>> OF COURSE THE EQUITY
MARKET’S BEEN LARGELY DRIVEN BY THE TECH STOCK. >> TELLING YOU THAT THE
RECESSION SHOULD BE STARTING. >> I THINK IT’S A WARNING THAT
SOME OF THE THINGS BECOMING LESS. >> WE’RE NOT SUPER RESTRICTIVE. >> THE ECHOS AND THE
RAMIFICATIONS. >> I LOVE WHAT RYAN BEAM WRITES
UP. FOR EVERY APPLE, MICROSOFT,
TEXT REPORTING AND ALL THAT, COMPANIES ARE STRUGGLING AND
THEY NEED TO RESET. JONATHAN:
LET'S TALK ABOUT EUROPE. WE TALK ABOUT THE FED HIKING IN
THE LABOR MARKET. EUROPE, 42 AND MANUFACTURING
PMI. THAT IS CONTRACTUALLY. TOM: IN MIDDLE OF THE SUMMER, A
COMBINATION OF THE BLENDED PI. ON FRANCE IN GERMANY, THAT TO
ME IS THE LEAD STORY. JONATHAN: ON CHINA CAN WE HAVE A BAILOUT
AND GET SOME STIMULUS. THE TOP DECISION-MAKING BODY
FILING TO STRENGTHEN TOM: DOMESTIC CONSUMPTION TOM:.
-- STRENGTHEN DOMESTIC CONSUMPTION. TOM:
IS THERE SOMETHING NEW HERE? THIS IS THE MODEL OF
TOTALITARIAN REGIME. JONATHAN: DID YOU WATCH ANY OF THE MOVIES
OVER THE WEEKEND, BARBIE AND OPPENHEIMER? TOM: I'M GOING TO WATCH TOP GUN
BEFORE I SEE BARBIE. THE OFFSPRING SAW IT AND SAID
IT WAS NICE BUT SHE WAS IN LOVE WITH BARBIE, SHE SAID IT WAS
MORE OF A STATEMENT. WHEN PUTIN WORKED UNDER
OPPENHEIMER WAS NOT THRILLED BY OPPENHEIMER.
WE WILL SEE IT SECOND OR THIRD OR FOURTH TIME.
WE USED TO DO THAT. JONATHAN: LET'S TURN TO PRICE ACTION IN
THE EQUITY MARKET. A MAJOR WEEK OF CENTRAL BANKING
DECISIONS. YIELDS RIGHT NOW DOWN TO BASIS
POINTS. EURO WEAKNESS, HAVING DOWN FOR
ANOTHER DATE, -- ANOTHER DAY. TOM:
THE KEY METRIC IS THE IDEA OF A SWITZERLAND ASCENDANT.
YOU LOOK AT THE EURO AS COMPARED TO SWISS.
I KNOW IT IS MEANINGLESS TO MOST PEOPLE BUT THE SUM TOTAL
OF WHAT I AM WATCHING IS WHAT YOU AND I WATCHED I FIRST MET
YOU. JONATHAN: I THINK YOU'D FORGET WHEN WE
FIRST MET BUT OK. WEDNESDAY, THE FEDERAL RESERVE,
ECB THURSDAY, FRIDAY THE BOJ. ALPHABET, GOOGLE COMING ON
TUESDAY. META WEDNESDAY AND AMAZON
THURSDAY. NEXT THURSDAY IS WE HEAR FROM
THE BANK OF ENGLAND. TOM: BEING -- THE BIG THING IS
AMAZON AND HOW IT IS DOING. JONATHAN:
YOU HAVE HEARD THE COMPLAINTS, DO WE NEED TO WORRY ABOUT THAT? >> I THINK WE WILL GET A LOT OF
CLARITY THIS WEEK. THE FED AND ECB, NOT MUCH
FURTHER TO GO. IT WILL KEEP VALUATIONS HIGH. THE S&P 500 REPORTING,
EARNINGS, AND A BIT OF NO MAN'S LAND. ROSE OUT OF TECH GIVING US
ENOUGH TO GET THROUGH THE SUMMER. TOM:
YOU GO RIGHT TO THE HEART OF THE SEVENTH STOCKS AND I WANT
TO FOCUS ON THE FACT THAT HE HAS NAILED THIS FOR THREE YEARS.
YOU TALK ABOUT A HIGH EMERGENT TECH SECTOR.
THE RETAIL PUBLIC AGREES, INSTITUTIONS ARE FAR MORE
CAUTIOUS ACCORDING TO REPORTS WE SEE FROM BLOOMBERG MARKETS.
WHO IS RIGHT, THE INSTITUTIONS OR RETAIL IN LOVE WITH APPLE? BEN:
NEVER GIVE UP ON THE MARKET, WHETHER IT IS TECH OR CRYPTO. TOP OF THE FED CYCLE, INFLATION
COMING DOWN, EARNING CYCLE ABOUT TO TURN OUT, A BIG
TECHNICAL OVERLAY, THE MORE WORK IT GOES HIGHER THE MORE
THE INSTITUTIONAL MANAGING, ULTIMATELY GET PAID TO MANAGE
MONEY. FUNDAMENTALS ARE INCREASINGLY
VALIDATING IT. THE MONEY WILL HAVE TO STEP UP.
TOM: YOU MAILED THIS, I BELIEVE
CHRISTMAS 2018. I CAN'T REMEMBER RIGHT NOW BUT
THE ANSWER IS, IT IS JULY, WHEN DOES THE PRESSURE KICK IN ON 12
MONTHS PERFORMANCE? DOES IT HAPPEN NOW OR?
AFTER AMERICAN LABOR DAY? CASH DOES HAPPEN NOW OR -- DOES
IT HAPPEN NOW OR AFTER AMERICAN LABOR DAY? BEN:
NEXT YEAR WILL BE A FANTASTIC YEAR.
WE START TO DISCOUNT SOME OF THAT. MAYBE IT COMES EARLY. THE MASSIVE RALLY WE HAVE HAD
GIVEN SOME WEEKS. THE MARKET NOW WANTS TO GO FOR
STEP FURTHER INTO CYCLICALS. WE HAVE HAD 10 DAYS OF DOUBT
RAILING AND WILL TELL YOU WHAT THEY ARE THINKING AND MAYBE
LOOKING AT THE NEXT ONE. JONATHAN:
YOU SAID CONFIDENTLY THAT NEXT YEAR WAS GOING TO BE A GOOD
YEAR. WHAT IS BEHIND THAT CONVICTION?
BEN: WE ARE LOOKING TO A GREAT ACCELERATION OF EARNINGS. JANUARY WE DOUBLE DIGIT
EARNINGS. WE WILL START TO SEE THE PROFIT
MARGINS. WE DON'T TALK ABOUT RELIEF FROM
PROFIT MARGINS. WILL BE CLOSE TO THE FED
CUTTING INTEREST RATES. THAT WILL KEEP VALUATIONS HIGH. IT IS FULL OF TECH, HAIR CARE
AND THESE ARE SENSITIVE TO YIELDS AND THE FED CUTTING
RATES. RITIKA: -- JONATHAN: WHY WOULD THE FED CUT RATES?
BEN: WE HAVE HEADLINE INFLATION OF
3%. WHAT WE WILL SEE TWO MORE
INFLATION PRINTS BEFORE THE FED MEETING.
I THINK YOU'LL SEE THE HEADLINE NUMBERS COME DOWN FURTHER. I STILL THINK MOST OF THE
GROWTH SLOWDOWN IS STILL TO COME. YOU HIGHLIGHTED THE SLOWDOWN
WHICH IS COMING. IT IS ENOUGH TO KEEP YOU IN THE
DEFENSIVE AREAS AND AWAY FROM CYCLICALS. JONATHAN:
OUTDOES EARNINGS GROWTH WE ACCELERATE IF WE SEE
DISINFLATION AND SLOWER ECONOMIC GROWTH? BEN: ONCE WE GET THROUGH INTO THE
BEGINNING OF NEXT YEAR, WE WILL GET A BIT MORE STIMULUS OUT OF
CHINA. I DO THINK THE U.S. CONSUMER WITH THE LABOR MARKET
WILL SOFTEN OUT. I THINK LOWER INFLATION AND
ALSO GIVING POWER BACK. TOM: YOU HAVE LIVED THE STRATEGIST
OR'S AND I SAY THIS WITH IMMENSE RESPECT FOR HIS
MAGNIFICENT AND LONELY CALL AT THE END OF 2018.
WHAT IS THE PRESSURE THE MAJOR HOUSES AND BANKS THAT PEOPLE
ARE CONVINCED IT IS BEARS? BEN: IT IS FORWARD LOOKING.
WE ARE LOOKING TO THE FED CUTTING INTEREST RATES. WE WILL GET A GLIMMER OF HOPE
WHEN EARNINGS COME UP FROM THE GIANTS.
VERY TECH HEAVY, THE OPPOSITE OF WHAT WE SEE IN THE STOCK
MARKET. A LOT OF PEOPLE HAVE MISSED THE
RALLY. UNLESS THE BANKS DRAMATICALLY
CHANGED WHICH THEY HAVEN'T, PEOPLE WILL GRADUALLY GET
DRAGGED INTO THE RALLY BECAUSE THEY HAVE TO.
I THINK THE FUNDAMENTALS WILL INCREMENTALLY GET WORSE AND
THEN TURN POSITIVE. JONATHAN: AND CONSTRUCTIVE CALL FROM BEN
LAIDLER. CENTRAL-BANK DECISION WORTH
REPEATING, FEDERAL BANK AND THE BOJ ON FRIDAY.
ECB COMING UP THURSDAY. TOM:
I WILL LEAN ON YOU ON THIS BUT THE ECB'S WINNER INCHED AND
THEN THE FED HERE. I THINK ANNMARIE HORDERN DID
GREAT JOB LAST WEEK. UKRAINE IS NOT A SMALL MATTER.
THERE IS A WAR GOING ON IN UKRAINE INTO THE CREDIT OF
LUMBER AND OTHER NEWS ORGANIZATIONS, THEY ARE KEEPING
IT FRONT AND CENTER BUT I DON'T SEE IT VISIBLY IN THE MINDS OF
INVESTORS OR THE AMERICAN PUBLIC IN GENERAL.
IT IS OUT THERE. JONATHAN:
WE NEED TO TALK ABOUT WHAT IS HAPPENING WITH WHEAT AND HOW
CONCERNED THE NATION SHOULD BE. TOM: IT IS ABOUT MEDITERRANEAN
DYNAMICS COMING OUT OF THE BLACK SEA INTO THE EASTERN
MEDITERRANEAN. EVEN OVERNIGHT, THERE WAS
UNREST IN THE BLACK SEA. MY ONE BAG FOR THE AMERICAN
NETWORKS IS THE BRITISH ANNOUNCERS ARE SO MUCH BETTER.
THEY ARE LOOKING AT THE PITSTOP, 1.9 SECONDS. IF THE AMERICANS WERE DOING >> ALL THREE ARE GOING TO HYPE
BY 25 BASIS POINTS, BUT THAT IS WHERE THE COMMONALITY WILL END.
I THINK THE FED WILL COME ACROSS AS DOVISH, THE BACK OF
GOOD WILL BE HAWKISH IN THE ECB WILL BE IN THE MIDDLE IN TERMS
OF THE POLICY GUIDANCE. JONATHAN: THAT IS MOHAMMED AL ERIAN ABOUT
THE BANKING. ON THE S&P 500, 40% OF THE
MARKET CAP THIS S&P 500 REPORTING EARNINGS THIS WEEK
ALONE. A MONSTER WEEK OF EARNINGS
SEASON THIS WEEK. YIELDS LOWER BY THREE BASIS
POINTS. 55 ON THE U.S. 10 YEAR. DOWNSIDE SURPRISE UNDATED IN
THE U.K. AND PMI 9:00 FOR THE U.S. TOM: THE DATA COMING IN AROUND JOBS
DAY IN AUGUST. THE WHOLE THING IS ABOUT THE INFLATION REPORT.
THAT IS THE NEXT BIG REPORT OUT. JONATHAN:
ULTIMATELY, IT WAS NEVER ABOUT THE DECISION FROM THE FEDERAL
RESERVE. IT WAS SEPTEMBER AND BEYOND. TOM:
IT FEELS LIKE A MONDAY MORNING IN LATE JULY AT FOUR POLICY
STRATEGISTS. IN THE OLD DAYS IT WAS ABOUT A
UNION AMERICA. I KNOW THAT HAS CHANGED, BUT IT
HASN'T. WHAT I FIND FASCINATING IS ALL THE STEREOTYPES, BIDEN OF THE
AFL-CIO IS SUPPOSED TO BE WE GET A PRO UNION.
IS THIS PRESIDENT WE COULD? GREG:
UNION LEADERS WANT HIM TO BUT OUT. THEY HAD A RADICAL TALKING GUY
AT THE TEAMSTERS WHO SAID WE DON'T WANT YOU INVOLVED.
THIS WEEK AND NO THE FED IS A BIG STORY BUT THIS WEEK IS A
BIG STORY FOR THE CONTRACT OR WILL THEY COME BACK ON TUESDAY, EVEN AS THEY AGREED ON A DEAL
WEDNESDAY WILL THEY GET A DEAL DONE? AT LEAST THEY WILL HAVE A STRIKE AND THAT WILL BE THE
BEST SCENARIO. TOM: HOW DOES UPS EXPAND IF WE ARE
NONUNION AMERICA? GREG: THEY WANT TO BRING IN PART-TIME
WORKERS. AND YOU HAVE COPYCATS. YOU HAVE THE UNITED AUTO
WORKERS INDICATING MAY -- THEY MAY GO ON STRIKE.
A BIG DEAL FOR JOE BIDEN AND I WOULD ARGUE A BIG DEAL FOR THE
FED. COULD THIS PRECLUDE THE FED FROM ANOTHER MOVE AFTER THIS
WEEKS HIKE, THEY MAY HAVE TO WAIT IF THERE IS A STRIKE AT
UPS. JONATHAN: ARE YOU UNDER THE IMPRESSION
THIS PRESIDENT WOULD STAY OUT OF THE NEGOTIATIONS IF THAT
HAPPENED? GREG: AT LEAST FOR A WHILE.
HE DIDN'T STAY OUT EARLIER ON RAILROADS BUT HE WILL BUT OUT
IF THE UNION SAYS TO BUT OUT. IF THE STRIKE DRAGS ON AND WE
TALK ABOUT THE PLAY CHAIN ISSUES IN THE HOLIDAYS, YOU HAD
TO BE UNDER PRESSURE TO CALL THEM BACK TO WORK. JONATHAN:
IT IS THE PROBLEM THAT WON'T GO AWAY, THE BUSINESS DEALINGS OF HIS SON AND THEN VICE PRESIDENT
JOE BIDEN. GREG: IT IS QUITE A STORY TALKING
ABOUT HOW THEY WOULD BRING IN JOE BIDEN IN CONVERSATIONS TO
CLOSE A DEAL. WHAT IT PARTICIPANTS WILL
TESTIFY. I THINK HE WILL BE IMPEACHED
OVER IT BUT CERTAINLY THE SENATE WOULD NEVER CONVICT.
DONALD TRUMP CAN SAY I AM BEING PERSECUTED AGGRESSIVELY AND
DONALD TRUMP -- JOE BIDEN ISN'T. JONATHAN:
RON DESANTIS, THE GOVERNOR OF FLORIDA, DROPPING TO THIRD
PLACE. WE UNDERSTAND NIKKI HALEY'S
ROUTES IN SOUTH CAROLINA AND LIKEWISE WITH TIM SCOTT.
HOW WAS HIS CAMPAIGN OVER THE WEEKEND? GREG: HE IS STILL IN FREEFALL AND HIS
COMMENT ABOUT SLAVERY OVER THE WEEKEND DIDN'T HELP.
IT WAS SHOCKING. I THINK THE BIG SIOUX IS -- BIG
ISSUE IS WHO BECOMES THE SECOND. ABOUT TIM SCOTT?
HE COULD BECOME THE SLEEPER OVER THE NEXT COUPLE OF MONTHS.
TOM: THE DEBATES ARE UPON US, WHAT
IS AFTER THE DEBATE? ARE YOU LOOK AT IT AS A
CONTINUUM OF DEBATES TO A PRIMARY VOTE OR IS IT NEW
POLITICS? GREG: THERE WILL BE A LOT OF
FUNDRAISING AND FOCUS ON THAT. THERE WILL BE A LOT OF
SPECULATION. COULD THERE BE ANOTHER
CANDIDATE WHO COULD ANNOUNCE LATE THIS YEAR? I SAY YES. I THINK THE GOVERNOR OF
VIRGINIA, GLENN YOUNGKIN, IS STILL A REAL POSSIBILITY. TOM:
I SEE ALL THESE CANDIDATES THEY ARE OUT LOOKING FOR FUNDRAISING.
IS THERE A VALUE TO FUNDRAISING TO X. GREG: WHAT DO YOU MEAN X. TOM:
ELON MUSK WAS TALKING ABOUT CHANGING THE NAME OF TWITTER TO
X. IS THERE VALUE? GREG: VERY MINIMAL. JONATHAN: WHAT DO YOU MAKE OF THAT? AND THEN WE HEAR ABOUT A GRAND
PLAN FOR X. YOU SEE THE CEO HAVING THE
AUTHORITY? TOM: THE ANSWER IS IT REMAINS TO BE
SEEN. A LOT OF PEOPLE WITH RESPECT
FOR HER CAREER AT NBC IN THE HOLISTIC ABILITY OF RAISING
MONEY CONSISTENTLY ARE CUTTING MAJOR SLACK BUT WE HAVEN'T SEEN
IT. JONATHAN: I THINK THIS IS REALLY
IMPORTANT IN SOUTH CAROLINA. IT GOES TO THE TOP DECISIONS
WHEN DECIDING THE CHOICE FOR PRESIDENTIAL NOMINATION.
ECONOMIC ISSUES ARE AT 1%. THAT IS A PROBLEM FOR THE
GOVERNOR OF FLORIDA WHO HAS MADE SOCIAL ISSUES A BIG DEAL. TOM: DONOVAN WILL BRING A
CONSTRUCTIVE INTO THE AMERICAN POLITICS. JONATHAN:
ARE WE TALKING ABOUT THE ELECTIONS IN THE U.K.? TOM: THE GREEN LEFTIST AT HAMBURG IN
OXBRIDGE BECAUSE IT IS GREEN POLICY IN LONDON. IT WILL AMEND THE GREEN PARTY.
JONATHAN: SHIFT TO THE RIGHT THERE AND
YOU ALSO SEE IT IN SPAIN. TOM:
DOES IT MEAN FOR REAL HUNDRED? JONATHAN:
COMING UP, A BIG WEEK AHEAD. EARNINGS. JONATHAN:
40% OF THE S&P 500 REPORTING EARNINGS THIS WEEK.
