline figure but when you take that out of the picture import prices were pretty much flat you also have Israel bracing for a possible attack from Iran what does all this mean for the markets let's get to it right now we'll start with the S&P 500 down about 710 of a percent the Dow down half a percent the NASDAQ down nearly 1 % we go over to the 2-year yield at 4.89% uh and that is down about seven basis points the 10-year yield at 4.5% and that is down about eight basis points as well to Commodities have to talk about oil uh we have NX crude at $87 a barrel Brent crude $91 a barrel we also have silver hit the highest in more than three years have to mention that copper rising to its highest level since June of 2022 and at the open of course we want to talk about Banks we have JP Morgan they're down 3% and Wells Fargo they're down about nearly 2% that is your Bloomberg opening bell report Tom and Damen at least tell thanks so much on Apple carplay tune in right now Bloomberg business app it's free there's no charge you get a fancy car like Damien like Paul Sweeney you get apple carplay on YouTube right now this is a demand listen on YouTube search Bloomberg podcast huge huge audience this week thank you so much for the global audience including many people from Mont Vio I can't spell it but it's down there it's near buar Uruguay it's like uru urug urug is that you say it Uruguay it's like God's country this is really important I'll put out a tweet and there'll be like some announcement I'll go dot dot dot anticipated this is the anticipated book of The Fall Christopher whan and his staff were kneed deep and through the summer rewrites of his classic inflated how money and debt built the American dream first edition we're going to give you a front run on the second edition right now your book's got to be radically different given the debt and deficit mess we're in right now oh certainly Tom and thank you for that wonderful plug um the last two chapters have to be Rewritten in the past we were more worried about the dollar does the election matter to you no not in the grand scheme of things I think it's we're we're nearing the end of the progressive wave of the past Century which was largely driven by my ancestors fault right no it's just that when a society takes on too much eventually the demographics tell you what's going to happen and we have fewer and fewer workers and more and more old people so we're going to be consuming Capital you know Bob Dugger the retired partner at Tuda wrote a great piece about the coming drought of savings in international economy magazine and that's that's what's going to drive policy Bob Douger is one of the most original outfront thinkers I've known in the act for years he's like really twisted and different Damen dive in Tom I I mean I appreciate you plug I'm I'm going to plug another book I'm going to take you back to 2014 Chris wh and let's talk about you know Financial stability fraud confidence in the wealth of the Nations your book back then let's think about the lessons learned from the last Global financial crisis and now what we're seeing today with these markets I mean how should investors be looking what more importantly what indicator should they be looking at to say you know hey things aren't right here things don't smell good well the way I look at Banks you know we published some Bank indust earlier this year and we waited quality versus size now you can't ignore size but my attitude is if you want to be safe with banks you want to own the top 25 out of the top 100 so that's a pretty harsh cut you're basically saying you want to avoid 2third of them or three4 of them Daman JP Morgan 196 down to 188 oh well let's just talk about that Chris let's let's unpack that a bit you're talking about owning from an investor standpoint right you're not talking about keeping your deposits with banks whether you care about income or Alpha yeah you want to know where the good ones are and so for example we just wrote a piece about uh Bank ozk George gleon well George is a little bank but he produces a lot of construction and development loans people make the mistake of thinking he's in commercial real estate lending he's done he lends in the beginning of the life cycle of the asset then he gets out very smart so talk to us about the big Bank little Bank you know talk to us about that Dynamic you know I mean is that not going away soon do you see that wedge that Divergence in the performance between big and small Banks continuing well in terms of financial performance the smaller Banks do better they have more pricing power they tend to have much more operating leverage too much lower efficiency ratios and this is why Jamie Diamond is so remarkable since he bought First Republic his efficiency ratio has been in the mid-50s which is painful for everyone else because they're in the 60s low 70s if you want to compete with Jamie you've got to have a five handle on efficency inflated is a twisted book I mean I mean chapter to chapter to chapter it's the only one I know that comes close to you is Mariana mosato who's doing a Marxist thing over in England and and masakado and you go chapter to chapter and say hey you can't understand Bloomberg surveillance unless you know your history are we heading towards a fifth National Bank of the United States in a combo of JP Morgan and Bank of America I I think America's headed to a large restructuring that is very similar to the 1930 when the Reconstruction Finance Corp essentially re restructured everything that wasn't solving right I got a shift gears or Daman I want you to climb on board this Insight CR and Wayland's led the discussion on this is different now because we have Twitter so you're at home or whatever you're out the road I'm walking vet bill and I got Twitter up and it's one guy with a genius walkth