19 Burst results for "Paul Karen"
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"And right now, the S&P 500 it opened lower, it's down one and a quarter percent on 49 points, the Dow Jones Industrial Average down 1% or 340 points. It's at 32,815. The NASDAQ down 1.6% or 184 points at 11,404 and again the S&P 500 down one and a quarter percent at 39 62. Ten year treasury down 1930 seconds, you have 3.95% that yield on the two year 4.79%, nymex crude oil is down 1% on 75 cents at $74, 64 cents a barrel. Comics go down four tenths percent or $8 20 cents at 1818 50. The Euro one O 5 four two against the dollar and the yen one 36.3 a Tom and Paul. Karen, thanks so much. Paul Sweeney and Tom Kean on a Friday and now a very important conversation. We do this with the yield lifting up as Karen just mentioned to four digits ten year yield 3.9569 and rising, we're going into the 10 a.m. data housing and Michigan, and I'm really, really watching that statistic, the Dow down 400 points to put things in perspective. This is maybe the conversation of the week for those of concern of inflation, who are not quiescent. And this goes back a long way to freshwater economics to the giant of my childhood Carl bruner of the university of Rochester and a guy named Meltzer out at Carnegie Mellon and all other thinking, pushing against fed theory of the shadow open market committee. Providing leadership for their for years was Mickey Lee. Now with barenberg capital markets and we're thrilled doctor levy could join us this morning. Mickey, I'm going to cut to the chase. M two is back in Vogue again, even among those that have pushed aside monitors theory. After the Biden stimulus and the M two crash, what should be the appropriate theory for chairman Powell? Well, Tom, I think you're right on because the combination of the excessive fiscal stimulus and monetary stimulus is what drove excess demand in the higher inflation. So when I think back to 2020, that's when I started signaling watch out inflation is going to come more back and the fed model you plug in an extra 2 trillion in fiscal stimulus in Biden's March 2021 package and it didn't even move the dial on their inflation forecast for their economic growth forecast. So we have this huge bulge in household disposable income, a large portion of which was spent. Some was saved and now it's still trickling out and meanwhile so you had a 6 and a half. $1 trillion bulge in M two and now people are spending it and now you have the situation where inflation is high and I know we're going to get to this, but let me just emphasize one critical point here. Everybody's focusing on the funds rate. Guess what? It's still below the rate of inflation. So Tom, if the funds rate is negative in real terms, is monetary policy really, really restrictive now? Very good. That's important. That's a Mickey Levi. Jump in here. That's the doctor levy. I used to know. So Mickey, I mean, given the inflation data we saw today hot pretty much across the board. I guess you could characterize it. That gives plenty of leeway for this Federal Reserve to go higher for longer. What's your call on what our Federal Reserve is going to do over the next several meetings? Paul, here I have to distinguish between what they ought to do and what they're likely to do. They ought to move 50 basis points. That's what I wrote in a report last week. And once again, they should be focusing on the real funds rate, not the nominal funds rate. And so they really shouldn't move 50 to reinforce their inflation Biden credibility and to slow aggregate demand in the economy. Once again, note with today's number, you've got nominal GDP is growing way too rapidly even through Q one. What's your nominal GDP statistic right now? This is important. What's your nominal GDP number right now, doctor
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Tommen Paul. Karen, thanks so much, president out of the headline as we get towards the election inflation slowed last quarter. Energy prices coming down. Paul, I did a study this morning. I can't remember even the context. U.S., food inflation, September, up 11.3%. You go to supermarket, go to a restaurant, it's just extraordinary. I'm like, are they making fewer chickens or fewer? Visited us from Chicago today with Stifel. She was blistering that the east coast does not understand how selected parts of this nation are flat on their back. She was blistering. Right now, and this is a joy because of the competency in bob Paul. Why don't you bring in the absolute best on technology? He's okay. I mean, on a rock run, Bloomberg intelligence senior technology analyst mandeep Singh is also out there doing it for Bloomberg intelligence. I used to think these guys were really, really, really smart. But I don't know, this week, we had some really disappointing numbers out of the technology companies. And on a rock, I'm gonna have to ask you to give us a sense of what's going on out there. I mean, is the technology story? Is it overplayed? Was it just a tough quarter? Was it just a currency issues? What's your new view or updated view of kind of what's going on out there in technology? So I mean, the way I look at it is I think when you went to this year, our last 6 months analysts did not update their estimates as much in my view as they should. So I think there was a shock on the top line that some of the business lines are slowing. But to me, the biggest issue has been that surprised me has been is the way inflation side effect in terms of the higher energy cost and higher wage inflation for cloud related businesses, which are hurting the operating margin and then overall profitability, which we saw in Amazon last night. No reason from your perspective on Iran to maybe think that Wall Street may rewrite these stocks maybe accord them a lower multiple going forward. Is that a risk do you think longer term? It's already done. In my view, Paul, I mean, if you look at each one of them and frankly speaking, if you look at the ten year hovering around 4%, some of these companies may not be able to show that level of you could say high double digit growth this year. But frankly speaking, if you look at over a two to three year Verizon, we think that demand comes back. The end markets for each one of them are so strong that it's just a matter of time when this demand comes back. And we saw this during the pandemic. Things were much worse in terms of the top line during the pandemic, but only the kicker at that point was that the wage inflation wasn't that high. So they did not get you could say beaten up by both of the top line as well as the bottom line. But in this case, we are seeing that. Tell me about cash in buying at the bottom. Like are they sitting around having a cup of Seattle's best coffee at Amazon today? Going, we've got to rapidly increase our buybacks or literally do a Dutch auction since we're down. I don't think Amazon would go in that in that area, but I think apple is doing a lot more of that. I think when you saw last quarter in the yesterday, we saw they bought more stock than they did. I think in the last 6, 7 quarters or so, they spent close to $89 billion last year buying back stock. That is just monumental. I mean, I can't think of any company that comes even close to that that generates close to a 100 billion in free cash. I know you and mandeep Singh and your technology team at Bloomberg intelligence do a lot of work on kind of the industry demand dynamics. So as we go into a recession, what is corporate America do in terms of their technology spending? Is that something they can really cut back on? Is that a concern for just kind of global tech? Yeah. So I'll talk about two different things. One is a massive shortage of labor and technology. That is going to force companies to embrace more software and outsource more work. So that's very good for the tech industry. Now, having said that, next year, we're going to see tech budgets flat to slightly down, which means they're going to not upgrade a lot of the non-essential work. But this is going to have an impact on tech spending. So it's thought that it's not going to happen. But the argument that I'm making is areas such as security software, cloud computing actually helps people to save money in the end. One of the biggest arguments I would say is when you look at Amazon cloud services, they slow down because they're clients were able to dial back on their investments. Imagine if these clients were on their own data centers, they could do that. It will force more companies to shut down their data centers and go to the cloud. If you take out foreign exchange, do they have blowout quarters? I mean, the numbers on foreign exchanges just extraordinary was strong at dollar. If you X that out, how well did they do? I think Apple did phenomenally. Well, if you take the FX out it did far better than what I was expecting. Amazon? Amazon's cloud business did slow down. So you can't even if you talk about FX and not their international business though, a little bit better, but the consumer international is really stressed out right now. Eric, thank you so much, congratulations to your team on just world leadership here on technology here in the heart of a tech week pause. I mentioned the dilution and Credit Suisse before. And I'm sorry, I have to readjust how I think of strong dollar foreign exchange effects. On corporate investment because what folks, I can't emphasize this enough, where we are now, I've never been. Never seen 7 8 9% currency adjustment. I don't know what to do with that. Yeah, I mean, this strong dollar has just been an extraordinary story in it as you and I have talked about a lot time. I mean, where's the bare case for this U.S. dollar? Now, a lot of FX strategists have come in here and said, you know, we are at or near peak, a dollar, but I'm just not sure what kind of pushes this thing down materially, given where we know the Federal Reserve is going with rates. So we'll have to see. But Tom, if you want to go back over to Paris, you're below parity. But the plane flight is above Paris. Okay. It's up a lot. I mean, the plane flight's just not giving it up. They're selling every seat. The Dow up 429 points. NASDAQ up almost 1% confounding the gloom. We saw yesterday afternoon. We survived the gloom of the week with our producer. It's Truman, Ken fellow, is our global technical director. This