TUESDAY, WEDNESDAY, THURSDAY, BIG TECH NAMES. THE EQUITY MARKET ON THE S&P
500, FIRMER BY TWO POINTS, ON THE NASDAQ BY .3%.
APPLE SLIGHTLY POSITIVE. AND REPORTING MOMENTS AGO,
APPLE ASKING SUPPLIERS TO PRODUCE 85 UNITS -- 85 MILLION
UNITS OF THE IPHONE. THE KEY POINT IS THEY ARE
LIKELY TO INCREASE REVENUE BECAUSE APPLE IS CONSIDERING
RAISING THE PRICE OF THE PRO MODEL.
ULTIMATELY REVENUE PER UNIT FIRE. TOM: IT IS $3 TRILLION LEVEL. IT IS PRICED FOR THE CASH FLOW,
HUGE PROFITABILITY. THE DIVIDEND PAYOUT 14.3%.
IPHONE IS THE COMPANY. I WOULD ASSUME THE BULLS ARE
SUGGESTING THAT ALL THAT IS NEEDED IS THE STABILITY AND
ANOTHER CYCLE OF GETTING IT DONE. I DIDN'T EVEN KNOW WHAT IPHONE
THIS IS OR WHAT THE NEW ONE IS BUT WHAT IS?
GOING TO BE THE DIFFERENCE? -- BUT WHAT IS GOING TO BE THE
DIFFERENCE? JONATHAN: THE PRICE POINT APPARENTLY. TOM:
WHO IS PAYING 100. JONATHAN:
I FINALLY PAID THIS ONE OFF. THE STOCK IS POSITIVE BY 0.6
PERCENT. APPLE REPORTS NEXT THURSDAY.
TOM: SO AFTER THURSDAY WE HAVE 70%
OF THE S&P 500. JONATHAN: THE TWO YEAR YIELD PUSHING
HIGHER OFF THE BACK OF BETTER THAN EXPECTED JOBLESS CLAIMS
DATA. A 10 YEAR, DOWN THREE BASIS
POINTS. IT IS A RALLY IN THE BOND
MARKET BACK FROM AWFUL DATA IN EUROPE.
THE EURO NEGATIVE AGAINST THE DOLLAR. EURO-DOLLAR LOOKING AT
WHEN 10.82. TOM: IS YOU OUT OF LONDON WHERE
FOREIGN EXCHANGE RATE IS SUPREME.
BUT THE BASIC IDEA IS STREET CALL IS WEAKER DOLLAR.
USUALLY WHATEVER IT IS CONFOUNDS THE STREET CALL.
AT LEAST THAT MEANS DOLLAR STABILITY. JONATHAN:
THE DATA GOING AGAINST THAT CALL.
CHINA'S COMMON PARTY PLENTY NEW STEPS TO BOOST THE ECONOMY.
A MEETING REPORTEDLY UNDERWAY. HEADLINES FOR THE CHINESE
MEDIA, THE PARTY WILL BOOST DOMESTIC DEMAND AND LOOK TO
RESOLVE LOCAL DEBT RISK AND ADJUST PROPERTY POLICIES.
THERE IS A LOT THEY HAVE TO DO IN CHINA. TALK ABOUT THE WEAK DOLLAR AND
THAT MATERIALIZED IN A BIGGER WAY IF CHINA COMES OUT WITH A
MASSIVE STIMULUS PACKAGE. TOM: THEY HAVE THE REGISTERED
UNEMPLOYMENT IN THE WEST AND THE INSERT IS IT IS MORE
IMPORTANT THAN WHAT JANET YELLEN THINK IN WASHINGTON AND
THE ANSWER IS THIS IS DOMESTIC POLICY WRAPPED AROUND GETTING
PEOPLE JOBS. CAN YOU IMAGINE THAT MEETING OF
ALL OF THESE PEOPLE. THE ANSWER IS THE PRESIDENT XI
IS THE UNEMPLOYMENT RATE. WHAT WE NEED IS IMPLEMENT
ACROSS THERE. JONATHAN: EUROPEAN POLICY MAKERS WATCHING
CLOSELY. PMI DROPPING TO THE LOWEST
READING GOING BACK TO NOVEMBER. IT IS SERVICES MANUFACTURING
LOWER-THAN-EXPECTED. TOM: WE HAVE TO GO FROM BUDAPEST TO
BELGIUM FOR THE F1 RACE AND THEN YOU TAKE A MONTH OFF
BECAUSE THAT IS WHAT YOU DO IN EUROPE AND THEN THE ITALIAN
RACE IN SEPTEMBER. THE KEY OBSERVATION LINKING F1
IN BECAUSE WE HAVE TO TAKE A MONTH OFF.
YOU HAVE NO IDEA HOTELS I AM. JONATHAN:
I THINK IT IS A GREAT THING. YOU TAKE THE MONTH OFF AND GO
TO THE MOVIE THEATER. OPPENHEIMER SMASHING
EXPECTATIONS. I'M MAY WATCH OPPENHEIMER THIS
WEEKEND. BARBIE BRINGING IN 55 MILLION.
THESE WERE THE ESTIMATES THAT CAME OUT SUNDAY.
OPPENHEIMER BRING IN $80 MILLION.
TO HAVE A TRIPLE DIGIT NUMBER LIKE 55 MILLION OVER BARBIE
AND STILL SEE ANOTHER NAME AND MOVIE DELIVERING $80 MILLION,
THAT IS PRETTY RARE. YOU DON'T SEE STUFF LIKE THAT.
TOM: IT COVERS UP A LOT OF FLOPS
THIS YEAR.
WHAT IS REALLY IMPORTANT,
IMAGINE WHAT THE NUMBERS WOULD HAVE BEEN IN THE OLDER TIME AND
PLACE. BARBIE WOULD HAVE POPPED 250
MILLION. JONATHAN: IN PRE-STREAMING WORLD. TOM:
I HAVE DEAL WITH SWEENEY EVERYDAY AT 9:00 WHO IS
EXCELLENT AND PAUL SWEENEY'S ROLE IS A JUMBLE.
I DON'T KNOW WHAT TO MAKE OF THIS. JONATHAN:
GOOD NEWS FOR WARNER BROS.. MUCH-NEEDED. TOM: NO I'M NOT GOING TO SEE BARBIE
OR OPPENHEIMER. I WANT YOU TO IN THE IMPACT OF
CHINA WHEN YOU ARE LEADING COVERAGE THERE.
YOU HAVE AMERICA WITH A STUNNING REAL GDP OF 3%.
I WILL CALL YOU AN OUTLIER RIGHT NOW.
THAT TELLS ME CHINA IT IS NOT SLOWING DOWN AMERICA? IAN: ALMOST HALF OF THAT IS
INVENTORY. IT IS NOT SUSTAINABLE.
I THINK WE GET A MUCH WEAKER PROFILE IN THE SECOND HALF OF
THE YEAR. THE IDEA THAT THE 3% HEADLINE
IS INDICATIVE OF THE TREND IS QUITE MISLEADING.
WE ARE GETTING NOTHING OUT OF CHINA.
CHINA COVERING STORY HAS DONE NOTHING.
IT WAS PROBABLY SMALL DRAG. EVERYBODY WAS EXCITED ABOUT THE
POST CHINA COVID STORY ABSOLUTELY HAS NOTHING. THAT IS WHY WE ARE SEEING
NOTHING IN ASIAN AND EUROPEAN TRADE. TOM: GLOBAL WALL STREET TUNING IN
AND YOU ASCRIBE TO THE GLOBAL SLOWDOWN THE AND OTHERS ARE
TALKING ABOUT? IAN: LOOKS LIKE EUROPEAN GROWTH HAS
FLATTENED OUT. THE U.K. PMI IS TERRIBLE AS WELL. I THINK THE TALK OF A FEW WEEKS
AGO OF 6.5% IS OFF OF THE MARKET.
THE ECB IS LIKELY TO RAISE. IN THE U.S., THE Q2 READING
WILL BE MISLEADING. THE RESTARTING OF THE STUDENT
LOAN PAYMENTS IN OCTOBER WILL DAMPEN U.S.
CONSUMPTION IN THE RUN-UP TO THE HOLIDAYS.
IT WILL SEE INVESTMENT IN THE SECOND QUARTER IN THE U.S.
HIGHER. I AM ON BOARD WITH THE IDEA
THAT THE REAL GROWTH IT SURE IS NOT GOOD EVERYWHERE.
WE ARE JUST NOT SEEING IT. IT IS NOT CATASTROPHIC OR
RECESSION TERRITORY BUT YOU COULD GET THERE.
IT IS IMPLAUSIBLE TO THINK THERE COULD BE AN ABSOLUTE
RECESSION IN THE SECOND HALF OF THE YEAR AND I AM NOT RULING IT
OUT. 3% Q2 DOES IT TELL US ANYTHING
ABOUT WHERE WE WILL BE IN Q3 OR Q4. JONATHAN: MY QUESTION WOULD BE, WHAT IS
THE LESSON FROM EUROPE AT THE MOMENT WITH THE ECONOMY ON THE
BRINK OF RECESSION AND INFLATION STILL A PROBLEM? IAN:
INFLATION WILL BE LESS OF A PROBLEM IN EUROPE IN THE SECOND
HALF OF THE YEAR. THE BIG THEME OF THE SECOND
HALF OF THE YEAR EVERYWHERE IS GOING TO BE MUCH LOWER
INFLATION,. HEADLINE IS HELPED BY THE
ENERGY STORY BUT ALSO IN COURT NUMBERS WITH LABOR MARKETS AND
GROWTH MODERATING. ALL THE FORCES COMING THROUGH
TOGETHER, A CRAZY COUPLE OF YEARS DURING THE PANDEMIC AND
MUCH LOWER INFLATION ENVIRONMENT. JONATHAN:
I REMEMBER HAVING THE SAME CONVERSATION WITH YOU THIS TIME
LAST YEAR AND IT DIDN'T,. WHAT HAS CHANGED THAT YOU
DIDN'T ANTICIPATE? IAN: THE STICKINESS IN THE LABOR
MARKET WAS A SURPRISE. VERY STRONG WAGE GROWTH IN THE
U.K.. THE LABOR MARKET IS NOT SOFTENING. YOU LOOK AT THE TREND AND THE
DONALD -- DOWN TREND IS THERE. THE WAGES OF WILL OVER IN THE
LAST MONTH. IT HAS BEEN VERY FRUSTRATING IS
HASN'T HAPPENED SOONER. THE UNDERWEIGHT NUMBERS HAVE
ROLLED OVER AND IT IS LIKELY THEY CONTINUE. IN THE U.K., IT WILL WORK OUT
IN THE SECOND HALF OF THE YEAR. WE DON'T HAVE GOOD UP-TO-DATE
WAGE DATA IN EUROPE. IT MAKES A BIG DIFFERENCE, THE
SERVICES INFLATION IS WHERE THE PROBLEMS HAVE BEEN BECAUSE
LABOR IS SUCH A BIG PART OF THE TOTAL BUNDLE FOR BUSINESSES.
TOM: WE WILL ASK, DO YOU SEE A FED
THAT IS ABLE TO RHETORICALLY CUT INTEREST RATES AND CUT
INTEREST RATES OR IS IT EASIER TO HOLD THE LINE? IAN: FOR NOW THEY WILL STICK TO THE
LINE THEY THINK THEY HAVE MORE TO DO POTENTIALLY.
IT IS TOO SOON TO EXPECT THEM TO DECLARE VICTORY.
HAD COURT CPI AND PAYROLL NUMBERS. IT IS NOT ENOUGH. I WOULD EXPECT CHAIRMAN POWELL
TO RETAIN THE POTENTIAL TO GO AGAIN IN SEPTEMBER.
WHEN PUSH COMES TO SHOVE, MY GUESS IS THEY WON'T GO IN
SEPTEMBER. A LOT OF INFORMATION COMING OUT
BETWEEN NOW AND SEPTEMBER AND MOST WILL BE CONSISTENT WITH
THE IDEA THAT INFLATION IS THE UPSWING. WHY THAT ON THE LINE?
I THINK THAT WILL BE MUCH MORE CAUTIOUS AND RETAIN THE
OPTIONALITY OF THE DATA. THAT ALSO MEANS THEY ARE IN A
POSITION WHERE THEY CAN SAY IN SEPTEMBER, WE CAN EXTEND THE
PAUSE THAT SEEMS PERFECTLY REASONABLE TO ME.
THE DOVES ARE GOING TO BE DISAPPOINTED. TOM: SPEAKING OF THE DOVES, THE
MAGPIES THE TWO TOUGHEST TEAMS IN SOCCER. JONATHAN:
WHAT WOULD SUCCESS LOOK LIKE? IAN:
IN OUT OF THE CHAMPIONSHIP IN THE FIRST STAGE AND QUALIFYING
FOR NEXT YEAR. JONATHAN: THERE WE GO. HE HAD A SEASON TICKET BUT HE
GAVE IT UP AT NEWCASTLE. HE WAS UNIMPRESSED WITH
READERSHIP. DID YOU HAVE SEATS THERE ONCE
UPON A TIME? TOM: I DID. I SAT WITH STEVEN KEAN. >> WE HAVE BEEN FIGHTING
DEFLATION FOR DECADES. ECB, I THINK IT CAN GET HIGHER
THAN THE DOLLAR. JONATHAN: PUSHING BACK AGAINST THE WEAKER
DOLLAR CALL. WELLS FARGO ERIC NELSON DOING
THE SAME THING. YOU NEED TO SEEK STRONGER
GROWTH WORLDWIDE. YOU NEED TO SEE A BIG TO ME
EFFORT OUT OF CHINA AND THERE IS PLENTY OF TALK ABOUT THAT
BUT NO ACTION. THE DATA, EUROZONE AND U.K.
DOES NOT BACK UP THAT THIS ECONOMY IS RIPROARING. TOM:
YOU SAY WHAT WAS THE INTERESTING STOP THE SHOW POINT
OVER THE LAST EIGHT MONTHS. IT WAS THE IMF FIVE YEARS SLOW
GROWTH PROJECTION FOR GLOBAL GROWTH.
TO BE FAIR, IT MONTHS COME IT IS HAPPENING IN REAL TIME. JONATHAN:
FIVE DAYS OF EURO WEAKNESS, FOLLOWING THE BIGGEST WEEK
SINCE MAY. TOM: AND OTIS THE MEXICAN PESO, 16.9.
SOMETHING AMERICANS ARE WE FROM, THERE ARE COMMODITIES,
AND JUST FOIL. THINK COPPER, IRON OR.
AND THEN THERE ARE THE SOFTS. YOU CAN GET ON TREND, MAKE
MONEY, LOSE MONEY, HEDGE, COFFEE, COCOA, LIVESTOCK,
SUGAR, WHEAT. WHEAT IN THE NEWS
THE FIRST PRINCIPLES, IS THERE A GLOBAL PRICE TO WHEAT LIKE
THERE IS A GLOBAL PRICE TO BRENT CRUDE? >> THAT IS PROBABLY A GLOBAL
BENCHMARK. EQUITY FUTURES IN EUROPE FOR
PARIS. TOM: IS WHEAT A SINGULAR NEWS ITEM
ON UKRAINE, BLACK SEA AND SUCH OR DOES IT LINK INTO THE OTHER
SOFT COMMODITIES? >> RIGHT NOW WE SHOULD ALL BE
TALKING ABOUT WHEAT. WE HAVE ONE OF THE LARGEST WEEK
SUPPLIES CUT OFF. THEY HAVE IT BUT THEY DON'T HOW
TO GET IT OUT OF THE COUNTRY. GREENS BEING BLOCKED IN THE
BLACK SEA. THE ESCALATION OF FIGHTING AND
FEWER CHIPS COMING INTO THE PORT, ALL OF THIS MAKES IT HARD
FOR ANY SHIPMENTS COMING OUT OF THAT REGION. HIGHER IN TERMS OF
TRANSPORTATION COSTS AND SLOWER COMING OUT AT A TIME WHEN
LOCALLY FOOD PRICES ARE STILL ELEVATED. JONATHAN:
RUSSIA HAS KILLED THE GREEN DEAL ATTACKING HAVE SEEN
HIGHLIGHTS OF THAT ONCE AGAIN WHICH IS COMPROMISING THE BLACK
SEA. CAN YOU DESCRIBE WHAT ALTERNATIVE ROUTES ARE AND WHY
THEY ARE MORE EXPENSIVE THAN JUST GOING TO THE BLACK SEA
LIKE THEY TYPICALLY WOULD? KONA:
IT WOULD BE THE PORT OF THE NEW -- PART OF DENUBE. THEY REQUIRE A SMALLER BARGES, WE ARE TALKING SMALL AMOUNTS OF
QUANTITIES EACH TIME GOING THROUGH DIFFERENT ROUTES AND
NOT AS EFFECTIVE. NO ONE IS GOING TO ENSURE A
SHIP COMING INTO THE BLACK SEA REGION.
IT IS TOO RISKY FOR THEM. IT ALSO HELPS RUSSIA.
THEY WILL TRY TO GRAB THE MARKET SHARE THAT UKRAINE IS
NOT ABLE TO GET. SO RUSSIA WILL TAKE ADVANTAGE
IN TRIED TO GET TO THE BIG IMPORTING NATIONS LIKE AFRICA,
SOUTH ASIA, EGYPT. IN THOSE COUNTRIES RIGHT --
RELYING ON UKRAINIAN WHEAT WILL NOW HAVE TO USE RUSSIAN WHEAT.
JONATHAN: OUT ARE EXPORTING NATIONS
RESPONDING? IS A MORE PROTECTIONISM AROUND
GOODS STOCKING UP AT HOME? KONA: THE FAR WE HAVEN'T SEEN IT TOO
MUCH OF THAT, ONLY BECAUSE IN THE YEAR SINCE UKRAINE WAS LAST
-- FIRST ATTACKED BY RUSSIA , THE HEIGHT SPIKE IN PRICES HAVE
LED TO STOCKING. WE HAVE SEEN PRICES BUILT UP SO
THE PANIC IS NOT QUITE THERE. IF THE BLACK SEA IS CUT OFF FOR
TOO LONG, YOU WILL START TO SEE PANIC SET IN. ONE THING WE ARE NOTICING WITH
WHEAT AND GRAIN, RICE IN INDIA AS JUST BEEN GIVEN A MAN ON
EXPORTS AND INDIA IS THE LARGEST FOR RICE EXPORTS. IT IS NOT NECESSARY GREENS BUT
IT IS A MASSIVE STABLE AND HALF OF THE WORLD'S POPULATION RELY
ON RICE. TOM: THIS IS SO IMPORTANT.
I LOOK AT WHEAT AND SA WHAT DOES IT MEAN FOR A LOAF OF
BREAD AT THE FANCY GROCERY STORE IN NEW YORK CITY?
THAT IS COMPLETELY REMOVED FROM REALITY.
