Bloomberg Surveillance | Israel at War | April 16, 2024

[Music] this is Bloomberg surveillance with Tom Keane and Pa we we're addicted to The Parlor game the fed the monetary ballet where do you see opportunities in have fixed income space here in 24 with Lisa Mato on markets AI affecting demand for cloud computing and Michael bar with news another legal setback for Donald Trump this time across the pond the best in economics Finance investment and international relations this is Bloomberg's surveillance on Bloomberg Radio you know how Lisa it's great Damen sassau wals is in his music cues up it's an amazing skill that he has do that and for the BBS Damen sesar and short notti as Paul Sweeney with Alex Steel in support of a really important Bloomberg conference at NF and Damian's been kind enough to come in are you here what are you here for a week two weeks three weeks uh I'm here today and tomorrow yeah today and tomorrow today and tomorrow we're going to watch the vix go to 30 it's going to be wonderful well it's going to be interesting we'll talk a lot about about that yesterday we were really restricted by a fabulous discussion of our international relations the geopolitics of let me get the list down here I think we're going to do a little bit less of that but thank you to everybody that checked in yesterday particularly Elliot acrian and James travus with my book of The Summer with Chip War 2054 is the name of their book and I got to get to that that's that's an important read uh right now but we're going to get back to markets today and we're doing it with Damen sassar with a you Us full faith and credit 4.95% is em showing the same inks that we see in Full Faith and Credit us absolutely Tom em credit and equities which were up on the year and now down on the year em equities specifically overnight on the back of some of the weakness we're seeing out of Asian equities because my goodness Chinese uh the Chinese economy strong start to 2024 appears to be fading here you know we got some weaker activity data overnight despite the fact that GDB uh kind of performed well above 5% it's just not convincing anyone that uh worth it through of it we'll get to this later we got to get to the start start the show off Lisa Matteo's over there when do I get in but but seriously on the currency front with a strong dollar I just happen to look at Philippine peso and I'm sorry it's 55 to 57 it's weaker is there a destabilizing in your world because of what we see with strong dollar well the EM carry trade's been the big star performer this year Tom we talk about it all the time and what happens in markets like this when volatility ticks up and by the way the vix is at 19 and change right now when Vol ticks up it kind filters over into em and that causes carry trades to unwind and that's what we're seeing a bid for funding currency that's what we see here to get us off of three hours here Drew Mattis to start us off yes uh strong here as well Steve shivone from Federated on your next allocation we're on Apple carplay on YouTube we'll get to that I get to get out on live chat on YouTube as well we're in the Interactive Broker Studios and with your Bloomberg business flash Lisa Matel good morning yeah we've got red and green on the screen after the major robbert says has ended with losses to start the week right now we have NASDAQ futures they're little change Dow futures they're up about 310 of a perc S&P futures they're little changed as well over to the 2-year yield at 4.94% that's up about two basis points the 10-year yield at 4.64% and that's up about four basis points to Commodities Gold city says gold will hit 3,000 an ounce over the next 6 to 18 months right now we'll check in wh spot gold is at 2372 an ounce comx gold at 2388 an ounce as far as oil's concerned we have Brit crude at $89 a barrel NX crude at $85 a barrel on the economic calendar for today reports on housing starts building permits and industrial production and yes earning season continues we'll start with Bank of America they're down about a percent right now reported trving revenue for the first quarter that beat estimates then you have Bank of New York melon bny melon up 2% first quarter Revenue topped estimates had benefited from higher Market values and also inre inre client activity we're still awaiting results from Morgan Stanley that's suspected around 7:30 Wall Street time we'll be sure to bring that to you that is your Bloom break business flash Tom and Damien Lisa Matteo thank you uh so much we start strong here with a layout of the American economy but folding it into investment strategy and the Hallmark of Drew mattis's work and this is from my Harris and the team at UBS ages ago is the research note is very carefully written that's the true madis does it Met Life right now as Chief Market Strat is Drew I've just got to start with the first bullet point because I think it says so much and we saw it with our retail sales yesterday corporate profit strength never really left us is that the big fake of the next three weeks as we go oh earnings are pretty good uh well it it seems to be the case you know we've been trying to figure out why the labor markets remaining so strong uh you know that caught us a bit off guard um and it seems like the reason it was so strong is because firms could afford to hire people um of course you know when you look at a lot of the the details in the economy they're not particularly great you know I I know I know how the Market's behaving and I know um what yields are doing Etc but you know when you look at certain things um you know you like to see kind of a consistency in order to be become confident and then in order to B increase risk and that consistency isn't there and and that's I think troubling going forward uh one case in point I'll give you right now is you know tax receipts tax receipts the US government said were going to be extraordinarily strong in April that would affect Bill issuance treasury issuance we could see a decline there uh tax receipts kind of look like they looked last year so that there's not this kind of Rapid expansion caused by um right caused by the Improvement in the equity Market that we've seen so and if that doesn't happen there are all kinds of secondary effects in terms of Flows In and Out of the banking system that will matter and and we'll see how that plays out of over the next couple of weeks with Drew Madison Met Life on YouTube search a Bloomberg podcast to get out there and on to our valuable live chat really intelligent Chad we what I need right now I need an intelligent question Daman dive in here with Drew Mattis Drew back in 2001 when we were at Leman Brothers together you were senior financial markets Economist I was a lowly associate fetching your coffee were you allowed to speak to him no no never never and and here's the thing Drew I saw dick fold once Leman was the big Bond house you're talking about credit card delinquencies Tom is emphasizing that point talk to us about spreads here why aren't spreads buckling here under the weight of some of the things we're seeing in the markets well I think it's it's the same that you see in the equity space uh but you know spreads are basically holding in um you know there's so much demand for anything that resembles an investment uh that what you're seeing is this pressure and of course you know you do have corporate profits staying higher you have inflation which is actually credit positive right up to a point uh and so you know I think people are pricing in kind of this this goldilock scenario where we have just enough inflation that doesn't worry the fed too much but but allows for an easier payback of all that debt that's out there um and then of course you look at Pro profit margins and they're holding up and so you kind of push them all together and if you sprinkle in a little bit of productivity going forward you know you have a pretty good outcome you know the real question is are you being paid for your risk appropriately and I think that's a question people have stopped asking um you know in part because there's a little bit of almost fear of missing out in in kind of the credit space so Drew I get the sense you want to talk Equity so is now the time to double down on growth or are we shifting to Quality here you know I I have a problem with risk assets when we don't see the consistency um you know and when cash is paying 5% right so uh you know what are you taking the risk for and and how much risk should you be willing to take to get that extra couple of basis points and and I think you know that's the that's the problem we're having when spreads are this compressed uh when equities are behaving the way they are is are you really getting paid uh appropriately for the difference um and and in my opinion you know I I see some signs of weakness in the labor market they they never panned out into kind of an overall deterioration in the labor market but they're still there you're still seeing some weakness and kind of um Consumer Credit uh particularly for kind of you know um lower credit worly borrowers um and you know I I I think when you add those up you know there are signs of weakness in the economy they're just not enough to kind of offset this kind of Juggernaut of of corporate earnings and profit margins Tom it sounds like Dre's getting a little defensive here real estate maybe utilities maybe those set those defensive beat down sectors you know and I did the math here Damian dive in here but you let me explain the math and that I looked at NASDAQ 100 and the ansers were through two standard deviations a little bit of Gloom there out of the very tight Trend it's a maximum draw down of three point some percent or maybe it's 4 perc but we we it has been so long Damian since Drew Mattis saw a correction he doesn't even know one is anymore pimples and elephants Drew I wonder if you could just quickly you know talk to us a little bit about what you're seeing geopolitically here obviously the Middle East obviously Eastern Europe you know how does that kind of factor into your Calculus in terms of asset allocation well I I think if you look at everything every geopolitical flasho is inflationary if it happens right um if something deteriorates from where it currently is and if you look around the world you'd have a you'd be hard pressed to kind of put your finger on a part of the globe that that doesn't have a geopolitical issue attached to it that doesn't involve Penguins right um so you know pick a continent there's a problem that problem could be inflationary um and has the potential to be inflationary on a global scale so you know from my perspective you know that that's another reason to be a little bit more cautious here um and it's one reason why I I think you know this idea that you can the FED can hold at kind of the the level of inflation we're currently at and just kind of wait things out you know all the risks are are skewed to One Direction on inflation right we're not suddenly going to wake up and inflation's gone away tomorrow um and in that kind of environment you know I I think you know the game that they're playing in terms of the level of caution is is you know is is a tricky one Drew we got to leave it there Drew Manis thank you so much with metti this morning to get us started SE shivon uh coming up uh next red and green in the screen nice lift of the market fractional Futures up three as Damen sassa mentioned the vixs above 19 19.11 with our news in New York City John Tucker all right Tom thanks Middle East tensions may be ramping back up Israeli military officials are saying they have no choice but to respond to Iran's drone and missile attack over the weekend but the US and European allies are urging Israel to avoid the kind of Tit for Tat that could spark a wider War here's State Department spokesman Matthew Miller Israel is a sovereign country they have to make their own decisions about how best to defend themselves what we always try to do is provide our best advice as a longtime friend of Israel and a longtime Ally and partner of Israel and that's what we've done since October 7th across a broad range of fronts it's what we have done over the weekend well the Biden Administration has put more than 500 sanctions on Iranian entities to hold tyan accountable and the turmoil in the Middle East has added new urgency to passing foreign aid in the house after months of in action let's get that story from Bloomberg's Ed Baxter speaker Mike Johnson is planning separate votes this week on new Aid to both Israel and Ukraine this in an attempt to assemble fragile coalitions to speed Weaponry to both places we have uh terrorists and tyrants and terrible leaders around the world like Putin and XI and uh and in Iran and they're watching to see if America will stand up for its allies and in our own interest around the globe and we will now his party majority is very slim and he may need Democrat support and he very well may get it the impass over a has been dragging on since October Ed Baxter Bloomberg Radio and the Supreme Court will weigh the legality of charges brought against hundreds of people in connection with the attack on the US capital the question for the justices is whether a law passed as part of the sarbanes Oxley Financial reforms can be read to cover the January 6 Riot hundreds of people including Donald Trump have been charged with obstructing an official proceeding Global News 24 hours a day whatever you wanted with Bloomberg News now I'm John Tucker this is Bloomberg Tom Damen John Tucker thanks so much get to have Damen Cesar in with this with real expertise On Em Damen you know what you do with em you go back pre-1995 yeah because you're looking at the agian financial crisis and I'd love to get some reliable data pre 1995 but I'm with you I'm sorry we're round trip over 20 years Indonesian what is itup rupia Indonesia rupia is basically back to The Angst of 1998 that's exactly right and what I mean IMF meetings coming up I mean nobody including you can ignore this right it's not just the rupe you mentioned earlier the Philippines peso it's the Indian rupee I mean the high yielders in Asia are all getting um crushed today basically because these carry trades are rolling off and those are all high yielding carry currencies within Asia a way to kind of clip a little bit of extra coupon 20 seconds why don't care who cares about this I care I know you care Emerging Market practitioners should care Risk Managers should care Banks should care and quite frankly it's a precursor of things that can happen in DM that's why you should care okay Danny and Cesar thank you so much what a joy to have him here with the world blowing up dxy 106.2 six yen is really not through levels but there we're on ample carplay stay was there worldwide on YouTube search Bloomberg podcast we have a live chat good morning [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 Mata we have little movement in Futures D Futures are up about 410 per but Nasdaq futures little change S&P futures they're just up about a tenth of a percent over to the 2-year yield at 4.95% that's up about two bases points the 10-year yield at 4.65% and that's up about four basis points to currenc we have the dollar stronger Japanese Yen weaker Euro British pound stronger Bitcoin is lower at 62733 now today we have reports on housing starts building permits industrial production and that follows yesterday's strong economic reading on retail sales also words from San Francisco fed president Mary Daly she said there's no urgency to adjust those interest rates to earnings we go Johnson and Johnson down about 1% first quarter profit beat estimates drug sales came in higher than Wall Street expected and then we have United Health Group they're up about 6% reported first quarter profit that beat expectations also affirmed its outlook for the year and that's despite those costs related to their Cyber attack and then we have some news from Trump media and Technology that's racing earlier losses they're up about 2% right now says its social media Network truth social plans to launch a streaming platform that is your Bloomberg business flash Tom and Damien now thank you so much Lisa Daman says are in for Paul Sween is a good thing Lots going on in the screen and we'll get to that uh through the morning this is a joy he has arguably the most intimidating job in asset allocation on global Wall Street because he has to put up every day with people like Linda dle and Steve O whove been doing this for decades and decades and the young whipper snapper comes in and what he mostly does is take notes and comes up with really really smart Dynamic Solutions in asset allocation Steve shivon thank you so much for joining us I love love love the way you approach asset allocation which is the movable part right now that matters oh I I think the part that matters is you know we've been positioned Tom all year for a more hawkish Fed so fewer rate Cuts than the market what we're contending with now and the question at hand is we even we too doish with our kind of one and two cut forecast is it zero and if so you know that calls into question a number of asset allocation decisions into earning season putting up with Steve O and other Titans at Federated Ms in the earning season what does free cash flow look like are we missing use of cash we talked about it three years ago like it was religion are we missing a massive use of cash this time around witness J&J and United Healthcare this morning look I I think first off you've had an earnings inflection and and this is what makes this Market hard to sell and makes us want to buy dips here is companies are um earnings are inflecting higher at a time where rates are likely to fall I mean it may be delayed it may be slower and so both of