Karen Moscow, Tom Keen, Creedy Gupta discussed on Bloomberg Surveillance


And good morning, I'm Karen Moscow along with Tom keen and creedy Gupta. The S&P 500 is lower at the open. It's falling down 1.4%. It's down 52 points at 37 65. The Dow Jones Industrial Average down 1.2% down 369 points at 30,605 and the NASDAQ down 1.7% to hunt down a 188 points at 11,076. Ten year treasury down 1530 seconds, yelled three 2% that yield on the two year 3.18% nymex screwed oil is up a tenth of a percent or 16 cents at $95, 98 cents a barrel comic school is down half percent or $8 at 1716 ounce, the Euro is at 1.0024 against the dollar the yen is at one 37.52 and looking at Bitcoin, it's lower down 2.4% at $18,900. Tom and creedy. Thanks so much and of course here some real movement in the markets will continue to watch it pretty. What do you think Kirby version, negative 16 basis points? That's a big deal. It's a massive deal. I'm still a little bit of shock that Ira Jersey said it could go further to negative 40. Yeah, well, he said negative 40 pre a misery TD securities is a negative 50. What's important there folks? Those are just numbers in the air for so many of you. Those are truly historic moves that harken back to the Volcker eras of ginormous volatility. Right now, this is something we rarely do, but because of water hazard on Bloomberg radio, but when you can get someone standing in the south fork of the snake river in a drift boat, fishing away and speak to them on radio, it's always constructive, joining us the Fisher person, David kotak, joins us this morning with Cumberland, advisers. David, of course, you're out in Idaho talking economics, but is there a little bit of fishing going on for the acclaimed Yellowstone cutthroat trout? Absolutely Tom. Thank you so much for having me in. It's nice to be with you and pretty and pretty. You can come fishing with me anytime. I can't find waiters long enough to fit. Yeah, you have that right. I'll take you up. I've turned this down for years. I have to have credit, put the worm on the hook for me. Right now, David, you and I are the only two on the planet that remember inflation like this, but you and I also know this is different pandemic and massive fiscal stimulus, explain to our audience coast to coast, shell shocked at 9.1%. Why this is so different inflation. Yes, this is a different inflation and thank you, Tom. You have to back the way this is not a business cycle. So we have a shooting war widening in Europe. We have a worldwide financial sanctions payments for we still have a pandemic and still have COVID shocks. One of the panels that I'm doing and tomorrow in the Victor Idaho is on long COVID millions of people with disability in the labor force. And we have massive political turmoil, including a country which is having a war between the states. This is not a normal shock. It's huge. And so shock response is what financial markets are dealing with. You've been talking about it this morning and I really appreciate a 40 year old, the store you told about the trade. It makes those of us who have a prospective of history enable us to respect the history. Thank you for that. Well, I have to, let's talk about the history, Tom has reminded me over and over and over again this morning that a negative 16 yield curve inversion that we're seeing on the twos tens curve will put that into perspective of the Volcker area and you saw an inversion of negative 200, right? So this is something that you actually haven't seen going back to 2000. Can you reversions way rarer than you think? Well, it's funny because I feel like it's all we've been talking about for the last couple of months. David, how much faith, how much stock should we put in this curve inversion that keeps getting more and more negative? Well, I just published not long ago, a pamphlet, 80 pages of data, but it compared two metrics in yield curve, the two ten, which everybody's talking about looking at. And the old bubbler comparison of the very short term rate and the long-term rate say 98 treasury bills versus 30 year treasury bonds. You must, in my opinion, look at both curves when all of them are flat, we really encounter trouble. And right now, the long short curve is not inverted, the middle is inverted. And so that's a mixed message. So I'm not all up in arms over to ten, it's a short rate which it looks like it's coming because I agree with Ira and your conversation earlier, we're going to get 75. We're going to get 75 again. We're going to take a fed funds rate somewhere between three and four, ten year treasury. Where does it go? Maybe close to four, that's an expectation, and that will cramp down the U.S. economy hard. We're already seeing some of that in the data flow today. David, are you seeing this in Florida? Come on, Florida is a massive boom. Who do we know that's not moving to Florida? That's true. Either Florida or Austin, Texas, right? Yeah, I mean, what is the state in your Florida, David kotak? Well, it's already have two things going on. One, we have a public health policy, which is ignoring public health. That is causing outward movement in some businesses and service sectors in the mids. And we have an influx of people and the influx of people who look at no taxes and they want to move from someplace else. So it's a mixed picture in Florida. I am not so sang when about Florida. Now we need a good hurricane watch what the shock will be. You talked about heat in Texas. Right. Some to Florida, it's 90° and 90 humidity all the time. David, we got to talk about investment because you've always been a Cumberland adviser. Very clear about your investment exposure now. What are you exposed to and may I guess it's municipal bonds? Well, muniz on the buy side we have been very heavy on the buy side long muniz above four high grade tax free. So that's one side on the stock market U.S. stock market U.S. CTS strategy portfolio is 25% in cash. 20% of it is in the quantitative work and the other remaining 55

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