EXPLAIN WHAT WE PRICE DYNAMICS -- WHAT WHEAT PRICE DYNAMICS
MEAN ACROSS THE MEDITERRANEAN AND THE PEOPLE IN EGYPT.
GIVE US THE SCOPE AND SCALE WE IN THE FANCY WEST TO UNDERSTAND.
KONA: IT IS THE FACT THAT THEY ARE
EMERGING MARKETS. THEY ARE NOT AS ADVANCED AS
THEY ARE IN THE WEST. IT MEANS MOST GETS'S DENSE ON FOOD ITEMS
IN STAPLES. CONSUMPTION IN DAILY BASIS,
FOOD RANKS HIGHLY AND A STAPLE IS BREAD OR RICE. THERE IS A SITUATION WHERE IT
IS REALLY AFFECTING THE COST OF LIVING AND IMPACTING THEM
ECONOMICALLY. BACK IN 2008 WE SAW FOOD RIOTS
IN AFRICA. IT IS HOT TOPIC MOST GOVERNMENTS WOULD WANT TO AVOID.
YOU COULD ARGUE THE ARAB SPRING HAPPENED BECAUSE OF THE FOOD
RIOTS. THIS IS SOMETHING GOVERNMENTS
WILL BE LOOKING AT CAREFULLY. JONATHAN:
I WOULDN'T EXPECT YOU TO COMMENT ON POLITICS BUT RUSSIA
HAS VERY FEW FRIENDS ON THE INTERNATIONAL STAGE AT THE
MOMENT. PERHAPS YOU COULD DESCRIBE
TURKEY AS INTERMEDIARY BETWEEN RUSSIA AND THE REST OF YOUR
APPEAR CHINA HAS BEEN A FRIEND ON THE INTERNATIONAL STAGE.
WHERE WOULD THIS LEAVE CHINA'S GRAIN IMPORTS AND FOOD PRICES
GIVEN WHAT IS DEVELOPING AT THE MOMENT? KONA:
BENNETT HAS A DISINFLATION PROBLEM. THEY WERE CLEVER IN TERMS OF OR
THING IN A WHEN PRICES WERE LOW. CHINA AND RUSSIA UNFRIENDLY
TERM SO THEY WILL BE ABLE TO GET EVERYTHING THEY NEED FROM
RUSSIA AND THAT WILL NOT BE A PROBLEM. IN TERMS OF RICE, IT IS
SOMETHING THAT CHINA HAS A PROBLEM WITH BECAUSE IT HAS
BEEN AFFECTED BY THE HEAT WAVE. THAT IS SOMETHING THEY MAY NEED
TO LOOK AT CAREFULLY. JONATHAN: THANK YOU. TOM:
REALLY INFORMATIVE. JONATHAN:
DIFFICULTY IN SOFT COMMODITIES WITH THE WHEAT STORY AND THE
BLACK SEA. TOM: YOU KNOW I AM FOCUSED ON THIS
IS THE ADVENT OF THIS TERRIBLE WAR IN THE FEBRUARY OF LAST
YEAR. THE NEWS ORGANIZATIONS HAVE
DONE A GREAT JOB. CAN I MENTIONED THE ELEPHANT IN
THE ROOM HERE? 12 WANT -- 12 MONTHS TRAILING,
WANT TO LOOK BACK TWO YEARS TO 2019, STANDARD & POOR'S 500 UP
15%, THE DOW UP 10% AND THE NASDAQ ROARING UP 24%.
IT IS A DOUBLE-DIGIT STOCK RECKITT 12 MONTHS TRAILING THAT
-- STOCK MARKET AND THAT IS THE 12 MONTH TRAILING. JONATHAN:
41%. TOM:
WILL BE INTERESTING TO SEE WHAT THE MONTH OF AUGUST BRINGS.
JONATHAN: CONVERSATION ON THE EQUITY
MARKET ON THE MASSIVE RUN YEAR-TO-DATE AND A BIG WEEK OF
EARNINGS IN AMERICA. EQUITY FUTURES POSITIVE ON THE
S&P 500. ♪ >> OF COURSE, THE EQUITY
MARKET HAS LARGELY BEEN DRIVEN BY TECH STOCKS. >> A RECESSION SHOULD BE
STARTING. >> I THINK IT IS A LITTLE
WARNING. >> WE ARE RESTRICTIVE, NOT
SUPER RESTRICTIVE. >> YOU HAVE ECHOES AND
RAMIFICATIONS OF THE FED'S ACTIONS THAT REMAIN TO BE SEEN. >> THIS IS "BLOOMBERG
SURVEILLANCE." JONATHAN: LET'S GET YOUR WEEK STARTED
LIVE FROM NEW YORK CITY THIS MORNING.
GOOD MORNING TO OUR AUDIENCE WORLDWIDE.
THIS IS "BLOOMBERG SURVEILLANCE ." YOUR EQUITY MARKET, 0.2%
POSITIVE. ONE OF THOSE SPECIAL WEEKS YOU
GET ONCE A QUARTER, A TRIO, A TRILOGY.
THE CENTRAL BANK DECISION JUST AROUND THE CORNER AND TONS FROM
BIG TECH INTO NEXT WEEK. TOM: I WILL LET YOU DECIDE WHICH IS
MORE IMPORTANT. EARNINGS ARE FRONT AND CENTER
FOR PEOPLE IN THE MARKET. PEOPLE NOT IN THE MARKET, IT IS
ABOUT FED POLICY. WHAT IS UNIQUE AS THEY ARE ALL
THE SAME BUNDLES WITH THE CHALLENGES OF GLOBAL GROWTH,
BUT THE FED, ECB, AND BANK OF JAPAN HAVING DISCRETE
CONVERSATIONS. JONATHAN: A LOT OF PEOPLE ON THE
SIDELINES WONDERING WHETHER IT IS ONE AND DONE FOR THE FEDERAL
RESERVE. I THINK THIS FEDERAL RESERVE
WILL REFUSE TO EMBRACE ONE AND DONE AND RETAIN THAT THAT OF
MORE TO COME -- RETAINED THE THREAT OF MORE TO COME.
WHY WOULD THEY WANT TO GET BURNED TWICE? TOM: I WILL LOOK AT JEROME AND
CHRISTINE LIKE I LOOK AT BARBIE AND KEN, ON THE JOURNEY OF
SELF-DISCOVERY. JONATHAN: WHICH ONE IS BARBIE? TOM:
PLEASE. MADAME LAGARDE WILL TAKE THE
TROPHY AS BARBIE. THE JOURNEY STARTS WITH WHAT WE
SEE IN DATA CREATED LAST WEEK, THE DATA WAS SOFT.
NO OTHER WAY TO PUT IT. JONATHAN: BETTER-THAN-EXPECTED.
TOM: OK. JONATHAN: STOOD UP TO A MASSIVE RATE HIKE
AND CYCLE FROM THE FEDERAL RESERVE.
STILL HAVE UNEMPLOYMENT AROUND 3.5%.
INFLATION GOING FROM 3%, 4% DOWN TO 2%.
YOU ARE ASSUMING UNAPPOINTED HAS TO GO HIGHER. TOM:
THE PRESSURE ON THE WALL OF MONEY OUT THERE TO GET ON BOARD
IN SOME WAY HEDGE, UNHEDGED, WHATEVER.
THE PRESSURE IS EXTRAORDINARY. JONATHAN:
5%, GOOD THE FIRST COUPLE WEEKS OF 2023, AND THEN TECH
ABSOLUTELY RIPPED. THIS WEEK ALONE, YOU WILL GET
ALPHABET, GOOGLE, MICROSOFT TOMORROW, AND THEN ON
WEDNESDAY, META, FACEBOOK, AMAZON ON THURSDAY.
THE FOLLOWING THURSDAY, MORE. TOM:
YOU DID NOT HEAR FROM APPLE, BUT YOU WONDER HOW MUCH IS
OWNED. SOME SAY IT IS UNDER OWNED BY
WALL STREET. IT IS AN OLD WAR HORSE.
I WILL NOT MENTION THE NAME. ONE YEAR COME UP 13%.
I BELIEVE THAT IS A DOUBLE DIGIT RETURN.
DO THEY FEEL LIKE A FAILURE? THAT PRESSURE IS THERE.
JONATHAN: HEAVING THE STORY ON APPLE THIS
MORNING, APPLE IS ASKING 85 MILLION UNITS TO BE SUPPLIED
FOR THE IPHONE THIS YEAR. OUR REPORTING SUGGESTING THEY
ARE TURNED TO PUSH FOR A HIGHER AVERAGE BUYING PRICE.
JUST IMAGINE THE PRICE OF THE PRO MODELS.
STABLE BUT YOU GET A BETTER PRICE. TOM: JUST AS IMPORTANT, MARGIN
DISCOVERY. ONE OF THE GREAT CALLS ON APPLE
THAT WAS WRONG WAS THE MARGIN CORROSION.
THE VIX 14.23, STILL RESILIENT. NOT 12, BUT I WILL TICKET.
JONATHAN: -- BUT I WILL TAKE IT. JONATHAN:
AROUND EUROPE, DREADFUL IN THE EURO ZONE. TOM: DO YOU ROUND SPX UP TO 4600?
JONATHAN: WE ARE ON RECORD HIGH WATCH.
WE ARE LIKE 6% AWAY. TOM: I CAN STILL GET USED TO 4571 ON
THE SPX. LIKE, WOW, WE ARE HERE. JONATHAN:
YOU KNOW WHO ELSE IS HERE COME OUR GUEST -- HERE, OUR GUEST.
GOOD MORNING. WE WILL START WITH A SIMPLE
QUESTION, WHAT TAKES YOUR FANCY THIS WEEK? WHAT IS YOUR FOCUS? >> ALL OF IT. CENTRAL BANK.
TECH. LOTS FROM THE MICRO AND MACRO
FRONT. BUT I THINK PROBABLY -- TOM WAS
SAYING THIS EARLIER, THOSE NOT IN THE MARKETS, WHAT YOU SHOULD
FOCUS ON IS ACTUALLY HOW THEY SIGNAL WHAT IS COMING AFTER. SO HOW MUCH THEY CAN KEEP THE
OPTIONALITY OPEN. THAT IS WHAT DETERMINES THE
OUTCOME OF THE FED FROM HERE ON OUT. JONATHAN:
I AM ASSUMING YOU WOULD GUESS THE CHAIRMAN WILL TRY TO TAKE
THAT OPTION WITH AN ADDITIONAL RATE HIKE FROM HERE. >> THEY SHOULD.
THEY WILL TRY VERY HARD NOT TO LOCK THEMSELVES INTO ANOTHER
SEPTEMBER HIKE. HOPEFULLY THEY DO ACKNOWLEDGE
THERE HAS BEEN SOME SOFTENING IN INFLATION BECAUSE THAT IS
FACTUALLY CORRECT. BUT THE SAME TIME, IT IS TOO
EARLY TO CALL A VICTORY ON THE INFLATION BATTLE.
AFTER THAT, WHAT THEY SHOULD DO IS LEAVE ALL DOORS OPEN SO THEY
CAN GO AGAIN IN NOVEMBER OR THIS CAN BE THE END.
IF THIS IS TRULY THE BEGINNING OF WHAT I THINK IS A
DECELERATION, NOT BACK TO 2% BUT BACK TO A MUCH MORE
PALATABLE 3% OR 3.5% ON CORE CPI.
THIS COULD BE THE LAST HIKE, AND THEY SHOULD LEAVE THAT DOOR
OPEN. TOM: THE SUMMER RACE IS ON.
THERE WERE THREE BIG FIGURES. WHAT IS THAT ABOUT? SUMMER IS MOVING ON, AND YOU
ARE RIGHT ABOUT BUY AT THE END OF MAY. SOMETHING HAPPENED MAY 24, 25,
26. WHAT HAPPENED AT THE END OF MAY?
>> THE EQUITY MARKET STARTED BROADENING OUT.
WHAT WE HAVE SEEN OVER THE COURSE OF JUNE AND JULY IS WHEN
YOU LOOK AT THE EQUAL WEIGHTED INDEX, THAT HAS STARTED KEEPING
IN PACE WITH THE BROADER S&P. WHY? WHAT HAPPENED IN THE MACRO?
I THINK NUMBER ONE, THE GROWTH DATA STARTED NOT DISAPPOINTING
SO MUCH. THE GROWTH DATA STARTED GETTING
BETTER. IF YOU LOOK AT RETAIL SALES, IF
YOU LOOK AT INITIAL JOBLESS CLAIMS, ALL OF THAT IS
REMAINING RESILIENT. I THINK RESILIENT IS THE WORD
OF THE SUMMER. SECOND MOST IMPORTANT AND
PERHAPS MOST IMPORTANT IS INFLATION FINALLY TOOK A LITTLE
BIT OF A BREATHER. THAT IS MORE OF A JULY STORY.
TOM: MORE OF A JULY STORY, BUT THE BOTTOM LINE IS PEOPLE INCLUDING
A HUGE PART OF WALL STREET, WHAT IS THE TO DO LIST NOW TO
BUY AT THE MARGIN SO I CATCH UP INTO NOVEMBER AND DECEMBER? >> THIS IS ABOUT AS GOOD DATA AS WE WILL GET, AND THE FED IS
CLOSE TO BEING DONE SO CALL IT ONE MORE RATE HIKE AT THE MOST
AFTER THIS WEEK. I THINK YOU CAN PLAY FOR THE
QUICK CATCH-UP TRADE. I THINK THAT DOES MAKE SENSE.
WE HAVE SEEN FROM THE ETF SPACE WHERE INVESTORS ARE PLAYING FOR
THE CATCH-UP TRADE. NUMBER TWO, STILL FOCUSING ON
QUALITY, STILL LOOKING AT COMPANIES, WE WILL FIND THIS
THIS WEEK, BUT LOOKING AT OPPORTUNITIES.
WE SAW HOW MUCH THE COMPANIES THAT MISSED ON THE PROFIT
MARGIN GOT POLISHED SO THAT IS SOMETHING TO FOCUS ON. TOM: WHAT IS INTERESTING HERE, SOME
DISCONTINUOUS TRENDS HERE. SOMEBODY WAS OUT THERE OVER THE WEEKEND SAYING BACK IN 1979 --
GINA MARTIN ADAMS, LARGE AND SMALL CAPS PARTITION GOES BACK
TO 1979. >> NOT YET. MAYBE FOR A WEEK OR SO, BUT I
THINK BROADLY -- TOM: DAYTRADING. >> LISTEN, THIS IS AN
ENVIRONMENT WHERE YOU HAVE TO BE MORE NIMBLE.
I DO THINK IT IS ABOUT DAYTRADING.
IT IS ABOUT RECOGNIZING THE DATA CAN BE CHANGED AND WE HAVE
TO BE NUMBER ENOUGH TO CHANGE OUR MINDS EVERY FOUR OR SIX
WEEKS SETTING UP FOR A NEW STORY.
NOW IS NOT THE TIME TO LOAD UP THE BOX WITH SMALL CAPS.
CAN WE HAVE A QUICK SMALL CAPS CATCH-UP TRADE FOR 12 DAYS?
SURE. JONATHAN: YOU SAY IT IS TIME TO GET
DEFENSIVE. WHAT IS DEFENSIVE TO YOU? >> DEFENSIVE TO US IS QUALITY
COMPANIES, DIVIDEND COMPANIES, ACTUALLY MAYBE A LITTLE BIT OF
VOLATILITY SO IF YOU HAVE THE DOWNTURN YOU ARE STILL REMAINING INVESTED WITH A
LEVEL, BUT DEFENSIVE DOES NOT MEAN TO LEAVE THE MARKETS AND
GO TO CASH. DEFENSIVE MEANS STAYING IN THE
PARTS OF THE MARKET THAT ARE LIKELY TO OUTPERFORM LIKE THE
LARGE CAPS IN A SLIGHTLY HIGHER VOLATILITY ENVIRONMENT.
JONATHAN: WHERE DOES AI FIT INTO THIS?
THERE IS SOME DOUBT NOW ON HOW YOU SHOULD PLAY IT. >> I KNOW.
I DEFINITELY THINK THIS EARNINGS SEASON, ONE OF THE
THINGS WE WILL PROBABLY SEE IS EVERY COMPANY TRYING TO MAKE
THEMSELVES OUT TO BE AN AI COMPANY.
IT IS CHOOSING WHICH COMPANIES ARE ACTUALLY USING AI TO GAIN
EFFICIENCIES VERSUS NOT. WE ARE TALKING ABOUT THIS SOON
IN OUR MIDYEAR OUTLOOK. THE REASON WE PUT IT THAT WAY
IS THIS WILL BE WITH US FOR A LONG TIME, BUT IT HAS ALREADY
OBVIOUSLY IMPACTED PERFORMANCE THIS YEAR.
YOU CAN PLAY THIS THROUGH FIXED INCOME, BUT REMEMBERING THIS IS
NOT TOMORROW'S TRADE BUT THIS WILL STAY WITH US.
AI REMAINS WITH US. THINKING ABOUT AI AND
PRODUCTIVITY IS IMPORTANT. LOOKING AT AI ENABLERS AND
DEVELOPERS WILL BE THE NEXT LEG. TOM:
IS AI A BRANDED TECHNOLOGICAL PROGRESS FROM ANOTHER TIME AND
PLACE? I THINK IT IS A BRILLIANT ANSWER, BUT SHE SAYS IT IS OUT
THERE FARTHER. JONATHAN: I THINK IT IS PART OF
TECHNOLOGICAL PROGRESS, SURE. THE PROBLEM WE HAVE RIGHT NOW
IS EVERYONE WILL GO ON THE CALL THIS EARNINGS SEASON AND SAY
"WE ARE DOING AI." IT WILL BE 20 DIFFERENT THINGS
TO 20 DIFFERENT PEOPLE. TOM: I WANT TO GO TO A SIMPLER WORLD
LIKE A BEACH CABIN. JONATHAN: WHERE ARE YOU GOING WITH THIS
THIS MORNING? TOM: I SAW "BARBIE" THREE TIMES.
JONATHAN: YOU ACTUALLY WATCHED THIS MOVIE?
TOM: I THOUGHT BEACH KEN IS WHERE WE
SHOULD BE. JONATHAN: I DON'T BELIEVE YOU. THANK YOU.
TOM: DID YOU SEE IT? >> I DID NOT. [LAUGHTER] >> "OPPENHEIMER," THOUGH.
JONATHAN: YOU HAVE SEEN THAT? >> I AM GOING TO TODAY.
JONATHAN: PEOPLE GO TO THE MOVIES AT
SUNDAY NIGHT. >> I HAD TO BE HERE THIS
MORNING. JONATHAN: IT IS THREE HOURS.
THEY HAVE A LIFE. TOM: WE HAVE PEOPLE COME ON THE SHOW.
>> I AM NOT LIVING MY RIGHT LIFE, I DON'T THINK. JONATHAN: COMING UP A LITTLE BIT LATER, A
GUEST FROM DEUTSCHE BANK, LOOKING FORWARD TO THIS
CONVERSATION A LITTLE LATER THIS HOUR.