those things are good for cash flow um and it and it makes parts of the market that should benefit from an economy that's stronger than expected we've got a 2.6% GDP growth this this year um and parts of the market that should benefit from rate cuts when they eventually come they should start to participate and they've been on sale for 6 months here um and so that that makes us interested you know despite some of the concerns that are out there Steve we got to talk King Dollar here I mean you have to help me out I mean as a as a portfolio manager you you know math it's the math it's all about diversification it's asset allocation but when the Dollar's going in this direction and it's all going one way how do you diversify how do you build ballast into your portfolio I mean you certainly can't go into non-dollar assets fixed income or Equity can you well I mean emerging market Market debt has been a good trade this year right as spreads were were a little bit wider and have tightened um and something that's something that we what's that past tense well the Deb's been pretty good I mean that's certainly something that we we've kind of leaned in through most of the year I mean I think the story here is that we do expect a broadening out from the strength of the kind of mag7 but we expect that primarily in US value we expect to see that more acutely once rate Cuts come in small in small cap it's hard to make an argument here to be massively overweight International when you've got a scenario where inflation's behaving it looks like those central banks are going to get to a cut cycle a little bit ahead of us and we've got real questions as about whether or not a 5 a half% federal funds rate is even restrictive in the United States um and so we just prefer the US you just made a great point you know central banks and Emerging Markets Tom they they they tend to follow the FED right and so you know my question here is have markets gone too far and pricing in Cuts in Emerging Markets you know I'm thinking Brazil I'm thinking Poland Chile some of these markets forward markets are pricing in significant Cuts between now and the end of the year Mexico I mean do we really think that some of these central banks are going to be able to deliver on that in the face of a Fed on hold I I I don't know if it'll be as dramatic as the markets expected but when you look at the inflation Trends non us they are much more well behaved I I think the broader point on Emerging Markets is emerging market equities tend to do well when the FED is cutting when the dollar is weaker and and neither of those things are happening imminently how does emerging ginormous tech stocks do I mean I look at some of these growth blue chip us-based growth portfolios I mean how much meta Facebook can you own how much Nvidia can you own what's the risk to our portfolio concentration now so you know it's hard for a professional investor to own them at the index weights if you have any position size limits um you know for us you know we're in this almost like it's a Cisco moment but it's different Tom oh explain that that's fabulous okay I'm going to steal that I like that you've got this is Sunday evenings like 20 M oval whatever it was my wife's wearing her Cisco shares on her finger I'm just letting you know congratulations my my wife's ring came from the lumber Isis at Home Depot last year uh she asked me to take her somewhere expensive um so you've got six companies that all killed their parents right no one shows you their Myspace anymore and no one searches on Yahoo and they all they all became prominent by figuring out the next big thing and these six compan companies see Ai and they're asking themselves are they going to be unseeded by it and they have more money than God slightly less than the Catholic church and they're willing to spend all of it to figure out the AI thing and so demand for what Nvidia sells is huge I I think the one thing that's different between this and the pure Cisco moment is these companies know to sell it as a service right so whatever the solution in AI is it's going to come with a monthly subscription yeah Damen John from uh Tiffany's just Se Me and he says tell Damian he could have an Invidia moment anytime he wants well that's a good segue into my next question Steve Commodities Commodities have rallied Big Time gold gold has rallied big time right but what's really interesting is just last week alone we saw a really big move in Copper I mean now it's starting to spread into the Industrial Metals complex what's the read through into equities and other asset classes I think there's a huge secular story about the AI Revolution which right now has been all about tech becoming a real economy story right once you get get to a factory that has fewer workers that factory can be in the United States and we have trains that can't stay on Rails and ships that hit Bridges and you know cars that fall through streets in Pittsburgh PA and so I I I think you've got as you have this ruring this manufacturing Renaissance to borrow from from Nancy Lazar and her Theory um as that becomes more and more evident I think there is an old school industrial buildout needed in the United States and you're going to see copper due to the us what it used to do when we were talking about China growth sounds like you know anacon copper and steeve off when an of Steel let's get yeah uh Steve shivone brilliant thank you thank you so much as well Mr shivone was Federated uh this morning I look at at Damian and and the like where are we fourth quarter with barely a pullback in the market I think people have really been sobered up here and it makes even more fascinating the earnings to come after the big Banks well for me Tom it's that high frequency growth I mean like the the the pmis you know they're sort of starting to tick higher globally you know so that manufacturing rebound sort of starting to extend into Europe and Asia and the question is does it have enough juice to find its way into asset valuations the verdict is still out and of course China front center folks with the five handle on GDP and it was the makeup of the five handle in that you know we'll get a lot of good coverage of that infrastructure investment yeah you know typical like Big Industry uh investment they're waiting for the consumer to come come on um as well but all in all really really fascinating here Damen again I I I come back to the heart of the matter we've forgotten what a correction is yeah we're supposed to go down 10% a correction is when in New York Mets go 8 and3 after beginning 0 and5 on the season that my friend is a correct they're 500 playing 500 ball now yeah they're fun to watch I mean they come I don't know about fun but you know i' I've been watching all the early teams here and some are getting it dumb and done the Kansas City City Royals I mean I'm all over you know we have some playing games out of the West in the NBA tonight it's going to be interesting that will be interesting that be very interesting Lakers Warriors stay with us on ample carplay we got a great lineup coming up but on ample carplay please look for the Bloomberg business app it is free and you can download carplay from there on YouTube search Bloomberg podcasts that's the place to get us and there's a live chat it's very valuable people suggest songs how great is that we're going to get satisfaction from that 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 when the Bloomberg brok Interactive Broker Studio I'm Lisa Mato right now Futures we've got green on the screen we've got S&P futures well that's a little change down Futures up about 410 of per Nasdaq futures they are little changed right now the 2-year yield at 4.95 % that's up about two basis points the 10-year yield at 4.65% and that's up about four basis points uh want to check back in with some of the bank earnings that we've had coming into today uh we're just awaiting for from Morgan Stanley at any moment Bank of America they're down about a tenth of a percent Bank of New York melon they're up about 1% and we have PNC they're down about half a percent and another news buy at interest that's fading over at Samsonite sources saying the private Equity firms feel the price is just too high and that's going to be clearing the way for a dual listing that is your Bloomberg business flash Tom and Damen H thanks so much K Lisa Mata thank you uh for that Morgan Stanley's out with earnings and it's just simple there's a nice lift here we're watching uh the stock carefully he had a little lift before I think maybe off of Bank of America Mr pick with his first headline out on the Bloomberg here taking over for James Gorman institution of Securities saw strength across markets that's what CEOs are supposed to say as well here's a key statistic wealth management was 6.7 billion and came in at 6.9 billion so on a first year first moment look that's very constructive like Bank of America they have a 3% rise maybe Daman they give it back as we look on but it's a Continuing Story here that life goes on you just execute over 90 days and good things happen you seeing any headlines on the layoffs that were supposed to come under Ted piic I mean there were supposed to be quite a few of them but will they be subtle layoffs I think this is a new thing you saw the shock of Tesla layoffs yesterday okay fine that's a a managed layoff but you wonder if there'll be more a discreet here in charge of discreet at CF is Kenneth Leon Ken Leon's been doing this for years and we're going to not only look at Morgan Stanley but with Ken Leon look across all of banking are the days over Ken Leon where they announce a 6% layoff or is everybody cuter about it now 20 here 10 here in Asia Etc well Tom it's good to be with you and you know uh these businesses are cyclical so we can always see that as a a scenario but the narrative is not about going into recession significant layoffs or streamlining it's about taking advantage of technology and most importantly today with disappointing Bank of America results and probably very strong Morgan stany results it's the capital markets going to give you outperformance I I look at the capital markets and to me what's important here is on an employee basis yeah there may be layoffs but they're going to rehire the same as same amount of people or more in other areas like technology and intellectual content is that what's happening it is and even on one of the calls yesterday they're talking about uh artificial intelligence or Ai and how you can work that into processes of the bank particularly the back office sector dispersions usually at a ties during PE periods of Market distress Ken I'm curious you know it's been abnormally high in US Equity since the pandemic talk to us a little bit about the role of sector allocation diversification in the current environment it's a good question and as a research director and looking top down I'm thinking of the financial sector for listeners um there are 12 constituents Berkshire haway is the largest the six largest banks are in there they're 65% of the sector so we're going to have a full week of Bank earnings but quite frankly for your question the most important one is the performance and Outlook of the six largest global US Bank interesting so you know rate sensitive sectors other rate sensitive sectors sorry like utilities and real estate are probably the two worst performing sectors in the S&P this year I believe talk to us about those sectors do they stand out to you in the current environment yeah we uh we have an underweight on those sectors mostly because well gee we you know we have the scenario of a very healthy economy yeah um and we think that looking out um even if we have a correction and Sam Star Chief in bestman strategist there's been 24 Corrections since World War II but they come back to all regain those losses in four months that's the average so we'd like to be with growth which is technology uh we also like Communications services and also consumer discretionary U you know I look Kenley on with the Morgan Stanley earnings and I guess it comes down to the Strategic difference the distinction between Goldman Sachs with a bang up effort the other day maybe awful lot of Gloom about David Solomon boy he push that aside in Morgan Stanley here what's the distinction between Goldman Sachs and Morgan Stanley and what does Mr pck Show this morning well there's two things first of all what is the uh body language and and and really delivery of a new CEO versus one of the Hall of Fame James Gorman second um I think Tom we're entering a very interesting period I said Capital markets is really going to drive these particular firms but when you look at Goldman Sachs and asset management it's their really closer link to Alternative Investments private equity and equity and and debt financing they there is1 trillion dollar in business from sponsor still to be released into the market that will benefit Morgan Stanley and Goldman Sachs what do you think about this Damian what's your distinction right now between Goldman Sachs and Morgan Stanley well I mean I think the interesting thing is well they're two very different banks right now but I I agree with that that's important and I think I I think really for me I'm looking at credit card delinquencies above pre-co levels bankruptcies Rising housing activity in Decline so I take a little bit of your point Ken with the fact that this economy is completely healthy I mean talk to me about these recession odds I mean they've Fallen substantially can the FED really truly engineer a soft Landing I I think J Pal's getting better in his messaging um he needs to be more Allen Greenspan because when things are quite honestly working well that you know and it keep hearing from the financial media rates higher you know you know even at these levels corporates are beginning to go to the Capital Market the first quarter was a record for debt underwriting since 1980 and I think for the consumer there are parts of the of the the population that do suffer but I I think we're going to wait uh there's no need to cut rates immediately you know one of the things that's important here folks is we wait the Ken Leon 62 page annual letter it's like James Diamond's letter it's just Ken Leon Ken Leon what would you put in your 62 Page Letter after seeing these Bank earnings their reports on Revenue Mo Han's effort on digital what what do they look like five years out wow it's a great question and I think what we'll see is that uh these banks are positioned for to flourish and grow as we see Innovation and change in the market you know you asked me a little bit earlier about what the difference between those banks are and the way I see it is you know net interest income versus wealth management I mean to some extent right and I'm talking B A Bank versus asset man a very big Bank though and so my question for you Ken is talk to me about this curve I mean everyone seems to think the curve is going to steepen that should be pretty pretty bullish for for Bank of America for City group for JPM no well Bank of America probably went 0 for 10 on the results today but on that interest okay okay we we got to stop the show here this is the second time you've mentioned this where did moan fail today they missed it on net interest income they missed it on wealth management they missed it on investment banking um and on trading it was just average compared to even JP Morgan Chase or city so but to that question um net interest income they're getting pressure on cost of deposits I went through the 60 page supplemental and I'm just not finding anything to cheer about and believe me I look at all metrics oh come on the solution Ken Le on is they got 212,000 people they're going to go in there after they hear the Ken Leon report how many bodies does it take to rightsize Bank of America after a challenge you know in history for Bank of America and I've been covering them 15 years you do sometimes get quarters like that and then they come back strongly next quarter but they are one of the best in terms of their disclosure and explaining their performance can not even Equity trading I thought Equity trading beat it's very minor it's actually Equity trading is a very small component I'm I'm joking I'm looking for one silver lining in the report I agree with you Ken yeah Ken lean thank you so much really really appreciate this wonderful to finish the all the series of banks strong particularly Ellison Williams thank you so much for leading our coverage Mr Leon is with CF red and green on the screen Damen sassar watching to vix now 319 a better vix 18.83% [Music] could provoke a wider War we get more in Israel's possible response with Bloomberg's Ethan Broner and Tel Aviv the sense that the United States is back again embracing the Israel uh and and sharing in its um defense needs and so on is important to people here it's the most important Alliance uh that this country has but you know there's this kind of old debate here which is do we want to be uh loved by our friends or feared by our enemies if we have to choose we'll is feared by our enemies now the remaining question is is hitting back the best way to be feared and I think that's part of the debate too that's Ethan Broner in Tel Aviv President Biden hitting the campaign Trail in his childhood home state of Pennsylvania Biden's campaign says the trip aims to highlight the differences between the president's tax and economic agenda and the policies of Donald Trump who oversaw tax cuts for the wealthy in corporations the three-day trip includes a visit to Scranton and events in in the Pittsburgh area that's where nipon Steel's deal to buy United States Steel has rankled Union allies the president will close out the trip tomorrow or Thursday in