through of how something that was 100 million is now 18 m million in real estate I mean social media Daman has changed to C tobacco no I agree with that and look I mean there's been a lot of talk about the death of CR and Clos and other securitized products for that matter in this environment and so you know just to move away from that I really just want to kind of focus more on this concept of the big Banks and how you know the big 20 and those are the ones you want to focus on that's still 20 Banks right and there's a big difference between City group and JP Morgan so help educate you like what are you looking for how do you differentiate between those big banks in terms of um making an investment Cape one way or the other well you know I've been doing this for a while we've been building Bank analytics for 30 years and over time you decide what's important so Equity returns total Market return operating leverage Price to Book all of those things tell you a kind of sort of the same thing but from a different perspective you know for example George has got one of the best performing banks in the country at bank ozk but he's still trading around book yeah American Express is five times book okay very different right franchises let me give a market update here Daman get ready for another question with Christopher way we're down 211 on the Dow 32 pretty much lows here with the market open 5167 SPX we are moments away from 92 Brent we're not there yet 9184 just made a dash didn't get there 87 and change on NX gold 2416 and out I sound this sounds like a data check from 20 years ago you know when you look at Banks though I mean just going back I mean you look at an interest rate sensitive sector right and so you know I guess for me you know if I'm believing all this Kool-Aid that's going on in the market right now and I want to get defensive you know Chris walk me through how do you think about protecting investor Assets in this market is it gold is it cash is it money markets is it something else well I would be very careful with financials because we're still coming out of the covid period when we had zero interest rates this both helped and hurt it caused problems and it also solve problems but going forward you know everyone was fixated on net interest margin you guys had a piece on the Bloomberg this morning no it's about spreads and guess what Mar could be flat rest of the year what's so important folks of Bloomberg surveillance worldwide what you just heard from Mr whan is a completely different world from Gina Martin Adams and yet they came to the same conclusion on financials that's really important two Twisted orinary different views and the same conclusion is be careful out there yeah and dividend yields are now I mean earning yields are now far less than fixed yields you can get in fixed income right so I mean you know it's got that mountain to climb also if we go into sort of a risk-off environment you know last question Chris I mean talk to us a little bit about you know when you do look at equities and you take a step back how do you approach that are you looking at Big versus small caps are you looking at Tech versus other sectors I mean we talk about the banking sector but what else is out there well look half of my book is either preferred or debt the other half is Equity I rode Nvidia up I kept stepping off because it was too big it was a third of my portfolio at one point um and finally I got out a couple months ago um so there are opportunities I own Chevron I own some other things but in terms of the banks I own US Bank Common and Wells that's it everything else is a preferred so if you want exposure to financials look at the preferreds because there's a lot less volatility Daniel Paris with a real con controversial Bookout who says we got to get back to the time we remember where dividends mattered yes are stock BuyBacks a dividend equivalent Chris wh no no it's it's a different thing discuss that stock BuyBacks are basically about feeding the street it's kind of The Vig you have to pay to the guy on the corner you know who works for black stone or you know whatever so to me Dividends are a more honest way to return cash to shareholders because I don't have to pay a fee right you yeah we're trying to get you here with 92 a barrel to create some drama 91 I'm with you give me the tick guys I need triple digits I need I need a are you predicting triple digit oil uh when that missile flies and hits uh real estate in Israel yes look the world is at War we never talk about this the world is in a low intensity conflict that's about to get hot and that's why Jamie damond by the way is talking about geopolitical when everybody else wants to talk about Nim think about what Chris is saying here since the October 7th Invasion right at Hamas spreads are tighter oil is relatively maybe a little bit higher now right but but really the dollar is weaker Dam we stay in the script Damen we got to go to the news here there's a lot of news there Chris Wayan I know you're in from mono don't be a stranger Chris whan with a book out this fall that will be must must read with our news in New York City Michael bar thank you very much Tom Damen and Lisa Israel is bracing for possible attack from Iran either directly or via its proxies with drones and missiles on government targets within days that's according to people familiar with Western intelligence assessments the move has the potential to trigger an all out Regional War chairman of the Joint Chiefs of Staff General CQ Brown Jr said that he is talking with counterparts in the region to try to prevent that from happening while at the same time implementing measures to make sure US forces in the region are protected we're always planning and preparing that's one thing we do very well is plan and prepare General Q Brown Jr spoke on CBS