AND THEN WE WILL CATCH UP WITH ANOTHER GUEST AT 7:30 EASTERN
TIME. TONS OF EARNINGS AROUND THE
CORNER AND THE CENTRAL BANK DAYS AWAY. TOM:
I HAVE NEVER SEEN THIS EARNINGS SEASON.
WE MAKE JOKES ABOUT IT, BUT THIS IS ABOUT PEOPLE'S CAREERS,
THEIR ADVANCEMENT INTO 2024. IT IS A JUMBLE.
IT WILL BE FASCINATING. JUST FASCINATING. JONATHAN:
COULD NOT AGREE MORE. SPECIAL COVERAGE ON WEDNESDAY
OF THE FEDERAL RESERVE DECISION. THERE WILL BE AN APPEARANCE.
TOM: I DID NOT KNOW THAT. JONATHAN:
I DON'T KNOW HOW LONG SHE WILL STICK AROUND.
SHE WILL COME BACK FOR A FED VISIT. TOM: A DAY OR TWO.
JONATHAN: VERY EUROPEAN THESE DAYS. TOM:
SHE HAS TAKEN OFF ALL MONTH. JONATHAN:
EQUITIES AT 0.2% ON THE S&P 500. FROM NEW YORK, THIS IS
BLOOMBERG. >> IN TERMS OF WHAT RUSSIA
SOUGHT TO ACHIEVE, EVERYONE SAYS THEY ALREADY LOST. THE
OBJECTIVE, TO ERASE UKRAINE FROM THE MAP.
THAT FAILED A LONG TIME AGO. UNLIKE THE RUSSIANS, THE
UKRAINIANS ARE FIGHTING FOR THEIR LAND, THEIR FUTURE, THEIR
COUNTRY, THEIR FREEDOM. I THINK THAT IS THE DECISIVE
ELEMENT, AND IT WILL PLAY OUT BUT NOT OVER THE NEXT WEEK OR
TWO. WE ARE STILL LOOKING SEVERAL
MONTHS. JONATHAN: THE U.S. SECRETARY OF STATE SPEAKING
OVER THE WEEKEND. GOOD MORNING TO YOU ALL.
EQUITY FUTURES JUST A LITTLE BIT POSITIVE BY 0.2 PERCENT ON
THE S&P 500. WE HAVE GONE THROUGH THIS A FEW
TIMES BUT IT IS WORTH GOING THROUGH IT AGAIN.
META ON WEDNESDAY. AMAZON ON THURSDAY.
FOLLOWING THURSDAY, YOU WILL HEAR FROM APPLE.
IPHONE SHIPMENTS, WE WILL GET TO THAT LATER THIS MORNING.
BEYOND THE EQUITY MARKET, IN BONDS, A RALLY WORLDWIDE. ON THE 10 YEAR, 3.8016. REALLY REALLY TOUGH PMI'S OUT
OF THE EURO FROM THE MONTH OF JULY.
NOT A GREAT START, LET'S PUT IT THAT WAY. TOM: GERMANY AS WELL. DIFFERENT OVERLAYS HERE, BUT THEY GET A STRANGE CHOICE --
STRAINED CHOICE THAT MAXIME LAGARDE HAS.
WHAT IS THE IMPACT ON INFLATION THIS YEAR?
I DON'T KNOW WHERE THAT SITS. JONATHAN:
EUROPE, THE ECB HAS HIKED BEFORE WHEN PMI WAS TERRIBLE AT
INFLATION WAS PROBLEMATIC. I WOULD SAY THE DEFINITION FOR
PROBLEMATIC WAS DIFFERENT IN 2008 AND 2011 COMPARED TO NOW.
THE HIKES THEY MADE BACK THEN TURNED OUT TO BE BIG MISTAKES.
I WONDER HOW MUCH OF THAT COMES UP IN THE NEWS CONFERENCE THIS
WEEK ON THURSDAY. TOM: I WILL SUGGEST THE ECB NEWS
CONFERENCE WILL BE MORE INFORMATIVE AND SIT ON THE EDGE OF YOUR SEAT GIVEN THE BACKDROP.
TOM: OUR BLOOMBERG WASHINGTON
CORRESPONDENT, YOU CAN THROW ANYTHING AT HER.
IT IS THE KIND OF MONDAY IT IS. WHAT IS SEARED IN MY MEMORY IS
THAT ISRAEL I KNEW, THE EXPERIMENT I KNEW THAT ENDED
WITH AN ASSASSINATION IN NOVEMBER OF 1995. WHAT I AM READING FROM THE MEDIA
, FROM EXPERTS LIKE YOU, NOW IS A MOMENTOUS TIME IN
CONTEMPORARY ISRAEL. THE ILLNESS OF NETANYAHU AND
ALL THE JUDICIAL TURMOIL. HOW DOES WASHINGTON ADDRESS
THAT? >> A STATEMENT FROM THE
PRESIDENT SAYING BASICALLY A NOD TO HOPING NETANYAHU WOULD
BACK OFF ON THIS AND SAYING THAT WHAT ISRAEL NEEDS TO DO IS
FIND CONSENSUS, REALLY TRYING TO SLOW DOWN, AND PUT SOME
PRESSURE ON THE BRAKES WHEN IT COMES TO A JUDICIAL OVERHAUL,
BECAUSE WE SHOULD ALSO NOTE THERE HAS BEEN NOT JUST
RECENTLY PROTESTS BUT OVER THE PAST FEW MONTHS PROTESTS
REGARDING THIS. BY AND LARGE, IT LOOKS LIKE THE
POPULATION DOES NOT WANT TO SEE THIS GO THROUGH.
IT EVEN COST NETANYAHU HIS GOVERNMENT THE LAST TIME AROUND.
THIS IS A CONCERN. IT IS ALSO INTERESTING.
WE HAD THE PRESIDENT OF ISRAEL HERE IN THE U.S.
THERE WAS A JOINT SESSION OF PROGRESS, AND HE ALSO SPOKE
WITH PRESIDENT BIDEN. IT WAS ANNOUNCED, AN INVITATION
TO THE YAHOO!, BUT INTERESTING THAT NO DATE OR TIME WAS IN THE
INVITATION. JUST THAT WE HOPE AT SOME POINT
YOU CAN COME TO THE UNITED STATES.
AND THEN OF COURSE HE HAS HEALTH CONCERNS.
A PACEMAKER WAS ANNOUNCED THIS WEEKEND, AND WE SEE HIM STILL
WANTING TO PUSH THROUGH THIS JUDICIAL OVERHAUL. TOM:
FOR "BLOOMBERG SURVEILLANCE ," IT IS ABOUT JACOB FRANKEL, THE
GOVERNOR OF THE BANK OF ISRAEL, AND STANLEY FISHER AS WELL.
BUT IT GOES MUCH MORE BEYOND THAT.
DESCRIBE A TRADITIONAL JEWISH LOBBY. DESCRIBE THAT JEWISH LOBBY NOW
THAT YOU REPORT ON EACH AND EVERY DAY. >> THERE IS A NUMBER OF JEWISH
LOBBIES WITHIN WASHINGTON, D.C. I THINK IT REALLY DEPENDS ON
THE ISSUES AT HAND. MOST OF THE JEWISH POPULATION
IN AMERICA DOES LEAN LEFT. OBVIOUSLY, THERE IS A SMALLER
GROUP OF ORTHODOX JEWISH INDIVIDUALS WHO LEAN
CONSERVATIVE RIGHT, BUT IT REALLY DEPENDS ON THE ISSUE. WHAT YOU DID SEE RECENTLY, WE
SHOULD NOTE, WAS A FULL-FLEDGED BACKING OF THE ISRAELI STATE
AND JEWISH FRIENDS WHEN YOU HAD THE CHAIR OF THE PROGRESSIVE
CAUCUS COME OUT AND CALL ISRAEL A RACIST STATE.
SHE HAS SINCE WALK THAT BACK. THIS WAS CENTERED AROUND SOME
INDIVIDUALS WHO ALSO THEN DECIDED TO PROTEST AND NOT SHOW
UP TO THE SPEECH IN CONGRESS. TOM:
I LOOK AT THIS AND TO ME IT IS A CHANGE.
I DON'T SEE A CHANGE OF PACE LIKE 10 YEARS AGO OR 30 YEARS
AGO. JONATHAN: IT SPEAKS TO THE DOMESTIC
ISSUES OVER THE WEEKEND. GOVERNOR DESANTIS IN FLORIDA
FALLING TO THIRD PLACE. THERE ARE OBVIOUS REASONS FOR
THAT GIVEN THE CANDIDATES INVOLVED, BUT HOW MUCH OF A
SHIFT ARE WE ABOUT TO SEE FROM HIS CAMPAIGN? >> WHEN YOU LOOK AT IOWA, I AM
LOOKING AT THE NUMBERS NOW. DONALD TRUMP, RON DESANTIS, THE
NUMBERS DROPPING PRECIPITOUSLY. ONE THING IN MY READING OVER
THE WEEKEND IS YOU ARE SEEING MOMENTUM FOR TIM SCOTT BECOMING
THE THIRD IN IOWA. YOU HAVE TO IMAGINE IOWA --
THIS IS A NEW NAME SO IT DOES NOT HAVE THE SAME NAME
RECOGNITION A FORMER PRESIDENT WOULD HAVE TO GET THEY ARE
RUNNING AGAINST AN INCUMBENT IN THE PRIMARY AGAINST A FORMER
PRESIDENT. YOU LOOK AT GOVERNOR RON
DESANTIS AND "THE NEW YORK TIMES" HAD A BIG STORY OVER THE
WEEKEND ABOUT HIM, THE BIG REBOOT, AND WHAT THE CAMPAIGN
IS TRYING TO DO. THEY WANT TO BECOME LEANER AND
MEANER. THEY HAVE SHED SOME STAFF
BECAUSE THEY ARE REALLY PLUMMETING THROUGH A LOT OF THE
CASH THEY HAD ON HAND. THAT HAS BEEN A CONCERN FOR A
LOT OF DONORS, WHICH IS WHY YOU SEE SOME STILL WANTING TO WAIT
IN THE WINGS BEFORE THEY DROP MORE MONEY OR SOME OTHER DONORS
TO GET INVOLVED. THEY WANT TO SEE IF THIS
RESTART OR REFRESH REALLY WORKS. JONATHAN: FOLLOW THE MONEY.
WHERE IS THE MONEY GOING? >> THAT IS A GREAT QUESTION.
AT THE MOMENT, THERE IS A LOT OF MONEY THAT IS JUST ON PAUSE
WHEN YOU LOOK AT THE BIG CASH, BUT THEN YOU LOOK AT SOME OF
THESE SMALLER DONORS. WHEN YOU LOOK AT THESE SMALLER
DONORS, A LOT OF THE MONEY THE FORMER PRESIDENT IS ABLE TO BRING IN, IT COMES TO AN
INDIVIDUAL DONATING $5,000 OR 0,000.
AT THE MOMENT, A LOT OF THESE PEOPLE ARE WAITING ON THE
SIDELINES. THEY WANT TO SEE WHO POTENTIALLY CAN EMERGE FROM
THIS PACK. IS IT SENATOR TIM SCOTT, WHO IS
AT THIS POINT STARTING TO GET MOMENTUM?
OR IS IT SOMEONE WHO HAS NOT ENTERED THE RACE?
I HEAR RUMORS ABOUT A POTENTIAL GOVERNOR GETTING INTO THE RACE
AT SOME POINT IN THE FALL, BUT THAT REMAINS TO BE SEEN.
JONATHAN: WE HEARD THAT IN THE LAST HOUR
AS WELL. A LOT OF PEOPLE SUSPECTING THAT
MAY OR MAY NOT HAPPEN THE LAST FEW MONTHS.
NEXT MONTH, FOX NEWS HOSTS THE FIRST DEBATE.
ON THE DEBATE STAGE, A HOST OF CHARACTERS.
WILL THOSE CHARACTERS INCLUDE THE FORMER PRESIDENT DONALD
TRUMP? >> WE STILL DON'T KNOW YET.
I SAW HIM PUT OUT ONTO SOCIAL OVER THE WEEKEND THAT A LOT OF
PEOPLE HAVE BEEN TALKING ABOUT THIS, A COUNTER PROGRAM BEFORE
HIM AND TUCKER CARLSEN. I BELIEVE HE HAS A SHOW ON
TWITTER OR X OR WHATEVER WE ARE CALLING IT THIS MORNING.
IT TOTALLY DEPENDS. WE JUST DON'T KNOW YET. THE FORMER GOVERNOR OF NEW
JERSEY CHRIS CHRISTIE HAS SAID HE SHOULD SHOW UP TO THE DEBATE.
JONATHAN: THANK YOU. THAT DEBATE IS ABOUT A MONTH
AWAY. ONE MONTH AWAY. JUST AROUND THE CORNER.
AND THEN 18 MONTHS OF IT. TOM: MORE. JONATHAN:
A SOLID YEAR AND A HALF OF CAMPAIGNING COMING UP.
FROM NEW YORK CITY THIS MORNING, GOOD MORNING TO YOU
ALL. ♪ JONATHAN: JUST ABOUT SQUEEZED
OUT A SECOND WEEK OF GAINS ON THE S&P 500.
SOME UNDERPERFORMANCE ON THE NASDAQ LAST WEEK THROUGH THIS
WEEK. THIS MORNING, THE POSITIVE BY
0.3% ON THE NASDAQ 100. 40% OF THE MARKET CAP ON THE
S&P 500 REPORTING EARNINGS THIS WEEK.
IT IS ONTO APPLE NEXT WEEK. SOME NEWS ON APPLE IN JUST A
MOMENT. IN THE BOND MARKET, YOU WILL
NOTICE A RALLY WITH YIELDS LOWER BY FOUR BASIS POINTS ON
THE 10 YEAR, DOWN A SINGLE BASIS POINT TO 482.
IF YOU ARE LONG TREASURIES, YOU CAN THINK YOU'RE UP THIS THIS
MORNING. THE PMI'S ARE PRETTY DREADFUL
OUT OF THE EUROZONE AND U.K. FOR THAT MATTER.
THE EURO WEAKER OFF THE BACK OF IT. SESSION LOWS AT 111. -0.2% ON THE CURRENT PATH.
THE LATEST FROM CHINA. CHINA'S COMMUNIST PARTY
PLUNGING STEPS TO BOOST THE ECONOMY WITH THE BUREAU MEETING
REPORTEDLY UNDERWAY THIS WEEK SAYING IT WILL DRAFT A LIST OF
THINGS INCLUDING ADJUSTING PROPERTY POLICIES. TOM: MAY HAVE TO LISTEN CLOSELY TO
LEGITIMATE CHINA EXPERTS. A LOT OF MOVING PARTS HERE.
I HAVE NO IDEA WHICH WAY THIS GOES. HENRY KISSINGER TRAVELS OVER
AND THESE ARE ALL DISTRACTIONS. I WANT TO TALK TO CHINA EXPERTS
ABOUT WHAT THEY SEE DOMESTICALLY ON THE GROUND.
THE BASIC IDEA IS THE MIX OF IT IS THE SAME CONCERNS YOU SEE
AMONG THE LEADERS AROUND PRESIDENT XI. JONATHAN:
PICK A BANK, ANY BANK, THAT BANK PROBABLY DOWNGRADED GROWTH
FOR CHINA. THEY SET THE TARGET THAT IT IS
ACHIEVABLE IF THEY GET STIMULUS OUT OF THE COUNTRY.
MAYBE WE GOT A HINT OF THAT THIS MORNING. EUROPE NEEDS IT. DATA FROM THE EUROZONE COMING
IN MUCH COOLER THAN EXPECTED THIS MORNING. THESE PMI'S, MANUFACTURING,
SERVICES, THAT DROPPED TO THE LOWEST RATE SINCE DECEMBER.
EUROPE AND THE EUROZONE NOT ALONE.
WE HAVE THIS REALLY INTRIGUING DYNAMIC NOW.
THE EURO ZONE DOWN WITH THE ECB SET TO HIKE. THE U.K.
WITH DISAPPOINTING DATA AND THE BOE SET TO HIKE. TOM:
THE DATA IS EVERYTHING HERE. THE ANSWER IS I LOOK AT AMERICA
AND THE BIDEN STIMULUS IF YOU WANT TO CALL AT THAT, AND I
DON'T KNOW WHERE THE EU STIMULUS IS.
THERE IS THE STIMULUS OF THE WAR BUT I DON'T BUY IT BECAUSE
THERE IS A U.S. CONTRIBUTION THERE.
I GO BACK TO WHEN WE TALK TO THE FORMER OF ITALY AND HE WAS
REALLY, REALLY CAUTIOUS ABOUT EURO ENTHUSIASM. JONATHAN:
JUST TO GO THROUGH THE CALENDAR FOR THE CENTRAL BANK DECISIONS,
THE FEDERAL RESERVE ON WEDNESDAY, THE ECB COMING UP ON
THURSDAY, THE BOJ ON FRIDAY. AUGUST 3 FOR THE BANK OF
ENGLAND. ON THE SAME BAY AFTER THE
CLOSE, YOU WILL HEAR FROM APPLE. REPORTING THIS MORNING ON
IPHONE SHIPMENTS, THE COMPANY ATTEMPTING TO KEEP THEM STEADY
COMPARED TO THE NUMBERS FROM LAST YEAR DESPITE WHAT WE ARE
SEEING ABROAD. CHINA AND EUROPE SLOWING DOWN.
THE TECH GIANT IS ASKING TO PRODUCE 85 MILLION UNITS OF THE
IPHONE 15 THIS YEAR. THAT IS THE SAME NUMBER AS LAST
YEAR. BUT ULTIMATELY, REVENUE CAN
INCREASE BECAUSE THEY ARE LOOKING TO PUSH UP THE PRICE OF
THE PRO. YOU GET THE AVERAGE SELLING
PRICE HIGHER AND KEEP SHIPMENTS STEADY. TOM: THERE ARE A LOT OF OTHERS OUT
THERE THAT QUESTION THE MARKET PERSISTENCY WITH THE REVENUE
STATEMENT AND WHAT THEY WILL DO WITH THE MARGINS.
THE MARGINS WILL ERODE. YOU HEARD IT ALL BEFORE, BUT THE ANSWER IS ON A REVENUE
BASIS, UNITS AND PRICE. JONATHAN:
THE PRICE IS UP 50% YEAR TO DATE ON APPLE.
WE TALKED SO MUCH ABOUT NVIDIA, META.