Philadelphia and another body recovered at the site of the Baltimore highway bridge collapse it was found in a construction vehicle underwater well the FBI meantime says agents boarded the container ship they're looking for any evidence of criminal wrongdoing one of copenhagen's oldest buildings is on fire and its iconic Spire has collapsed the roof of the 17th century Old Stock Exchange that was once Denmark's Financial Center was engulfed in flames the distinctive Spire in the shape of the tales of four dragons twined together reached a height of 184 ft and finally the flame that's to burn at the Paris Olympics was uh kindled today at the site of the ancient games in southern Greece Cloudy Skies prevented the traditional lighting that's when an actress dressed as an ancient Greek Priestess uses the sun to ignite a silver T Lisa Mato was shortlisted for that yeah well that she did it last year they offered up a prayer to Apollo apparently he wasn't listening instead she used a backup flame and the lesson there always have a backup flame yeah okay right now Paramount has a prayer to Apollo that's what's what's going on there John Tucker thank you so much John of course our surveillance congestion reporter this weekend I enjoyed both the Westside and the FDR here in New York are they going to become parking lots with the congestion tax uh possibly so at least that's the argument opposed uh presented by the opponents including New Jersey that case still in court uh taking place in Newark my question I still haven't gotten this answered and uh I have to take a deeper dive when you come in to the are you charged just once or every time you go through one of those oh they're definitely going to charge every time John Tucker John Tucker our chief Greek mythology strategist John tell I am now praying to Apollo tell me a little bit about your parking garage of choice you know our parking garage is on 58th Street it's just below the 60th Street cut off what's your plan uh well Damien I have no plan my plan is to throw myself on the mercy of those that uh that pay my bills what's interesting here folks is this this back and forth between Damen sassar and John Tucker they're actually living this you know to me it's like a joke it's like hahaa swe was on the train to you guys this is a real deal I I mean where you park on 62nd Street and walk fine you know that's great but what if you work on 53rd or you work you know well what if they redirect you there's a little bit of construction all of a sudden they send you a block around the corner to 59 then you just paid $20 for no reason what does Bank of America do at Fortress moan down there a brilliant skyscraper they ask Jim deari for help you know he's the man over there he I mean he turns the lights on in capital markets a b AI quickly John Tucker what's the calendar on this uh I don't know it's well whenever the courts conclude uh and it could be you know Lisa's not in her head could be well well into the sum June but yet June June's busting out all over with congestion fees we'll see raging debate here in New York City we welcome you across the country and around the world what you need to know higher yields the market churning of course waiting for geopolitical headlines International real head LS out of Israel good [Music] [Music] [Music] television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Matteo right now we have S&P futures they're up about a tenth of a percent same for Nasdaq futures we have Dow futures up about 6 t0 of a percent the 2-year yield at 4.94% that's up about 2 basis points the 10-year yield at 4.65% and that's up about four basis points over to Commodities we have spot gold lower at 2373 an ounce we have Brent crude at $89 a barrel NX crude at $85 a barrel want to point out Bank earnings we'll check in with Morgan Stanley right now they're up about 2% then we have an other news Tesla reporting that the company's round of layoffs that will affect more than 10% of its Workforce well it's already begun reuer saying it's hitting the US and China as we speak then layoffs over at as HSBC sources saying it's going to cut about a dozen roles in its Investment Banking division over in Asia and finally some tension at stellantis it's CEO's $39 million pay drawing concerns from investors because they're taking job Cuts as a Jeep maker transitions to EVS that is your Bloomberg business flash Tom and Damen let's rip up the script here Damen says with us Paul Sweeney with Alex steel at a Bloomberg nef Suare much on that as we go into uh the morning Daman you're sort of living the commute living the life large he's got the romantic weekend I don't have Teslas they're everywhere I see them constantly like almost like I see Toyotas and yet what a troubled story what are your thoughts onuse of Tesla you know they scare me because you know I don't hear him coming and you know I'll be walking on the street all of a sudden these EVS come up behind you and I'm like I mean it sounds like a cat hering I'm like oh my God you know so but anyway look I mean Tesla's a a rare breed obviously the layoffs are going to matter I'm interested to kind of see what that means for some of the conversations that are happening between Olaf Schulz in Germany and president xiin ping in China because as we know they're being accused of dumping specifically in EVS yeah you know into Europe and into the US for that matter and we're going to see whether or not uh there's any progress there I doubt it but it seems to be that Europe's ripping a page from the US play can Tesla go into Europe though and that's the real the real point there I mean this can't say enough folks how this is a partition between the US view on EVS China and the German view on EVS China I mean it's a raging debate in the background they're going to have to compete with the Euro autom manufacturers and they're not going to let them in easy yeah we'll have to see on that Futures up 11 now a look at the front pages what's making news around the world your daily Roundup of today's headlines from major Publications a daily look at the front page is a stack of newspapers at the desk Lisa Mato it's brought to you by interactive brokers interactive brokers they charge doll dollar margin loan rates from 5.83% to 6.83% rates subject to change you learn more at ibkr.com compare she's fired up she's got a whole list of Twisted stories here people love this or they hate this people are like can you just talk about Japanese Yen and I'm like come on Lisa's got some Jewels here what's what do you start all right this one was on Bloomberg um this has been going on the US preparing for an anti trust suit against Live Nation over Ticket Master so this Live Nation Ticket Master whole situation has been going on for some time they sources are saying they want to force Live Nation to spin off The Ticket Master ticketing business the agency's been investigating that entertainment agement for years so it's been going on the reason why well there's concerns live nation illegally tied its concert promotion services to use on Ticket Master but these two companies emerged like 14 years ago after this lengthy antitrust investigation they both agreed that they wouldn't tie those Services together but now they're saying well I've got a really strong opinion on this Damian before I voice what's your thoughts on Live Nation well when we go on tour what does that mean for us right we're not going to be really reaching our true audience out there you on guitar me on Me on the Bongos so I mean I'm a little I don't know what are your thoughts here's my thoughts on this this is all about the artists the artists want to feel that they're being an egalitarian and I'm going to have a 80 or $100 ticket so the people can come see me and the demand for some of these acts is not 80 or $100 it's way way higher it's almost it's just an artificial auction Theory because the demand is way way higher to see pick the artist but the artist doesn't want to visibly show on Ticket Master a $480 ticket try getting tickets for you two at the sphere or Billy Joel here at MSG I mean the Taylor Swift tickets that I I take this back to the artists I take it right back and they're Representatives you know they're artists and it's it's a mess I mean and there what's there going to be litigation out of this lease is that the basic idea that's what they're trying anti suit yeah okay what do you got next we'll see uh bubble tea have you ever tried it either of you God no no the Milky beverage with the tapioca bubbles in it no no I haven't tried it the kids love it oh really my Apple pay goes I don't even know how much I spent on this for my daughter but here's the thing so the market for it in China competitive they're fighting for customers but now they want to start to bring them you know here to the mainland to different areas you have a company like Chanda they're looking at southeast Asia they're looking at opening a store in South Korea a few years ago you have Haiti they opened up in New York in December so they're starting to trickle in a few companies planning IPOs in the coming months in Hong Kong but they're saying that they're going to start rivaling coffee chains that it's going to be this B between the coffee chains and the bubble tea this is you know my bank does like what did you spend during the year you get it about now you know for 2020 bubble tea was number eight on my list tell I don't even know this I mean the the fights block to block on the upper you saw it on bubble tea have you ever had it I've tried it it's too sweet for me I can't do it it's basically sugar and tea right my my milk ning it down and this is cherubs out the door it's 300 p.m. long yes and they're addicted they're in the malls they're overtaking like they're just going Stu that's what I'm saying they're going to start riving in with the coffee chain so I don't we'll we'll see how this battle goes I don't know New Yorkers do New Yorkers like their bubble tea or their coffee that's the question strawberry lemon Refreshers the Cher the cherubs like their bubble tea let's let's move on this is too painful it is okay here's a new trend for you longevity vacations okay this is the trend people are out big money we're talking about $1,200 to go on vacation and get ozone therapy or to $1,800 to get early detection cancer tests on their vacation wow and it's really really going on resorts are starting to go to it Resorts can now find biological age testing poolside vitamin IV drips stsm therapy this is all happening for a big Daman S I mean shout out to Dan Weinstein restore hyper Wellness IV drip on vacation you don't have to go to vacation to get your Ivy drip you can do it right in Westchester County restore hyper Wellness Dan Weinstein shout out is there such a thing as a Tang drip Tang drip you need one of those okay but this is this is a all seriousness I don't have the guy in front yeah in all seriousness there's a lot of people with a lot of disposable income into this taking red light they do cryo there you go into this freezing chamber I'm not done any of this by the way Bloomberg intelligence has a cryo thing it puts years on your life Martin Adams is in three days a week which you are you done or is that no this last one's a Zinger going to love this one oh thank you bubble can't wait this is from the New York Post so apparently there was this blog post on X from a tech executive who saying he spoke to a guy who admitted to spending 10,000 a month on AI girlfriends okay so he went on different websites he can create them he points a two ones Candy Ai and Cupid at I so this Tech guy is saying that if someone were to come up with a dating app that was for digital AI girlfriends they could make billion dollars I I have I have two daughters Lisa I can't talk about AI girlfriend believe this I don't know where this is going I mean lives on Saturday night the AI girlfriend's on Friday night we get it Daman help me here I get you know this is like a thing I get AI for cat GPT and the computer people tell me it's like a whole new world after all but other than that aren't we just searching around for things that maybe will stick to the wall you know I have to say I mean there was a big take on the terminal I don't know if you caught it Lisa Tom about sextortion scams um and and driving teenage I don't want to get all Dow here but it's a real serious thing and you got to read this article it's about driving teenage boys to Suicide I mean Nigeria like these guys are basically pretending to be girls reaching out to Young students high school students and causing them to do some really awful things it's really terrible got to read it it's a big take on Bloomberg it's on top okay there's the newspapers today sort of that was a different one I mean you know I mean AI girlfriends well I'm worried more about bubble tea that's more the reality all I know is Lisa Mato drove the market hire with our newspapers Future's up 16 D Future's up 259 EV Vick's under 19 Jess mton came in she said Tom Stones satisfaction we're doing satisfaction the Shell's off of the miracle the stones rot radio tell about that my I can't get [Music] [Music] [Music] this is Bloomberg surveillance with Tom Keane and Paul sweet are these stocks under owned by institutional Wall Street a lot of these companies talking about generative AI with Lisa Mato on markets investors just worried about the ongoing sales slump in China and Michael bar with news a ship traveling through the southern Red Sea has been attacked the best in economics finan investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone Tom Keane and Paul Sweeny Bloomberg surveillance yes economics Finance investment what a show yesterday on international relations working all through the weekend to bring you that perspective on the Eastern Mediterranean Paul Sween off with Alex steel today they will be with you at 10:00 a.m. from the Bloomberg nef conference it is our lead conference on hydrocarbons on energy and we'll have that for you Damen sassar agreeing to sit in with us for the next uh two days in perfectly timed is well Daman unquestionably across economics finance and investment dollar strength yes changes the debate yeah if you look year to date now the 22 major Emerging Market currencies just W the Mexican peso is up on the year in dollar terms it's just fascinating uh to see here Bloomberg surveillance this morning we're brought to you by con Resnik of course con resnic advisory Assurance tax let con resnick's Enterprise risk advisors help you build confidence in your supply chain using data analytics visit conn. CN Rez Nick con Resnik uh.com we're out on Apple carplay the Bloomberg business app we're on YouTube you search Bloomberg podcast there's a live chat very active really pleased with it thank you uh to the gentl have just said could you just get Mark McCormack on I love folks when you ask us for guests cuz usually my little brain can't get there mark McCormack at TD is fabulous on dollar and he has been dead out on dollar resiliency that's a brilliant suggestion off of live chat one more question as our guest sets up here uh uh Daman if I see dollar strength as well if we have an election and if Mr Trump's elected you know what he's going to say we got to drive that dollar can a president do that yeah I think he could try what I think is notable here about the price action in currencies is the fact that while the dollar is rallying it's even rallying versus the Japanese Yen and a sort of Safe Haven bid you would have thought that the Yen and even the Swiss frank would actually do okay and they just specifically the yen is rolling over here this is a joy and for Global Wall Street this is without question our interview of of the day uh well let's do this let's get the data in first Lisa I was going to go to David Hunt but let me go to Lisa Mato with the Bloomberg business David Hunt needs a day to check Lisa please it does and we've got green on the screen right now this is after the major averages and with losses to start the week so we have Dow futures they're up about 610 of a percent S&P futures up 210 of a percent Nasdaq futures up about a tenth of a percent the two-year yield at 4.94% that's up about one basis point the 10-year yield at 4.63% and that's up about three basis points to Commodities Gold city actually saying gold will hit 3,000 an ounce over the next 6 to 18 months right now we'll check in with spot gold it's lower at 2372 an ounce we have Brent crude at $89 a barrel NX crude at $84 a barrel on the economic calendar Forte reports on housing starts building permits that comes out in about a half hour from now and then we have industrial production that's about less than an hour later from that earnings yes it is earning season so far we've heard from Bank of America they're down about half a percent Morgan Stanley up about 3% Bank of New York melon up 2% and PNC they are down half percent. that is your Bloomberg business flash Tom and Daman this is a joy and for Global Wall Street this is the conversation of the day it is rare that you are in the consultancy game you know you go you do Princeton engineering you get some parchment graduate you end up at McKenzie you do that you end up running the asset management franchise and then the rarest of rarest things you actually go out and do it yep cuz like credential was like yeah okay credential and and then they became Pim and then they started with Total return Excellence the guy driving this ship is David Hunt he's a chief executive officer at p and we're thrilled he's with us today I can go for like two hours with you so get comfortable let's let's let's go it's it's great to be with where is the bond say I finally have a real job as yeah you got a real job where where in five years is the bond debt world I