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Bloomberg would bring up to Washington D.C. to Boston Bloomberg one O 6 one to entrance this go Bloomberg 9 16 to the country Syria's XM channel one 19 and around the globe the Bloomberg business app in Bloomberg radio dot com This is Bloomberg surveillance And good morning I'm Karen Moscow along with Tom Keene and Paul Sweeney and the S&P 500 ish lower at the open down 14 points at 41 44 that's done about a third of a percent The Dow Jones Industrial Average down 7 tenths percent or 223 points at 32,982 And then Alistair is a little changed at 12,124 Ten year treasury down 24 30 seconds Yale 2.82% the yield on the two year 2.53% Nymex crude oil is up three and a half percent at $4 at a $118 99 cents a barrel And comex gold is down a tenth of a percent or $2 30 cents at 1855 ounce The Euro 1.0712 against the dollar the yen one 28.54 Bitcoin is higher up one and a half percent at $31,700 Tom and Paul Karen thanks so much Greatly appreciate it World's been can we say can we pause here Sure Staggering in the June The best day to check in the world Darren Moscow No question Across equities bonds currencies come on Which you like to do best Karen And she may be I like them all I'm an equal opportunity with all of them Now they're all good All the numbers Now she does Bitcoin She does crypto too That's what she said That's a new arrow in the quiver 32,000 rounded up It's bottom Oh yeah okay You buy below $30,000 Sensitive topic at Davos Yeah there was some conversations on it to say the least right now David Balan with us City global wealth chief investment officer in always a treasure to speak to David the simplicity is after last week have we seen a bottom in the equity market but rather than that silly question how do markets form a so called bottom Well I think in many ways they form a bottom after they reach an extreme time And it sort of known extreme where they have gone too far And there was a moment a week ago Wednesday when we saw the equity market almost look like it was capitulated It was down the SB was down 20% for about 30 seconds And that could have looked like a bottom But I think it's difficult to call the bottom also until you have all of the facts in there are a few major things that are still to come that I think could make them equity markets go lower And that's what the market is going to be worried about And those are quantitative tightening We've seen interest rates rise substantially We've seen people worried about the fed and what they're going to do in the future in terms of the number of rate rises to deal with inflation but people have not been talking about quantitative tightening they're removing liquidity from the markets And that's still right in front of us And then ultimately we also have to go through a series of earnings revisions in four equities for companies because right now when you look at earnings analysts are still expecting to be up 10% this year and 10% next year and that seems highly unlikely to me Talking about a soft landing which I think is what this administration this Federal Reserve would love to navigate towards How do you think about that Is that something that is reasonable or do you think stagflation slash recession is kind of inevitable here Some people thought maybe even prior to last week maybe Yeah the issue that the fed has is it's using conventional forces to fight an unusual enemy right Because the nature of what we're talking about are two types of inflation rate two events the pandemic and the war and the inflation that it's caused which are largely in food prices and energy prices is really not much that you can do to make wheat come down in price or oil come down in price by raising rates You can destroy demand in order to reduce prices But that's going to be a very slow process So in order to have a soft landing you need a fed that's patient and you also need the willingness to accept that as inflation data begins to trend down You've been gently let's assume that the rate at the end of the year was 6 and a half percent that they would be satisfied with that And I don't think the evidence is clear at all that they will be What do you do with big tech because if I partition any given companies into those with free cash flow profit making they have a story out three years or 5 years away from all the uncertainties right now there's other companies that do not have those attributes How do you study the two in partition between profit making and nonprofit making tech It is the hardest thing to discern time because what you're talking about is exactly of course first of all the discount rate is the interest rate And if interest rates stay where they are they come down a little bit Now we're going to begin looking again at cash flows And what you have to do is you have to believe that a company is going to be able to sustain its growth rate whether it's 15% or 30% And at some point right it's cost of client acquisition and everything else becomes less relevant And you can actually envision what that cash flow is going to look like What the company will look like For those companies where there's a higher degree of certainty they're going to get a premium and for those that have been paying for their growth through the expenditure of a large amount of money to acquire clients So those companies are going to continue to do poorly But what I would say overall is that this is an environment in front of us that actually is going to be more favorable to tech than really than we have seen in the last obviously in the last 8 or 8 or 9 months because prices have normalized to a very sizable degree It's been a very significant here But if you have a three year vision in power help me here a run rate on some of these profit making Texas 12% revenue growth Plus 12 is 36% Am I right David I'm modeling out a three to 5 year Citigroup guestimate with a cushion of 36% revenue growth Well I mean that's right And what's interesting is that that's why this idea that we're having we're going back 30 years to the bubble 2002 makes no sense because the probability that you're going to see those kind of growth rates for some of these companies is pretty certain because instead of spending on typical capital equipment they're actually spending on tech and you can identify these things in a variety of spaces Whether it's whether it's cloud whether it's cybersecurity certain of the payments companies there's a high degree of certainty that you're going to have very considerable growth rates The question is can they can you see profitability Can you believe real substantial cash flow generation And for those that you can I agree with you I think they are buying So David what do you tell cities wealth clients.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Need to thank you That's a Bloomberg business flesh Tom and Paul Karen thanks so much again dab 400 points here on a nice lift This morning pulse reading and Tom Keane and with us now to provide American clarity Michael McKee in charge of all of our economic coverage as well Michael the last month was sort of like gloomy one negative statistic boom a big revision Can you trust the retail numbers when they come out Or do you have to be an adult in wait 30 days or 60 days It depends on what your job is If you're at the fed and you have a meeting this week which they don't but if they did then they would have to go with the numbers that they have But retail sales are always heavily revised And we just had this month an additional revision because they did the annual revisions where they go back and update with newer data to fill in all the numbers for the past year What do they get wrong They know what the sales are at Walmart Well they sort of they sort of know but it's just what is reported by the retailers And if all the retail numbers don't come in on time and they don't which is why we get the revisions every month then they go back and cross check them at the end of the year and redo that So we had a big jump in the month of March All right Mike I get some real time inflation data from one Ken fellow He's our global technical director but he's also He and his wife are the bakers Yeah they are And so he shows me what he pays for eggs flour butter I mean it's up three X four X just over the past 6 months That's real inflation How does a consumer not just get crushed Well it's interesting We are not seeing evidence of the consumer getting crushed yet Gasoline sales went down this month but they have been they have moved up to around 10% of what you're spending And food sales have been above 10% But they have come down a little bit as a percentage of overall spending So maybe people are cutting back or buying cheaper stuff at the grocery store I can't imagine Kenner his wife would be buying discount flower and sugar but the two categories are taking up about 20% of what everybody's spending but we haven't seen significant weakness in other categories yet The kind that you would think you would see Is housing a rent a retail sale because you're talking about 20% of our paycheck is baking goods and eggs and the rest of it But part of that is the monthly I got to live right Housing is not included in the retail sales It is starting to We're seeing sales decline we're seeing mortgage applications decline in the refi market is completely dead So with mortgage rates at 5 and a half percent you're seeing an impact Right I did Faro was going on giving us a lecture on British football or something and Paul I took a 30 year mortgage at 3% or at the present 5.42% That's real money And it's like real money like up a third The new mortgage payment You know every for sale sign that gets put in the ground in my town New Jersey It's under contract It's not even for sale But they got to put the sign in the ground I guess And they put it because everything's under contract before it comes to market Now I'm starting to see for sale For a week Two weeks That's going to start happening And we're kind of getting out of the prime spring selling season But you are going to see that happening because people are going to be more reluctant to move especially the first time homebuyers who don't have as much money are going to have a harder time coming up with extra each month if the cost of the house goes up because of the mortgage payment Over the weekend demand destruction in airfares clearly the airline said clearly domestically there's a new lessening of air force That jumped out at me boy Wow But I don't know if you've been at the airport lately You're going to fly off to Davos I wonder what's the demand destruction Yeah he can go private I mean francine gave it to me this year which is great But seriously Mike are you seeing demand destruction in the categories of our economy Not yet but airfares air travel is going to be a service so that will come out in the PCE numbers at the end Air travel is a service Yeah Really Yeah haven't you been flying into the services fantastic You might even get a cup of soda or something I don't know It was a stewardess come up to me They're flight attendants And I was having a beverage of my choice And she wanted me to put the mask on again You don't have to do that anymore Yes Most people on the planes that I flew on over the last couple of weeks were wearing masks Yes Yeah And the subways are probably 50 60% mast even though it's supposed to be Did you see this story that Eric Adams mayor of New York City is challenged Jamie Dimon to start going to work on the subway Really Because he said we need to get the leaders showing that if they want their employees to come back 30 seconds other than chairman Powell which fed speaker today is of interest to you You know it's kind of interesting Most of them have spoken Neil kashkari hasn't spoken as much So maybe we could argue he's somebody just to get his overall bullet right Well they all kind of are and that's the problem here People say well who's a hawkin Who's done their all hawks right now And for the next two meetings at least there's no difference between any of them So I don't think you're going to learn a lot We got to wait for more data since they've already told us two months out Should I start planning for Jackson hole Sure Is it going to be a big deal this year Well it's just your charges last year as hosts so it could.