THE LIKES OF APPLE, THINK OF HOW MUCH MARKET CAP THERE IS TO
DATE. TOM: MY TAKE IS TO COMPARE TO INTEL
WHERE IT WAS NOT SUCCESSFUL. INTEL RAN INTO LARGER STRATEGIC
CHALLENGES. APPLE SEEMS TO BE USING
DIVIDEND CASH AND GROWTH BUT DOING IT IN A PROFITABILITY
CYCLE THAT SEEMS TO ENDURE. DON'T ASK ME WHAT WILL BE IN
2026. YOU MENTIONED 85 MILLION IPHONES.
84 MILLION AIRPODS UNDERNEATH THE COUCH AT HOME.
DO THEY MAKE MONEY ON THEM? JONATHAN:
IF IT WAS A SEPARATE COMPANY, IT WOULD BE PRETTY BIG.
THEY DON'T WORK FOR YOU? TOM: THEY DON'T FIT. JONATHAN:
I THOUGHT YOU COULD GET ADJUSTMENTS. TOM:
THEY DON'T WORK. JONATHAN: THEY DON'T WORK FOR YOU BUT
THEY WORK FOR A LOT OF PEOPLE. TOM: THIS IS A JOINT.
RIGHT NOW, EARL DAVIS WILL JOIN US. HE HAS A WONDERFUL CANADIAN PEDIGREE OUT OF WESTERN
ONTARIO, WHICH IS ITSELF ITS OWN STATISTICAL AND ECONOMIC
EXCELLENCE. THE ONTARIO TEACHERS PENSION
PLAN. AT ONE POINT, THEY OWNED THE
TORONTO MAPLE LEAFS. THEY HAVE SOMETHING TO DO WITH
RETAINING OWNERSHIP OF THE NEW YORK YANKEES.
SOMEONE HAS SEEN IT ALL AND JOINS US NOW WITH THE MARKABLE
RESEARCH. -- WITH REMARKABLE RESEARCH.
THE HEADLINE NUMBER IS YOU LOOK AND CONSIDER 8% INTEREST RATES
IN THE UNITED KINGDOM. OK, THAT GIVES EVERYBODY TO SIT
UP STRAIGHT. CAN YOU FRAME OUT 6% INTEREST
RATES IN THE UNITED STATES OF AMERICA? >> YEAH. TO BE SPECIFIC, THE 6% IS ON
THE SHORT END. I THINK IT IS CAPPED AT SIX
SENT OVERNIGHT IN THE RECENT -- I THINK OVERNIGHT IS CAPPED AT
6%, AND THE REASON WHY IT IS ALL OF THE CENTRAL BANKS ARE
INDEPENDENT. YOU ARE GOING TO GET A LOT A
BACKLASH. BACKLASH FROM THE POPULATION.
BACKLASH FROM A BUT'S. TO STAVE OFF THAT BACKLASH, YOU
NEED POLITICAL BACKING. YOU NEED YOUR SENIOR
POLITICIANS TO SAY WE HAVE NO CHOICE BUT TO GO THERE.
YOU DON'T GET THAT DURING THE SECOND HALF.
YOU GET THAT AT THE BEGINNING AS REAGAN PROVED.
THAT WAS THE KEY TO STOPPING INFLATION IN THE 1980'S.
I AM NOT SAYING WE ARE DOING LIKE WE DID IN THE 1980'S BUT
TO FIGHT THE BACKLASH, YOU NEED THAT BACKING.
WE HAVE SEEN THIS AS A HARD CAP AT 6% AT LEAST UNTIL THE NEXT
ELECTION CYCLE. TOM: WHAT DO YOU DO WITH DURATION
THEN? YOU DON'T BUY THE EXTEND DURATION.
YOU GET THE INTEREST RATE TO HELP YOU OUT ALONG THE WAY.
WHERE ARE YOU WITH ASSET MANAGEMENT ON THE EXTENSION OF
MATURITY? >> YEAH, WE ARE HESITANT TO
EXTEND MATURITY NOW. WE THINK 2024 WILL BE THE YEAR
TO EXTEND MATURITY. WE LOOK AT THE MARKET OF SAFETY.
IF YOU TAKE YOUR SOVEREIGN BOND YIELD AND AT A CORPORATE YIELD,
HOW MANY MONTHS OR YEARS OF PROTECTION DO YOU HAVE IF YOU
GET 100 BASIS POINTS? RIGHT NOW, IF YOU HAVE A
THREE-YEAR PORTFOLIO OF CORPORATE AND SOVEREIGN BONDS
AND YOU GET 100 BASIS POINTS INSTANTANEOUS SHOCK, YOU WILL
MAKE THAT MONEY BACK WITHIN A YEAR.
THAT HASN'T HAPPENED ONCE YOU START GOING BEYOND FIVE YEARS
DURATION. WE THINK THE POINT TO EXTEND
DURATION IS NOT FAR AWAY FROM A TIMING PERSPECTIVE.
WE BELIEVE WE WILL SEE PEAK 10 YEAR RATES AND POSSIBLY Q4 OF
THIS YEAR BUT MORE LIKELY Q1 OF 2024.
THAT WILL BE THE OPPORTUNITY OF A LIFETIME. TOM:
ARE THERE SHADOWS FROM DEPOSITS TO HIGHER YIELDS AND MONEY
MARKET FUNDS? WE HAVE ALL BEEN THERE AND I
DON'T WANT TO GET TO HYSTERIA BUT DO YOU SEE SHADOWS IN THE
SYSTEM OR IS THERE A LOT OF TRANSPARENCY ON THE RESILIENCY
OF YIELD IN MONEY MARKET FUNDS? >> YOU ARE TOUCHING ON A LOT OF
THINGS HERE. FROM A YIELD PERSPECTIVE, CASH
IS NOW AN ASSET CLASS. A YEAR AGO OR TWO YEARS AGO,
CACHE WAS NOT AN ASSET CLASS. EARNING TWO BASIS POINTS IF YOU
ARE LUCKY. RIGHT NOW, YOU ARE EARNING ON
CASH 5%. THAT IS VERY ATTRACTIVE FROM AN
ASSET CLASS. GOING BACK TO THE OTHER
QUESTION IN REGARDS TO FINANCIAL STABILITY, THAT IS OF
THE UTMOST CONCERN FROM A CENTRAL BANKER'S PERSPECTIVE.
WE BELIEVE THE MARKET IS VERY RESILIENT.
WE BELIEVE WE ARE PAST THE POINT AT LEAST IN THIS POINT OF
TIME OF FINANCIAL RESILIENCY BECAUSE YOUR BIGGEST BANKS,
BIGGEST INVESTMENT BANKS ARE EVEN SAFER NOW THAN THEY WERE
THREE MONTH AGO WITH ALL THE FACILITIES BROUGHT IN AFTER SVB
AND THE LIKE. WE THINK THE FINANCIAL MARKET
IS VERY STABLE HERE FROM A FINANCIAL STABILITY PERSPECTIVE.
THERE ARE NO WORRIES THERE. WE LIKE CASH AS PART OF THE MIX
BECAUSE IT IS A NEW ASSET CLASS AND IT IS GIVING YOU INFLATION
AT LEAST FOR THE SHORT TERM TIME SO IT MEANS YOU ARE
EARNING A REAL DOLLAR. JONATHAN: THERE IS A REINVESTMENT RISK
ASSOCIATED WITH THAT. CAN WE HAVE AN IDEA OF WHAT
YOUR CONVERSATIONS WITH CLIENTS SOUND LIKE?
PERHAPS THE RATE CYCLE IS AROUND THE CORNER AND THEY WANT
TO LOCK THE STUFF IN LONGER THAN THREE MONTHS OR 12 MONTHS.
WHAT ARE YOU TELLING THEM? >> WE THINK IT IS A GREAT
INVESTMENT OPPORTUNITY. WHY WE SAY THAT IS PART OF THE
SEQUENCING OF LOWER YIELDS, FIRST YOU HAVE TO GET YOUR RISK
ASSETS TO SELL OFF THAT WILL BE THE BIG TRIGGER TO GET YOU
LOWER YIELDS. IF YOU ARE IN CASH NOW AND YOUR
RISK ASSETS, EQUITIES, CREDIT BONDS SELL OFF OF YOU COULD GO
FROM CASHING TO RISK ASSETS, SO THAT IS ONE KEY THING.
NOW I WILL GO BACK TO YOUR QUESTION DIRECTLY ABOUT
DURATION. PEOPLE ARE IN FIXED INCOME FOR
TWO REASONS. ONE IS THE YIELD AND THE COUPON.
THE OTHER IS THE FLIGHT TO SAFETY INSURANCE PLAN.
AS YOU SAID, RATES START GOING DOWN, YOU GET CAPITAL GAINS.
RIGHT NOW, WE ARE NOT AT THE LEVEL WHERE YOU GET ADEQUATE
CAPITAL GAINS. YOU GET ADEQUATE YIELD.
WE BELIEVE THAT WILL BE Q4 OF THIS YEAR OR Q1 OF 2024 AND
THAT IS WHEN WE EXTEND OUT DURATIONS TO GET YIELD AND THE
CAPITAL APPRECIATION IN THE RISK OFF MOMENTS. JONATHAN:
INTERESTING. THAT WAS GREAT. THANK YOU FOR TOUCHING BASE.
ON THIS BOND MARKET RIGHT NOW. CASH HAS BECOME AN ASSET CLASS
THIS YEAR IN A BIG WAY. IT WAS FAVORABLE OF 5%.
I JUST MEMBER THAT INTERVIEW WITH THE TEAM HERE AT BLOOMBERG
WITH MORGAN STANLEY WHEN HE SAID YOU WILL GET TO THE THIRD
QUARTER INTO FOUR AND PEOPLE WHO ARE IN CASH AT 5% AND
MISSED OUT ON THE MASSIVE GAINS IN THE EQUITY MARKET WILL START
TO FEEL PRESSURE TO DEPLOY IT. THAT TIMELINE HAS COME ALL THE
WAY IN FROM THE FIRST QUARTER OUT TO SEPTEMBER ALL THE WAY.
TOM: NORMAL RATIONAL BEHAVIOR IN ANY
KIND OF BULL MARKET. THERE IS A FIRST LEG IN OCTOBER
AND MAYBE A SECOND LEG IN LATE MAY, THE BROADENING OF THE
SECOND LEG OF A BULL MARKET. BUT I WOULD FOCUS ON THE
CALENDAR GETTING TO THE END OF THE YEAR WITH PEOPLE BEHIND.
IF YOU ARE UP 7% IN AN EQUITY PORTFOLIO, YOU CAN SAY I GUESS
THEY WOULD BE CASH, BUT WHAT ARE YOUR CUSTOMERS THINKING,
YOUR CLIENTS, YOUR SHAREHOLDERS, WHATEVER THE
RELATIONSHIP IS? JONATHAN: WELCOME TO THE PROGRAM PERMIT
EQUITY FEATURES ON THE S&P 500 JUST ABOUT POSITIVE BY 0.16%.
COMING UP AT 8:30 EASTERN TIME, WE WILL CATCH UP WITH THE CHIEF
ECONOMIST AT NATIONWIDE. A KIWI FOR CHAIRMAN POWELL AND
THE FEDERAL RESERVE FOR CHRISTINE LAGARDE AND THE
EUROPEAN CENTRAL BANK ON WEDNESDAY AND THURSDAY
RESPECTIVELY. TOM: THAT INVENTORY BUILD GIVING HI
NORMA'S NUMBER -- GIVING A BIG NUMBER.
WE WILL GET AN UPDATE ON THAT AS WELL.
EARL DAVIS I THOUGHT WAS GREAT THERE WITH THE STATE OF YIELDS. THE ONTARIO TEACHERS PENSION
PLAN, THEY OWNED THE TORONTO MAPLE LEAFS.
THEY MAKE FOUR TIMES THEIR MONEY WHEN THEY SOLD THAT.
IT IS AMAZING, THE MONEY IN SPORTS. JONATHAN:
INCREDIBLE, THE DEMAND FOR IT. TOM:
A PENSION PLAN MADE FOUR TIMES THEIR MONEY. JONATHAN:
HAVE YOU SEEN THE STORY THIS MORNING THAT A SAUDI ARABIAN
CLUB HAS MADE A BID FOR MBAPPE? TOM: IN THE NEWS THIS WEEKEND.
JONATHAN: HE IS IN A CONTRACT DISPUTE
WITH PSG. PSG, MBAPPE HAS AGREED WITH THE
REAL MADRID AND WANTS TO LEAVE FOR FREE NEXT SUMMER. TOM:
WHO IS DRIVING THE BUS HERE? JONATHAN:
PSG IS PUTTING HIM UP FOR SALE. THIS CLUB BID $332 MILLION FOR
MBAPPE, WHICH IS AN UNBELIEVABLE SUM OF MONEY. TOM:
DOES THE PLAYER HAVE ANY CONTROL OF THIS DEBATE, THIS
DISCUSSION? JONATHAN: HE HAS A YEAR LEFT ON HIS
CONTRACT. 12 MONTHS LEFT AND THIS DISPUTE
WILL GO THROUGH SEVERAL WEEKS THROUGH THE REST OF THIS
TRANSFER WINDOW I IMAGINE. TOM: MBAPPE WAS THE GUY WHO WENT
DOWN THE FIELD. HE JUST GOES DOWN. JONATHAN:
VERY FAST. TOM: DOWN THE FIELD. FOOTBALL TALK. JONATHAN:
THAT IS THE LATEST ON FOOTBALL TALK. >> OF COURSE THE EQUITY MARKET
HAS LARGELY BEEN DRIVEN BY THE TECH STOCKS, AND THERE ARE GOOD
REASONS FOR WHY THAT HAS OCCURRED. YOU HAVE TO UNDERSTAND
ESPECIALLY WHEN YOU ARE INVESTING IN GROWTH STOCKS, IT
IS ABOUT THE FUTURE AND TAKING A VIEW ON HOW DEMANDING
VALUATIONS ARE FOR WHAT IS EXPECTED OF THESE COMPANIES.
WE HAVE NOT SEEN VALUATIONS WITH THIS DEMAND SINCE THE LATE
1990'S. JONATHAN: THE DWS GROUP CIO THERE.
WE WILL GET A LOOK AT THE PAST WHEN WE GET TECH EARNINGS FROM
SOME OF THE MAJOR PLAYERS ON THE S&P 500 AND THE NASDAQ.
AND THAT WILL FINISH WITH APPLE NEXT THURSDAY.
NOT THIS THURSDAY BUT NEXT THURSDAY.
THE EQUITY MARKET RIGHT NOW ON THE S&P 500 SLIGHTLY POSITIVE
5.2%. A LIFT LAST WEEK, JUST IN THE
NO ONE. WE ADD SOME WEIGHT TO THE RALLY
THIS WEEK. 380 ON THE 10 YEAR. 3.7937.
DATA IN EUROPE AND THE U.K. UNDERWHELMING. MANUFACTURING AND SERVICE DATA
SURPRISING ACROSS THE CONTINENT. TOM: STARTING WITH GERMAN
MANUFACTURING, WHAT DOES IT SAY ABOUT THE SERVICE SECTOR IN
EUROPE? BUT BEYOND AMERICAN TOURISTS
WALKING AROUND IN THE HEAT, WHAT ELSE IS THERE? JONATHAN:
IN THE U.S., WE WERE TALKING ABOUT IF MANAGERS WOULD
CONVERGE BUT IN EUROPE IT IS THE OTHER DIRECTION. TOM:
SEEING GOOD DISINFLATION AND DEFLATION OUT THERE.
WE WILL GET RIGHT INTO IT. A SENIOR TECH ANALYST FOR
BLOOMBERG INTELLIGENCE. I HAVE A BUNCH OF QUESTIONS ON
LARGE LANGUAGE MODELS. LET'S GO TO SMALL LETTER MODELS
OVER THE WEEKEND AND OVERNIGHT. FROM TWITTER TO X TO WHAT?
WHERE IS X HEADING? >> I THINK HE IS THINKING OF
FOLDING TWITTER INTO HIS FAMILY OF APPS. CLEARLY, HE IS TRYING TO LIVE
-- LEVERAGE TWITTER. TOM: HE IS TRYING TO CATCH UP WITH
THREADS? >> I THINK IN THE PROCESS, HE
HAS DAMAGED THE BRAND. TWITTER AS A BRAND HAD A LOT OF
VALUE, WHICH IS WHY HE ENDED UP PAYING $44 BILLION FOR IT.
NOW THE REVENUE IS DOWN 50% AND HE IS TRYING TO DO SOMETHING
BIG BUT NO ONE KNOWS WHAT BECAUSE CLEARLY HE DOESN'T HAVE
THE CREDENTIALS OF THE TECH COMPANY, AND THE PLAY HERE IS
DATA. HE THINKS TWITTER'S DATA IS
INVALUABLE. TOM: YOU ARE THE EXPERT. >> I THINK IF YOU LOOK AT THE
POPULARITY OF THREADS AFTER WEEK ONE, IT HAS GONE DOWN
SIMPLY BECAUSE PEOPLE ARE FINDING IT HARD TO SWITCH TO
THE NEW PLATFORM THAT HAS LARGE AMOUNTS OF DATA. JONATHAN:
WE ARE PART OF THE PLATFORM, NOT THE ONLY ONES.
WE WANT TO SEE HIM SUCCEED. WHEN DO THEY START TO KNOCK HIM
AND WE START OF YOUR SERIOUS CONCERN ABOUT THE DIRECTION OF
THE BUSINESS? >> AS LONG AS TESLA'S STOCK IS
HOLDING UP WELL, HE IS FINE BECAUSE WHAT HAPPENED DURING
THE LAST SIX MONTHS IS TESLA'S STOCK HAS COME UP QUITE A BIT. THAT IS WHAT IS SOOTHING THE
CREDITORS. IN TWITTER'S CASE, EVERYONE
KNOWS THE COMPANY IS PRIVATE AND WILL GO THROUGH A COMPLETE
MAKEOVER. WHAT SORT OF MAKEOVER IT WILL
BECOME A NO ONE HAS AN IDEA. JONATHAN:
YOU HAVE SOME OPTIONS WHEN YOU ARE PRIVATE. I UNDERSTAND THAT.
ONE OF THE OPTIONS IS TO GO DOWN THE FINANCIAL ROUTE TO
BECOME A BANK NOT IN THE TRADITIONAL SENSE BUT INCLUDE
SOME KIND OF BANKING. HOW DIFFICULT IS IT TO EXECUTE
THAT VISION? >> VERY DIFFICULT GIVEN HE IS
COMPLETELY TAKING AWAY THE BRAND VALUE AND REBRANDING TO
SOMETHING THAT NOBODY KNOWS. I DON'T THINK THERE IS ANY
PRECEDENT WE CAN OFFER THAT HE WILL BE SUCCESSFUL.
BUT AT THE SAME TIME, YOU CAN GIVE HIM CREDIT FOR AT LEAST
HAVING A VISION IN TERMS OF WHAT HE WANTS TO DO. HE WAS EARLY IN AUTONOMOUS
DRIVING AND WHAT HE IS DOING WITH TESLA AS A CAR.
