Tom Keane, Lisa Parameters, Jonathan Pharaoh discussed on Bloomberg Surveillance

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So far so good Scott managed not alone though The Guggenheim C IO there and what happens when the fed pulls back From New York City this morning good morning Tom Keane Lisa parameters and Jonathan pharaoh your equity market all time highs on the S&P 500 Equity futures up another 6 advancing a little more than a tenth of 1% 5 day winning streak on the S&P into Thursday 8 on a NASDAQ We just keep grinding higher And granny get all time highs too Yields in Tom three basis points on ten to one 57 35 Caught up with bob Michael at JPMorgan asset management so I'm going into the decision I said to him is tapering tightening or not It's tapering tightening and he said John that will be a price to pay You can't just pull back and when we pull back even though we're expanding the balance sheet still and all that good stuff Bob's message is simple You will feel the move from one 20 down to zero You know when you plan the show John I love that you selected Scott minor there And what was so important within his caution is there was a point there where he said he's fully risk on And I think to a lot of our viewers and listeners that's important Here's a guy with all the caution radar up And yet he's in the game Keep down sick Isn't that something we talked about Yesterday When he speaks to Scott you're right The prospect of a policy mistake The prospect of a recession in several years time But when you hear someone say those things you have to ask them okay if that's going to happen what are you going to do tomorrow And the answer you get Tom is they're still stick with this equity market for the time being Yeah Well speaking of the equity market and there is no alternative Tina Wilson joins us right now with Bloomberg's stock Tell us about a group today which I guess I shouldn't be surprised is up 200% Absolutely What we're talking about are the staffing companies you know the ones that are getting very struggles and the rest Absolutely I mean you see so much in terms of how the job market is difficult for companies in terms of their ability to hire It's been great for the staffing companies and it's something that Sean Darby over Jeffries was pointing out in a report this week So prompted me to take a look at the group broadly so we're talking larger smaller midsize companies and if you look at an index the tracks them it's tripled since the lows of March of last year while the S&P 500 has doubled over the same period It's been one of the best performers in what they call the S&P composite 1500 and bring it over to them as 2 billion revenue companies These are true small caps You're the only one in the building who's experienced a small cap boom Would you say in all the reading you see from Jefferies and others that people are calling for a continued strength in small caps Well I mean in terms of where they are now You look at the Russell 2000 and hasn't kept up with the S&P 500 this year So there's room for recovery arguably by that standard but yes strategists have certainly pointing to the smaller companies lately as a potential strong part of the market I mean given the fact that they really haven't performed all that well and you know if the economy is able to sustain its growth to the point where it doesn't need the support from the fad I mean you figure would benefit companies across the board and smaller companies arguably have more to gain from that scenario I'm so glad Dave that you focused on the staffing firms And the reason why is because equities discount future growth We're not just looking at staffing shortages now What kind of growth are we looking at Are we discounting in these shares given the gains What does it imply in terms of how long these staffing shortages are likely to last Well it tells you the business is going to be good for a while and you look at numbers like what the national federation of independent business puts out on how difficult it is in terms of their monthly surveys for companies to hire It means it gives you a sense that what we're seeing now is going to be relatively long-lasting And so that works to the benefit of companies that help businesses fill those jobs and that's where you find the staffing and employment businesses and we've seen the benefits already So Darby was certainly argued there's more to come But the interesting aspect is this kind of goes in the face of what we heard from Jay Powell yesterday where he was talking about how the labor market is a lot has a lot more slack than a lot of people seem to perceive Is this basically a contradiction to that People on the equity side of things saying not really that actually it's pretty tight It's going to stay that way for a while and the shift to power for labor is going to remain Well certainly it suggests that shall we say the body in motion remains in motion and in the sense of how difficult it is for companies to find workers Now you can talk about slack all you want but when you see numbers like what you see out of the NFL IB you mean it's clear that on the ground companies are having issues in terms of finding workers I mean we'll get a real sense in the next few weeks because you have all this holiday hiring going on at the likes of Amazon and FedEx and UPS and retailers So you know that'll really kind of be another flash point arguably in terms of companies ability to hire workers Dave looking forward to the conference for the day you and I'll catch up a little bit later once this market gets open Dave Wilson Honestly TK All time highs in the equity market up about 5 or 6 points 7 minutes from now A bank England a right decision so on To our an American audience not two If you still consider the Central Bank in the UK Tom to be a major Central Bank they may be hiking You are actually saying there's a probability here they will hike rates in this environment I'm not saying it I'm going off the words of Hugh pill at the Bank of England with the chief economist who called this one life meeting Split Okay Square mile right now is split on this the market in terms of rate pricing has been pricing it in It's a 9 vote MPC 9 officials look to see how divided that is Do we get a 5 four Do we know where governor Bailey is I mean this guy's a bright bright guy He has flirted with the idea that we have to tighten monetary policy as well And I used the word flirtation actually deliberately because in the past this Bank of England has been what's considered Lisa to be an unreliable boyfriend Floating with the idea of doing things but ultimately not following unreliable boyfriends Really Tom you really want to go there I'm going to divert away from that right now and go to what we heard from Adam pose and the idea that perhaps the Bank of England has a very different picture that it's facing than the Federal Reserve Basically Adam pose and saying the Federal Reserve should not hike rates at this point seeming to say perhaps it's different for the Bank of England because of Brexit Yes but also consider there is a 6 handle expected for UK GDP next year It's a better option I didn't know that It was in the forecast that we got from the OPR And they last week or so the office of did you say 6% inflation adjusted GDP GDP And do our audience to be clear that's remarkably different than what we sense in the United States Pick up in growth in the UK The problem is I think a lot of people think that there may be responding to all of this maybe prematurely because what might happen with inflation down the road what might happen with the currency trying to establish some credibility with the FX market What will interest me is what happens at about 8 O one So in about 6 minutes from now if we get a decision to hike interest rates how does Sterling respond dispelling rally or disturbing San off off the back of that And.

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