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"O three 7 one against the dollar the N one 29.28 and yes still watching Bitcoin It is up more than 7% at $30,600 now Elon Musk causing chaos over his takeover bid for a Twitter first claiming his bid was on temporarily temporary hold and then maintaining he is still committed to the deal sending the social media giant into a tail spin shares are currently down about 11% right now That's a Bloomberg business flash Tom and Paul Karen thanks so much Paul sweetie and Tom keen in New York and we welcome all of you across this nation around the world in a particular welcome to those in the Middle East Joining us now is someone who is a sister so much on an understanding and my travels to Dubai of the greater Middle East in particularly the Persian Gulf Christopher Davidson is the scholar on UAE on Dubai and Abu Dhabi and of course is important to work from sheiks to sultanism statecraft and authority in Saudi Arabia and the UAE with the Henry Jackson society as an associate fellow Professor Davison thank you so so much for joining us here on the death of the leader of oil rich Abu Dhabi Shik Khalifa explained the importance of his passing today Well many thanks Tom and Paul for having me today Yes this is a very important day in many senses It's business as usual given that Shakespeare's younger half brother Muhammad bin Zayed The Crown prince of Abu Dhabi will fairly soon succeed in as ruler of Abu Dhabi but there are two important dynamic side by side here Of course is the oil rich the wealthiest of the 7.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Quick take This is a Bloomberg business live And I'm Karen Moscow stocks are dropping amid concern over how much the Federal Reserve will have to boost rates to tame decades high inflation without throwing the economy into a recession We check the markets every 15 minutes throughout the trading day on Bloomberg Right now the S&P 500 ish down 1.9% down 76 points at 40 46 the Dow Jones Industrial Average is down one and a half percent or 497 points at 32,403 And the NASDAQ is down 2.2% or 262 points at 11,884 ten year treasury of three 30 seconds yield 3.11% The yield on the two year 2.63% Nymex crude oil is down 3.1% on $3 40 cents and a $106 36 cents a barrel combs gold is down 1% or $18 90 cents at 1863 90 announced the Euro one O 5 three 5 against the dollar the end at one 30.88 British pound 1.2326 and Bitcoin this morning is down almost 4% at $32,880 That's a Bloomberg business flash Tom and Paul Karen thanks so much Paul Sweeney and Tom Keane negative 5 O three a little bit of a deterioration to the tape in the last number of minutes With us now Arthur love at the former chairman of the Securities and Exchange Commission in Arthur with the miracle of the Internet I can go find photographs of Arthur levitt and Alan Greenspan acting serious you know very important photographs Here's one of secretary Paulson chairman Greenspan Chairman Volcker chairman leavitt and somebody else I can't They did this photographs out there Players of players standing there dealing with and menu factoring credibility Arthur levitt we are so far from the traditional way a Central Bank manufacturers credibility What happened Well I don't think the fed stayed up with the times apparently I think this is style as much as anything else Yeah Arians remarks Suggests that the chairman of the fed simply doesn't do it right He said that you can't come on TV and speak about uncertainties and then rule out a certain policy response And his overall pitch is that we don't know enough about the path of inflation To rule out any of this action This is of course Muhammad el Arian of the University of Cambridge and someone who's thinking about the financial system each and every day Is there too much information about chairman I mean Paul Arthur levitt when he was at Williams quill dripping it in the end The whole thing worked just fine It worked just fine back then But Arthur we moved on from the quill and then the miracle of the ballpoint pen to 24/7 news cycle How are people like you supposed to adapt to that I mean the most extraordinary I think it takes it adaptation on both sides on the presentation and our ability you and me to interpret intelligently matters that wouldn't stand the test of understanding by themselves And I think we've come a long way on that But the notion that the chairman of the fed has a credibility problem is a very serious indictment of both the chairman and the process And Arthur you know I guess the case can be made that the credibility issue to the extent that that has one started maybe or certainly had his origins perhaps in the fact that they called this inflation that we're experiencing transitory Boy was that wrong Yes it was wrong And when you get inflation wrong on either side the credibility of the spokesperson in this case the fed chairman is really at issue As I thank you so much That's a love it with us Former chairman of the Securities and Exchange Commission today here on the new credibility The credibility to me in Allen Greenspan was so good at this Paul is the market is way important to the behavioral construct of the financial system Do you think this is really important Paul's enjoyed this more than me Do you seek catharsis on the Bloomberg screen I don't I don't I mean we've had you know last week a lot of folks were suggesting is that capitulation right there We had some big big moves It's a pretty big volume Some of the good earnings stories kind of just got steamrolled by this market But again it seems to be until I think one of the issues might be when we some of the inflation reads over the next couple of months we start to see that coming down that might be an area where we might find some support Their research led this week in Paul by January as a Goldman Sachs looking for a much more constructive inflation front into the autumn as well I look on the screen Paul at two things to measure the catharsis What is gold down $20 today is giving me no love on catharsis Any other Euro Swiss E which has gone one O one O two O three and rounded up 1.05 is anything but speaking of fear And I folks I get it down negative three 46 the vix 33 way above that 30 statistic But I just don't see the angst out there yet No I'm not sure I haven't had the cab driver talk to me about the markets recently I've had the true shame Where's the market going Are we at the bottom here but you mentioned the dollar the DXY index boy that's had such a move here where one of three point 7 9 6 we did touch a one O four today So dollar safe haven There's definitely concerns out there and whether it's geopolitical with Ukraine and China Or the Federal Reserve we think we know where they're going As well as the lingering inflation Tangential things there are India coming out early this morning with some form of intervention the leadership.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Up a dollar 61 at a $109 88 cents a barrel combs gold up to 10% or three 70 cents in 1879 40 announced the Euro 1.0585 against the dollar The yen had won 30.50 Tom and Paul Karen thanks so much Paul's really in Tom keen on this Friday It's a Friday I'm going to do a lot of reading this week I just got to catch up It's going to be a rainy weekend It's a good time to stay in and just read Just read there's a terrific article in Finland that I'm going to go over because I'm pretty much ignorant there other than the cigars and Helsinki are very good Report that to you right now it is a perfect time off of a good jobs report if not a very good jobs report with a 90 day moving average of non farm payrolls Paul with revision 535,000 Fantastic 5 years ago ten years ago we would have killed for that The optimist joins Neil duda with the renaissance macro this morning You know how does this job report reaffirm your congenital optimism on the American experiment Well it just shows the continued strong labor market dynamic I think at the margin it was kind of Goldilocks like solid jobs growth the unemployment rate was flat Wage growth moderated a bit I think this will take off talented and do it already It will clip a lot of the potential hawkish tail risk outcomes around the fed No one's really going to be talking about 75 basis points anymore after this report So I think it's welcome And I think some of the details under the surface were encouraging right Like manufacturing employment is booming So the good side of the economy looks pretty healthy and that tends to be more cyclically sensitive What do you think about wages going forward here It seems like when we get down to these unemployment rate numbers it really suggests that the pressure is mounting to really push wages up How do you think about that in the context of the overall inflation we're seeing in our economy Well wait has it been so strong in certain industries as it is And you're actually beginning to see some of those industry start to moderate somewhat So like leisure and hospitality it's still quite strong but it's not nearly as strong as it was several months ago The same can be said for retail trade But I do think as participation rates I know we don't have a good month for the participation rate this month A lot of that was just a function of the younger workforce I believe But if participation picks up and more people are looking for work that will make the those that are already working less tempted to quit their jobs Kind of switch from one employer to another And that should take some of the.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Into a competitive advantage An SCI C dot com slash IMS So stocks are lower at the open The S&P 500 down 1.2% on 50 points at 43 34 Dow Jones Industrial Average down one at a third percent or 404 130 points at 33,627 and the NASDAQ is down 7 10% or a hundred points at 13,595 Ten year treasury of 22 30 seconds yields 1.88% They yield on the two year 1.46% Nymex crude oil is up 3.7% of $3 33 cents at $94 90 cents a barrel Comb schooled up one and a half percent or $28 in 1915 50 an ounce The Euro 1.1211 against the dollar the yen at one 15 .32 Bitcoin this morning moving higher up more than four and a half percent at $39,130 And again the S&P 500 now down more than 1% Tom and Paul Karen thanks so much I appreciate that Pulsing in Tom keen here was on the markets Christopher Santi MAI capital manager of value and growth evaluation as well Chris how you doing I mean with the news flow it's been extraordinary Do you get under the desk and just change nothing or are you actually doing something Is that your way some of asking are we having fun yet No it's not the question of fun but it's a war What is a guy like you who's measured do in a way in all serious style We go back and look at the historical precedent and we took about a dozen geopolitical events all the way from Pearl Harbor to the present And they really have no long-term relationship on the stock market They're obviously grabbing the headlines I think they're presenting some opportunities over the last week although we've actually been pleased with the strength in the S&P over Thursday and Friday when the invasion started So I think it's coming at the same time when the fed is about to raise rate and investor sentiment is extremely negative All of those things are good contrary indicators and we think in the short term at least it's not a bad time to put the money away So Chris one of the things that's really jumping out at investors here is the global energy complex looking at Brent crude at north of a $100 a barrel here How do you see are you surprised or that we haven't seen a big influx of supply into that market Yes Paul I think what's happening is there's a crisis moving oil But I wouldn't buy that I would say the next move on the chess board is for example you heard Germany over the last 24 hours saying hey we may not close down those nuclear plants And my bed is even moderate democratic politicians will be much more open to less regulation in the oil production And so we're going to see spigots open everywhere from Saudi Arabia to the United States and then alternative sources being used