don't understand active management versus what the passive world's going to be and ETFs what's Greg Peters going to be doing in 5 years in Pim the good news is Greg's going to be really busy um because bonds are back and I'm really glad you asked it in a five-year context I think that's the right the Right View to take um there are both near-term reasons why we believe bonds are back which are just the higher the higher yields and as we begin to get a little bit of duration back into this we'll see a lot of money shifting from money Market funds but the real structural shifts that are happening are actually probably more important to the 5-year View and that is that retirement assets pension assets when rates go up become better funded and they actually then uh move to drisk their portfolios and that means moving money significantly into fixed income the blunt instrument here and I can go back to John Templeton 340 years ago and I can go to Larry McDonald's essay of last year is the wall of money that's out there your smartest people at Pim where is that money going to go I think that's the great mystery right now again over five years where does trillions of fear money go so the the good news is it's going to go back into uh you know high quality fixed income Assets in the public area and I want to talk about the private area too because a lot of it is going to go into private assets um but in the public asset pieces of this you you you mentioned the wall of money but a l lot of this is retirees right this huge demography CH which is happening not just in the US but all around the world they need decumulation products and they need income products and that means fixed income and and Daman I can't say enough McKenzie Global Institute what they've done on the failure of global Retirement Systems is just stunning and and they're absolutely right um we we are in no better shape um than we were 20 years ago in in this move to and so we at Pim are working really hard to make sure that there is a very big Suite of decumulation and income products available to people who need them as they hit 75 well I mean let's tear up the scripts here let's talk about choice choice for investors choice for retirees choice for active managers for Passive choice you know I'm looking at the Leman uh Global sorry the Bloomberg Global aggregate Bond index sorry sorry down four point I used to work at Leeman BRS down 4.3% year to date if you look at it by subass by currencies there's only one subass by currency that's up on the air and it's only by a handful of basis points and that's China so let's talk about Choice what choice do fixed income managers have if everything's in the red this year so they need to take the longer term view I think taking something uh on a three-year basis is not all that that useful um really when people uh have uh their retirement uh savings at risk they are looking at an ability to meet income payments over the next 20 years and so they need regular income as well as whatever appreciation can happen in the bond portfolio that's a different construct so when you ask me what are our portfolio managers going to be doing they are going to be spending as much time on decumulation and income as they do now on the accumulation uh phases of this but they're going to be every bit as busy David we all have children I have three myself you know we're not supposed to pick favorites but you Hayden my 12-year-old you know my you're my favorite um Kathy Hepworth Greg Peters Robert tip who's your favorite no I'm just kidding I'm just kidding don't answer that question but seriously such smart people there talk to us about the quality within Pim about retaining hiring keeping that type of talent there and giving them an environment a culture to make the right investment decisions for their produ so I'm really glad you raised that because it is the secret sauce right in order to be a successful active manager you need to both be right uh ultimately in your investment thesis and you need to be non-consensus meaning it can't be priced in now it's easy to be okay on one of those two you need both and you need a culture therefore that actually supports that so you need to back people even when they're wrong for periods of time and most corporate cultures can't do that right you need an investment culture that that values and wants non-consensus views and then backs people that have it our running joke is the only way you snag Porcelli is the hle picnic boat the 40s comes downi comes down to find him on 55 Locust in gwi Connecticut he comes down the picnic boat every morning just to come up to the dock at Pim is well when you do you guys have a consensus view now or is it like Pimco where you're like fighting and arguing and screaming in a 10: a.m. meeting about where the view goes how do you so so we uh we do both right we we absolutely believe that at the end of the day people should argue for their views and those views are are are Divergent and they should be and we don't see that as a a problem we actually think that's a strength um but we do at the end of the day have to position portfolios I got to squeeze this in as a chief executive officer work from home work from Office where are you so we went uh quite early in in all of this to uh our culture is a talent organization and we need mentorship we need creativity and we need people to be together and so we're going to do that three days a week and we're going to be in the same three days a week uh and so we come on got some news here where are you in 12 months you going to go to a 4 day 5 day six day a week in the office so I'll be honest with you Tom two years ago I had in our employee survey I had 1,000 questions on back to the office right this year I got 12 it's it's a finished issue for us people feel like we've gotten a good balance don't be a stranger I want you to come back and talk about engineering at Princeton David on CEO Pim thank you so much be sure porcelli's got the he's warm enough in the chill going down the Hudson River David Hunt uh driving a picnic boat for David uh for uh Tom pelli is well with our news in New York City John Tucker all right Tom after Iran's weekend drone and missile attack on Israel the question isn't if the country responds but how more on that for Bloomberg's Ronn mat there's a wide range of possibilities here from a direct attack as you say from Israel on Iran that would not be unprecedented but that's one option for them targeting military sites perhaps um even nuclear sites in Iran of course there's a lot of concern about Iran's nuclear program or does it go for something instead like going for one of Iran's proxies in the region we're talking about the houthis in Yemen we're talking about Hamas in Gaza Hezbollah in Lebanon do they go through one of those proxies to retaliate Iran's Deputy foreign minister is warning any Israeli counter attack would be met with a more severe faster and immediate blow House Republicans will walk the articles of impeachment against the homeland security secretary Alejandro Boris over to the Senate today kicking off a trial in that chamber Republicans accuse him of mishandling the crisis at the southern border the Senate Majority Leader Chuck Schumer has made it clear he wants to make quick work of this impeachment he can move to dismiss the charges or hold the trial not on the senate floor but in committee vice president Harris returning to the campaign Trail to underscore the stakes of the election once again the VP speaking of in Las Vegas a week after the Arizona Supreme Court upheld an abortion ban from 1864 what we are seeing in these states that we are talking about are Trump abortion bans and he can't get away from that in the wake of the Arizona Supreme Court decision now California bracing for an influx of women seeking abortions and the Supreme Court will weigh the legality of charges brought against hundreds of people in connection with the attack on the capital the question for the justices is whether a law passed as part of the saran's Oxley Financial reforms can be read to cover the January 6th Riot Global News 24 hours a day whenever you want it with Bloomberg News now I'm John Tucker and this is Bloomberg Tom Damen John Tucker thanks so much really really interesting going on here we got a lift in the equity Market of course very very different than the Ang that we saw yesterday and again thank to Admiral stus and Ian Bremer and others uh for being with us and I guess it sort of backed on more normal but as you look at the screen it's one thing Damian we haven't even talked about this I got a 10year real yield y back years 2.21% 22 how do you do business with a 2.21% 10year real yield you go to the sips market right because got it on the flip side it means that break evens are probably undervalued here so I mean maybe a carry in t i he the tips you actually can carry in tips you can positive carry for going a little bit further out on the curve it's not a bad idea to do that inside baseball with Damen sassar please stay with us on economics Finance investment good morning [Music] [Music] [Music] breing 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 on the rise right now we have Dow futures up about five half a percent we have S&P futures up a 10th a percent Nasdaq futures though they are little Chang right now the 2-year yield at 4.94% that's up about two basis points the 10-year yield at 4.64% and that up about three basis points to Commodities we have spot gold lower at 2374 an ounce and over to oil Bren crude $89 a barrel NX crude at $84 a barrel to earnings we go Johnson and Johnson just down uh just under half a percent right now first quarter profit beat estimates drug sales came in higher than Wall Street expected and then we have United Health group they were up about 7% first quarter profit beat expectations also affirmed its outlook for the year and that's despite the costs from that Cyber attack that they suffered from and some news from Microsoft up 210 of a percent the company will invest 1.5 billion dollar in g42 that's the uae's top AI firm that is your Bloomberg business flash Tom and Dam you know Lisa I was getting sentimental there after the newspapers as well I mean you know like like a substantial foundational cash flow of the Keen household went to boba on Madison Avenue and I'm clicking in here with a cumquat lemonade at $525 I mean the cherubs were out the door lined up halfway down the block for this stuff they're not in business anymore I don't know what happened to them but you know but but but the bobamosa things got to go away it's a lot of money it really adds up but the kids love it I'm telling you they're like addicted to it they always want and then they bring it home they get this ginormous size they bring it home they put it in the refriger Ator and it sits there for 3 Days oh got to throw it out toss it yeah thank you Lisa mat we're playing off the newspapers there if you if you're not in the last segment I mean newspapers was especially strong uh today this is a joy he's usually in Los Angeles you know he's like what's mookie doing what's the Dodgers doing he's worried about Hollywood the future of Paramount and all that Shri Kumar is truly one of the guest people lean forward and and listening to uh he iconic at TCW for years and of course now strear global strategies and it's just simply on the economy but with a different take what is your distinctive take now a wise one versus the consensus view um I have stuck to my view Tom the consensus view as you know has been first six Cuts seven Cuts in interest rates during 202 then it came down to 3 three for sure first cut was going to be in March no no no but it's going to be June for sure and I even wrote saying they should be increasing the interest rate not talk about how many times to cut so the change that we've seen in the last two weeks do you suggest we could see a shock interest rate lift because the real yield is getting out where it is exactly I think you should be uh increasing interest rates at this time if you really want to kill inflation but there are political reasons not to cut interest rates this is an election year and I look back to to what happened to the Nixon reelection campaign in 1972 author Burns whose path now right now Jerome Powell seems to be following followed a policy which was intended to make the Richard Nixon reelection possible and look at the way it is you can't cut interest rates too soon because inflation is too high it's tough for the FED to explain why they are doing it especially when they lost credibility with the transitory inflation argument in 2020 2021 okay but then can we cut closer to November 5th no you can't because that is that will be called politicized action making so how they are going to face it Tom is clearly not clear uh is not clear to me at all and that's where I come s when you leave in the morning uh from your home up in Malibu you take the PCH down to Santa Monica shutters great place um you know and you're thinking about this and you're thinking about channeling Arthur Burns and you're thinking about Arthur Burns and that stopandgo policy of the 1970s what does that mean for fixed income investors how do you how do you manage your duration risk in that type of an environment it is very difficult to manage your duration risk in other words it's a very you're going to be either very good as a Trader managing your duration risk or you're going to be very bad and you're going to lose a lot of money it's not clear which way you're going to come down to but the point is there is no in between because it's a very tough environment what I keep saying though is that you can make money if you ignore the next two years you're saving for your retirement you're saving for further education or for living then you can ignore all the changes in the short term and there I would come forth and say that long data treasuries despite the killing they have suffered in the last few days is still a good place to go in you know why I say that the higher interest rates the higher yields are going to kill some part of the economy the banking crisis of March 2023 is going to look like child playay yeah then this is the history of the fed you say I'm very much focused on bringing down inflation keep saying that until you create a crisis that's right oh I'm sorry I have to save the system and then I'm going to flood the place with liquidity General Williams with us yesterday button and of course you know Detroit Lions Blue Button John Williams was with us yesterday the New York fed and the Raging debate here is and I think of John Taylor out at Stanford we got to change the Taylor rule we got to change the foundational dynamics of your academics do we have to do we can we work within the same theoretical and applied regime of 20 30 years ago when you were TCW or Drexel or or that I mean or is it a new territory street thank you for asking John Taylor actually I have one more connection he was one of the three professors on my PhD committee at Colombia so I'm very familiar with the Taylor Rule and visiting him and this is Taylor before Colombia before he went out and got indoctrinated at Stanford that's a joke what what are we going to do about the basic foundations of our belief or do we have to find a new post pandemic economic belief I think you have to go back to the prepandemic long ago 1990s uh approach to Taylor Rule and it was first proposed Tom in 1993 Janet yelen who was then in San Francisco said she hopes that it can be adopted soon and 30 years later there is no progress toward it the So my answer to you Tom would be yes you need the tailor rule back it is a very flexible formula taking into account whether your growth is above or below Target your inflation is above or below Target and based on that should you be increasing or lowering interest rate you put the formula out you publish it in newspapers speak about it on Bloomberg and I will know what's going to happen to interest rate Daman get a question I have to ask you this you know I mean in to our audience you know s and I debate this offline you are a TCW Dave loinger a China expert in the truest sense of the goody talk to me about China how can we even think about China and is it even investable at this point I mean how can a US dollar based investor approach China in the current environment the way to deal with it I think is for you to have a small percentage of your portfolio which you can throw away which you can afford to lose and it is not going to be anymore a significant chunk of your portfolio if it ever was so what you're going to do is to say that if things work out and if you have a regime even with xiin ping who somehow switches over to free market capitalism rather than controlling the Communist system which is there are no signs it's going to happen I that's why I say to very tiny portion of your portfolio that's the only way to approach it we look forward to the milin Institute with Bill Lee out there chief economis for milin and as a senior fellow Shri Kamar that will be an important event in Los Angeles Shri thank you so much and yes we'll feature Shri Kamar on single best idea here uh today our podcast that we'll be putting together I mean I think this stuff is brilliant and it really goes back and you got somebody Colombia with Taylor ages ago and Ned Phelps and the rest do we get back to that economics post pandemic is a raging debate well I think that stop and start type of fed I mean wow that is going to be a very challenging environment for fund managers to operate and I mean if that's exactly what we're heading into where the FED might hike it might pause it might cut I mean that is tough I go back to the Dual mandate how can you be cutting rates with a sub for handle right unemployment it just doesn't and I get that there's an immigrant mystery here a migration mystery here as well but I I just a huge pricing tree is just s actually Lee talked to me today about the fed the sides coming up may one looking for a great show there as well Shri Kamar on fire there thank you so much from uh Los Angeles red and green on the screen right now the Vick well okay I'm going to go with it deep under 19 1898 thank you uh Brent crude quiescent $89. 