'Bloomberg The Open' Full Show (07/06/2022)
JONATHAN:, GOOD MORNING. EQUITY FUTURES BASICALLY UNCHANGED. THE COUNTDOWN TO THE OPEN STARTS NOW.
>> EVERYTHING YOU NEED TO KNOW TO GET START FOR THE -- GET READY FOR THE START OF U.S. TRADING. THIS IS "BLOOMBERG: THE OPEN" WITH JONATHAN FERRO. JONATHAN: LIVE FROM NEW YORK, WE BEGIN WITH THE BIG ISSUE.
>> STOCKS HAVE BEEN HORRIBLE. BONDS HAVE BEEN HORRIBLE. >> SENTIMENT IS TERRIBLE. >> WE WENT DOWN 23%.
>> WHAT YOU ARE SEEING NOW IS CONSISTENT BEAR MARKET SELLING. >> POSITIONING AND VALUATION IS BEARISH. >> YOU DIG DEEPER INTO THE SYSTEM, AND BALANCES ARE STARTING TO COME OUT.
>> VOLATILITY IS SO HIGH AND LIQUIDITY IS SO LOW. >> LACK OF LIQUIDITY. THE CENTRAL BANK IS >> DEALING WITH THIS DUAL ISSUE. THE NARRATIVE BETWEEN INFLATION AND RECESSION. >> VOLATILITY IS LIKELY TO PERSIST. >> THIS IS A POINT OF
GREAT UNCERTAINTY. JONATHAN: WHAT KIND OF A SLOWDOWN OUR REPRICING IN RIGHT NOW -- ARE WE PRICING IN RIGHT NOW? >> RIGHT NOW WE ARE PRICING IN A GOLDILOCKS SLOWDOWN, A MEDIUM SLOWDOWN. THE MARKET WRIT LARGE IS RELATIVELY HOT. WE HAVE NOT REACHED THE KIND OF SINGLE DIGITS YOU WOULD EXPECT ONCE YOU HAVE GOTTEN TO THE BOTTOM OF ANY KIND OF SLOW DOWN IN MARKET VALUATION. THE OTHER THING THAT IS A
CONCERN AS I DO NOT THINK ANALYST ESTIMATES HAVE REALLY FACTORED IN HOW MUCH OF A SLOWDOWN WE COULD SEE. NUMBERS ON THE CONSUMER SIDE ARE NOT GREAT. THERE IS STILL MORE RISK FROM HERE. JONATHAN: HE SAYS THIS IS A RECESSION TRAIN AND THE RECESSION IS ALL BUT PRICED IN.
THERE IS NO OTHER WAY OF DESCRIBING IT. WE ARE NOT IN A RECESSION NOW, BUT I THINK THE MARKETS SEE THE ECONOMY POTENTIALLY GOING INTO ONE. YOUR TAKE ON THAT PARTICULAR TAKE? >> THIS IS WHAT I CALL A TRIPLE D ECONOMY, DEMAND DESTRUCTION BY DESIGN. THEY ARE TRYING TO SLOW GROWTH BY INCREASING INTEREST RATES AND BRING DOWN PRICES.
THAT WILL HOPEFULLY GET INFLATION UNDER CONTROL, BUT IT COMES AT THE COST OF SLOWER GROWTH. QUESTION IS WHAT KIND OF A SLOW DOWN TO WE HAVE? IS IT A FULL-BLOWN RECESSION? I HAVE A LOT OF SYMPATHY WITH THE VIEW WE MAY SLIP INTO RECESSION, BUT WE HAVE TO DEFINE WHAT THAT IS. IS IT JUST TWO CONSECUTIVE QUARTERS OF NEGATIVE GROWTH BUT INCOMES DO NOT GET HURT SO BADLY? I AM TALKING MORE OF A TECHNICAL RECESSION HERE. I WOULD NOT ARGUE THIS WOULD BE A STRONG RECESSION WHERE THERE IS A LOT OF INCOME DESTRUCTION AND JOB DESTRUCTION. JONATHAN:
WHAT I HEAR FROM YOU IS ANOTHER 75 FROM THIS FED AT THE END OF THIS MONTH. JIM: ABSOLUTELY. I WOULD TAKE THEM SERIOUSLY IN TERMS OF THE FED'S RATE HIKE PATH. THEY ARE TRYING TO RESTORE CREDIBILITY AS WELL AS FIGHT INFLATION. THE THING IS THAT PRICES LAG. GROWTH COMES DOWN.