all over the world What are the common themes Chris one of the common themes this morning is it's holding up the market as earnings resiliency Does that earnings resiliency continue Even given caution on what economic growth will be You know the honest answer Tom I think so But we're seeing stuff this morning and over the last 72 hours We haven't seen before The ruble is down 30% The Moscow market is closed Ukrainians are keeping up the fighting So there's a lot of unknowns here that we haven't seen in other crises We've never tried to isolate such a large economy in such a forceful way before And I'm quite afraid of unintended consequences But having said that I think the most likely scenario and one that investors are currently overlooking is that there is terrific earnings resilience in the United States now The consumer is strong omicron is going away So I think the base case is that stocks move higher but there's a lot of uncertainty So Chris again given some of the geopolitical risk which is something many market participants you know having really had to calculate recently what segments of the equity market do you think investors should be exposed to Well I do think there's some defensive names that we like right now that are getting beaten up that things have prosaic as Domino's Pizza or Dollar General These are names that are down 20 30% yet ought to actually benefit from a more cautious economy So we like how that's setting up And we also like the travel of the whole travel segment with all the way from Disney to Boeing And we think they're getting hit quite hard right now And I think this will be a blip that will be seen as an opportunity month for them If you're just joining us Chris cassander with us MAI capital pulse medium time keen on Monday Market down 450 points 32,600 on the Dao SPX down 50 points call it four threes three four the vix was a 33 level actually not too bad right now 31 versus the glue of earlier critically Russian ruble has just broken out again to new weakness not through where it was at 4 a.m. this morning but the pricing on ruble right now at one 11 is important to note One 18 is a critical level We're nowhere near that yet on week ruble Chris what do you do with big tech Ana rug Rana of Bloomberg intelligence and his team they write a brilliant essay this morning on cloud margins There's enough in it for all Are you long big tech after they've been beaten up Yes Tom we are But I would say not uniformly What I would say is I'd like to use the phrase it's a Jerry Maguire market that doesn't remember that movie Show me the money So you've got Google and Microsoft that are really showing the money in a good way where you had Facebook really disappoint and have some serious questions about the viability of their growth So I think you have to be choosy but I think the model still works is definitely not broken and this is not 1999 when you had that when you didn't have the cash Now you have the money and I would follow them on Yeah yeah I'm just reading right now You pull it up There's a lot of numbers in there A lot of numbers Once a year he doesn't Exactly right Chris I mean I'm looking again at oil at north a hundred bucks a barrel for Brent crude is the energy trade played out or do you think there's more room to run here You know it's so hard to predict But what I would say is you know there's a lot of investors that want to buy oil at a hundred that didn't want to buy it assist And what I would say is if you look down the road a little.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Com slash IMS The S&P 500 higher at the open up 1% or 44 points at 44 45 the Dow Jones Industrial Average up 8 tenths percent or 292 points at 34,855 The NASDAQ step one and a half percent or 204 points at 13,991 The ten year treasury down 1530 seconds the L two O 3% they yield on the two year 1.58% Nymex crude oil is down four and a quarter percent on 4.8 cents at $91 41 cents a barrel Comex gold is down 8 10% or $14 70 cents at 1854 80 an ounce The Euro 1.1350 against the dollar British pound 1.3529 and the yen is at one 15.70 also continue to watch Bitcoin It's moving higher at $44,250 And Tom and Paul Karen thanks so much We're going to get to Fred lane here in a moment lean generational but the headlines are too critic a lot of Moscow Mister Putin this is a strong headline What's happening in Donbass This is eastern Ukraine Up against the Black Sea is genocide again what's happening in Donbass is genocide But Paul farmer importantly is a headline Putin partial troops pull back decision has been made Yes So we moved from the speculation of that to an overt statement by the leader of Russia Yes and that is good news certainly and we're seeing that reflected in the markets Let's bring on Fred lane Tom he's lane generational founder and CEO He's been in this investment game for decades which means he has perspective and that's clearly what we're looking for in these markets here Fred thanks so much for taking the time to join us here very busy times of course Give us your sense as we start this 2022 It's been a rocky January a little bit more stability here as we come into February How are you thinking about these markets here How are you thinking about risk assets here Well it is no question it's been rocky Any investor who's active in the markets and looking at price discovery is seeing incredible levels of volatility You can see stocks move one or 2% upwards or downward or more in a day Well as we put it we see a year's move in one day And so it's pretty amazing to see really good stocks down 10% 8% And when I'm talking about companies with market caps of three or $400 billion And I'm not talking about companies that are unprofitable that can't generate cash flows or have a kind of have a questionable business plan or only with great growth Will they get there I'm talking about pretty solid company So you put that together with inflation and you put that together with probably are we going to go back to work or not Are we going to mask or unmask And I think just think there's a tremendous amount of uncertainty And then we hear more and more about the fed And everything the fed is doing which by the way is mostly bark and very little bite They continue to buy bonds the balance sheet remains at over 8 trillion up from 4 trillion at the outset of this about a year ago actually And we look at 2019 the S&P was up 28% 2020 up 18% 2021 up 20 It's no surprise here that this market has to take pause and people have to look at and look at what is the geography look like I don't think anything has changed in terms of growth stocks Okay but Fred was so important here Is it lane generational where you're actually running money in We have friendly non folks who deal years ago and Raymond James investment banking dotted out but here's a guy actually saying to people you got to stay in the market It's sort of the same now How do you find the courage to participate in the market rather than listen to the fears coming out of my mouth Well listen it's a lot more interesting to listen to provocative ideas and fear and so on than it is solicit someone assisted stay the course Davis course stay the course And by the way we don't totally stay the course I want to explain that we actually did pull out of the market in February of March of 2020 And we sat in the sidelines with 40% cash during all of that year and still outperformed the market by a lot I mean we basically returned almost double the market with 40% cash It meant we own the right stocks 2021 We made the mistake of not going back into the market so that hurt us a little bit And then we went in late under basically capitulating and that hurt us a bit too But the fact of the matter is it's very difficult to time the market What can do however is look at individual holdings and gauge whether or not they're overvalued The S&P 500 has been a very distortive index as we all know over the last two or three years because it has been so dominated by several large cap tech stocks 5 or 6% of them accounting for 25% of the market value When those rollover as they will at some point and have to some extent that's going to hurt the index But there are an awful lot of companies in the S&P 500 in the Russell 2000 that are actually down over the last 12 to 16 months And when you look at those companies you need to dig in and what those companies do and where they now are at values that weren't available a year ago And maybe weren't available 6 months ago or three months ago So we're very active managers We're looking at specific holdings with the view that are interested in high margin companies would have a very defensible market position preferably a leadership position in a sector which is not only growing rapidly but does not rely on cost inputs from commodities and energy and things like that because obviously if they're basically intellectual property driven companies those inputs don't matter don't matter anywhere near as much And so they will not be impacted by inflation and they have pricing power as well So Fred that sounds to me like technology like healthcare What are the sectors that you are focusing.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"The S&P 500 is higher at the open a tenth of a percent or about 6 points At 45 ten the Dow Jones Industrial Average of a tenth of a percent or 34 points at 35,275 and the NASDAQ's up to 10% or 24 points at 14,208 Ten year treasury up 7 30 seconds yield 2% the yield on the two year 1.55% 9 X screwed oil is F 1.2% of a dollar too at $90 90 cents a barrel Comics hold down four tenths percent or $7 50 cents in 1829 80 announce The Euro is at 1.1387 against the dollar yen at one 15.90 and Bitcoin this morning $43,700 And Tom and Paul Karen thanks so much Ten year old 2% two year yield at 1.55% is well inequities with a modest lift here on the opening Dow up 48 points And the way I've been measuring this for 700 points from down 36,000 and the Vic's 23.74 which means Paul we need to talk to somebody with historical perspective And the charm of young stove all is nobody of his generation has the history that he does Sam what does your world do When the yield curve goes flat or inverts What happens to equities Well good morning Tom and thank you again for a nice intro Well I think when the yield curve flattens and then looks to invert then I think that you've got to prepare yourself for a slowdown in economic growth most likely a recession and certainly something that would look smell and sound like a fair market With inflation high nominal GDP or at least good de revenue sustain and as that stay save your Ford 5 star stocks Well I think that the four and 5 star stocks are basically on a relative basis which ones are going to outperform the market But if we do fall into a bear market if we do have as a result of an inverted yield curve then defensive sectors are called defensive not because they rise in price but rather because they lose less than the overall market So I think it's more a matter of relative outperformance in an underperforming absolute environment Sam we saw a fairly historic CPI print yesterday 7.5% annualized inflation What did you take away from that number Well I took a way that it was a bit higher than our expectation of 7.3% And as we had been warning this is probably not going to be the peak We're not going to be on the leeward side of this inflationary bubble until most likely march or into the second quarter and that when we look to headline CPI probably see about 7.8% for the February reading and that we could also see about 6.5% for the core reading which won't peak until February or