73 on YouTube Bloomberg surveillance good morning [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 we've got red and green on the screen now Nasdaq futures they are little changed but we have down Futures up about 4/10 of a perc S&P futures they are little change to the 2-year yield at 4.95% that's up about two basis points the 10-year yield at 4.65% and that's up about four basis points to Commodities we go we'll have H comx gold at 2,390 an ounce we have spot gold at 2,373 an ounce and over to oil Brent crude $89 a barrel NX crude at $84 a barrel want to touch back in with bank earnings today we heard from Bank of America right now those Shares are up about half a percent we also heard from Morgan Stanley they're up about 3% Bank of New York melon they're up nearly a percent right now and finally PNC they are down 2% in other news buy out interest fading over at Samson night Source are saying private Equity firms well they think the price is too high and that's going to clear their way for a dual listing that is your Bloom break business flash Tom and Daman uh Lisa Mata thanks so much there is housing data and it is a miss the revisions are actually constructed that's about as positive I can get but month over month looking for -2% and it came in4 15 uh percent as well the revisions just out are a little more constructive but all in all the housing market uh a pause Damian I mean you look at starts you look at PR my wife's not going to be happy with this you know month over month it's like it's like there and I'm sorry the bank rate mortgage I looked at the fancy moving averages of a 30-year mortgage it's not Grim but the vectors towards Grim what is the mortgage fix rate 30 now 7.3 bank rate 7.3 yeah that's why no it's getting up there and I mean you know again this is a backstory into the FED discussion and we're going to do this uh in a bit our economic indicators support for all of Bloomberg surveillances economics brought to you by Commonwealth supporting more than 2,000 independent financial advisers with the solutions they need to you're a thriving business Commonwealth go where you grow visit commonwealth.com to learn more the CEO Commonwealth I think he ran the marathon yesterday in Boston we had a little bit of an upward revision on the on on the prior month just so you know so the housing data is not so bad it's not brutal Vision as well industrial production always interesting coming up at 95 Greg darker with us right now with ey Greg I just want to play off what Shri Kamar just said which is the interest rate is so messed up with inflation rising and not any sense of transitory disinflation are you in any way modeling out a probability of a rate increase well I think we can't say that it won't happen uh we know that there can always be surprises to the upside but I I would still think we're we're close to um you know well we're close to the onset of the easing cycle more so than we are to another rate hike uh we have heard some policy makers become a little bit more concerned with the inflation Dynamics uh I for myself continue to believe that the disinflationary momentum is well in place um yes the data has been a bit hotter than expected a little bumpier than expected but if you look at the underlying fundamentals that drive inflation pricing power pricing sensitivity wage growth productivity those are all actually still quite encouraging and some of the bumpiness that we've seen are in sectors that are perhaps less reactive to the FED insurance cost medical care cost those are the types of things that may not necessarily react that much to the FED State Higher for longer surveillance not correction but we like to be up to date we can do that with the Bloomberg Professional Service Damian the 30-year bank rate 7.43% out at two standard deviations above late February and that's taken that back to middle of December mortgage rates Peak 88.2% Greg I have to ask you this question you know we're looking at the CPI prints outside of the us from last week Mexico Brazil China Taiwan all weaker than expected so to your point this inflation is kind of taking hold outside of the US but my question for you is can diverging price pressures between the US and the rest of the world really Fuel That central bank policy Divergence that we're calling for I mean can these other central banks actually cut in the face of a Fed on hold I think that's what we're seeing being priced into markets right we're seeing the dollar uh strengthen quite a bit against emerging currencies uh we're seeing uh strength in terms of how the higher long-term rates in the US are affecting the rest of the world I think this tightening in financial conditions is something that we have to be keenly aware of because in the past this has led fed policy makers to be a little bit more cautious about how they communicate their intent to tighten or ease monetary policy so this is certainly something that we have to keep in mind um but I would not put it past the ECB for instance to start cutting rates in June as it has telegraphed while the FED stays on hold and perhaps Waits a little bit longer to see more evidence of disinflation so when you get somebody smart like Greg Doo folks talking about a tightening of financial conditions what do you do good morning Michael Rosenberg you look at the Bloomberg Financial conditions index and I didn't see this until Greg came up with that great Insight Damian we've had a lot of tendency towards an accommodative policy very much and it is broken down decisively early March well outside two standard deviations so we you know we we become a little more restrictive here I see in the 10year real yield I don't know where Greg sees it but to his point we have become less accommodative well Greg let me ask you that question we all know the components inside these Financial conditions indices right and one thing that's not behaving or that is behaving shall I say are spreads so we know it's not spreads that are driving that tightening of financial conditions it's got to be the vix and equities right I mean what is it well it's the vix it's uh equities it's uh the dollar that is is strengthening um and if you put all those together it is leading to some tightening of fin Cal conditions now in the BR grand scheme of things this tightening has not been massive and has not reversed the easing that we had seen previously so it's nothing alarming as of yet but I'm sure policy makers are paying close attention to the fact that the 10year yield is now above 4.6 that the two-year yield is is approaching 5% these are the type of indicators that fed policy makers have been increasingly talking about they've been talking about the Restriction from monetary policy but at the same time they've also been talking about the restriction from Financial conditions Lori Logan of course spearheading that discussion but that is really something that we have to keep in mind when it comes to how rapidly the FED may or may not ease we're now looking for two rate Cuts over the course of this year we've moved that down from three with the onset in July and the second rate cut in November um but I think we still have to keep in mind that there could still be swings to the other side to more easing if the data disappoints let's not forget the FED right now and some policy makers are playing it on a play-by-play basis so each and every single economic data point has its own importance not sure that's the right approach but that's what the FED is doing right now Greg I agree with your call on disinflation but I need to push back just a little bit here I mean Commodities have rallied across the board they're up 4.1% year-to date energy 5.4% precious up 14% now Industrial Metals are starting to play ball here I think copper had a huge week last week how does this factor into your Calculus in terms of looking at inflation I know it's all about the core and you know core Services whatever talk to us a little bit about the impact of commodity prices that's something we should be concerned with here so first to set the scene I think we'll we'll have core PCA inflation around two and a half percent in the next month or next couple of months so that would be the timing in terms of the onset of of rate Cuts but you're absolutely right that these higher commodities prices and in particular the potential for higher oil prices could put fed policy makers in a bit of bind because the higher energy costs would not mean just higher prices at the pump but also higher Transportation costs that filter through in this Supply fragile environment that we have so that is a risk because if you have this higher Commodities price inflation that generates higher inflation that puts the FED in a bit of a bind because it's contractionary for economic activity but at the same time inflationary GRE doco thank you so much E paron I greatly appreciate it on the economy uh this morning green on the screen here a lift here Futures up 11 D Futures up 243 the vix from that stressful 19 level comes into a better statistic 18.67% with our news in New York City John Tucker all right Tom thanks Middle East tensions may be ramping back up Israeli military officials are saying they have no choice but to respond to Iran's drone and missile attack over the weekend the US and European allies are urging Israel to avoid the kind of Tit for Tat that could spark a wider War here's State Department spokesman Matthew Miller Israel is a sovereign country they have to make their own decisions about how best to defend themselves what we always try to do is provide our best advice as a longtime friend of Israel and a longtime Ally and partner of Israel and that's what we've done since October 7th across a broad range of fronts it's what we have done over the weekend the Biden Administration has put more than 500 sanctions on Iranian anti I to hold tyan accountable for the attack the turmoil in the Middle East adding new urgency to passing foreign aid in the house after months of inaction Bloomberg's Ed Baxter says votes could come this week speaker Mike Johnson is planning separate votes this week on new Aid to both Israel and Ukraine this in an attempt to assemble fragile coalitions to speed Weaponry to both places we have uh terrorists and tyrants and terrible leaders around the world like Putin and G and uh and in Iran and they're watching to see if America will stand up for its allies and in our own interest around the globe and we will now his party majority is very slim and he may need Democrat support and he very well may get it the impass over8 has been dragging on since October Ed Baxter Bloomberg Radio and the Supreme Court will weigh the legality of charges brought against hundreds people in connection with the attack on the US capital the question is whether the law passed as part of the sarban Oxley Financial reforms can be read to cover the January 6 Riot hundreds of people including Donald Trump have been charged with obstructing an official proceeding but defense attorneys argue the statute refers to documents and Congressional investigations not the counting of electoral votes before a joint session the Biden Administration will argue and urge the court to read the law more broadly and allow the prosecutions to stand and another body recovered at the site of the Baltimore highway bridge col colls it was found in a construction vehicle underwater the FBI meantime says agents boarded the container ship that crashed into the span causing the collapse they're looking for any evidence of criminal wrongdoing hours before leaving Port the container ship reportedly had electrical problems Global News 24 hours a day whenever you wanted with Bloomberg News now I'm John Tucker this is Bloomberg Radio Tom Damian Michael bar uh not with us this week and he would speak of Ernie Harwell in the Detroit Tigers I was speak my you and Kurt gouty at the Boston Red Sox before Kurt had huge National Fame he was the voice of my childhood let's listen to someone speaking about the judge here's the one one swung on there it goes deep left it is high it is far it is gone number 62 to set the new American League record Aaron judge hits his 62 all the Yankees out of the Dugout to greet him John Sterling Damian he retires the young age of 85 listen to him just listen to him even with the dreaded Yankees he's going to be missed I mean absolutely iconic I don't know how I'm going to listen to the well I guess they have Michael Cas you know who I remember Phil rudo the scooter God I love the scooter love Theo John who's your favorite Yankee I'll just tell you short conell McShan used to work with us uh he had interned with the two of them in the Yankees booth and said it was hilarious and they they were both nuts in the greatest greatest way so it's just like it it must have been a joy working with those two guys legendary he's going to be missed I mean it's going to be a real it's it's heartbreaking almost it I look at the new generation and there's some that I just adore I'll leave them out right now and there's others that are just they don't have the passion we have to be careful chops we have to be sensitive and like this and I'm like no you got to be John Sterling you got to have some emotion to it John Sterling of course uh always Associated forever with the New York Yankees particularly back to the 19 uh 90s when the Yankees won I thought I'd get that in there okay yeah know I mean it's nice to see uh you know you're talking about the Yankees when the Boston Red STS are having a little bit of a harder time here did you see there uned errors uned runs I know I know you know but look I mean the Red Sox I mean look it's early in the season I I think I think the boys up north are going to make a run here I think it's time for me to buy an Orioles jacket and say I love the Baltimore at least you got the Celtics Future's up 14 Dow futur is up 271 the vix does better and better 18.4 one we're watching the bond market this morning 2yy old Damen sassar on that minute by on the break he's trading oh 4. 93% on the 2-year yield stay with us from New York City Bloomberg surveillance [Music] go [Music] go [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 right now we have NASDAQ futur is up about a tenth of a percent but Dow futures up 7/10 of a percent S&P futures are up about 2/10 of a perc to the bond market the 2-year yield at 4.93% that's a little change and the 10-year yield at 4.62% and that's up about two basis points some more economic data coming in today we talked about it new home construction in the US fell to the lowest level since August and this is as consumers going to wait out those High mortgage rates residential starts a decreased 14.7% in March building permits they fell more than expected to some companies making news we'll start with Tesla they're down 2% now yesterday we heard the company was planning to lay off more than 10% of its Workforce today reuter is saying it's already begun hitting the US and China and we have some layoffs at HSBC their ADR is down about a perc sources say it'll cut about a dozen rolls across its Investment Banking division in Asia that is your Bloomberg business flash Tom and Damen uh thanks so much Gan at monster now with deep waterer asset manager je Jean thank you so much for joining us in the talk on Apple today they got a May 2nd earnings report I want to forget about all the Gloom about China Revenue worries and that can they hold margins and continue to develop free cash flow which is basically doubled since pre pandemic can they still generate ample free cash flow growth uh the simple answer is yes they can they generate about a 100 billion in operating income and so this is about a$ 350 400 billion Revenue company the probably do about 95 billion This Year free cash flow will be around 55 billion so this is still a machine when it comes to and I want to uh I I think I buried the lead relative to that data point about their free cash flow is revenue growth if you take what it will be in the March quarter what they're going to report in a few weeks here Revenue growth over the past eight quarters has been down will be down 0.4% on average so they continue to drive that kind of 50 billion plus free cash flow despite Revenue being flat I think it speaks to uh the strength of the the business model that they have so I got to go back to use of cash and running a company for profit not growth which I think most of the media doesn't understand here Gina Martin Adams adamant we're going to see use of cash click in here are we going to see a use of cash bombshell from Apple uh I think that the so first this is going to be the period when they report their March quarter they typically give guidance about what they're going to do in terms of expanding their buyback and and their dividend and I would expect an increase the buyback in dividends somewhere around 25 billion so we're continuing to see them expand uh and that's over a multi-year period but can the bottom line is I expect to continue to see that move higher that's coming at the same time where we're going to hear more about their investments in AI they of course broke the seal last quarter after a full year of not uh proactively talking about Ai and now they have this event coming up in June where they're going to announce some products but those products come at