SENTIMENT -- SENTIMENT INDICATORS ARE COMING DOWN, BUT PRICES ARE GOING TO LAG. INFLATION WILL STAY HIGH AND THAT MEANS IT IS GOING TO BE TOO HIGH FOR THE FED'S COMFORT, WHICH MEANS THEY ARE LIKELY TO CONTINUE TO GO WITH 75 IN JULY AND ANOTHER 50 IN SEPTEMBER UNLESS REALLY BAD THINGS HAPPEN OR SOMETHING BREAKS. JONATHAN: PETER WAS ON THIS PROGRAM YESTERDAY AND HIS TAKE WAS WE HAVE TO START THINKING ABOUT THE WEALTH EFFECT. CRYPTO HAS BEEN HORRIBLE.
I THINK WE HAVE SEEN A TURN. I SENSE FROM THE KIND OF THINGS YOU HAVE BEEN THINKING ABOUT THAT YOU MIGHT BE ON THE SAME PAGE WHEN THAT PERHAPS PEOPLE ARE UNDERESTIMATING WHAT COULD HAPPEN AND OVERESTIMATING THE RESILIENCE OF THE AMERICAN CONSUMER IN THIS ECONOMY. CAN YOU RUN ME THROUGH IT? JULIE: EVERYONE HAS VIEWED THIS CONSUMER AS A BEAST THAT IS ALWAYS WENT TO BE THERE FOR YOU. THE CHALLENGE IS NOW WE HAVE COME TO THE END OF THE BOOM. WE ARE STARTING TO DIP INTO THAT AND SENTIMENT IS AWFUL. GENERALLY, CONSUMERS HAVE BEEN ABLE TO SPEND, BUT I THINK WE ARE AT A DIFFERENT PLACE NOW WHERE THEY ARE STARTING TO FEEL THE STING OF GAS PRICES.
THERE IS NO HOPE IN SIGHT AND WE ARE STARTING TO HEAR MORE ABOUT LAYOFFS. THE MINUTE YOU START HEARING ABOUT LAYOFFS, THAT RIPPLES THROUGH THE ECONOMY WITH OTHER BUSINESSES DECIDING TO HOLD BACK ON HIRING NEW PEOPLE, ACTUALLY DECIDE TO TRIM SOME PEOPLE THEY ALREADY HAVE, AND THAT IS GOING TO REALLY IMPACT THE HEALTH OF THE CONSUMER GOING FORWARD. THAT IS CENTRAL TO THE REST OF THE ECONOMY. JONATHAN: RETAIL HAS BEEN HAMMERED.
YOU SAID AVOID MOST RETAIL STOCKS AT ANY COST. JULIE: I THINK IT CAN GET MUCH WORSE IN THE RETAIL SECTOR. IF YOU THINK ABOUT BACK AND HOLIDAY, THEY WERE ORDERING ALL OF THAT INVENTORY BEFORE THE WAR IN UKRAINE, SO THAT MEANS -- AND THEY HAD ALSO MISSED OUT ON A BUNCH OF SALES BECAUSE THEY DID NOT HAVE THE INVENTORY. WHEN THEY FINALLY GET ACCESS TO THE INVENTORY IS WHEN CONSUMER DEMAND IS GOING TO DROP OFF. I WOULD AVOID RETAILERS UNDER ANY CIRCUMSTANCES OTHER THAN THE OFF-PRICE WHO BENEFIT FROM EXCESS INVENTORY.