March as well And how do you think that's informing where this Federal Reserve goes The market we started with a three rate hike this year now some folks are calling for upwards of 7 How do you think our Federal Reserve reacts to kind of maybe what we saw yesterday and what we're experiencing in this economy Well I think what happened was that yesterday the market was surprised by the CPI but then battered by bullard Because fed president St. Louis fed president James bullard said he could see a one percentage point increase by July 1st which implies at least one 50 basis point increase And I think that while some people were thinking that we could have 1% it would be for all of calendar year 2022 not simply in the first four months The CFR we continue here Right now equity is a modest lift fraction I'm going to call it a churning market off the tension scene Yesterday and even in the early this morning the vix 23.93 Sam what are the banks do I mean we got yield curve gyrations I know you're on the phone daily with diamond moynihan the rest of them Garmin All the rest What are the banks going to do Well the banks actually did fairly well yesterday because we have not seen the narrowing of the yield curve But if we do end up seeing a flattening of that yield curve banks are among the worst performers looking at the sector performances in the 1970s if we think things are going to get that bad and we don't The worst performing groups were your growth oriented consumer discretionary and technology but also financials was right down there with them because of the flattening and inverted yield curve But Paul helped me or Paul check in here Sweeney stove all right now How do companies do poorly that have 15% revenue growth You know I think some of them it comes to the cost side and really being able to manage their costs and some companies don't have a lot of control because they have a lot of commodity exposure But it comes down to management We look back at that And Sam we think about that Tom talks about 15% revenue growth but boy a lot of these companies are dealing with some brutal inflation We're seeing it across the board How concerned are you about earnings going forward Well I am concerned because we're looking now at less than 7% about 6.8% for the S&P 500 and twenty 22 that's a full percentage point below the average earnings gain since 1988 when everybody started looking at earnings before bad stuff also called operating earnings And so the feeling is that we are also on the leeward side of this earnings bubble and even though revenues might look good now what we could find is downward We're going to stop the show here Is this a gloomy stovel It sounds like it No more like a realistic store of all I'm looking for only a mid to low single digit price appreciation this year I think that higher rates will cause or continue to cause PE compression because there is a -.5 correlation between the ten year yield and PEs on the S&P 500 See if I depress this Yeah Well he's just one more question Bengals are ramps help us I'm going for the rams Mainly because of the Super Bowl theory popularized by my father many many years ago Also I like the uniform colors better Explain to us the August mister stovall Super Bowl theory Yes And who are you rooting for Tom I'm going against the stovall theory Bengals But tell us your seriously This was a hugely important deal a number of decades ago Explain the stove all Super Bowl theory Well actually it was first identified by a New York Times reporter named Leonard koppett who wrote about it once and then basically shelved it and said I'm not going to write about it again because it's silly It's correlation without causation But people like things like that So pop picked it up in the 1970s and just continued to write about it So like the stock traders almanac in a sense popularized this too much Stop The world's top for the snowball Super Bowl indicator It was a big deal For well over ten years sim still will thank you so much Greatly appreciate this one It was CFR a there I don't believe I've ever heard Sam stole all that cautious No No You know it's interesting I mean you see some of these interest rate calls that we're hearing from the street here Tom Again we started just a couple of months ago with three When the fed made the pivot and now I'm hearing people that I do pay attention to talking about 7 You know can you do that Michael McKee says yeah it's happened before Math on radios always good Michael I loves meth on a radio but you got the two ten spread And it's basically a straight line flatter Right And then you run it to logarithms And it looks like a cliff It looks like it's falling off a cliff here on a first derivative rate of change basis Nevertheless green on the screen the Dow of 53 points with our news in New York City.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Dot com slash IMS Stocks higher at the open the S&P 500 up 9 10% or 40 points at 45 62 Dow Jones Industrial Average of 7 10% or 235 points at 35,699 NASDAQ 1.2% or a 161 points at 14,357 Ten year treasury up 8 30 seconds He has 1.93% They yield on the two year 1.33% Screwed oil is up half percent or 45 cents at 89.82 cents a barrel That'll change in 1828 an ounce The Euro 1.1432 against the dollar British band 1.3567 and the yen is at one 15.47 Bitcoin this morning moving lower at $44,050 And Tom and Paul Karen thanks so much Greatly appreciate that Post really in time came with our conversation of the day On a measured perspective to the equity market and participating in the American stock market Liza and Saunders joins with Charles Schwab their chief investment strategist Lizanne as you know and I know in Paul knows betting on a consensus is a good way to maybe lose money and certainly not make money Our heads are spinning on an hourly basis over the argument the battle out there even 12 months let alone a responsible 36 months If you're going against consensus now what's the most intelligent path Well first of all I think to be a contrarian just to be a contrarian I don't think ever makes a lot of sense But as I've often said probably even on your program Tom I'm always at least as intrigued by stories that very few are telling versus the stories that everybody is telling And I think the inflation will remain hot and be with us forever story maybe the one being over told And I think a move to lower levels of inflation even if sort of that plane lands at a higher elevation And a switch to maybe we'll be talking about supply gluts Sooner than a lot of people think I think that's the potential story in the latter part of this year that is not being told very often these days We're right in the middle of this earnings period here What are you really looking for when you see some of these big companies reporting earnings What are you listening for on these conference calls What are you looking for in some of the commentary We're hearing from these companies Yes So I think the real key is not so much the results so far for the quarter which in an absolute sense and relative to long history have been good at the start of earnings season 21% was the expected growth Now that's up to 30 even ex energy It's 22 And the beat rate at 78% is strong relative to history although quite a bit lower relative to the past four quarters the rate by which companies are beating which is about 5% Again very strong relative to the long-term history but quite a bit lower than the past four quarters But it's the outlook I think that matters a bit more The profit margin outlook And then just what we're seeing in terms of revisions analysts will behind the curve for the last 6 quarters they didn't extrapolate each quarter better than expected numbers into subsequent quarters and therefore just consistently set the bar too low Now we've got negative revisions about triple the pace of positive revisions And the city net revisions index which you can get on Bloomberg has moved into negative territory So I think that that tailwind is largely behind us And we may not be facing a direct headwind yet but it's that forward looking profit margin pricing power and then looking at the ratio of positive revisions to negative revisions that I think is really key over the next few months I'm looking at WTI crude oil just under $90 a barrel and our good friends down in the oil patch have had a nice run here over the last year or so have they kind of had their day in the centers or more to go on this energy space which has been so out of favor for so long It has except in the past year the energy sector is by far the best performing sector double the performance of the next the number two sector which is financial The not including yesterday's weakness and energy up 70% in the last year relative to again half of that for financials Whether yesterday was assigned that maybe we got overly stretched from a technical perspective from a sentiment perspective overbought conditions That may be a sign in the short term but much longer picture when you look at the percentage of energy represents in the S&P versus periods in the past you could argue there's more room to go on the upside even if we inevitably have to go through a period of pause just because of some of the short term access I mean Paul you and I remember this question Los Angeles is so young She's never had this question Positive term before Was that the ten year yield is 1.93% The Bloomberg showed me SPX at 1.33% Is yield starting to compete with the dividend of the standard and poorest 500 Well it probably will start to become more of a competition especially for the more fixed income oriented investors that aren't way up the risk tolerance spectrum that want the safety of a yield that we're forced out into the equity market to get that pickup and yield I think the offering in areas like treasuries is a little bit more but interestingly though dividend yield is a factor as in performing quite well in the last several months So when you rank how stocks are performing based on factors not at the second level not at the value growth level free cash flow yields and dividend yields have been pretty dominant factors that are winning even within growth year segments of the market So you're saying use of cash reigns supreme I think factor level investing makes much more sense now than sector based or style based investing I think that's where there's been.