a cost and it it there will be an investment cycle here and I think Apple investors should be aware of that investment cycle what does it mean ultimately for the business in the near term is you have these gross margins kind of right around 40% there's probably going to be a little bit of a step back in Gross margins Maybe by 50 100 basis points about 1% but I do think that that uh we do need to to factor in what they're investing in AI when we think about the context of the capital uh distribution they'll announce Dam pre pre pandemic uh uh gross margin 38% now out at a modeled 44% you know I mean Jean we're a little over a week away from April 25th when Microsoft Google and Amazon report after the Bell but before then this Thursday we're going to see earnings from Taiwan semi uh Thomas favorite book Chip War I mean Chris Miller I mean talk to us a little bit about Intel AMD what is China and all that's going on with the Chip War mean to those companies and how are their stocks expected to perform so I think Intel uh they're two different stories they're both within the context of chips and in terms of when when you look at what's happening in China Intel has greater exposure relative to AMD from from China the so I think that there is more of a headwind both of them are going to face a headwind and specifically within China some of these revised recommendations from the government puts Intel and AMD like eighth and Ninth on the list of Chip providers that they recommend the top six are are are Chinese chip providers so uh that is uh going to be a headwind I think that's part of what has negatively impacted iPhone sales over the past year is that there has been this um spoken um uh Focus towards wuwei within government employees it's a massive base so I think this is going to have a negative impact on Intel and AMD and our Flagship Titan fund we own uh AMD uh we do not own Intel we have sold Intel uh not because of this China but because of I think just some of the challenges that they have had I think there is some managerial challenges that they've had just to try to capture some of those uh faster chips and to build those those uh those better chips so big picture is this China is going to be an issue it's going to be an issue for AMD Intel Apple Tesla all these companies are going to have to navigate this it's going to get worse there over the next few years Jean let's shift gears let's talk a little bit about m&a activity Microsoft back rubic is seeking up to $713 million in an IPO that just announced talk to us a little bit about the potential for m&a activity within the tech sector over the B balance of 20124 do you expect a lot more new issuance I mean what what's really there how deep is the pool so uh two fa two people two pieces to that first in terms of the m&a side is I don't expect much uh in particular because the best companies already have valuations that are $5 billion plus it's going to require some of the bigger companies to take action to be the acquirers there and of course given what's happened in the regulatory environment I just see that less likely uh whether it's uh actually less likely to happen I think there's just it's I think the management teams feel that this is uh not worth uh invest the time in that so I don't expect a lot of m&a activity I do expect not this year but in 2025 to be the first year where we're going to see a class of AI first companies go public and I think that uh we what we' have seen of course with the move relative to AI a lot of that value has been created with the mega caps but we haven't seen really a u an AI IPO class yet and I think we will see it they can be uh from companies like data brecks it can be obviously open AI anthropic uh some of these uh kind of the the ordained AI companies likely will go public 2025 well let me fit in this question does private money front run that public process uh the private money does uh we I want to be careful about how answer this because yes uh the goal of private investors is to invest as before valuation as valuations continue to increase into the public markets uh that's how Venture makes money of course uh sometimes that gets turned upside down and Venture investors we have Venture funds too it's a different investment style it's more of a tech Visionary we are not only Tech Visionaries but we're also Tech investors I just want to make the quick point is that uh I think the mistake that a lot of venture makes is they just look at everything as being Rosy and can often times over pay and there is a painful look what happened with spax in 2022 there's a painful um correction that a lot of those earlier investors so I I think that they're just as risky uh owning stuff in Venture doesn't necessarily mean that it's going to go up when it goes public I thanks so much Gene monster really really wonderful comments here particularly on Apple Gene monster with deep water Asset Management Damian to your wonderful question there on IPOs I've got this Nostalgia of your for an IPO Market of another time and to me it's just gone the business now the bus is five or six cute phone calls round B round C round D round H round Z I mean that's where the action is I mean I mean if you want I mean you can't get in at the IPO you have to BEP yeah I just think that I'm as guilty of this as anyone a Nostalgia for the red herring the road show yeah the merch bag the good old days the good old days it's gone I mean it's six phone calls and like you say it's the ballet of getting out front of the private money guys yeah well I think that's technology and its impact quite frankly on the broader financial markets right I mean people have information they know these companies before I mean before you needed the investment Banks to bring them to Market an apple uh uh Apple carplay can't say enough about it Bloomberg business app and also on YouTube search Bloomberg podcast just met and demanded it wall the wall satisfaction they invented it the stones I can't get no I can't get no driv in my car on the radio tell me more about some step information suppos to find my imagination [Music] [Music] [Music] [Music] [Music] [Music] this is Bloomberg surveillance with Tom Keane and B we 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 mass in 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 Tom King Paul Sweeny Paul Sweeny on at 10 o00 with Alex steel the BNF hydrocarbon energy infrastructure seminar it's a huge deal for nef and Paul Sweeny uh will be there leading our coverage at 10:00 a.m. in Damen sassar Rich did you see how Damien will stack the deck here like he said I'm not coming on he had a sassar tantrum and he said I'm not coming on unless we speak to xlean people that's right is is Dick ful with us here later i' commercial paper with dick F I mean Drew Mattis was with us earlier we got cenzi coming up for Global Wall Street I mean this is what it's about sassa pulls weight to have Tony cenzi with us we're going to get right too and I mean where's short term for Damen sassa what when it's not commercial for two years I mean know three months you don't look more than three months in this x% come on you got to stay tactical stay on your toes I mean I guess I don't know okay this is domestic we're talking we're not talking you know Indonesia or something I mean I think even I think even Indonesia really I mean look I know it's a less liquid Market there Tom but I mean the way this Market's trading you really got it you can't look much further out than three basis points 4.95% I'm going to call it a 5% 2-year yield uh we're going to get to Tony cenzi here in a moment on Apple carp on YouTube search Bloomberg podcast we are humbled by the intelligence of a live chat out there including song ideas and Boba mosa and the rest of it from the interactive Brooker Studios our Bloomberg business flash looking forward to all that good morning right now Futures we have Dow futures up about 410th of percent S&P futures up a tenth of percent but Nasdaq futures they are a little changed right now the 2-year yield at 4.95% that's up about two basis points the 10year yield at 4.65% that's up about four basis points more fed speak later this afternoon chairman Jerome Powell speaks in DC alongside the head of the Bank of Canada and then meanwhile you have the feds John Williams and Mary Daly said there's no rush to cut interest rates but they still think they can move this year we had some more Bank earnings out today Morgan Stanley they're up 3% posted better than expected first quarter Revenue its wealth management business got back on track and then you have Bank of America they're Traders they notched one of the best Quarters on record the company also reaped the benefits of elevated barwing costs those shares up more than 1% we also heard heard from bny melon they're up about 1% and PNC they're down 2% that is your Bloomberg business flash Tom and Daman Lisa thanks so much the Blue Book just out the IMF of course I trudge around Washington with my blue book my green book my maroon book all the Brilliance of the IMF they raise their Outlook that's going to be the headline you're going to hear about including growth leadership by the United States of America but for the spring meetting meetings IMF saying the medium-term view is still that struggle uh worldwide joining us away from a longer view of economics and really on short-term paper truly owns The High Ground Anthony cenzi with us of uh Pimco Tony should I be nervous about a 5% to your yield hey Tom hey Daman uh no you should be happy you should be pinching yourself you should be Blissful we haven't seen these yields in quite a long time and it's one of the reasons why many people think that the US economy is fairing better as is a story on Bloomberg today about it interest income in the United States is about $1.8 trillion today that's up300 billion dollar from two years ago it's $300 billion that but the ambiguity is downplay I'm going to blame the media for this interest rates OMG price down yield up but you know and you've cified in all your books including the great stigum's 2,000 Pages uh you've cified that there's an ambiguity here explain the ambigu it that price down yield up can be good for our listeners well here's the here's a statistic going back several decades um uh the the fiveyear looking out five years in terms of what you're likely to get in terms of a total return looking at the Bloomberg aggregate which is a pretty much a compilation Bloomberg let me tell you what that is hey by the way on Leman I worked for Leman Brothers in the 1980s in the World Trade Center 104th floor with a view of Uptown remarkable period that was but so looking back at the looking at the Bloomberg aggregate today which is 40% us treasuries 25% mortgages 25% corporate bonds the yield is 5 and a qu% now if you take that figure it's that starting yield should be the return you get the next five years based on the 30-year history of it the rolling return over multi-year period should equate to what what you see as a stated yield today so 5 and a qu% is that good enough for some investors maybe not that's why yields are rising prices are falling they're selling they think yields would go higher but I would suggest to investors that they be careful about the story now and what I would suggest is thinking about three don'ts about what to do in terms of investing now we're off next about what to do here's what not to do for one don't try to time the market awfully difficult to do secondly sure perhaps don't catch a falling knife but do catch these yields while you can the yields could slip away and finally don't fight the fed and Tom and Damon you might think this means well the Federal Reserve is keeping policy tight so it's a bad thing but it's tough love the more it stays tight and it is getting tighter based on the definition of of what is tight a high infl a low a falling inflation rate and it is falling 2.8% pce versus a 5% yield it was they were almost equal last year uh fighting the FED today means believing this the central bank will be successful in his quest to bring inflation down has every means of an ability to do that Tom did you see did you see Tony wink at me when he said don't be a short-termist to actually invest for the long term I mean he's win at me he WN he knows I'm reading your note Tony and I got to say don't fixate on the fed's 2% objective Focus instead on the notion of quote unquote price ideas stability that reads like the South China Morning Post price stability what is price stability well Dam mean so I'm really old uh Tom is much younger than me but um call a period before 2012 and I'm going to tell you what that means when we didn't have a 2% price objective to go on we had to go on something else what was that something else a notion that prices are stable or they're not so it was in 2012 that Ben banki the FED former Fed chair implemented the idea of a price objective prior to that called the 1960s 7s 80s 1950s what did an investor have to go on to drive prices higher or lower they had to decide are pric is stable now if we fix fixate as investors on the 2% Target you could miss a great deal of return in your Investment Portfolio and many that that have fixated on the 2% Target in the past 6 months have lost a sign significant amount of investment turn in their portfolios because we haven't gotten to 2% but we might be achieving price stability which Alan Greenspan and Paul voker defined as a level of price changes or degree of price changes that ceases to have an impact on business and household decision making and that's where we're moving why the equity Market is feeling better because we're getting closer to the an era of price stability even if it's not 2% Tony behind closed doors some of the conversations I have with the people I know and that I respect we talk about that 2% inflation Target and we try to determine what it would take for the FED to consider removing that Target now I know it's far-fetched but do you feel that the FED in this environment can even remotely consider that if inflation stays persistently high it's highly improbable now uh they can't walk back on the notion especially with the inflation rate higher because then uh Market participants would would not would lose their sense as where as to where the anchor is because it's becoming grained in thinking uh but again as investors we have to uh take a step back and decide is the in inflation that we're uh experiencing uh enough to get in the way of future cash flows for businesses to pay you back at maturity to pay the interest on your bonds Etc give us the and this goes to economics and I want to go to your Staten Island or Richmond County I'm sorry but if I'm at the fed and I'm looking at chenzi Staten Island it's a great Labor picture overlying your Brilliance in the financial space is there this huge elephant in the room which is the labor economy of America the story for the 2020s which is a lot different than the 2010s is uh uh a story of retirements and immigration uh with retirements uh outweighing the immigration over the longer span of time there's a shortage of Labor and the context is this notion of stakeholder capitalism which is different than the notion of shareholder capitalism which Milton fredman shepherded in the 1970s when he said the sole purpose of a company is to grow its profits no company can say that today they have to be seen as a partner with the community as are seen to be helping with the with climate change and also uh contributing to um a a a diverse and inclusive Workforce and so in that context it's more likely that companies given that there's labor shortages um will want to to share income more and fin final stat Tom is think 1957 the biggest birth year last century 65 and a half years later they're receiving Social Security and retiring and this wave lasts until the last Boomer born in 64 retires in the early 2030s so we've got a shortage of Labor that'll last a while but uh final final word is immigration's helping lift GDP potential Tony thank you he is with Pimco Tony cenzi can't say about his different books about grabbing the coupon is really what this is about uh the vix 18.66 shows an improving tape a better feeling out there a 10year real yield wow 2.22 wow percent with our news in New York City John Tucker all right thanks Tom Israeli military officials are saying they have no choice but to respond to Iran's drone and missile attack over the weekend this even as European and US officials boosted their calls for Israel to avoid a tit fortat escalation that could provoke a wider War we get more in Israel's possible response with Bloomberg's Ethan Bronner in Tel Aviv the sense that the United States is back again embracing the Israel uh and and sharing in its um defense needs and so and is important to people it's the most important Alliance uh that this country has but you know there's this kind of old debate here which is do we want to be uh loved by our friends or feared by our enemies if we have to choose we'll choose feared by our enemies now the remaining question is is hitting back the best way to be feared and I think that's part of the debate too Bloomberg's Ethan Bronner President Biden hitting the campaign Trail in his childhood home state of Pennsylvania the campaign says the trip aims to highlight the differences between the president's tax and economic agenda and the policies of Donald Trump who WEA tax cuts for the wealthy as well as corporations uh Biden's three-day trip includes a visit to Scranton and events in the Pittsburgh area wild weather sweeping the central us today with tornado watches posted across parts of Nebraska and Kansas and an enhanced risk of severe thunderstorms later in Iowa Missouri and Illinois at least one tornado was reported in