mornings sources tell Bloomberg an assault is expected to come as soon as the next 48 hours one scenario is an attack on Israel from Iranian soil which would be unprecedented in Washington the House of Representatives is set to vote today on reauthorizing a key part of the foreign intelligence surveillance act the fisa law allows us intelligence agencies to spy on the communications of foreign Nationals without a warrant FBI director Chris Ray warns of dire consequences if it's not renewed section 702 is indispensable in keeping Americans safe from a whole barrage of fast-moving foreign threats it is crucial to identifying terrorists in the Homeland working with or inspired by a Rogues gallery of foreign terrorist organizations who have publicly called for attacks against our country Ray the law cannot be allowed to lapse describing perhaps the most dangerous threat environment here at home since 911 round one is wrapping up at the Masters Bryson Des Shambo leads at 7even under and will tee off a round for the round two at just before noon now Tiger Woods just finished up after his play was suspended last night he played the first 18 at one over and we'll start round two in just over a half hour Global News 24 hours a day and when ever you want it with the Bloomberg News now I'm Mike lar this is Bloomberg Tom Damen Mike Lear thanks so much we got to go back to markets here I want to talk sports but we're not going to do it right now - 212 on the Dow 38246 uh Futures were -25 up to6 we're now open with the SPX - 32 NASDAQ down a stick we out two big figures on vix we at 16. 72 Daven what do you see in the foreign exchange space well I'm just looking at the US 10 you're also we're back above 450 but in FX it's a sea of red here I mean it's just red across the board dollars up versus nearly every currency on the planet and that makes sense right I mean look this is the dollar smile we talk about you know this dollar exceptionalism growth is great dollar is going to rally and then flight the quality dollar is going to Rally moments ago Brent crude $929 a barrel we're out up 2.62% look to Will Kennedy and our hydrocarbons team from London for further uh news on oil through the weekend on ample carplay on YouTube search Bloomberg podcast there's a live live chat good morning [Music] [Music] markets headlines and breaking news 24 hours today on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Mato we've got red on the screen on this kickoff to earning season right now the NASDAQ down 710 of a percent the Dow and S&P 500 down about half a percent the 2-year yield at 4.89% that's down about seven basis points the 10-year yield at 4.5 0% and that's down about eight basis points as well want to check in with a few more big banks that we've been hearing from this morning as far as City bank right now uh they're up about 1% we have black rock down just a fraction State Street up about 7/10 of a percent over to Tech we have Intel and AMD Intel right now down nearly 4% AMD is down more than 42% and this is after the report from The Wall Street Journal China telling its Telecom carriers to phase out foreign ships by 2027 that is your Bloomberg business flash Tom and Daman liso thanks so much we'll continue to follow these markets $92 print on Brent 9194 right now something changed yesterday we're going to parachute in Damen Cesar and Tom Kean Mandy Singh here did something changed it was a jump condition in a ginormous stock yeah Mand saying what does it take to make Apple computer go up 4% well so I think uh for the pretty much four months of this year you have been hearing how Apple has been behind uh you know Ai and really they haven't done as much as Microsoft and other companies Google and uh you know uh open AI have done on the Gen side so that's where the chip really makes a difference because Apple's value proposition has always been their vertical integration the fact that they give you the seamless experience across operating system the chip they have and the app system that's built so I think the fact that they announc a new chip most likely it will have on device AI features and that's what got everyone excited because that was a bare case get it afterthought needs AI to get through you know physics in Junior you're fine do I need AI on my next apple toy absolutely I mean look uh the features are proven at this point of time think of you know Siri right now you don't use Siri at all but if you start applying on device Ai and what it can do for you Siri is a huge uh function that Apple has and they can enhance it with AI features the autocomplete feature you see in your messages I mean that can be enhanced so much with AI the the camera I mean yes apple has a great camera but if it incorporates AI features it will make it even more powerful and sticky it'll even make me look good Dam you how about that you know man I really need to ask you about some of this word this this talk out of China that's telling its Telco characters to start phasing out chips from Intel and AMD talk to us a little bit about the impact on those two companies well so I think from our perspective we are modeling that all the chip companies will lose their China business over the course of the next 5 to 10 years and the fact that you know the Chinese have given a date around phasing these out probably it's going to happen earlier than what everyone expected everyone was thinking it's going to be a 10 years phase out this looks like more of a three-year phase out and so that's why you know Nvidia we know has suffered they because they can't sell to China well now Intel and AMD that had a business in China they will probably lose it and guess what even Nvidia will have a very tough time selling their chips to China because clearly the Mandate is very clear for them that you know they want to use domestically