AMERICANS LOVE A GOOD DEAL, SO THEY DO BETTER IN A DECLINE. JONATHAN: A LITTLE LATER THIS MORNING, WE GET THE ECONOMIC DATA IN THE UNITED STATES OF AMERICA AND THEN MIKE MCKEE IS IN D.C.. WHAT IS THE AGENDA FOR YOU? MICHAEL: WE ARE NOT ANTICIPATING A HUGE DROP, THE SERVICE SECTOR HANGING IN. YOU TAKE A LOOK AT WHERE THE MARKETS ARE AND I HAVE TO QUESTION EVERYBODY. THE MARKETS ARE NOT THE FED. WE GET THE MINUTES THIS AFTERNOON FROM JUNE 15. THERE IS A DIFFERENCE BETWEEN WHERE THE MARKET WAS THEN AND WHERE THE FED WAS. THAT IS WHERE THE MARKETS WERE.
THEY THOUGHT THE FED WAS BEHIND THE CURVE. NOW THEY THINK THE FED IS STILL BEHIND THE CURVE IN THE OTHER DIRECTION, THAT THE ECONOMY IS SLOWING SO QUICKLY. THE FED HAS NOT MADE ANY STATEMENTS ABOUT THE FORECASTS SINCE JUNE 15, SO WHAT WE WILL GET IS PROBABLY OLD AND NOT HELPFUL.
JIM CARON MADE A GOOD POINT ABOUT THE FED AND CREDIBILITY BECAUSE A LOT -- A LOT OF OFFICIALS HAVE SAID 75 IS THEIR BASE CASE FOR THE END OF JULY. WHATEVER THE MINUTES SAY, YOU ARE PROBABLY GOING TO WALK AWAY FROM THE MINUTES WITH THAT STILL BEING THE BASE CASE. IF THE ECONOMY CONTINUES TO SHOW THAT DATA, WE MAY SEE THE FED SLOWDOWN.
IF WE GET A HIGH CPI NUMBER, 75 STAYS ON THE TABLE. WHAT DO YOU LOOK FOR TODAY? THE SUPPLY DEMAND BALANCE. ARE THEY GOING TO TELL US ANYTHING ABOUT WHEN THOSE TWO WILL GET BACK TOGETHER? INFLATION DYNAMICS -- HAVE THEY CHANGED? PEOPLE ARE STILL SPENDING EVEN THOUGH CONFIDENCE IS DOWN. AND THEN A HOST OF GLOBAL ISSUES THAT I DID NOT EVEN PUT ON. COVID SEEMS TO BE BACK IN
SHANGHAI. THE QUESTION IS THE FED, WHAT WILL IT LOOK LIKE ON JULY 27, NOT JUNE 15? JONATHAN: NUMBERS WE HAVE NOT SEEN SINCE 2002, EURO-DOLLAR. WE NEED TO TALK ABOUT THE BOND MARKET. SOME CURVE INVERSION. THINK ABOUT THE CONTEXT FOR THESE MINUTES.
WE WERE LOOKING FOR A 50 BASIS POINT HIKE. THEN WE GOT A STRONG STEER OF REPORTING THAT WE WOULD GET 75 BASIS POINTS. TO WHAT EXTENT DO THESE MINUTES CAPTURE THE SHIFT FROM THE FEDERAL RESERVE? WE NEED TO CAPTURE THE SHIFT IN THE BOND MARKET. YIELDS ARE DOWN ON THE 10 YEAR. MY QUESTION IS WHETHER WE HAVE
SEEN THE HIGH FOR THE YEAR. HALFWAY? -- HAVE WE? JIM: I WOULD HAVE TO SAY WE HAVE. THE MARKETS ARE SURRENDERING TO THE FACT THAT WE ARE NOT LIKELY -- THAT WE ARE LIKELY TO HAVE A RECESSION. THE MINUTES ARE OLD NEWS AT THIS POINT.