Kansas in the last few hours another was suspected in Nebraska about 2.9 Million people face the highest risks Global News 24 hours a day whenever you want it with Bloomberg News now I'm John Tucker and this is Bloomberg Tom Damen and Lisa John Tucker thanks so much so much going on here and of course all of it uh centered on the economic data at 9:15 we got some productivity numbers coming out in about 3 minutes we'll give you that data as well but along the way it is towards the FED meeting and I can only say we've had a huge huge variance today in opinions out there including SRI Kumar looking for a possible rate increase I'd say that's a lonely view right now but nevertheless it's part of the fan distribution of what this fed H is going to do we're going to drive forward that a conversation and of course we do it on Apple carplay got a whole new distribution model for radio thank you for listening on traditional radio Across the Nation around the world but I'll tell you Apple carplay we've been stunned at the usage here this is in new cars Ty typically it's like 80% of new cars have it you download the Bloomberg business app it's free and then you run apple carplay and it's like this one button you get to us and it's safer and better as Apple says on YouTube search Bloomberg podcasts um I'm completely thunderstuck by the immediate success of this Bloomberg podcast out on YouTube look for Lisa Mata that's the easiest way to get to our live broadcast couple other things out there uh as well and there's a live chat which has been very very uh informative uh this morning Futures up seven down Futures up 229 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 Lisa Matteo right now Dow future is up more than half a percent NASDAQ and S&P future is up about a tenth of a percent the 2-year yield at 4.96% that's up about three basis points the 10year yield at 4.66% and that's up about five basis point to Commodities we go spot gold lower at 2373 an ounce and over to oil we have Brent crude at $89 a barrel currency is a dollar weaker Japanese Yen weaker Euro British pound stronger Bitcoin that's lower down almost a percent at 62755 to earnings we'll start with Johnson and Johnson just under 1% those shares first quarter profit beat estimates drug sales came in higher than Wall Street expected and then you have United Health Group they're up about 7% at reported first quarter profit beat expectations also affirmed its outlook for the year and that was all despite the cost from a Cyber attack and finally some news from Trump media technology uh they're up about half a percent right now they say it's social media Network truth social plans to launch a streaming platform that is your Bloomberg business flash Tom and Damen Lisa thanks so much industrial production capu which used to be gospel less so now pretty much on plan I don't want to make much about it maybe manufacturing production a little more sprightly not Market moving here but nevertheless perhaps some more quiet tape but I have no idea where will'll be at 2 p.m this afternoon Tom Keane and Damen sassa are this morning we say good morning Paul Sweeny and Alex steel coming up from our BF concert uh uh conference I should say concert yeah Alex is singing uh conference uh in uh Manhattan looking forward to that this is a a joy and thank you Eric so much for getting Dr Lee in Julian Lee needs some explanation he is in London writing for the Professionals of the Bloomberg terminal and we're kind enough to drag him onto the program here and he does this with years of work for different think takes very much associated with the Middle East he has a real steeped Middle East and Saudi Arabian history to a study of hydrocarbons Julian let me begin simply why is oil not at $104 a barrel I think there's there's two reasons uh one is that uh the Iranian attack on Israel at the weekend doesn't appear to have done a great deal of damage despite the number of of missiles and drones that were launched um and more importantly uh at least for the moment uh Israel has been uh persuaded not to react now that may change um and there certainly seems to be uh pressure within Israel itself for some kind of reaction but for the moment uh the market is is taking comfort in the fact that they haven't reacted and there and there's no real sign of escalation at the moment with all your experience does Israel have Arab allies allies I think is is a very strong term um I think what we have seen is that a lot of the Arab countries have uh come uh much closer towards normalizing relations with Israel um Saudi Arabia was the next in line that looked like it was going to um normalize its relations and and there's also a lot of tension of course between the Middle Eastern Arab countries and Iran um so that that sort of sets up if you like a three cornered Dynamic um where the Arab countries are not necessarily uh desperately close to Israel but they're not desperately close to Iran either what they will fear is that any escalation of the conflict between Israel and Iran will inflict collateral damage on them um either through Wayward strikes Wayward missiles or uh through the agitation um on on the the sort of the the Grassroots in their own population Julian uh I'm going to pick up on Tom's question here it does not appear to be um the case that Israel and BB are going to back off here so I ask you the question I mean our friends at sock gen are talking in the event of a US Iran conflict oil prices go to 140 and they're putting a 15% probability on that actually occurring what are your thoughts I mean where can oil possibly go if the US and Iran join the conflict well I think that there are so many moving Parts in this I mean firstly uh the US I think is has has said so far uh that it won't back and won't participate in uh any further retaliation by Israel uh on on Iran so I think the us is going to try very very hard to keep out of that um and as for the impact on oil I mean you know we're in a situation so far where we've got uh war in Ukraine we've got the the war in Gaza uh we've got militant houes in Yemen uh firing missiles and drones at ships in the southern Red Sea and the only production that has been lost in in sort of two years of of Wars around the the oil producing region the only production that's been lost is about $100,000 uh barrels a day from South Sudan uh which has been lost because of a rupture uh on a pipeline in its northern neighbor which is embroiled in its own um internal uh domestic War so the pipeline can't be replaced we haven't lost any crude production yet um and I think that as long as any escalating conflict doesn't in in inflict damage on physical production capacity uh the price Rises may be more limited than some expect well let's St on the supplied side here Julian talk to us a little bit about you know what's going on with Ukraine and Russia I mean Ukraine's now sending drones going after oil facilities refiners in Russia how does that impact the equation well I think I I think there there are sort of two ways of looking at this one is that uh Russia is is a significant exporter of diesel fuel um and so if you start mounting successful attacks on Russian oil refineries that has an impact on their ability to produce uh more diesel than they need domestically and therefore to maintain exports so diesel exports may be uh where we really feel the pinch of this uh in terms of crude I mean one of the the the arguments that a number of analysts have put forward is that well if Russian refineries get hit they'll simply divert the crude uh export Terminals and they'll less diesel more crude that may not be possible to quite the extent that many people think and I wrote about that earlier today sneak one in here Dam yeah Julian one last question here Energy's been the equity Market darling up 14% year to date talk to us a little bit about you know whether or not all of this is priced in I mean where can Equity performance go within the energy sector from here I I think that um I I mean you know I'll say this up front Equity performance is not really my my uh sort of Route into to energy I I look much more at the market and and the geopolitics um but I think that you know we are seeing a period of elevated oil prices it's quite clear uh that the OPEC plus producers want to keep oil prices uh if not where they are now or perhaps a little bit higher than certainly not very much lower than where they are now that gives um a law for the value of of what uh the oil sector is producing uh and I think that's a large part of what has uh led to this more positive outlook so if we continue to have a tight Market if oil prices remain at this sort of level perhaps Edge higher over the summer uh that's probably going to be good for uh oil stocks over the next three to four months at least yeah this has been great Julian don't be a stranger I know you're buried talking to terminal users in the the pros that help us go each and every day Dr Lee is outstanding from Queen Victoria Street uh this morning you know I look at everything like like like four or five days ago we were talking about Sanka we got a huge response on lousy decaf coffee we've had a huge response this morning uh in New York and frankly Nationwide on this congestion pricing thing and the arch issue is the confusion of it D I agree there's a lot to learn here to be constructive about I think you're only going to get once that correction has been made if you if you pass through the I and they you see their building you see the infrastructure build along 60th Street anytime you know you pass through 60 you look up in the sky see these things there's these things there that are going to probably pick you up pick up your license PL it's pretty uh it's pretty interesting it's pretty ingenious actually for all of you Nationwide thanks for putting up with this the Stockholm leading on this and a few other cities New York trying to be the first in the nation big issue here on the island of Manhattan Futures up three D Futures up 211 vix 18.65 I want to say contined dollar strength we we'll get some chat with Damen on that good morning [Music] for [Music] [Music] [Music] opening bell report and we have a special treat for you for today's opening bell if you're watching on YouTube take a special look Bloomberg media ringing the opening bell we're celebrating Bloomberg media's partnership with NASDAQ it brings that realtime us equities data to bloomberg.com using nasdaq's last sale plus data product so you can take a look you can see we have Karen also there CEO Bloomberg media we have Julia Biser Chief digital officer Bloomberg media along with a crowd of folks so congratulations there all right over to the opening right now we have the S&P 500 it is little Chang we have the Dow that's up about half a percent the NASDAQ right now it's ticking in at just under uh down about 10th of a percent over to the 2-year yield at 4.96% that's up about four basis points and we have the 10-year yield at 4.68% and that's up about seven basis points want to hit Commodities we have spot gold lower at 2376 an ounce Brent crude $89 a barrel at the open have to check in with big Bank we have Morgan Stanley up 3% nearly 4% and Bank of America down 1% that's your Bloomberg opening bell for what's great about Caren being down at the NASDAQ and I don't know if she knows this they they took a cast to hundreds down there they're the ones that all eat cheeses up in the food court you know the media crew these guys are animals you know they get they get lunches their catered lunches are delicious I go down to the third floor to steal their food while they're in a meeting they're in a different world than us they keep you know animals like me away from them they you know but how we get the look Florida Karen's driving the ship and you know their lunches are better than our lunches really good I mean grilled chicken caesar wraps the real thing congratulations for opening uh the NASDAQ today to all of Bloomberg uh media juler and Karen salzer uh helping out there doing a lot for bloomberg.com and events and and have you ever ring the bell before Tom have you ever been done we have had the honor I'll te up Ken Ken puit and Charles pellet they wanted me to do it and I stood next to them and I said Over My Dead Body I said Over My Dead Body and I Jim Kramer was throwing stuff at me from the CNBC studio in the pit but I said Over My Dead Body am I going to ring the bell and not Charlie pellet Charlie pellet and Ken puit were the soul Charlie pet of course is surveillance Europe on $5 a day correspondent we're saving him for Olympic coverage but did you ever ring the bell there I did I did I actually had the rare privilege of ringing the bell at the New York Stock Exchange with the former president of Columbia vanon du it was actually a really wonderful experience you know you go up a into this beautiful Auditorium this a kind of private room and and by the way they have good food there also I'm just going to say I mean nice catered lunch there was delicious uh you know grilled chicken stuff like that mix screen here NASDAQ a little light we'll talk about that in a minute the vix under 19 deep under 19 18.9 uh seven but the yield place here and what we learned from Anthony cenzi I think is chenzi let me just cut to the chase Damian chenzi saying take the coupon and say thank you no yeah summ you know I would have love to get to Tony in here a little bit more I want to I want to put his I want to put my options hat on him I want to ask him in this environment with volatility spiking up here is now the time where you you you turn and you ship to Capital preservation where you buy Hedges where you hedge it all up you move to cash you go to safe havens is now the time where you have to at least consider moving a portion of your portfolio into cash and doing something like that Tom I don't know yeah we're gonna have to say let's let's do a vamp here on a currency Market as well it's something maybe secondary to all the angst in America and what we're seeing uh in Israel and Iran we're looking for a little Ethan Broner on the watch in Tel Aviv and we'll get more from Ethan Bronner through their evening uh as we go into at night but I'm sorry you got a 106.2 three on dxy this is a new regime for the dollar even if it's not dramatic well you know also dollar youan I mean the pboc did uh adjusted the band a little bit today to the down side so what does that mean a weaker youu on and I think that's kind of Weighing on the Asian currency complex as well here but I mean you're right the bbdxy the Bloomberg dollar Index is up 4.2% year-to date and by association Emerging Market local government bonds are down the same amount 4.2% year-to date so a stronger dollar Weighing on the hearts and minds of all our em practitioner then a basic question and this goes good morning Bill rhods uh is is Jerome Powell the central Banker to em and my answer into the IMF meetings is yes he is absolutely you can't fight the FED I mean that's why every time we have somebody on here and they say we see this Divergence and inflation this Divergence in terms of the manufacturing PMI growth I just don't buy it you can't fight the FED I mean us interest rates are where it's at it is the number one most the biggest exogenous risk factor in my mind in your portfolio and you got to stay mindful of it uh Damian Cesar with us Paul Sweeny you're here for what a week days CP days C couple days but I'll be in back sporadically throughout the summer you know a I don't think we get this in this morning we're going to get this in right now because I'm deficient of that I so bad want Celtic Lakers my oldest Cashflow my oldest was born the night of the iconic Celtics Lakers game yeah I I mean is there any chance I get Celtics Lakers you know I mean look I mean the Lakers are playing the Pelicans Zan Williamson appears to be healthy got a lot to prove but you know I do think the Lakers I mean we're talking LeBron James here I mean I think the Lakers are going to get the play in and the Warriors too I mean Steph Curry I mean they haven't been anything to speak about but I just can't see them not being in the playoffs I think they're going to win as well they're playing the Sacramento Kings tonight there's your NBA talk right now joining us Thomas hner Tom hner of all spring with a wonderful herriage out of Milwaukee with strong and what's so important about this discussion folks is this is our large cap quality growth discussion Tom do I stay with the winners of the last 6 8 10 quarters hi hi it's great to be here you know I we feel you can't ignore them but you also have to realize how much concentration risk is really been gotten into these big indexes it is it is amazing and you know I'm a client that's where I'm I'm really focusing on risk is how much I have in 10 stocks okay so what do you have right now in your top 10 Holdings are you at 55% % no we're less than that on our top 10 but the index is close to 55% with the rebalance is going to go close to 58 but we're North the 40 right now which you know is near an all okay so that's Tom you've been doing this for years that's clearly outside perspectus how do you rationalize that to shareholders who bought a perspectus yeah no we're definitely we ourselves for sure are within the perspectives right and uh we all that you know obviously explicitly um and do that we communicate that with clients but we're well Less in what the indexes are and again you know really when we talk to clients and I think there's so much pressure to go passive into index well do you want 60% of your portfolio to be in 10 stocks I don't think that's what they signed up for to me it reminds me of an Emerging Markets type Market not US market right well speaking of that on Q Damian sassau with Tom hner