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Bloomberg business flash Tom and Paul Karen thanks so much Right now we go to Washington to find out what's in the white marble halls of the capitol Nancy ignatius joining us Bloomberg government senior capital hill reporter On all that is going on Is there a shift in your world Nancy right now within the Democrats from left to center And listen to your question and I'm not completely sure I know what you're asking When there's an election year of course people start to modify their positions and come around to places when they know they're going to be standing in front of the voters only a few months from now And some of these positions that perhaps were very ambitious and almost pie in the sky They're on the back burner and Democrats are looking for things maybe more pragmatically to get before the voters as soon as they can and try to strike some deals And strike some deals within the next four to 6 weeks before they hit the trail in the spring So Nancy I'm thinking about what's happening in Congress over the last couple of months It doesn't appear that we're getting voting rights legislation It doesn't appear that build back better at least in its initial form we'll get past the Democrats lost any momentum they may have had Well they definitely lost momentum build back better I mean we're barely hearing about that And yes even very liberal Democrats in the Senate were saying that Manchin continues to insist that they would have to start over with a clean sheet or a clean piece of paper If they were going to do anything And so even those chunks that they were talking about doing separately right now seam and down because we're not hearing specific plans On voting rights we're not hearing a lot about that one coming forward again We are hearing again from Manchin and senator Michaels ski from Alaska about an effort to reform the electoral count act to try to protect the whole electoral college or the process for the Electoral College votes that are submitted by the states to protect them We're hearing about that but not in any real with a timeline The timeline is that our listeners whatever their political persuasion would actually like something to get done Is anything going to get done in this fractious environment I don't see it Yes There are two big opportunities for Democrats in the next month here Last Friday the House passed this America compete act which is to help the semiconductor industry and a deal deal with the whole issue of supply chain and semiconductor shortages and the Senate last year passed their version of the bill So now they're going to start a negotiation And the democratic leaders very much want to have a final bill to pass within several weeks maybe even sooner I don't think by March 1 the president comes for State of the Union And the other big thing that they have a shot at doing finally is this $1.5 trillion 12 12 Bill omnibus appropriations package to close out fiscal 22 spending And they just gave themselves a deadline of March 11 a Friday to get that done So when they begin working on that March 9th Yeah So they're working on a behind the scenes And I'll tell you why I think it might be you think that quickly There could be earmarks and projects this year And that is a big sweetener for people on both sides of the aisle When you know you might be getting a project that makes you want to deal They should do one of those black and white movies from our youth That used to watch in fourth grade you know civics class with Nancy ignatovich in her optimism for entrenched optimism about the process in Washington Nancy what's the early feeling about I don't know I'll phrase it this way How bad the midterm elections could be for the Democrats What's the early read here Early read is very bad especially in the House of Representatives whether there have been so many retirements Not only just going into it the polling was bad But then you have so many long-term people leaving And so that's that one is very bad On the Senate side the outlook for Democrats may be right now If I'm considered as poor that there might be a chance consumer to hang on But Mitch McConnell is looking really happy these days And he doesn't want to blow anything He feels he has a really strong hand His message is economic message and the presence that poll numbers help his party Nancy a gun of his Thank you so much Never never enough time Nancy Donovan Truly our senior capitalism Reporter I was going to ask about the Washington commanders Exactly I don't know or you're going to get some merch there Tom some Washington And there's just coming in All right That Shirley's working on it Okay Our full commanders stuff So there's online betting now in New York State Tom something We've already got here How to get better in New York I don't even know what to get an app There's an app There's lots of commercial apps and you go to It's a couple of clicks and you put some money down put some shuttles down on the screen I think it's the ramps like four I don't know where to go with this I'm not sure if that's enough of me to go Cincinnati I said to Damien's house or should I mortgage vet bill He said no don't do that Future's up 43 Nice lift of the market Dow up 261 We need to get the markets open.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Are boosting confidence in tech stocks which cryptos have been tracking over the past few months Now the major cryptos have been largely trapped in a range over the past couple of weeks Their struggle to break out comes as growth stocks and other riskier assets come out of Vogue while investors get more concerned about those imminent fed rate hikes and a global trend toward tighter monetary policy Meantime unprofitable Bitcoin miners fear 3D is rising ahead of the market open The CEO shares plans to spend up to $1.7 billion on 60,000 next generation units of Bitcoin mining equipment from new minor global In that your Bloomberg crypto update on this Friday live in New York I'm Renee young Bloomberg radio Karen All right ready to thank you and that's a Bloomberg business flash Tom and Paul Karen thanks so much greatly appreciate it We're going to digress to Amazon now off the shock of this labor report We do this in London where to give you an idea of Paul and this is how you translate it They have a 1 million ft² warehouse up in Scotland Do they It is 14 football pitches Okay We're doing this from Matt blocker Join some London here on the international that is Amazon Matt there's the cardboard box division There's the cloud division And there's the advertising division The sell side has numbers way up after a lousy stock performance for Amazon Did they clear up that mystery yesterday where the guesses that the sell side have seemed more certain the uncertainty drifted away yesterday Yeah I think to some degree certainly on that advertising number So just short of $10 billion of revenue in the quarter And up 32% So healthy gain compare that to Facebook which is essentially all advertising or meta sorry $33 billion of revenue up 20% So it's a third of the size and growing 50% faster So I think that that definitely helped to see that visibility And I think the cloud services business AWS 40% growth $18 billion of revenue are the big margin That helped a lot too Part what's amazing is jaded tech guys like matte blossom They say 30 He doesn't even bat an eye That's the usual business for you guys Okay 90 days Exactly So Matt it's interesting here Where is the money that they're spending Talk to us about some of the expenses here because they spend money and they always have Jeff Bezos always had He said I'm going to spend a lot on my operating expenses so don't worry about margin I'm going to spend a ton on capital spending so don't worry about free cash flow Where are they spending the money these days Yeah well I think you know it still seems to be large in the same places which is on the cardboard box division Making those warehouses as efficient as they can keeping their staff happy and obviously with the great redundancy and retirement It's been even hard for them to fill the hundred plus thousand roles that they needed to fill in that December quarter to keep those boxes moving to customers within one to two days So it's on all of that logistics operation where the money's going And I guess more on top because of COVID just to keep everybody safe 1.6 million employees Tom Yeah Can I ask a dumb question Why is Amazon's wage in the United Kingdom less I think after currency conversion than it is in America I mean you just said they have in trouble getting employees Just pop them 18 bucks an hour Thank you very much Well it's an issue across many industries in the UK We've been well advertised that our freight industry here in the UK is missing truck drivers That's actually a kind of European phenomenon too But yeah the people seem to want to pay them their money to bring them in The slow news day Matt we got to run Thank you for the brief We're intelligence What's a TMT analyst Tech media and telecom We hired Matt from Goldman Sachs because we figured he can just do anything Yeah And you know we can just plug and play and talk to me and make some good common sensical Yeah So he's seen it all So we love having him kind of anchoring our team tea franchise in Europe We got sophisticated Bloomberg surveillance Amazon analysis Paul I just look at the packages Coming in Exactly And what I noticed is they get more efficient seriously Yeah Is there what he call it The last mile delivery gets ever more sophisticated They're on bikes They got these little mini colorful boxes they're putting in the boxes and other boxes It's all you can see that they're anecdotally folks What I see I'm in a walk up over on you know it's like outside anyways in my walk up they're getting way more sophisticated than a lot of times I know you don't get to Jersey very often because you just go to your tattoo And I understand that so if you drive down if you drive down the New Jersey turnpike get to Central and South Jersey where it's the land of the warehouses and stuff And there are huge huge distribution centers And what you find is Amazon Prime trucks all along the turnpike there just coming and going and that is absolutely new That is in the last 5 years that we've seen that and that's we're seeing that all over the country all over the country and all over the world as you point out We talked about it with JPMorgan and my question Paul and you're way more pro at this than I am The marginal difference of getting from $18 an hour out to the big two zero Yeah Just go to $20 and test it Yeah And what we've seen since this pandemic is that we've seen we have seen them push wages up higher and higher and we see that in some of the jobs numbers as Michael McKee breaks down force every month So again but it's not enough It's not enough They're all as we've heard from you See a lot of help wanted signs on that Where else Absolutely Absolutely And truckers That's the big thing That's the big thing we've seen that you know we talked at the class cow from Bloomberg intelligence who covers the rails and truck industry And the trucking industry has always had high turnover almost almost a 100% on annual base annualized basis and it's always been this way but it's even more difficult today So it's a real challenge I have to hear that from the logistics stuff And another lifelong ago folks I used to eat in truck stops a fair amount And survived And just pay them more You know I just don't get it That's it And get them home more often I just don't It's really great on the screen We're babbling folks because the day this is truly been an historic 48 hours Stay with us We need to get the market open This is Bloomberg For the Jewish you could save big when you bundle your home and.