HE COULD BE ONTO SOMETHING. THAT IS WHAT EVERY COMPANY IS
TALKING ABOUT. THAT IS WHAT APPLE EVEN
MENTIONED. THEY NEVER TALKED ABOUT THESE
BUZZWORDS LIKE METAVERSE. TOM: AS I LOOK AT THE WE COULD BE A PAGE FOR LARGE
-- THEY USE CORPORA FOR CORPORATIONS.
THIS IS TECH BABBLE RIGHT NOW. WHAT IN GODS NAME IS A LARGE
LINK WHICH MODEL, AND WHY DO I CARE? >> A LARGE LANGUAGE MODEL USES
PRETTY MUCH EVERYTHING OUT THERE ON THE INTERNET. TOM:
WIKIPEDIA, CONTINUE. >> WHAT COMPANIES REALIZE IS IT
IS VALUE AND THEY DON'T WANT IT TO BE SCRAPED FOR THE MODELS
WHICH CAN BECOME VERY INTELLIGENT CHATBOTS.
WE WERE GIVEN A GLIMPSE LAST WEEK.
THEY CALLED OUT THIS SPECIFIC AREA.
SEMICONDUCTOR COMPANIES ARE ALWAYS EARLY IN TERMS OF
WATCHING DEMAND. THIS SEGMENT, OVER 50%. TOM:
IT WILL BE DECIDED IN COURTS WHERE SOMEONE SAYS GENERAL
MOTORS SAYS WE HAVE A COPYRIGHT ON THIS BODY, THIS DATA, IS
THAT WHERE WE ARE HEADED? >> I THINK EVERY COMPANY WILL
BECOME VERY PROTECTIVE ABOUT THEIR DATA.
THEY WILL ALLOW MINIMAL DATA TO BE SCRAPED BECAUSE THAT IS WHAT
IS FEEDING THE LARGE LINK WHICH MODELS.
THE NEXT THING WOULD BE WHO OWNS THE BEST DATA, AND THAT IS
WHERE SENTIMENT IS NEGATIVE ON ALPHABET OR THE INTERNET
COMPANIES, BECAUSE THEY HAVE THE BEST DATA. JONATHAN:
ALPHABET REPORT TOMORROW. WEDNESDAY, THE FOCUS WILL BE ON
CHAIRMAN POWELL. IF YOU CAN STAY AWAKE AFTER HIS
CONFERENCE, YOU CAN HEAR FROM META.
IS THREADS GETTING IT DONE? >> NO, I DON'T THINK SO.
WHEN IT COMES TO ENGAGEMENT, YOU SEE THE PATTERN, THE FIRST
FEW PATTERNS CAN BE OVERCOME AND THAT IS WHERE IT COMES TO
TOM'S QUESTION. HE MUST FEEL THAT TWITTER'S
DATA IS VALUABLE AND HE CAN DO MUCH WITH IT.
NOW IT IS ABOUT WHETHER THIS COMPANY CAN GROW ENGAGEMENT.
THEY HAVE SOME VALUABLE DATA. THAT IS WHAT THE SUITE.
IS BETTING ON I JONATHAN: -- THAT IS WHAT THE SUITE IS
BETTING ON. JONATHAN: I THOUGHT A TWEET -- I SAW A
TWEET ABOUT PEOPLE LAUGHING AT X. >> IT IS A FAMILY OF APPS.
THEY DON'T WANT TO FOCUS ON ONE BECAUSE THAT MAKES THE
REGULATORY OCCASION STRONGER. TOM: IS YOUR WORLD MATURING? ARE THESE TECH GUYS WHETHER
BRILLIANT OR LUCKY OR BOTH, THEY STRUCK LIGHTNING ONCE OR
TWICE, THREE TIMES, SOME OF THEM FAILED WITH GREAT RESPECT,
BUT THE ANSWER IS, ARE THESE CLOWNS MATURING? >> I THINK SO.
LOOK AT THE SPEED IN WHICH INCUMBENTS ARE CHANGING.
SOME MAY ARGUE THAT GOOGLE IS NOT CHANGING FAST ENOUGH.
BUT FOR THE MOST PART, THESE CUP NEEDS ARE CHANGING.
THEY ARE TRYING TO CATCH THE NEXT WAY, WHETHER IT IS THE
CLOUD OR AI. THAT IS THE BENEFIT. TOM:
WHAT IS THE NEXT WAVE OF X? >> LARGE LANGUAGE MODELS AND
GENERATED AI -- GENERATIVE AI. TOM:
TWITTER IN MY SINK OPINION IS NOT WORTH ANYTHING.
TWITTER HAS DRAMATICALLY DECLINED IN USABILITY AND
PROFITABILITY. IT IS PAINFUL. >> THEY HAVE BEEN ABLE TO
RETAIN THEIR CREATORS IN CERTAIN SEGMENTS.
I AGREE WITH YOUR ASSESSMENT THE ADS ARE PRETTY BAD AND YOU
DON'T WANT TO LOOK AT THEM, BUT IF YOU ASK THE CREATORS, THEY
THINK THEY GET THE FOLLOWING AN ENGAGEMENT RIGHT NOW.
IT WILL TAKE YEARS. THREADS WILL NOT CATCH UP
OVERNIGHT AND DISPLAYS TWITTER. IF THIS HAPPENS, IT WILL HAPPEN
SLOWLY AND THERE ARE MISSTEPS THAT TWITTER IS MAKING.
JONATHAN: WHAT DO WE CALL TWITTER NOW?
WHAT ARE THEY CALLED? ON TWITTER, WHAT ARE THEY ON X? >> THREAD, THAT IS THE NAME,
RIGHT? THREAD. JONATHAN: DID YOU WATCH IT OVER THE
WEEKEND? >> I THINK IT IS AN AMAZING
MOVIE AND CLEARLY THERE IS A LOT AND HOW THEY UNPACKAGED
THEIR STUFF AND WHAT THEY DID IN TERMS OF ADVERTISING IT
AHEAD OF TIME. THAT IS WHAT GENERATED THE
EXCITEMENT. JONATHAN: IT IS TRUE. >> IN THE END, IT TURNED OUT TO
BE GREAT. THAT IS WHAT PROMPTED ME TO
WATCH IT, THE ADVERTISING. JONATHAN:
THERE WAS ONE POINT WHERE THE MARKETING OF THE MOVIE, I
THOUGHT IT WAS OUT AND HAD BEEN OUT. THANK YOU. TOM:
MOVIE CRITIC. JONATHAN: BIG WEEK OF TECH EARNINGS AND
OUR RESIDENT MOVIE CRITIC AS WELL ON "BARBIE" AND "ARPIN HEIMER DESK AND
"OPPENHEIMER -- "OPPENHEIMER." JONATHAN: "BARBIE"
YOU CAN WATCH WHAT YOU ARE BORED, NOT SURE WHAT YOU WOULD
GO TO THE THEATERS. "OPPENHEIMER,"
I FEEL LIKE I NEED TO GO TO THE WOULD-BE THEATER TO EXPERIENCE.
THAT IS MY TAKE. TOM: IT IS BIZARRE. JONATHAN:
LEADERSHIP. I LOVE THE INSIDE STORY.
ARE YOU TELLING ME THE CEO WAS ON BOARD WITH THAT, THE
HAPHAZARD ABRUPT? TOM: WE WILL FIND OUT ONCE HE SEES
"OPPENHEIMER." JONATHAN: IF YOU WANT TO SAY IT, YOU HAVE
10 SECONDS TO SAY IT. [LAUGHTER] >> I DON'T KNOW.
I THINK RIGHT NOW SHE IS JUST FOLLOWING WHAT THEY WANT TO DO.
JONATHAN: THAT IS WHAT IT SOUNDS LIKE A
GOOD FROM NEW YORK CITY, >> IT'S A FAVORABLE DEVELOPMENT.
IF YOU CAN BETTER -- BATTLE INFLATION WITHOUT BOWING --
BLOWING UP THE SYSTEM. >> THE FED DOESN'T WANT TO
CHANGE AS LONG ROOM ESTIMATE OF WHERE THE FED FUNDS RATE IS. >> I THINK THE FED WILL COME
ACROSS AS DOVISH. >> WE EXPECT A SMALL RECESSION. >> THIS IS BLOOMBERG
SURVEILLANCE. TOM: GOOD MORNING, ON RADIO AND
TELEVISION, MONDAY TOWARD AN EVENTFUL 12 DAYS.
AFTER THURSDAY NEXT WEEK, IT'S ABOUT HER EARNINGS.
IT'S ALSO ABOUT CENTRAL BANKS. I THINK YOU CAN CONFLATE BOTH
OF THEM TOGETHER, EARNINGS AND CENTRAL BANKS. JONATHAN:
WE'VE GOT THIS SWEET SPOT WHERE JOBS GROWTH IS STILL PRETTY
GOOD AND MOST PEOPLE THINK THE FEDERAL RESERVE MIGHT WANT TO
DUMP BUT I DON'T THINK CHAIRMAN POWELL IS SAYING THE SAME.
AFTER GETTING BURNED EARLIER THIS YEAR, THE FOMC WANTS TO
REPEAT THE ACT. THE NOTES INDICATE THE MAJORITY
OF THE COMMITTEE ARE LOOKING FOR ONE OR TWO HIKES THIS YEAR.
MOST PEOPLE ANTICIPATE THIS INTO WEDNESDAY AND THEY WANT TO
RETAIN THE OPTION TO MOVE AGAIN IF THEY NEED TO AND BETWEEN NOW
AND SOME TEMPER, YOU HAVE A YOU MORE INFLATION PRINTS. TOM:
WHAT'S INTERESTING ABOUT THIS TO ME. THERE IS A LEVELING OUT OF
GROWTH. BRAMO IS OFF SOMEWHERE AND YOU
LOOK AT THE NORWEGIAN REAL GDP GROWTH AND SCANDINAVIA AND
THAT'S WHAT CHRISTINE LAGARDE HAS TO CONFRONT IS THE LEVEL
PRE-PANDEMIC BUT THERE IS A LEVELING IN EUROPE THAT THERE
IS NOT IN THE UNITED STATES. JONATHAN:
MANUFACTURING DATA IN EUROPE WAS TERRIBLE.
YOU DON'T WANT TO SEE THAT. EUROPE IS FAR MORE INTERESTING
THAN THE FEDERAL RESERVE THIS WEEK.
THE GROWTH BACKDROP AS FAR LESS RESILIENT. IF YOU LOOK AT WHAT'S
DEVELOPING IN EUROPE, AND ECB IS HIKING INTO WEAKNESS.
IF YOU ASK WALL STREET WHETHER THEY ARE HIKING INTO THE
WEAKNESS IN THE U.S., YOU HAVE MORE OF A SPLIT OK AND YOU AND.
THEY ARE HIKING INTO WEAKNESS BECAUSE INFLATION IS TOO HIGH
IN EUROPE. I REMEMBER GUY JOHNSON SAID IT
WEEKS AGO, EUROPE IS INTERESTING BECAUSE THEY'VE GOT
A GROWTH PROBLEM AND INFLATION IS STILL TOO HIGH FOR THE ECB.
THAT'S PRETTY FASCINATING IF YOU ARE ON THE SIDE WHERE YOU
THINK THE FEDERAL RESERVE CAN ENGINEER A DECELERATION IN
INFLATION WITHOUT A RECESSION. TOM:
WHAT WE WILL SEE THIS WEEKEND EARNINGS, EVERY NATION FOR ITS
SELF, EVERY COMPANY IN EVERY NARRATIVE.
MOST IMPORTANT PERSON THIS WEEK IS JULIAN EMANUEL AT EVERCORE
WHO DOES THAT DAILY SOME OF THE AGGREGATE OF ALL OF THOSE
INDIVIDUAL NARRATIVES. JONATHAN:
TECH EARNINGS HAVE GOT TO COME IN PRETTY STRONG.
TESLA LAST WEEK GOT PUNISHED. TOM:
WE CONFLATE TECH AND BIG BUNKS AND TECH IS MORE IDIOSYNCRATIC
THAN ANYTHING I'VE SEEN IN BIG -- THANKS. JONATHAN:
WE ARE TALKING ABOUT SHIPMENTS OF HARDWARE AT APPLE. TOM:
WHAT DID MET ESSAY? JONATHAN:
VICTORY LAPS AT META AND IT WILL BE ABOUT THE DATA. THREADS IS OPEN BUT I HAVEN'T
USED IT. TOM: IT WAS PEOPLE PARTYING ALL
WEEKEND. JONATHAN:
I'VE GOT NO PROBLEM WITH PEOPLE PARTYING. TOM:
I DON'T WANT IT TO GET INTO MIGHT TWITTER LIKE ACCOUNT. BRENT CRUDE, 81.47, NICELY
ABOVE $80 PER BARREL. JONATHAN: EQUITIES ARE SLIGHTLY POSITIVE
AND THERE IS A LIFT WITH THE RALLY IN THE BOND MARKET. THE 10-YEAR HAS A BREAK OF 3.80.
IT'S ON THE BACK OF WEEK DATA IN EUROPE AND THE U.K.. U.S.
PMI COMES OUT IN ABOUT AN HOUR AND 40 MINUTES.
WE WILL BREAK THAT DOWN FOR YOU. TOM:
I AM DEAF ON A 33 YEAR PAID -- 33 PAGE MIDYEAR REVIEW. DEUTSCHE BANK INTERNATIONAL
PRIVATE BANK DOES A GREAT JOB AND THEY ARE PUTTING TOGETHER
SOMETHING IN ENGLISH. HOW DO PUT YOUR NOTE TOGETHER?
ALREADY THREE PAGES AND IT'S ACTUALLY INTERESTING TO READ. HOW DO YOU ACTUALLY PUT A NOTE
TOGETHER TO GET YOUR BELIEF? >> THAT'S A GREAT QUESTION,
IT'S A COLLABORATIVE EFFORT BETWEEN US AND OUR
INSTITUTIONAL PARTNERS SO WE COMBINED FORCES WE TAKE INPUT FROM GLOBAL MARKETS WE MATCH UP
BUT FINALLY, THE INTERNATIONAL PRIVATE BANK AND DWS COME UP
WITH THE FIVE-MONTH FORECAST FOR THE FINANCIAL MARKETS. TOM:
YOUR LOOK DOVETAILS AS GOOD AS I CAN SEE WITH THE IMF GRIM
VIEW OUT TO 2028. YOU'RE LOOKING FOR GLOBAL
GROWTH. HOW CAN I PARTICIPATE IN THE
STANDARD & POOR'S 500 IF I HAVE A FRAMEWORK WRAPPED AROUND THAT
OUTLOOK? >> IT'S BEEN SAID A FEW TIMES
ALREADY TODAY THAT MARKETS AND ECONOMIES ARE DIFFERENT PLACES. FROM AN ECONOMIC PERSPECTIVE,
WE CAN EXPECT A DECELERATION. I'M NOT SUGGESTING A SHARP
CONTRACTION HERE. I THINK YOU WILL SEE IN THE
FOURTH QUARTER OF THIS YEAR OR FIRST QUARTER OF NEXT YEAR, A
BRIEF RECESSION IN THE U.S. THAT'S NOT REALLY OUR BASE CASE
BUT THERE IS A HIGH PROBABILITY THAT MIGHT HAPPEN.
YOU ARE LOOKING AT AN ECONOMY THAT REALLY HAS BEEN FIRING ON
A LOT OF CYLINDERS. YOU LOOK AT THE DOT PLOTS FROM
JUNE AT THE FED AND FORTH ORDER OVER FOUR ORDER, 0.9%. JONATHAN:
WHERE IS THE EARNINGS GROWTH GOING TO COME FROM? >> THE CONSUMER IS QUITE
RESILIENT. SPENDING IS STILL UP AND HIS
TURN TO GO UP IN YOUR SEEING EFFICIENCY GAINS. THE TROUGH PART OF THE EARNINGS
CYCLE, SECOND QUARTER OF THIS YEAR, MAYBE THE THIRD QUARTER
BUT STARTING THE FOURTH QUARTER, THE COMPS LOOK BETTER.
I THINK YOU ARE LOOKING AT BETTER EARNINGS GOING INTO
LATER THIS YEAR IN TERMS OF THE NEXT YEAR. JONATHAN:
ARE YOU LEANING AWAY FROM THE INDEX LEVEL STORY? >> PRETTY MUCH, BECAUSE IT'S
HARD TO ARGUE AGAINST BIG TECH FOR THE TIME BEING.
IT'S ALSO DIFFICULT TO RATIONALIZE THE SUSTAINABLE
REACTION OF THE TECH MARKET, HOW BIG CAN BIG TECH GROW?
YOU HAVE TO BE A LITTLE BIT CONSERVATIVE.
WE ARE NOT TALKING THAT CAPITULATION BUT WERE TALK
ABOUT CONSOLIDATION SUBMIT VIA 35 AND -- 3-5% PULLBACK GOING
INTO LATE SUMMER AND EARLY FALL. THE GOOD THING IS THAT IF YOU
ARE ALREADY INVESTED, THERE IS NOTHING MUCH TO DO. TOM:
YOU STAY INVESTED AND NO ONE IS RUNNING AROUND SAYING GO TO
CASH. >> STAY INVESTED BUT IF YOU
HAVE NEW MONEY TO DEPLOY, THAT'S WHERE THINGS -- HAVING A
BETTER ENTRY POINT MIGHT NOT BE TO FURTHER OUT. GIVEN THE THREE-MONTH PEOPLE IS
GIVING YOU 5.25 PERCENT, IT'S NOT A BAD TIME TO HAVE A LITTLE
BIT OF CASH IN THEIR AS YOU WAIT FOR BETTER ENTRY POINTS. TOM:
THEY HAVE A FIVE COURSE LUNCH ON WALL STREET AND THEN COME
BACK AND LOOK AT THEIR BLOOMBERG. JONATHAN:
PEOPLE WERE FOOLISH ABOUT MISSING OUT ON THIS EQUITY
RALLY. ARE THEY MORE INCLINED TO INVEST IN TECH OR GO ELSEWHERE? >> I THINK CHASING IS NOT THE
BEST IDEA GIVEN THE VALUATION LEVELS.
I UNDERSTAND THE PROFITABILITY FOR BIG TECH WILL BE BETTER
THAN THE OVERALL INDEX BUT VALUATIONS GIVES A PAUSE TO
START DEPLOYING NEW MONEY INTO TECH.
I THINK A STRATEGY WHERE YOU HAVE SOMEWHAT GROWTH ON ONE SIDE BUT LOOK AT VALUE STOCKS.
THAT LOOKS MORE PROMISING ON EUROPEAN FUNDS.
THAT KIND OF A STRATEGY MIGHT BE THE WAY TO GO. TOM:
HOW ABOUT CASH? WE'RE IS YOUR SHOP RIGHT NOW IN
CASH? >> WE ARE SLIGHTLY OVERWEIGHT
CASH COMPARED TO OUR NEUTRAL. THAT'S PRIMARILY BECAUSE WE ARE
WAITING FOR THE FED TO DEPLOY MONEY.