well Tom you know I got to go there then I mean you're every strategist and analyst that I speak of dismisses talk of seasonals yet I'm looking outside it's New York City it's 70 Dees in sunny and I can't help but think of these illiquid summer months kind of like Emerging Markets right so talk to us about how you position as you head in to the summer of 2024 yeah well you know we start obviously we' invest in growth but we always believe Can't Ignore valuation within that that's telling you what investors fut expectations are and believer right we're a believer that you know the AI is is transformative we want Investments there obviously you know companies like an Invidia are going to be extremely important but I also think you have to look at how AI broadens out things like uh software things like data management things like security things like power okay Tom Tom we got to leave it there we got some audio problems here we'll get back Tom I want you to come back on uh in the coming days here I think this is too important too important a conversation for people with real money in the game Real retirement Assets in the game this massive overweight that we see in quality portfolios we have had a fearsome live chat discussion out on YouTube over sassau wisdom we're going to get to that in a moment first our news in New York City John Tucker all right Tom Daman Lisa after Iran's weekend drone and missile attack on Israel the question isn't if the country responds but how more of that from Bloomberg's rosn mat there's a wide range of possibilities here from a direct attack as you say from Israel on Iran that would not be unprecedented but that's one option for them targeting military sites perhaps um even nuclear sites in Iran of course there's a lot of concern about Iran's nuclear program or does it go for something instead like going for one of Iran's proxies in the region we're talking about the houthis in Yemen we're talking about Hamas in Gaza Hezbollah in Lebanon do they go through one of those proxies to retaliate Bloomberg's Ronin mat reports the timing of an Israeli response also is not clear at this point House Republicans are going to walk the articles of impeachment against Homeland Security secretary Alejandro mayorca over to the Senate today that will kick off a trial in that chamber Republicans accuse him of mishandling the crisis at the southern border Senate Majority Leader Chuck Schumer has made it clear he wants to make quick work of this he can move to dismiss the Char or hold the trial not on the senate floor but in a committee meta platform's oversight board investigating the company's handling of AI generated deep fakes of an American public figure this follows a surge of such images depecting singer Taylor Swift earlier this year the board's going to evaluate whether two separate AI created images depicting nude women posted on Facebook should have been removed under meta's content policies and another body recovered at the site of the Baltimore highway bridge collapse it was found in a construction vehicle underwater the FBI meantime says agents boarded the container ship that crashed into the span they looking for any evidence of criminal wrongdoing hours before leaving Port the container ship reportedly had electrical problems Global News 24 hours a day and whatever you wanted with Bloomberg News now I'm John Tucker this is Bloomberg Tom Dam Andis I mean Lisa always monopol monopolizes a live chat forget about it sassau I'm wondering if Damien will make this tea time at 10:22 with the way this show is going thank you Matthew for that it's 12:30 let's be clear no 12:30 it's 12:30 good on the NBA we had a fearsome response out on live chat we all want Sixers uh Nicks but the answer is there's a playin explain the play in to people worldwide right so I mean it it gets a little complicated and I don't think we have the time to go into it I can tell you is this the heater playing the 76ers that's Jimmy Butler against Joel m b and one of those guys not right and one is not going to be in the playoffs after tonight after tomorrow night actually so I find that just so depressing because those are two players that you love to root for in the playoffs but one of those teams is going to be facing Jaylen Brunson and the Knicks and if there's one person who has just been looked over for all these awards for the Olympic team for NBA first team it's Jaylen Brunson point guard of New York what an absolute be he's been help me here Nick Sixers is like a original six in ice hockey I think it's going to be Nick heat unfortunately bamama Deo and Jimmy Butler I wouldn't count them out the way they play when it comes playoff time I mean they are pretty they're pretty awesome I don't know we'll have to see here the loser plays the Bulls what they say I think they're wrong you they don't know what they're talking about I don't know we'll have to see that's our NBA chat for the day uh Lisa you got to help me out with that next time because you know more uh than than I do what do we know we know we got red and green in the screen we got a massive churn out there right now John we had a fearsome response to the congestion debate in this the many Mysteries I mean John it's really not clear is it given all the litigation in their quiet the reticence about the process you maintain Damian that I'm going to have to pay every time I go through one of those it's not like a one time I think it's a one I think it's a one time only 24hour I can't douge you but uh yeah it's and it's different depending on time of the day you go like our overnight Crews will not have to pay as much as someone coming through the you know the normal I here 3 just going to say and then I leave at 300 p.m. do I get a discount for working really hard okay and the other thing I want to talk about here good morning to all of you is a construction boom on Park Avenue I mean you've got Fortress diamond and now we're going to have down at 52nd 53rd Street for have you been down there it's beautiful have you seen how yeah but it's going to be finished in what uh 2032 I think hey you're looking at the new John Sterling I'll still be here the good John Sterling was for the New York Yankees we did a shout out earli if you missed it to the great John Sterling of the New York at Yankees he has chosen to retire here it's 79 years old we'll have to see how that uh goes we got much more coming up we had a Titanic response yesterday to David gura's big tape I can't say enough about it huge response David girlo will be here on Israel and Iran please stay with us from New York 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 Lisa Mato right now we have stocks well we have the daq down about 2 T of a percent same for the S&P 500 but the Dow up about 3/10 of a percent the 2-year yield at 4.96% that's up about four basis points the 10-year yield at 4.68% and that's up about seven basis points more fed speak this afternoon we have chairman Drome Powell speaking in DC alongside the head of the Bank of Canada but already Vice chair Philip Jefferson said he sees a steady Fed rate helping to push down inflation now aside from the bank earnings we've also heard from likes of Johnson and Johnson let's get to that right now there's shares down more than 1% first quarter profit beat estimates drug sales came in higher than Wall Street expected you have United Health they're up 6% reported first quarter profit beat expectations and it also affirmed its outlook for the year that's despite those uh setback from the cost from that Cyber attack and later today we'll hear from United Airlines right now their shares down more than 1% that is your Bloomberg business flash Tom and Daman uh thanks so much Lisa greatly appreciate it the big take's a huge big project for uh Bloomberg it is eclectic and interesting and then sometime it sometimes rather it hits a resonance it hits a response which was made yesterday in all the different news and discussions and comments uh that we had an Israel and Iran with our leadership there in big tape yesterday was David gura who understands a political melstrom better than anyone I know Daman to have Mr gur in to have him walk into the building before what's great is you're going out to your tea time G is usually coming into the building you know he's got to get the kids to school and all that please you know so David talk to us a little bit about Israel I mean your big take obviously yesterday I mean this has changed the playing field changed the game is Israel losing the foreign policy battle and can they use what just happened overnight to try and write the ship a bit here we are at such a fascinating and difficult moment and you know the the big Take podcast features Ethan Bronner our Israel bureau chief and Nick wadams are very fine National Security editor down in in Washington sort of talking about what happened over the course of the weekend and interestingly what Ethan said was um this is kind of an opportunity for Israel to take a Victory lap we had this unprecedented attack by Iran hundreds of missiles and drones launched toward Israel from Iranian and and and so elsewh in the Middle East and by and large they were all intercepted so a victory for them but now we see this vacuum emerging what is Israel going to do next in terms of retaliation and also what does this mean obviously for the ongoing conflict with with in and with Gaza so it is a it is a precarious moment I hope we conveyed that in the podcast yesterday so David before any of this happened before October 7th of last year you know BB was on the hot seat right talk to me about how he's perceived domestically within Israel today and you know whether or not they can leverage what just happened overnight successfully on the back of that he has this war cabinet that was created just after that attack on October 7th so there is a push to for Israel to defend itself obviously in the aftermath of what happened October 7th but you're right he was in a very precarious political situation in large part because of these reforms that he was trying to to push through he also has all these corruption allegations which continue to swirl around him although less so given all that that's happening here you know what Ethan Broner told me yesterday it's so interesting in that cabinet in that panoply of of Israeli officials he's pretty much on the farthest left you have a lot of folks to the right of him who are pressuring him at this moment to take a stronger stance and to retaliate more forcefully than perhaps even he wants to so precarious position for the country but also for for viyah himself the heart of big take is the quality of your guests who gura brings in so you got Nick wadams who's seen it all he's been on he's the only one that goes on Air Force One that doesn't steal stuff that's how many times he doesn't take the M&M take the M&M and prob some of the people are walking out with the the seat belts in the chair notet and Bronner I mean is legendary at the New York Times now running the shop for Bloomberg in Tel Aviv do they and frankly David do you see a CO cohesive in continuance of our policy to the Eastern Mediterranean or does it radically shift the first Tuesday of November I think it's you know as it is in every country around the world an open question obviously what happens after the election here and uh we saw a strained relationship between Donald Trump and Benjamin Netanyahu when When Donald Trump was in office as well so it's it's unclear sort of how that policy would change we did see movement of course when Donald Trump was in power to move the embassy uh a lot of rhetoric and stronger rhetoric amican support of Israel but uh it's unclear and to your point Daman Benjamin nyah's position is so precarious it's unclear sort of what will happen come November in that country uh as well um but it's certainly I think galvanizing politicians in Washington to look at this issue a new we saw that we're seeing that on Capitol Hill speaker Johnson saying he's going to bring forward several of these bills that he's been really sitting on for the last few weeks foreign aid bills uh so what's happened over the course of the weekend I think has has sort of been a a catalytic event uh in to get Congress moving again grappling with the seriousness of what's happened and how this might escalate even more David I just have to get your temperature on this last point for me it's a US election year obviously and many people um you know believe that a vote for the Democrats is a vote against Israel right and vice vers a vote for the Republicans is a vote for Israel what do you believe like what do you think or more importantly what do you think is the reality out there you know what is what is sentiment out there as it relates to Israel on a party by- party sort of nature I don't think it's it's that radically the case but I do think you're hitting on something which is Democrats are having to navigate protests in their own ranks about what the policy is toward Israel and and and how this Administration is dealing with that crisis in Gaza we've seen how difficult it is for President Biden speeches have been interrupted events he's attended have been interrupted by protesters there is a a sense that he is um not or hasn't been payed enough to the plight of the Palestinians as a result of this so it's it's something I think the Democrats are very cognizant of and are going to have to navigate very carefully here tell us about the big take you know I I I look at the success of it and the ambition of it as well where do you want the big take to go in the next 90 days well you kindly said that it it can resonate on on the issues of the day and I really hope that we're going to get to that point where that's happening on a very regular basis today it's the play It's the play in the Sixers in the heat exactly you're going to do going to pull Daman before the tea time we'll get Damen in for that special topper to the episode um no I think that what I want is a nice mix of addressing the sort of broader context of the issues of the day but also uh elevating and giving a wider audience to the very fine work that our colleagues here at Bloomberg are doing so today's episode is going to focus on this very strong and sobering frightening scary investigative piece by Olivia Carville on a sort of extortion scheme that's affecting teenagers in this country the consequence I saw I read it was Inc it's scary really really devastating it's really frightening and and I think to get that to a wider audience is important we're going to be doing that as well Tom David Guru thank you so much look for the big take look for it out on ample podcast there with a lot of other uh Bloomberg issues Mr gura with a really important piece you can still go back and listen to it yesterday on Israel and Iran Damien we're closing out the hour here I know You' got to get you got your yeah you got the cleats on uh don't wear the cleats on a carpet in a food court but you know Damian I I I just have to talk about the core issue which is going back to Stanley fiser in 1998 suddenly in EM gauge the word suddenly right now in terms of em finale well suddenly I mean there's only one thing that's sudden in Emerging Markets it's that's how the currencies react relative to the dollar and so I think you know we've been talking about it all morning long I mean this is a dollar story this is about what would it take to derail this dollar strength and you know with you know interest rate differentials in favor of the US with growth in favor of the US and quite frankly if everything goes pair shaped and everything goes wrong in the world geopolitically whatever the case may be that's still bullish for the dollar so it's really tough as an em investor to make a bull case in this let's go back to em and that would be Japan got Japan at 154 and I got euroyen at 164 they were supposed to intervene here let's just start simply with why did they not well I don't know if they have or have not yet I know Indonesia overnight did intervene actually so that to me was kind of a precursor for what you might see out of the boj but certainly I do believe that it's just a matter of time before the boj is going to have to intervene to defend the 155 uh handle and look I mean if they don't I mean where could we go 160 higher I mean I think some of the some of the guys you know better than I are talking about a 10% move in dollar Yen from here so yeah that would be painful what does ren Mimi do they're clearly managing it it's basically shut down uh fully F almost fixed within a collar by Beijing as as well their shortest path here even with 5.3% GDP is depreciation they're managing it but what they're doing is manufacturing gains for dollar investors who had the audacity to buy China government bonds local denominated cgb are the only asset class in all of global fixed income in all of the Bloomberg Global aggregate Bond index that are up you know know the gura college fund is completely loaded with d did you did you did you you were listening to Dam David did you hedge that over doll I'm taking a page from your all cash triple leveraged College you're promoting this now I had a che and 20 Lisa wants to go to lunch I had a 2 and20 payout on Triple leverage all cash this has been great David gura looking for the big Take podcast Damien thank you thank you try to try to make power in a golf course Otis satisfaction in my man on the red [Music] meaz M up my imagination and I can't I get it no no no no and I can't don't

Channel: Bloomberg Television

Views: 8,309

Keywords: bloomberg, bloombergsurveillance, business, israel, markets, middle east, oil, politics, stock market, surveillance, tom keene

Id: CuOton4KLXU

Length: 176min 20sec (10580 seconds)

Published: Tue Apr 16 2024