WHAT I THINK IS TAKING PLACE IS THE MARKET HAS READJUSTED EXPECTATIONS SIGNIFICANTLY. THE FED IS TELLING US THEY WANT TO GO TO 3.8% BY EARLY IN 2023. THE TWO YEAR YIELD IS OVER 100 BASIS POINTS BELOW THAT LEVEL. THIS DOES NOT MAKE SENSE UNLESS
THE MARKET DOES NOT BELIEVE THAT THE FED IS ACTUALLY GOING TO BE ABLE TO HIKE RATES IN THE WAY THEY ARE SAYING THEY WILL OR SOMETHING IS GOING TO HAPPEN ALONG THE WAY AND WE COULD HAVE A RECESSION AND THAT IS WHAT MARKETS ARE STARTING TO PRICE. I THINK WE HAVE TO TAKE THE FED SERIOUSLY ABOUT HIKING RATES. ONE OF THE THINGS THEY ARE TRYING TO CONTROL IS WAGE INFLATION, AND WAGE INFLATION WILL BE KEY FOR THEM, SO SOME OF THE SOFTENING IN THE LABOR MARKET IS NOT NECESSARILY HURTFUL TO THEIR CAUSE AT THIS POINT. JONATHAN: WE HAVE TO THINK ABOUT WHAT KIND OF DATA PUSHES THIS FED OFF. IF WE ARE THINKING ABOUT LABOR MARKET DATA, IT IS TOO LATE. THE HORSE IS GONE. JIM:
THAT IS CORRECT. THAT IS WHY I THINK THEY WILL BE ON A STEADY PATH TO HIKING RATES. THE LABOR MARKET IS COMING TO A STRONG PLACE AT THIS POINT. EVEN IN THE FED FORECAST, THEY ARE SAYING THEY COULD HAVE A SOFT LANDING AND ONLY HAVE THE UNEMPLOYMENT RATE GO TO 4.1%, WHICH IS CLOSE TO THEIR NEUTRAL
RATE. TO ME, THIS IS PREPOSTEROUS. I THINK THE FED NEEDS TO DO DAMAGE TO THE LABOR MARKET, NOT THAT I'M ADVOCATING THAT. IF THEY WANT TO GET WAGE INFLATION LOWER, THEY PROBABLY HAVE TO SOFT IN THE ECONOMY ENOUGH THAT THERE IS MORE SUPPLY AND LABOR COMING IN AND THAT WILL EFFECTIVELY BRING DOWN WAGE INFLATION, WHICH HOPEFULLY TRANSLATES TO LOWER INFLATION BROADLY SPEAKING ACROSS CPI INDICES. JONATHAN: THE CONSUMER COULD GET HIT. LET ME GET TO THE EQUITY MARKET AGAIN. WHEN DOES THE NASDAQ GET
INTERESTING FOR YOU? JULIE: WE PREFERRED THE TECH SECTOR BECAUSE THERE ARE A LOT OF HIGH-QUALITY BUSINESSES THERE. NOT ALL TECH STOCKS ARE THE SAME. YOU STILL HAVE TO BE CHOOSY. THESE LONG-DURATION BUSINESSES ARE STILL NOT INTERESTING AND PROBABLY NOT GOING TO BE INTERESTING FOR A LONG TIME. THE GOOD NEWS IS THEY ARE HOPEFULLY LEARNING FROM THIS AND FIGURING OUT HOW TO BE MORE PROFITABLE. THE BIGGEST PROBLEM WITH THESE UNPROFITABLE BUSINESSES IS THEY ARE RUN BY YOUNG PEOPLE WHO HAVE NOT BEEN IN A MANAGERIAL POSITION IN A RECESSION.
THEY HAVE ONLY BEEN ABLE TO RUN THEIR BUSINESSES WITH ACCESS TO CHEAP CAPITAL. MY CONCERN IS THEY DO NOT KNOW HOW TO RUN A BUSINESS UNDER TIGHTER CIRCUMSTANCES, SO WE LIKE SOFTWARE BUSINESSES THAT HAVE EXPOSURE TO BUSINESS RATHER THAN THE CONSUMER AND ONES THAT ARE ALREADY PROFITABLE. JONATHAN: DO YOU THINK INVESTORS HAVE EXPERIENCE WITH THESE NAMES TO UNDERSTAND HOW EXPOSED THEY ARE TO THE CYCLE AS WELL? JULIE: I DO NOT KNOW IF IT IS EXPERIENCE. I THINK HISTORICALLY INVESTORS HAVE A SHORT MEMORY.