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Stocks are climbing as data signal the strengthening recovery while dip buyers are stepping in following a sell off spurred by a hawkish Federal Reserve The S&P 500 is advancing after reports show the U.S. economy expanded more than four cash in the fourth quarter While jobless claims fail last week and we check the markets every 15 minutes throughout the trading day on Bloomberg the S&P is up 1.6% up 67 points at 44 17 the Dow Jones Industrial Average up one and a half percent or 524 points at 34,695 and then asked to accept 1.4% or a 194 points at 13,736 Ten year treasury up 1730 seconds He had 1.80% that yield on the two year 1.16% Nymex crude oil is up 1% or 88 cents at $88 24 cents a barrel Down 1.2% down 21.9 cents at 1810 an ounce the Euro 1.1160 against the dollar British pound at 1.3404 again is at one 15.33 Bitcoin is at $37,000 And Apple were watching those shares up 2.4% This ahead of its earnings report do after the market closed and that's a Bloomberg business flash Tom and Paul Karen thanks so much greatly appreciate that Paul I'm going to let you bring this game because he's a danger to society And he's talking about Tesla being an investment grade How do you do that Did they even make money I don't know All right Joe all right listen we have really good colors out of ten I know We have Bloomberg intelligence here at Bloomberg 350 animals around the world covering stocks bonds all that kind of stuff And they all listen to this guy They all listen to this guy He runs the credit side of it for Bloomberg intelligence Joel levington he's been on Wall Street for decades on credit research And it's interesting for Tesla Joel thanks for joining us here in our Bloomberg interactive broker studio You're saying that Tesla has credit metrics that are superior to Ford Stellantis and General Motors How do they do that They generate cash That's what they do Really They actually become a cash machine Okay That's how they generated 5 billion last year In 2021 I think between 22 and 23 that's over $12 billion Just to put it in perspective Ford and GM this year are going to combine generated about $2 billion of free cash versus the 5 that Tesla did So that's how you get it Okay So they reported numbers last night What are the highlights from you from I know the stocks off a little bit from a credit perspective because Tesla does folks Remember they have about $7 billion of total debt outstanding So how did the numbers look last night From a credit perspective they were terrific They reduced about $4.9 billion of debt in 2021 so the credit metrics keep getting stronger They said on their call that they can expect to continue to pay down that I think really what the market is getting a sense of is that they said the CyberTruck won't be out until 2023 instead of 22 And I think there's very logical reasons for that And I think most models and consensus didn't include CyberTruck but I think that is somewhat of a disappointment to use some folks I want to talk to you This has come up three times at least in the last couple of days A small startup company called Microsoft is 97% equity 3% debt and 2.8% long-term debt of 72 gazillion dollars When you walk in and talk to their CFO or critically to their leadership talk to the CFO does a CFO almost have an obligation to tell them their balance sheet is a mess and they should immediately have more debt Well the very talented rob shift covers them And he's talking to other CFOs But but I do think that you're seeing a change over time of lazy balance sheets getting utilized Where very high quality names it seems like the triple-b categories where everybody has moved down to from the single a category meaning that they are using their balance sheets whether it's for share purchases dividends acquisitions or some kind of combination thereof That seems to be where the world has settled in Am I right that pros like you think Microsoft could do They have 72 billion of folks long-term debt They could do a $30 billion issuance tomorrow and they could do it in 6 phone calls like one 800 Singapore 100 Oslo and one 800 fidelity Yeah I think they could Well that's amazing It is Well the credit market show I mean your credit markets are so strong here What is a company like Tesla who is free cash flow positive or is Tom's mentioning Microsoft with all the free cash flow They have why do they even bother going to the credit markets No that's a great question I think with the case of Tesla it's a different need from two years ago as it is today Two years ago they were struggling very hard Today they're swimming in cash But that might be something.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"And I'm Karen Moscow and U.S. stocks are rebounding with equities around the world and optimism the only crime very end will not derail global growth treasury falling sending two year yields to the highest since March 2020 we check the markets every 15 minutes throughout the trading day on Bloomberg Right now the S&P 500 at 1.6% of 75 points at 46 66 the Dow Jones Industrial Average at 1.2% or 421 points at 35,648 and an Aztecs up to and a quarter percent or 339 points at 15,563 Ten year treasury on four 30 seconds yield 1.44% that yield on the two year .66% Nymex screwed oil is up 2.9% of a dollar 98 at $71 46 cents a barrel Comics gold little changed at 1779 90 announced the Euro 1.1241 against the dollar the yen had won 13.69 And when it comes to the markets passive investors are losing out that according to Peter lynch the former fidelity Magellan fund manager sites current fidelity staff that are beating the market This is very measurable Our active guys have a lot of market for ten 20 three years I think they'll keep doing it So I think this move to passive is mistake And Peter lynch was a guest on Bloomberg bay state business her weekdays from two to 5 p.m. on Bloomberg one O 6 one Boston and our Boston listeners can catch the full conversation coming up in the 4 p.m. hour of today's show and that's a Bloomberg business flash Tom and Paul Karen thanks so much Really wonderful effort by Tom maroni and jiff short sleeve working that up with mister lynch Do up 400 points which means that if you're making a gain and you take a game you may have taxes to pay And then there's all corporate taxing as well Paul last night insomnia set in And I started reading about pillar one And pillar two and I got the page 1000 Yeah Of the global tax agreement And I did finally not off into a good surveillance sleep This defines bureaucracy It does And you talk about taxes And I think one of the big things that we heard recently on the tax front yes we're going to get some higher taxes here in the U.S. but as the global tax rate global minimum tax rate trying to close down some of those corporate tax corporate tax rates think Ireland That's kind of where I used to do some deals there Michael rapaport he does this for a living He's a Bloomberg tax car spawned it Mike I suppose somebody's gotta cover the tax world You're the best we've got Talk to us about this global tax agreement Is that really going to work Is Microsoft is Intel is Google Are they going to actually pay fair taxes Well we'll see when the agreement gets implemented in 2023 but the idea of the agreement is to impose the first time a global minimum tax to avoid the so called raised to the bottom countries that the company's changing for one country to another like Ireland trying to get a lower tax rate The idea is that no matter where your operations or earnings are in the world you're going to have a 15% tax rate That sounds really simple really straightforward really easy to implement implement but I kind of feel like with the lobbyists are going to get in there and they're going to start pushing things around and finding loopholes Is this as clean as it seems or is this going to kind of be business as usual when we get again the tax specialists the tax lobbyists in there Well that remains to be seen I mean right now the OECD the group that oversaw the direct negotiation disagreement is working out the rules under which this is going to work I have no doubt that companies will do their best to try to avoid it The idea is that again as I said if you have your operations in Ireland or Luxembourg or any other country that has a very low tax rate you are going to be assessed the company at least 50% And that is the idea that try to avoid this kind of tracing around and make sure that that company spends taxes are supposed to pay Michael misses Keane it was in Dublin I was working in London She went off to dump Take a tour of the Guinness distillery And Michael she lost her AirPods So she's walking around Dublin looking for an official Apple store There isn't one It's up in Belfast And there's a Apple in Ireland But the real Apple in Ireland is I think in cork or something How does apple's behavior change with the Biden Ellen global tax effort Did things change for Apple in Ireland or not Well one of the things that's happened over the last several years as you know is that there have been other efforts both under the first of the Obama administration than the Trump administration to make sure that U.S. company state competitive overseas and didn't have as much of a much of an incentive to locate and then places like Ireland Obviously Biden now wants to get tougher on U.S. companies And his plan also has efforts to try to make sure that companies don't move their operations places like Ireland Like I said I've no doubt that companies will do their best to trust regardless But we'll have to wait and see if it works out or not Michael thank you Michael rapaport Bloomberg's correspondent here on corporate taxes in the global effort as well Paul this is an extraordinary market I was triple leveraged cash and I went four leveraged about ten days ago and made the gloom Down we went with a big drawdown of four or 5% Remember the sweat the blood and the streets The carnage the carnage and now we've got what are we living I don't know What are we 1% or actually we're probably right near the all time high here on the S&P 500 I was looking at it before the open today and we were just a 1% off the all time high Here we are at 1.7% Look at the NASDAQ up 2.5% here NASDAQ lagged yesterday but making up for it today here So say what you will by the dip it's Tina I mean all those things are out there and I think what people are saying is yeah I get the fed is going to tighten but we're at zero bound It's not like we're going to be going back to the interest rates of the 70s and 80s I think that's what I hear from a lot of bulls that the fed is still supportive of this marketplace despite the fact that they will be tightening But it's tightening off of extraordinary low I'm fascinated in one of the things folks And this I think will be a topic in the January is oil with a rebound I mean we're not back to 84 brand but we're $9 away $75 Brent crude up a dollar 82 2.5% And I guess the shoe to drop here and at least have rampant was uncommonly brilliant on this today Copper in China And the answer is called copper in China Yeah she's just like I don't know where she gets this stuff What you don't see folks is on the commercial breaks Lisa's reading bonfire exactly Exactly You know and it's painful But you know she nailed it What if you get China better Come out of the boom And what we're seeing on our screen right now it's extraordinary It is And maybe it's a little reflection of Omni Kron that the initial panic over what it could be Maybe we're getting a little bit of abatement I have a good day I got three different pronunciations of that Yes I did Milled into me No I know No you're wrong It's blah blah blah No you're wrong is that Anyways up 428 points Stay with Paul swe for the next hour as well He'll be up 600 points From New York.