manufactured chips and and what about Taiwan semiconductor so Taiwan semi I think is in a still in a much better spot simply because I mean you take aside the geopolitical aspect that China can ADV Taiwan other than that Taiwan semi is still the goto place for every device maker every fabulous chip design company because they are the only game in town in terms of manufacturing Advanced notes and I don't think anyone else is even close to them so they probably have a better shot in terms of you know allocating that capacity to someone else yeah okay now for the sensitive question of the day we leave this for 950 a.m. Wall Street time down 83 the tape a little bit better 92 Brent crude is now 9167 they're going to build semiconductor factories in America Mand deep sing Samsung in Arizona Taiwan this dot dot dot can American workers build 3 nanometer semiconductors I I think given such a big government push I am ready to bet they will it's just that it's going to be uh you know a big toll in terms of what it would take to uh do that and I would uh bet my money on tsmc actually being one of the first companies to do that because they have all the incentive I mean Apple Nvidia all these companies are the biggest customers but come on but Mandy in Chip War my book of the summer Chip War Chris Miller I I can't say enough about the book Morris Chang doesn't mince words he wants the labor intensity of Taiwan and all the processes that made Morris Chen iconic can he get those same labor processes in labor intensity out of American workers I mean it will come at a higher cost so clearly your costs for chips are going up and that probably means better gross margins because tsmc has that pricing power to pass those costs on to their customers so I I do think it will the cost will go up and uh tsmc still has the pricing power but uh I would bet you know coupled with the immigration policy and other changes around training the workers it it will happen if it's just it will take time and it'll come at a higher price you know man deep I mean now that we're P the CPI and we're past payrolls for the month of April I mean I just need to ask you you know this is all about earnings earning season is has begun it begins today you know we're still a couple weeks out before you know the big tech companies start reporting but you know take us through what you're thinking today you know which company is it Microsoft Apple Nvidia you know who are you focused the most on you know as we head into uh into this next earning season yeah look Microsoft clearly looks the most robust and resilient out of the big Tech in terms of you know their Topline growth they clearly have a lot of things going for them the other ones I mean Apple we know their China business is going to hurt and they just found it hard to grow their top line for uh Google and meta clearly you know they've got the a act together and the fact that they have their own large language model helps them I mean you have to go yeah you're on Bloomberg surveillance you're supposed to say Google has YouTube okay Tom Microsoft has a $3.2 trillion market cap that's larger than France's GDP I mean you know and and yet here we are and we're focused on it and there's reason for it to go higher is there not Mand yes I I think so they have the most recurring uh earnings Revenue stream and they're the best position in AI I mean everyone else has somewhat of you know a disruptive element to their business yes alphabet has caught up but their search business can still be disrupted by all the AI you know Innovation that's going on and in the case of meta they are hugely exposed to advertising so Microsoft does have all the bases covered from that perspective out of time on short not as Mand sing here off Mark German's brilliant work on Apple yesterday I can't say enough how German owns the path forward for Apple people everybody within the Tech Community uh reading Bloomberg News is Mark uh German shout out also to Lucas Shaw out in Hollywood writing a brilliant Paul swe I Lucas is just like a lot Daman what's your takeway here on geopolitical tension is that an opportunity um I think it always is but I mean I wouldn't be jumping all over it given where valuations are you know what I really wanted to ask Mand deep and I know he didn't see this but I see this cuz I don't know if you follow what's going on in China with this AI mogul's wife who admitted to $21 million of secret trades I mean basically the number one AI entrepreneur in China his wife was uh I guess front running and doing a little bit of insider trading at the margin and uh I guess the government found out and that's not good well it's going to be an interesting point there thank you to Leland Miller for wisdom from China beige book on uh the pth forward and you know he said you know thumb up but and there was a it was a nuanced conversation uh we're going to get out single best idea it's going to be a really good I think Chris whan's going to be one of our two chosen on single best idea this has been a spectacular week and to have it n with Daman sassar has been very gratifying thank you to all of you for listening particularly out on YouTube it's our new distribution YouTube you search Bloomberg podcast and the bonus is a live chat L Zeppelin 1969 you know the echo in it that was a mistake the giant Eddie Kramer had to cover up some recording mistakes really so he threw a lot of echo on I thought that was Robert Plant speaking twice they invented it right there have a great weekend way way down ins need I'm going to give you my I'm going to give you my [Music]

Channel: Bloomberg Television

Views: 20,399

Keywords: bank, business, business news, china, earnings, federal reserve, finance, inflation, interest rates, wall street

Id: 9h5YKQUBfz0

Length: 176min 20sec (10580 seconds)

Published: Fri Apr 12 2024