I WOULD SAY CASH EQUIVALENTS AND PUT INTO ACCOUNT ON A
SHORT-TERM CASH MANAGEMENT TECHNIQUE, NOT SAYING THEY ARE
CASH BUT HAVE A LITTLE BIT MORE EXPOSURE. THE FIRST TIME IN A LONG TIME,
YOU'RE GETTING A NICE RETURN ON THE INVESTMENT. JONATHAN:
LOOKING FOR A BETTER ENTRY POINT, ABSOLUTELY RIPPED PAST
EXPECTATIONS. LOOKING AT EQUITIES NOW,
LOOKING FORWARD TO A BIG EARNINGS WEEK. ALPHABET AND GOOGLE COMING UP
TOMORROW ALONGSIDE MICROSOFT TUESDAY, META ON WEDNESDAY AND
AMAZON ON THURSDAY. CENTRAL BANK DECISIONS IN
BETWEEN, THE FED ON WEDNESDAY AND THURSDAY THE ECB.
THE BOJ IS IN THE BACKGROUND. THAT'S ON FRIDAY SO WHAT WILL
THEY DO WITH THEIR INFLATION OUTLOOK? TOM: USE THE MARKET IS A POINT OF
INFORMATION HERE. DOLLAR-YEN IS .43.
A STRONGER YEN, WEAKER DOLLAR WHICH IS AN AFFIRMATION THAT
THEY ARE UNDER CONTROL. IT'S MESSED UP THAT ONE
SENTENCE GOTTEN WRONG COULD GO EITHER WAY. WITH THE FANCY PEOPLE ON THIS
TOPIC REMOVED FROM ALL OF US, ITS PINS AND NEEDLES. JONATHAN:
I THINK THE DIFFERENCES BETWEEN THE CENTRAL BANKS ARE
FASCINATING. EUROPE AND THE FEDERAL RESERVE
WANTS NOTHING TO DO WITH THAT WHATSOEVER.
WELCOME TO THE PROGRAM, EQUITY FUTURES ARE POSITIVE BY 0.1%.
PLENTY OF DATA THIS WEEK, PMI LATER THIS MORNING IN THE 9:00
HOUR EASTERN TIME AFTER SOME DISAPPOINTING PMI IN AMERICA. EWCI WILL BE OUT AS WELL.
WE WILL BREAK DOWN SOME OF THAT. TOM: I'M LOOKING AT THAT TTIP.
-- AT THE DATA. JOBS ARE EARLY WITH CLAIMS ON
AUGUST 3 WITH APPLE. AUGUST 4 EARLY JOBS DATA THIS
TIME AROUND, CPI IS AUGUST 10. JONATHAN:
AND THEN INTO JACKSON HOLE? TOM: LAST FRIDAY INTO THIS WEEKEND,
THAT WAS WHAT WE WILL HEAR IN JACKSON HOLE. THEY HAVE AUTHENTIC COWBOYS OUT
THERE. I'M DRESSED LIKE HOPALONG CASSIDY. IT SHOULD BE FUN. JONATHAN: WHAT DO YOU EAT THERE?
TOM: CHIPPED BEEF ON TOAST. JONATHAN:
IT'S LIKE BREAD WITH THE WHITE, GOOEY SAUCE. IT'S LIKE A 1950'S THING LIKE
VELVETY TO CHEESE. JONATHAN: I'M AWARE. INVESCO WILL JOIN US SHORTLY.
EQUITY FUTURES ON THE S&P ARE POSITIVE BY 0.1%. >> I THINK THE FED AND THE ECB
ARE GIVING SOME FACILITY BUT NOT MUCH FURTHER TO GO. THE S&P 500 IS REPORTING THIS
WEEK. JONATHAN:
A GLOBAL MARKET STRATEGIST WHO HAS BEEN CONSTRUCTIVE ON THIS
EQUITY MARKET ALL YEAR. HE'S LOOKING FOR MORE GAINS
AHEAD ANYTHING EARNINGS WILL PICK UP WITH A TON OF EARNINGS
THIS WEEK FROM BIG TECH. IT STARTS TOMORROW AFTER THE
CLOSING BELL. LOOKING AT THE EQUITY MARKET
THIS MORNING, A LIFT ON THE S&P 500 BY 0.1%.
YIELDS ARE DOWN SLIGHTLY LOWER. DATA IN EUROPE IS NOT GREAT IN
THE DATA IN EUROPE IS NOT PRETTY.
CENTRAL BANKS ARE STILL SET TO HIKE IN A COUPLE OF WEEKS.
THAT'S THE BACKDROP. TOM: WHEN THE FACTS CHANGE, THEY
WILL CHANGE AS WELL. THEY WILL WAIT TO SEE THE DATA
AND MAYBE WE WILL SEE AN ABRUPTNESS. ROB STONE IS LINKED IN TO
BRAZIL/PANAMA. YOU ARE WATCHING THIS
SURREPTITIOUSLY? JONATHAN: IT'S PRETTY SPECIAL. IT'S AN AWESOME TEAM BUILDER.
TOM: ARE THEY MAKING AN IMPACT ACROSS AMERICA? JONATHAN:
SOCCER HERE IS HUGE AND IS GETTING BETTER -- BIGGER IN THE
U.K. AS WELL. TOM:
3-0 BRAZIL/PANAMA BUT THE NEXT ROUND WILL GET MORE COMPETITIVE?
JONATHAN: YES. TOM: THERE IS YOUR WORLD CUP
COVERAGE FOR TODAY. I DON'T SEE THE VIDEO YET ON IT.
JONATHAN: I PUT IT OUT ON TWITTER. TOM:
EXCUSE ME. JOHN PUT IT OUT ON X. JONATHAN:
IT DIDN'T QUITE WORK. TOM:
ANYTHING WE ASKED MAX BRILL IS USELESS. LET'S SAVE OURSELVES FROM X. IT'S IN A NO MAN'S LAND BETWEEN
HIGH YIELD AND FULL FAITH AND CREDIT.
WHAT DO YOU LEARN IN QUALITY CREDIT RIGHT NOW?
HOW DO YOU SEE THEM OUT ON YIELD OR TOTAL RETURN SIX
MONTHS YEAR? >> GOOD MORNING, WE ARE LOOKING
AT TOTAL RETURNS AND EVERYONE IS COMPARING CASH VERSUS ACTUAL
FIXED RATE BONDS AND THEY ARE UP 3.5% YEAR TO DATE WHICH IS
COUPON PLUS, MAYBE AHEAD OF WHERE CASH AND T-BILLS ARE.
GOING FORWARD, WE THINK THERE IS A GOOD PATH.
THE INFLOWS HAVE BEEN THERE WE'VE SEEN ABOUT 17 WEEKS OF
INFLOWS. SPREADS ARE KIND OF NEUTRAL
OVER THE RANGE BUT YIELDS ARE EXTREMELY ATTRACTIVE IN THE LOW
5'S AND THAT DRAWS MONEY IN OUT OF CASH LITTLE BY LITTLE.
PEOPLE ARE STILL HANGING ONTO T-BILLS BUT THEY CONTINUALLY
ARE STEPPING OUT OF THE CURVE. THINK WE ARE SETTING UP FOR A
GOOD TOTAL RETURN. TOM: DO YOU SEE CORPORATE ISSUANCE? WILL YOU SEE A LOT OF CORPORATE
ISSUANCE HERE OR WILL THE CEOS PULL IT BACK? >> FOR THE MOST PART, YOU ARE
SEEING THE TYPICAL CORPORATION SAYING THIS IS FAIRLY EXPENSIVE
AND I DON'T WANT TO BORROW AT 5.5%.
THEY ARE NOT LEVERING UP AND IS BEEN LESS M&A OVER THE
NEAR-TERM. WE WILL SEE IF PEOPLE ADJUST TO
THIS NEW RATE ENVIRONMENT AND THERE HASN'T BEEN A LOT OF DEBT
COMING DUE. THEY HAVE TWO OR 3% BONDS.
THEY HAVEN'T REALLY FELT THE FULL SHOCK OF THE RATE CURVE
GOING HIGHER YET. WE WILL SEE FOR THE TYPICAL
INDUSTRIALS WITHIN THE BANKS FACE.
BANKS HAVE BEEN BORROWING MORE THIS LAST WEEK. YOU WILL SEE THE BIG BANKS
BORROWING BUT THE REGIONAL BANKS WILL BE ON THE SIDELINE
AND SAY IT'S TOO EXPENSIVE. JONATHAN:
I'M INTERESTED WHEN THEY HAVE TO BORROW, NOT WHEN THEY WANT
TO BORROW. WHEN DO THEY NEED TO? HAS THE HIGH-YIELD BOND EVER
REALLY MATURED? WHERE IS THE WINDOW OF THE
TECHNICALS, WHERE IS IT? >> FOR THE IG MARKET, THERE IS
NO MATURITY WALL. THE HIGH-YIELD MARKET IS UP 3%
AND COMING DUE THE REST OF THIS YEAR WITH 9% DUE IN 2024.
THEN IT GOES TO LIKE 15% SO THEY WILL PROBABLY WORK TO
ADDRESS THAT BECAUSE THEY WILL REFINANCE THAT.
THE WALL IS VERY CONTROLLED OR LOW FOR THE NEXT TWO YEARS AND
THEN IT CUTS HIGHER FROM THERE BUT THEN IT GOES BACK TO NO ONE
HAS FELT THE FULL EFFECT OF THIS HIGHER YIELD YET.
THEY HAVE NOT HAD A LOT OF DEBT ROLLOFF.
IF AND WHEN THAT COMES A LARGER PERCENTAGE OF THEIR DEBT WILL
BE EIGHT OR 9%. I THINK IS GOOD FOR FIXED RATE
BORROWERS THAT THEY'VE BEEN ABLE TO LOCK IN YIELDS FOR
LONGER TERM. JONATHAN: HAS IT EVER BEEN WIDE -- THIS
WIDE BETWEEN A COUPON PAYMENT FOR COMPANY AND WHAT WOULD
CAUSE THEM TO ARO IN THE SECOND -- TO BORROW IN THE SECONDARY
MARKET RIGHT NOW? >> NOT SINCE THE 1980'S OR THE
LATE 70'S. THE BOND ROSE OFTEN 4% AND YOU
REPLACE IT BUT THAT'S NOT THE CASE NOW. APPLE IS BORROWING AT 1.5% FOR
A LONG TIME SIMPLY BECAUSE THEY COULD.
I THINK THEY WILL KEEP THAT IS THEIRS DISH AS THEIR CAPITAL
STRUCTURE BUT THEY MAY CHOOSE TO PAY OFF. WE WILL HAVE TO SEE.
IT STILL CREATIVE EARNINGS. TOM: A DELICATE QUESTION -- IS CHALLENGES IN THE LEVERAGED
LOAN MARKET, HOW BAD IS IT? >> IT HASN'T BEEN BAD YET
SIMPLY BECAUSE THE ECONOMY IS GOING SO STRONG. THE LOW RATE MARKET WILL GO UP
IN SUMMER BORROWING AT 12% OR MORE. IT CAN BE ATTRACTED TO THE
LENDER BUT PUNITIVE TO THE BORROWER.
AS LONG AS THE ECONOMY STAYS THE STRONG, THEY WILL BE FINE
BUT IF YOU CAR LANDING, YOU COULD BE IN MORE TROUBLE.
JONATHAN: THANK YOU FOR THE UPDATE ON
CREDIT THERE. JUST GOT A GREAT EMAIL FROM AN
AMERICAN. ABOUT SOCCER IN AMERICA, THIS
IS SOMEONE WHO WATCHED CHELSEA RECENTLY.
AMERICANS NEED TO STAY IN THEIR SEATS AND PUT THEIR PHONES DOWN.
IT'S IS NOT AMERICAN FOOTBALL WHERE YOU HAVE HOURS OF NOTHING
HAPPENING. IT'S A VERY DIFFERENT WAY OF
EXPERIENCING THE GAME. THAT CAME IN MOMENTS AGO. TOM:
HUGE DEAL. I HEAR FROM LOTS OF PEOPLE.
THERE IS AN OUTRAGE OVER THIS NEW THING WHERE IT'S COOL
.IT'S LIKE THAT GAME IS SECONDARY.
YOU CAN START WITH FOOTBALL. IT'S A VERY SENSITIVE DEAL WERE
A LOT OF PEOPLE ARE SAYING THAT WE ARE MORE FOCUSED.
I ENJOYED THE TIME THE TOPS LET ME CAME IN FOR FREE. I REALLY ENJOY THE FOCUS OF
THOUSANDS OF PEOPLE. JONATHAN:
IT'S A DIFFERENT RHYTHM THAN AT HALFTIME. TOM:
IT'S A SENSITIVE ISSUE IN AMERICAN SPORTS. JONATHAN:
FROM NEW YORK, THIS IS BLOOMBERG. TOM:
BLOOMBERG SURVEILLANCE, GOOD MORNING AND ON FRIDAY WE LOOK
TO JACKSON HOLE. LISA ABRAMOWICZ IS OUT ON THE
TUNDRA. SHE IS LOOKING AT POLAR BEARS
IN ICELAND. AN IMPORTANT 9:00 HOUR COMING
UP. BITCOIN IS OVER $29,000 RIGHT
NOW. THE VIX IS UP 14, A FRACTIONAL
GREEN ON THE SCREEN NOW. WE WILL DIVE INTO THE ECONOMY.
WE NEED TO GO TO MICHAEL MCKEE. FRIDAY I WILL LOOK TO JACKSON
HOLE. WHAT'S IMPORTANT HERE AND MY
PEOPLE ARE HANDLING THIS, WE WILL NOT BE UP AT 3 A.M.
THIS YEAR. WE WILL SHIP BLOOMBERG
SURVEILLANCE LATER IN THE MORNING TO GET IMPORTANT PEOPLE
IN THE CONVERSATION. THAT'S THE LINE YOU'RE GETTING
FROM FOLKS. THE OTHER REASON IS SO I CAN
GET MY CHIPS TOASTY BEFORE THE SHOW. FOR THOSE ON RADIO, IT'S A
BEAUTIFUL IMAGE OF POTATOES AND MY FATHER WOULD CALL THIS A BIG
GLOB WHICH IS CHIPPED BEEF IN A WHITE SAUCE.
THE PIONEER GRILLED SPEAKS FOR ITSELF. MIKE: IT DOESN'T YOU SPEAK FOR
YOURSELF WANTING TO EAT THAT STUFF. TOM:
EVERYBODY EATS THEIR ALONG WITH THE WONDERFUL PEOPLE IN WYOMING.
IT'S SOMETHING TO LOOK DOWN THE PIONEER GRILL AND THE PRESIDENT
OF THE KANSAS CITY FED AND ALL OF HER STEP IS SITTING THERE.
WHAT IS THE KANSAS CITY FED DOING NOW TO MAKE FOR A
SUCCESSFUL JACKSON HOLE? >> LOOKING FOR A REPLACEMENT.
MIKE: THE FORMER PRESIDENT RETIRED
QUITE SOME TIME AGO AND THEY STILL DON'T HAVE A PRESIDENT A
MONTH OUT FROM THE EVENT. I TALKED WITH SOMEBODY THERE
FRIDAY. THEY ALWAYS SAID THIS EVENT IS
BIGGER THAN ONE PERSON. TOM: THIS IS THE HEARTLAND OF
AMERICA, KANSAS CITY AND DALLAS HAVE A DIFFERENT OUTLOOK THAN
THE SALTWATER ECONOMIES WEATHER AT SAN FRANCISCO OR THE
TRADITIONAL EAST COAST. ONE IS IN EARLY FEE FOR JACKSON HOLE
WHERE WE DON'T KNOW THE SCHEDULE AND WE DON'T KNOW THE
AGENDA AT WE DON'T KNOW THE ECONOMIC PAPERS YET.
WHAT WILL IT LOOK LIKE? MIKE: IT'S PUTTING TOGETHER A
FRAGMENTED ECONOMY WILL BE THE THEME AS WE TRY TO RECOVER FROM
THE PANDEMIC. AND THE VARIOUS THINGS THAT
HAVE BEEN GOING ON IN VARIOUS SECTORS THAT DON'T ADD UP
PREVIOUS MODELS. TOM: FOR ME, JACKSON HOLE IS TWO
CONSECUTIVE DAYS OF CHIPPED BEEF AND TOAST. NATIONWIDE
JOINS US NOW WITH A CLEAR VIEW ON THE AMERICAN ECONOMY.
THERE IS THE DISAGGREGATION OF THE AMERICAN ECONOMY.
DO YOU PUT IT INTO ONE ECONOMY OR DO YOU HAVE TO LOOK AT
AMERICA AND SEPARATE IT? >> GOOD MORNING. IT DEVOLVES.
YOU LOOK AT THE TOP DOWN BUT THEN YOU HAVE TO DISAGGREGATE
AND I LOOK AT IT ACROSS THE SPECTRUMS OF THE ECONOMY. IT'S BEEN A VERY INTERESTING
POST COVID -- IT WAS THE RECOVERY AND THEN THE EXPANSION
WHICH IS UNIQUE AND WE SEE THESE ROLLING RECESSIONS.
DO THEY CULMINATE IN A BROAD BASE ANY REAL RECESSION THAT
THE NATIONAL BUREAU OF ECONOMIC RESEARCH WILL CLAIM IS A
RECESSION? TOM: ARE WE A FULLY EMPLOYED AMERICA?
>> YES, WE ARE OVER EMPLOYED. IT'S GREAT IF YOU ARE IN
EMPLOYEE BUT IT'S PROBLEMATIC FOR THE FEDERAL RESERVE TO
BALANCE THAT AGAINST INFLATION PRESSURES.
SOME CORPORATIONS ARE STILL FINDING QUALIFIED WORKERS AND
FEELING THE WAGE PRESSURE DURING THIS PERIOD. MIKE:
THE ROLLING RECESSIONS IS WHAT HAPPENED IN 2015-16 AND NOW WE
SEEM TO BE SEEING IT AGAIN. WE SAW A SLOWDOWN IN NEW HOME
CONSTRUCTION AND A NEW LOW IN AUTO SALES AND THEY HAD COME
BACK. IS THIS WHAT WE WILL SEE THE
NEXT YEAR OR SO OR AN OVERALL FORECAST WITH A DECLINE IN
ECONOMIC ACTIVITY? >> THAT'S THE KEY QUESTION.
IT'S DIFFICULT TO GET THE TIMING.
WE ARE STILL IN THE CAMP THAT WE ARE CAUTIOUS AND THINK
CONDITIONS ARE THERE FOR A FULL-BLOWN RECESSION.
WE HAVE ALWAYS ARGUED IT WOULD BE ON THE MODERATE SIDE. YOU ARE RIGHT, HOUSING IS THE
FIRST SECTOR TO HEAR THE PINCH OF INTEREST -- HIGHER INTEREST
RATES. NOW WE ARE COMING BACK AT LEAST
FOR CONSTRUCTION AND NEW HOME SALES.