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"At SCI C dot com slash IMS and songs are hired the open the S&P 500 up 7 10% or 30 points at 45 68 The Dow Jones Industrial Average up 1% or 338 points at 34,926 and the NASDAQ ship a quarter percent or 38 points at 15,119 Ten year treasury down 1230 seconds yield 1.38% They yield on the two year .61% Nymex crude oil is up 2.4% of a dollar 60 at $67 85 cents a barrel Down three 10% or 4.9 cents is 1778 90 announce The Euro 1.1291 against the dollar the yen at one 13.20 Tom and Paul Karen thanks so much Paul what do you see on the screen I'm looking at oil A little bit of advance here Brent crude rounded up $72 a barrel That's not the gloom last week No it's not And I'm just going to call out because I know you just overlooked it but Bitcoin trading off one point That had there but on the equities we were decidedly green here Okay We don't get we don't get the quote of the doge No we don't It's doji I don't have it on my screen but it's there One of the joys here We protect the copyright of all of our guests literature Don't email me folks for Chris Work at Bank of America Merrill Lynch but he writes these brilliant short terse direct He's like Pauly he's like the king of direct That's what boom Boom Boom And Chris I'm going to suggest you're not a raging bull but you are a measured or just getting going climb on board this nominal GDP economy What is a gloom crew get wrong Well I think it's at every turning point Tom and Paul you see the high frequency data start to change the mind of certain people What we try to counsel is not just stay the course but actually just look at the real data in the overall economy and how that's filtering into corporate revenues And you won't really much pay attention to the media headline of the day or the week If you just stay focused on that and obviously a lot of people try to figure out investors psychology like what is the multiple or the valuation of the market I wouldn't say it's impossible but it's really not a task that you can have great accuracy And you just use the current multiple you understand that rates are going up maybe you shave off a little of the multiple but profit growth should super flat And that's how you get an uptrend This is a really important concept folks And the idea here that we're addicted to a bull market definition being up 20% and Chris I think what I'm hearing from you is up 7 or up 8 or dare I say up 10.0% that's a bull market Yeah that's correct It's an uptrend that has its peaks and valleys right now We fell 5% and it felt like the world was coming to an end for some folks who were overly allocated to the areas that did so well in the last two years And the big pivot is on the pivot by the fed the pivot by investor sentiment And if you look at cash on the sidelines in the instance let's look at that right now I mean Paul I mean the fact of the matter is in the 5% crater that we just saw I outperformed the market I'm sure you did 5 103 basis points It's exactly Chris you know I just filled up my rental car in California's tank $4 and 50 cents a gallon That's inflation to me Is that transitory or is that something we're going to have to deal with for some period of time and the economy is going to have to deal with it Well I think the reality is that regardless of what topic we're talking about most things are transitory It just depends on the timing of it At some point in time there will be demand destruction that will take the price of most commodities including oil down at some point But right now throw the word trend Tory out It was nice to see the best retired it But the base effects are there they're real for some areas Those will likely come down once nominal GDP starts to come back down And then secondary oil oil is a great example of falling significantly because of the new variant and the worries over potential future growth coming down harder than expected Stagflation fears whatever you want to call it From my perspective that's a big opportunity is energy financials some industrials and the material sector as we get through this latest variant And people see that nominal GDP is going to be well above average for 2022 All right so that Chris I guess suggest again sticking with those cyclical plays the rotation we saw maybe 18 months ago from some of the traditional growth stories into the cyclical plays like you mentioned energy banks That still has legs in your mind It does It is still not trusted And what you get is kind of like the wall of worry that we all talk about over the years The last few decades you need to well worry to continue to climb that We call it a ladder because it's easier to climb than a wall And from my perspective when you think about this inflationary consequence there's a lot of folks that are getting very worried about it I think the.
Bloomberg Radio New York
"paul karen" Discussed on Bloomberg Radio New York
"Tenths percent or 23 cents at 82.17 cents a barrel Call my skull is up almost 1% or 16.8 cents 1782 50 announce The Euro 1.1646 against the dollar British band 1.3810 and again is at one 14.21 and that's a Bloomberg business flash Tom and Paul Karen thanks so much Now live With Johns Hopkins center for health security How much adulter joins us thrilled that he could join us this morning I must we saw the general and COVID is in the headlines but I must say to me it is a real mistake And that what should be in the headlines is a gentleman with cancer fighting cancer that happened to get COVID Do I have that right You have it exactly right General Powell's death was something that's tragic but it's something that has to be contextualized based on the fact that a he's 84 years old B he had multiple myeloma and he had not received his booster vaccine as of as of yet And all of that really makes it more the case that the vaccine This doesn't undermine the case for the vaccine It actually shows you that yes there are people that the vaccine is not going to be 100% in and this is more the exception than the rule Are there more general polls out there There are more general powers out there I've taken care of a handful of fully vaccinated individuals that have severe disease and they all tend to be elderly they tend to have other medical problems And that's why we've seen the booster debate really focus on those people that are above age 65 or the immunosuppressed populations because that's where we're seeing the vaccine may not have the same ability to prevent severe disease as it does in someone like me a 45 year old healthy person Or unlike me Paul and two hours 20 minutes I will enjoy my booster shot You will get your booster shot Okay Let's see some Twitter coverage on that Carol's gonna hold my hand Good very good Doctor Odell talk to us about the boosters here How do you think this is going to play out Will it be similar to the initial role out of the vaccines where we go population subset by population subset until we get a very broad coverage I don't think that will be the case because what we've seen so far looking at the data is that the boosters don't benefit everybody Where the strongest benefit is are in those people above the age of 65 and those individuals who have high risk conditions that put them at risk for severe COVID I still think that there's really not strong evidence that a person with no other medical problems gets a major benefit from a booster because we don't know how long that boost lasts at stopping mild infections The goal of the booster is really to kind of shore up protection against severe disease and where the only places we've seen that issue is in the immunocompromised the elderly people with high risk conditions So I don't think with these first generation vaccines that there's a very strong benefit in an average risk healthy person getting a booster vaccine although there are some people who want to do that it just seems to be very very marginal of the benefit that you get if you're not in one of those high risk categories and that's why we saw that controversy with the Pfizer vaccine where the ACIP committee had basically voted down one of the recommendations that was then reinstated by the CDC director So doctors we head into the winter time The numbers of infections hospitalizations there are training very very positively leading Some people even think that hey this might be it for this pandemic in terms of the big big numbers However wintertime is coming How do you think this may play out Well what we're seeing is that this delta wave that we are just kind of at the tail end of really infected a lot of the people that were unvaccinated and left natural immunity and actually left some people also dead which then overall will make the population more resilient to anything else that the virus does But it's important to remember that our goal is not to eradicate or eliminate this virus That's not possible We're always going to have cases And in the winter I suspect there will be an acceleration of cases as it gets colder less humid less sunny people more indoors more people back to their activities holidays all of that's going to drive cases but the goal has always been to decouple the cases from hospitalizations and death And I think that's happening with vaccination and natural immunity and that's what we're seeing with the south and places that got hit hard Well I think doctor adults just suggesting I have to wfh from Turks and Caicos I think that's what I heard That was my prescription I'll check it with Al from Jersey All right so doctor talk to us about this Merck therapeutic It really sounds like it could be something that a very important tool in our toolbox Exactly If the data bears out and this becomes something widely available it really could be game changing because we've never had a highly effective oral antiviral that you could give someone with mild illness and prevent them from eating hospitalization or prevent them from dying It makes COVID.
Bloomberg Surveillance
Stocks sink at open, with the Dow off more than 300 points, after horrific GDP
"Bonds climbing after airport show the world's largest economy had its sharpest contraction on record in the second quarter, and separate data highlighted another increase in the number of Americans filing for unemployment benefits. We check the markets every 15 minutes throughout the trading day on Bloomberg, the S and P 500 Down 1% or 33 points at 32 25 DowJones industrial average down 1.5% 386 points at 26,155 and the NASDAQ's down half percent, or 49 points. At 10,492. 10 year Treasury of 8 30 seconds. He'll 300.54%. They yield on the two year 20.12%. Nymex crude oil's down 2.4% or $1.40 dollars, 27 cents a barrel. Comex school, down about 1/10 of a percent on the dollar, 30 in 1975 30 announced The euro 1.1797 against the dollar. The yen 105.7 Qualcomm Among the stocks were watching today, up 10.5% gave a strong sales for cash for the current quarter and announced a new licensing deal with China's well way technology's Procter and Gamble, up 1.6% of posted a certain sales this spring is higher at home consumption of laundry detergent and dish soap. Was continued stockpiling gave the consumer staples giant a boost. And that's a Bloomberg business. Flash toman Paul Karen, Thanks so much negative
WSJ What's News
Stephen Moore withdraws from Fed consideration
"Now, our main story this morning Stephen Moore yesterday, he withdrew his name for consideration for fed seat. That makes him the second person to officially withdraw after President Trump said that he would prefer to nominate them for a seat on the fed board to get the backstory Charlie Turner spoke with our reporter Paul Kiernan from Washington just a half hour after Paul was speaking with Mr. Moore himself on the phone, President Trump says conservative commentators Stephen Moore has withdrawn from consideration for position on the Federal Reserve Board. Mr. Trump tweeted, the news of Mr. Moore's withdrawal. But didn't say why Mr. Moore changed mind? Let's get details on this from Wall Street Journal reporter, Paul Karen who joins us via Skype from Washington, Paul first of all this came after Mr. Moore, abruptly changed his mind, didn't well, I dunno changed. His mind is the right way to put it. I spoke with Mr. Moore a little while ago half an hour ago, or so, and he actually told me that. He and Lawrence Kudlow, the White House. Economic adviser had basically decided to withdraw him from the fed candidacy last night.