Jay Pelosky, Janet Yellen, Jay Powell discussed on Bloomberg Surveillance

Automatic TRANSCRIPT

Futures this Friday morning down, seven on the SNP were negative about 2/10 of 1% very definite. Gotta cash, Tom. That was the story of maybe 12 months ago as we went into This pandemic in the past week, record inflows into equity funds massive inflows coming in and John, I'll tell you, you see it in the chart, folks. You go to the Bloomberg terminal. Pick your Beast. Whatever Disney yesterday doing so well, John. Some of these moves are up 20 up 30, even up 40% Since the election, I'll let you pick the date you on John. The story this week is a two year yield. It is a 35% decline from the high two year yield of mid January. Stan Fischer would tell you over to Black Rock. That percentage change is a huge deal. That fish would probably tell you not stay. Percentage change, Tom. What's going on? He would tell you that. No, no, no. What's this about? This is the textbook Dornbusch Fisher stars. Stanley Fischer of M I T would tell you the media and for that matter, Wall Street hey, doesn't look at percentage change of the yield with the respect that the economists looking and I'm fired up, Johnny, can I just tie to the opportunity to get some metrics are into the product identification, please? Sounds like you need a dedicated John. Tommy. A man city tomorrow. I can't concentrate. I can tell Let's just say, I think we can all tell but a broader markets on the equity market IPO's upsides pricing above the range for credit markets, any offering upsides tighter than initial guidance as well. You pick equity you pick credit fixed income stocks, Tom It's all about to be seeing a lot of cash looking for home, John. Let's get it out of the way. Lisa popped 8000 shares of Bumble So she agrees with you. I pose up. Yeah, well, it almost doubled. I'm going back to that. I was gonna Completely gloss over the idea that I personally purchased shares of this If I weren't so lucky to get in on this, that would be fantastic. I want to tie both of your points together. This idea of those ultra low to your yields and the money, the cash flooding into equities flooding into credit, and it's tied together not only are getting record equity funds, but we're seeing the balance sheet of the Federal Reserve rise to a new all time high. He says that this data overnight which you know I love looking at 4:30 P.m. on Thursday evenings, Eastern time, But when I find a $7.44 trillion, they're keeping pedal to the metal even as we get these extreme conditions to the easy side in financial markets, All right, here's what I'm looking for. Today. 10 AM US February, University of Michigan Sentiment survey. We've seen things kind of flat line a little bit. Kind of go down as people reassess how quickly we can get that opening how quickly they can get back out and go to restaurants and go to malls. Then in 11:15 A.m., Joe Biden president and vice president Harris are meeting with governors and mayors. It is a bipartisan group. They're going to discuss the infrastructure plan that they say that they have on tap after they pass his initial round. Stimulus they're talking about in Washington, D C. And today I find this really interesting. Janet Yellen, now with her hat as Treasury secretary, will be joining a Fed chair Jay Powell. Her first international meeting. She's representing the U. S. At a G seven finance ministers virtual meeting. She's going to take a very different tact than the Trump Administration in terms of international cooperation and trying to support economies, perhaps the developing world more than Trump lead on John just email in Stan Fischer. Save. It gets response in this show just to settle this. This is great. No, it would seem, he says himself. He understand how we sell an argument. Do you look at Bonnie of moves in percentage terms or basis? John when he was vice chairman of the Fed, I stood by. I sat behind him, rather at the Economic Club of New York. The chicken was lousy and stand. Fisher was viscerally engaged. In this fixation on yield and not movement of yield. That, too, is China and you've been on a LA week and I know you'll lead with on the real yield this afternoon. This is a huge move in the two here, you know, I was gonna lead with the asset shortage a little bit like to run. Actually, I'm gonna get to the price action of this morning. Just quickly. Thank you. Tom Equity futures down about 78 points of the S and P 500 were down 2/10 of 1% in foreign exchange euro dollar. 21 07. We come in about 2/10 off a 1% there and in the bond market have to say we saw a new high for the post pandemic period of 1 1981 in today. We saw that on Monday since then kind of stable 1 16 15. Very much in line with where we closed last Friday some. Yeah, we are. But the real yield, you know, John show you gotta watch this afternoon, folks. Negative 1.4 with all of this, John. The real yield really hasn't moved in for a lot of our guests. That's critical. Let's start that without guests this morning. Jay Pelosky of T P W advisory founder Principal Jake right to catch up, sir. Early Born a few too. Thank you Shared it. Thank you. Very happy to be here too. As early the normal beer. Thank you, sir. Let's start with you. It's why high yields good for the second market. Yes. Yeah, it's a good job because it suggests that the vaccination processes working that the economy is reopening that people are gaining confidence in therefore, money costs a little bit more. The whole pre glued here is all about how cheap money is. The fact that money is going to get more expensive is a good thing. Think of the counterfactual Vaccinations don't work. Economy doesn't reopen. We have negative yields in the United States. We have deflation. Is that a better environment for investors or for the economy or for the country? No, So to me the secret of investing success. Over the next six months is to not pay any attention to this whole debate. J. You have been wonderful. And this goes back to your Morgan Stanley days of an optimistic cast. Ron Temple was just on with Lazard and agrees with you that all of these signals are constructive signals for.

Coming up next