PEOPLE CAN'T FIND ENOUGH SUPPLY IN THIS MARK -- IN THIS MARKET. THE SUBSIDIZED MORTGAGE RATE IS
5% WHICH IS BETTER THAN SEVEN BUT THAT'S THE HOPE ON THE
HOUSING MARKET. THERE'S BEEN A RESTRAINT OF
SUPPLY AND THERE IS STILL PENT-UP DEMAND. AUTOMOBILES HAVE PRICING POWER
AND THEY ARE CONTINUING THAT SHORTAGE OF SUPPLY. MANUFACTURING GLOBALLY, WE ARE
SEEING THAT AS A RECESSION AND IT SEEMS TO BE GETTING WORSE. CHINA HAS BEEN REOPENING AND
WE'VE HAD 11 MONTHS STRAIGHT OF IMPROVEMENTS.
TIME WILL TELL AND THE LABOR MARKET IS RESILIENT ENOUGH TO
OFFSET THOSE OTHER FACTORS. WE THINK EVEN WHEN THE FED IS
DONE HIKING, WE THINK RESTRICTIVE RATES EVENTUALLY
WILL PINCH THIS ECONOMY. WE WILL SEE IS SLOW DOWN. MIKE: YES BUT DO WE ACTUALLY HAVE A
RECESSION? WE GOT WAGES RISING FASTER THAN
INFLATION RIGHT NOW. >> THAT'S RIGHT, RIGHT NOW,
THERE IS SOME REAL INCOME GAINS. THE KEY HERE IS WHAT HAPPENS
WITH CORPORATE PROFITS AND BALANCE SHEETS.
IF INFLATION CONTINUES TO TREND LOWER WHICH IS WHAT WE EXPECT
GRADUALLY, CORPORATIONS WILL BENEFIT AND WE ARE SEEING UP
DATING WAGE PRESSURE GOING ON. MORE WILL GO ALONG WITH UBS AND
THE OTHERS. ULTIMATELY, THAT'S WHERE THE
CONSUMER FEELS THE NEGATIVE. TOM: ANOTHER ANALYST SAID HE'S
CONSTRUCTED ON AN ECONOMY THAT LOSES STEAM ON INVENTORY
DYNAMICS. LECTURE US ON MARGINAL INVENTORIES. DO YOU THINK WERE MARGINAL
INVENTORIES WON'T ASSIST GPT -- GP GOING FORWARD? >> THAT'S A GREAT POINT.
INVENTORIES SEEM TO BE WORKING IN THE BACKGROUND.
WHEN THEY SWING, IT CAN BE A POWERFUL FORCE IN THE BUSINESS
CYCLE DYNAMIC. IT CAN BE VERY LARGE THREAT OR
MAYBE ADD TO GDP. COMPANIES THAT HAVE GOTTEN
THERE INVENTORIES AND CELEBRATIONS IN THEIR SHAPE, IT
DOES NOT MEAN WE WILL SEE A LOT OF THIS GOING FORWARD.
THAT'S A HEADWIND FOR GDP GROWTH.
JUST LIKE STUDENT LOANS DEBT REVIEWS COMING UP, THAT'S A
HEADWIND. THE DATA HAS BEEN STRONGER AS
PICKING UP SOME SUPPORT IN THE SOFT LANDING CAMP AT THE
ECONOMY IS STILL SOFT. IT'S NOT HARD TO GET HIS INTO
RECESSION. THAT'S WHERE WE REMAIN CAUTIOUS.
TOM: WILL THE STOCK MARKET ADAPT TO
THIS OR IS IT REMOVED FROM AN ECONOMIC SLOW DOWN? >> HISTORICALLY, THE EQUITY
MARKET IS NOT IMMUNE TO RECESSION OR A DOWNTURN.
IF YOU GET THAT ALREADY COME IN THAT DIRECTION AND NOW, I WOULD
ARGUE THAT VALUATIONS ARE QUITE HIGH. IF WE HAVE A RECESSION, PROFITS
GO DOWN. WE WOULD BE CAUTIOUS WE DON'T
THINK IT IS IMMUNE TO A RECESSION. MIKE:
THE GENERAL FEELING WEDNESDAY IS THE FED COULD SORT OF
STIPULATE WHAT'S GOING TO DO. WHAT THEY TELL US ABOUT THE
FUTURE IS WHAT IS GOOD OR BAD FOR THE MARKETS OF WHAT WILL
THEY TELL US ABOUT THE CHURCH? DO THEY KEEP GOING AFTER ONE
MORE? >> IT IS WHAT THEY PROVIDE AS
FAR AS FORWARD GUIDANCE. 25 BASIS POINTS SEEM TO BE A
SHORT BET. THERE IS A LOT OF UNCERTAINTY.
LAST NIGHT JUST LAST TIME, THEY ADDED TWO MORE RATE HIKES BUT I
THINK DATA COMES IN BETTER THAN EXPECTED AND I THINK CHAIRMAN
POWELL SHOULD BACK UP AT A LITTLE BIT. STILL YOU NEED TO BE CAUTIOUS
BECAUSE THEY DON'T WANT INFLATION WHICH WOMEN THE RIGHT
DIRECTION TO REVERSE YEARS. INFLATION HAS BEEN A PICKUP BUT
THE BASE EFFECT WILL BE LESS FAVORABLE GOING FORWARD. TOM:
WHAT IS YOUR PREDICTION FOR GDP FOR THE SECOND QUARTER?
FOR ENDING JUNE 30, WHAT IS THE STATISTIC? >> WE HAVE SLIGHTLY ABOVE 2%,
2.2%. ITS RESILIENCE IN THE CONSUMER
AND NONRESIDENTIAL INVESTMENT. IT WILL BE ADDED TO THE END
PRICE. AND WE WILL NOT HAVE A SLUMP
FOR RESIDENTIAL INVESTORS BECAUSE HOUSING HAS A
STABILIZED. THE MEMBER OF THE FED WANTS IT
BELOW 1.8% POTENTIALLY. THERE MUST BE SEVERAL QUARTERS
OF GROWTH WILL BELOW 2%. TOM: THANK YOU SO MUCH. WEIRD IS INTERNATIONAL COME
INTO THIS? IS THAT PART OF THIS DISCUSSION
FORWARD? MIKE: IT'S A MINOR PART OF THIS POINT.
TRADERS HAVE NOT BEEN A HUGE FACTOR IN THE OVERALL GROWTH
PICTURE FOR THE UNITED STATES IN RECENT MONTHS. YOU SEEN PEOPLE SAY
IT WILL HAVE A MAJOR IMPACT ON THE U.S. TOM:
IT'S AN IMPORTANT THEME. WE ARE GETTING READY FOR A FED
MEETING WEDNESDAY AND FUTURES ARE UP SIX IN THE S&P 500 IS UP
012%. GOOD MORNING TO ALL OF YOU ON
RADIO AND TELEVISION. LISA IS ON ASSIGNMENT.
I LOOKED ON THE MAP. MIKE:
SHE WILL PROBABLY HAVE GREAT PICTURES OF THE NORTHERN LIGHTS.
TOM: THEY GO AROUND THE WORLD. IT'S A LATITUDE THING.
WE DON'T SEE THEM. MIKE:
NOT SO MUCH HERE BECAUSE IT'S TOO LIGHT. TOM:
MAYBE YOU NEED TO GO UP TO YONKERS. THE ASTRONOMY REPORT WITH
MICHAEL MCKEE AND JONATHAN GET -- GETTING READY FOR THE 9:00
HOUR. THE MYSTIC FINAL SALES SEEMS TO
BE FRONT AND CENTER VERSUS THE INTERNATIONAL. MIKE:
YOU TAKE AT THE EXPORTS AND WE TAKE OUT BASICALLY GOVERNMENT
SALES. WE KNOW THE GOVERNMENT SPENDING
A LOT OF MONEY ON WEAPONRY. IT IS WHAT CONSUMERS ARE DOING
THAT'S THE KEY ISSUE. EVERYBODY THANKS THEY ARE
SPENDING DOWN THEIR PANDEMIC BENEFITS IN THE INFLATION RATE
HAS EATEN AWAY AT THEIR SALARIES EVEN THOUGH WE ARE
RUNNING AHEAD OF THAT AND THEY WILL PULL IN THEIR HORNS.
COMING UP, WE GOT BACK TO SCHOOL AND THEN THE HOLIDAYS.
IF YOU'RE GOING TO SEE ANY KIND OF SERIOUS SLOW DOWN, IT WILL
HAVE A MAJOR IMPACT OF CONSUMERS PULLBACK BUT A LOT OF
THAT IS CONFIDENCE. CONFIDENCE HAS BEEN GOING UP.
TOM: WE MENTIONED THIS EARLIER, THE ISRAELI PARLIAMENT APPROVED
THEIR CONTROVERSIAL JUDICIAL OVERSIGHT LAW. PLEASE STAY WITH US, WORLDWIDE,
THIS IS BLOOMBERG SURVEILLANCE. >> A NUMBER OF AIRLINES WERE
ONLY OPERATING AT 93% CAPACITY. WE BEEN GROWING STRONGLY AND
OUR GROWTH IS RESTORING TRAFFIC THAT WAS TAKEN OUT DURING THE
PANDEMIC. IT'S GROWING ACROSS EUROPE WITH
MORE CONSOLIDATION AT THE MOMENT. THAT'S LIKELY TO IMPROVE OVER
THE NEXT TWO OR THREE YEARS. TOM:
THEIR CHIEF FINANCIAL OFFICER. MIKE:
I HAVE NOT FLOWN RYANAIR YET. TOM:
I WAS GOING TO GO TO MOROCCO ON IT. MIKE: YOU ARE GOING TO HAVE TO STOP
SOMEPLACE. TOM: GOOD MORNING TO RYANAIR IN THE
SPIRIT THEY HAVE. MICHAEL MCKEE IS WITH US NOW.
IT'S A MONDAY IN THE SUMMER AND WE ARE THRILLED THAT EDWARD
HARRISON IS WITH US AND HE LOOKS AT THE MARKETS. I LOVE ONE OF YOUR RECENT NOTES
WHERE YOU TALK ABOUT EXPECTATIONS, THE STANDARD VIEW
IS THE MARKET IS ALWAYS OUT IN FRONT. HOW FAR OUT IS THE MARKET
GUESSING NOW? >> I THINK BOND MARKETS AT A
MINIMUM ARE LOOKING THROUGH 2024 AND THEY ARE SEEING THE
FED IS VERY CLOSE TO BENDING THERE RATE HIKES AND THEY WILL
HAVE SOME CUTS. THAT WILL BE THROUGH THE END OF
NEXT YEAR. ON THE OTHER HAND, I THINK
EQUITY MARKETS ARE NOT LOOKING THAT FAR AHEAD. THEY ARE LOOKING AT THE SOFT
LANDING AND THEY ARE BULLISH AS A RESULT OF THAT. TOM:
WHAT I NOTICED OVER THE WEEKEND IS THE POLARITY BETWEEN RETAIL IN LOVE WITH APPLE, AND
INSTITUTIONAL WALL STREET THAT IS CAUTIOUS.
IS INSTITUTIONAL WALL STREET BEHIND IN TERMS OF PERFORMANCE? >> THAT'S RIGHT, BASICALLY THE
INSTITUTIONAL INVESTORS WERE TOO PESSIMISTIC RELATIVE TO
WHAT ACTUALLY OCCURRED. THEY HAD A LEG INTO THIS AND AS
A RESULT -- TOM: WE ARE CATCHING UP. >> THE RETURNS HAVE LAGGED AS A
RESULT. THE FLIPSIDE OF THAT IS THE
ECONOMY DOESN'T HOLD IN THE SECOND HALF OF THE YEAR. YOU CAN SEE A VERY QUICK UNWIND
OF THE BULL MARKET WE HAVE SEEN THUS FAR. MIKE:
YOU SAY THEY ARE LOOKING OUT OVER ONE YEAR. YET, EVERY WEEK, THEY SEEM TO
CHANGE THEIR MIND OF HOW MUCH IS GOING ON.
DOES ANYBODY HAVE ANY IDEA OF WHERE THE ECONOMY AND INFLATION
WILL BE? >> WE WERE JUST TALKING ABOUT
THIS, THE SOFT LANDING IN 1994 AND 1998. 94, THE ST. LOUIS FED PRESIDENT
IS WHERE WE ARE NOW. THE MARKET DOES NOT WANT TO
BELIEVE THAT BOWIE THINK PMI COMES OUT OF EUROPE TODAY. IS THE DOWNSIDE RISK TO THE
ECONOMIES AND NO ONE KNOWS IN THESE NEXT TUMORS WILL BE
PIVOTAL BETWEEN JULY AND SEPTEMBER.
WE KNOW THE FED WILL HIKE BUT NOT IN THE NEXT TWO MONTHS. TOM:
I WANT TO MAKE AN AMENDMENT TO THE NEWS WE SET UP, THIS IS
HAPPENING IN REAL TIME IN THE LATE AFTERNOON IN JERUSALEM. THE AP HAS COME OUT WITH A
NUANCE. I HAVE SAID WE HAVE SEEN IN THE
PASSING OF THE CONTROVERSIAL LEGISLATION, THE ASSOCIATED
PRESS REPORTS ISRAEL APPROVED A KEY PART OF THE CONTENTIOUS
LEGAL OVERHAUL. I WANT THAT CLEAR. MIKE:
THEY ARE TALKING ABOUT A COMPROMISE OVER THERE. YOU SAID BETWEEN JULY AND
SEPTEMBER, THE DATA WILL BE REALLY IMPORTANT. DO THEY GO INTO THE SEPTEMBER
CAMP OR GO FROM SEPTEMBER INTO NOVEMBER? >> WE ARE REACHING THAT PLATEAU
VERY QUICKLY AND THERE ARE SOME MEMBERS WERE NOT ON BOARD WITH
GOING TO EVERY MEETING. THE COMPROMISE WE SOUGHT WHICH
I THOUGHT WAS SLIGHTLY INCOHERENT IN THE JUNE MEETING
WAS THAT WE WILL ACTUALLY RAISE OUR RATE HIKE BUT THEN WE WILL
PAUSE AT THE SAME TIME. THAT TELLS YOU IS WE ARE AT A
POINT WHERE WE NEED TO HAVE SOME SORT OF COMPROMISE IN THE
FOMC TO GET MORE UNANIMITY AROUND FUTURE POLICIES. I THINK SEPTEMBER WILL BE A
PAUSE. TOM: DOES IT FOLD INTO MARKET
ANALYSIS? DOES IT FOLD INTO MY EQUITY
MARKET OUTLOOK? >> IT DOES BECAUSE THE MARKET
HAS BEEN WRONGFOOTED. AS A RESULT, THAT HAS FED INTO
THE EQUITY MARKET. THE BOND MARKET NOW HAS TO TAKE
BACK A LOT OF THE PESSIMISM. THAT'S FED INTO THE EQUITY
MARKETS. WE ARE IN THE MIDDLE OF AN
EARNINGS RECESSION RIGHT NOW. THIS IS SUPPOSED TO BE THE
NADIR . IF THE ECONOMY IS NOT AS GOOD
AS WE THINK GOING FORWARD, PERHAPS WE WILL SEE SOME
DOWNSIDE RISK THERE AS WELL. WHAT DO YOU SEE IN THE CASH
DYNAMIC NOW IN THE EQUITY MARKET? PEOPLE SAY WE ARE OVER CASH AT
FIVE OR 10%. IS THERE A LOT OF CASH OUT
THERE? I REALLY DON'T KNOW HOW MUCH
CASH IS ON THE SIDELINES. MY THINKING IS THAT WEBWORK
CASH WILL QUICKLY COME BACK TO THE MARKET. IN TERMS OF THAT, THE FED'S
CONTINUING QT AND THE TREASURY STILL SELLING STUFF, IT LOOKS
LIKE WE ARE SEEING A REVERSE ROUTE REPO FACILITY SHRINK BUT
BANK RESERVES ARE NOT. IS WORKING OUT LIKE THE FED
WANTED. AS LONG AS THE DATA HOLDS, THAT
MONEY CAN STILL GOING TO MARKETS.
IN TERMS OF WHAT IMPACT IT HAS ON THE YIELDS OF TREASURIES, I
THINK IT WILL HAVE NOT THAT MUCH OF AN IMPACT.
OVERWHELMED BY THE VIEW WHERE THE FED IS HEADED. AT THE MARGIN, IT MIGHT HAVE AN
UPWARD DRIFT IN THE YIELDS. GENERALLY SPEAKING, YIELDS ARE
GENERALLY CAP. WE WON'T GET BACK TO THE 2022
HIGHS FOR THE 10 YEAR. THANK YOU SO MUCH.
THIS IS THE FIRST TIME I'VE HAD THE ABILITY TO TALK ABOUT THIS. WHO REPLACES BULLARD? HE'S BEEN AROUND FOR 15 YEARS
AS THE PRESIDENT OF THE BANK AND HE STARTED BANKING IN 1990
SO HE WAS A LONGTIME FIXTURE THERE. YOU DON'T KNOW IF THEY GO
WITHIN INTERNAL OR EXTERNAL CANDIDATE.
IT'S GOING TO BE INTERESTING TO SEE.
IT'S NOT THE SAME AS IT USED TO BE WHERE A BANK HAD A VIEW OF
THE ECONOMY. LEIGH LEWIS WAS OF MONETARIST DOES THE GOVERNOR OF THE
FEDERAL RESERVE SYSTEM MOVE BACK TO ST. LOUIS? DOES HE WANT
TO BE PRESIDENT? I SUPPOSE IT WOULD DEPEND ON
WHETHER HE LIKES THE CITY OF ST. LOUIS AREA THERE IS MORE
POWER AND INFLUENCE IN WASHINGTON BUT HE WAS MAKE --
WOULD BRING IN MORE MONEY. A FED GOVERNOR MAKES ABOUT
180,000 DOLLARS PER YEAR. I THINK THEY MIGHT HAVE GONE UP
CLOSER TO $200,000. JIM BULLARD WAS THE LOWEST PAID
OF ALL THE REGIONAL BANKS FED PRINT BUSINESS APPLY FOR A JOB
AT THE NEW YORK FED IN SAN FRANCISCO.
WHAT ARE THEY PULLING DOWN? THEY ARE OVER HALF A MILLION
PER YEAR. I HAD NO IDEA THE DISPARITY
BETWEEN PRESIDENTS AND CABINETS. THE BANKS OR QUADS I/O FOR SHOW.
THEY ARE RUN LIKE INDEPENDENT INSTITUTIONS AND HAVE TO HAVE
WHAT THEY CALL COMPETITIVE SALARIES. THAT EXPLAINS IT ALL. MICHAEL MCKEE AND
PERSONAL-FINANCE COMING UP ON