FOR THEM, IT IS A QUESTION OF RECOGNIZING RECESSIONS ARE A NORMAL PART OF HOW THINGS WORK. I FEEL LIKE I'M HAVING DISCUSSIONS LIKE BREAKING UP WITH SOMEONE. IT HAS RUN ITS COURSE. THIS BULL MARKET HAS BEEN SO LONG AND IT IS A NATURAL PART OF BULL MARKET'S TO HAVE PULLBACKS. FOR LONG-TERM INVESTORS, IT IS AN OPPORTUNITY TO FIND GOOD NAMES AT A BETTER PRICE.
THE PANIC THAT WE ARE SEEING IS A ROOMFUL -- IS A REFLECTION OF THE INVESTOR PSYCHOLOGY OF I DO NOT KNOW WHAT IS HAPPENING. JONATHAN: UNCHANGED ON THE S&P ABOUT 17 MINUTES FROM THE OPENING BELL. >> BELOW THAT RELATIVELY BENIGN SURFACE FOR THE S&P 500 AND NASDAQ, WE HAVE SOME BIGGER MOVERS, STARTING WITH SHARES OF TESLA DOWN. THIS IS AFTER THE COMPANY DID
MISS ON THE DELIVERY ESTIMATE OF VEHICLES FOR THE SECOND QUARTER. TESLA OVER THE LAST TWO DAYS HAD BEEN UP ABOUT 5%. BITCOIN UNABLE TO GET OUT OF ITS OWN WAY, AROUND $20,000 PER BITCOIN. ONE PIECE OF THIS -- A DUMP OF HOLDINGS. UBER IS LOWER. THEY ARE OFFERING FREE GRUBHUB MEMBERSHIP, SO DOORDASH AND UBER ARE GETTING HURT ON THAT.
THE FDA HAS TEMPORARILY SUSPENDED THE JUUL BAN SO INVESTORS SEE THAT AS A REPRIEVE THIS MORNING. JONATHAN: COMING UP, DEMAND CONCERNS BEGINNING TO GRIP COMMODITY MARKETS. >> DEMAND IS NOT THERE. I EXPECT WE WILL SEE FURTHER DAMAGE REVISIONS TO DEMAND. JONATHAN:
THAT CONVERSATION UP NEXT. >> WE ARE THINKING IN OUR BASE CASE THAT OIL IS GOING TO GO DOWN TO $85. THAT IS LOOKING AT A SUPPLY AND DEMAND BASIS. THERE IS NO EVIDENCE THAT WE WILL SEE A SUMMER SURGE IN DEMAND. THE DEMAND IS NOT THERE. I EXPECT WE WILL SEE FURTHER DOWNWARD DIVISION -- REVISIONS WITH DEMAND.
JONATHAN: BRIEFLY WE PREACH $100 AND GET BACK DOWN IN THE LAST 24 HOURS OR SO. AND CRUDE NOT TOO FAR BEHIND, GLOBAL COMMODITIES INCHING CLOSER TO BEAR MARKET TERRITORIES, THE REVERSAL COMING ONE MONTH AFTER SETTING RECORD PRICES. I WANT TO START WITH THE WORK OF ED MORSE IN THIS QUOTE HERE. HE'S BASE CASE IS IN THE 1980'S BUT HE TALKED ABOUT A RECESSION SCENARIO AND SAID WE COULD SEE CRUDE PRICES FALLING TO 65 BY YEAR END. ABSENT INTERVENTION BY OPEC-PLUS OR INVESTMENT. YOU KNOW THAT IS NOT THE CONSENSUS VIEW. YOUR TAKE ON IT?
>> I THINK THAT REQUIRES A BIG HIT TO DEMAND. WE ARE LOOKING BACK AT WHAT WE SAW IN 2008. WITHIN SIX MONTHS, THEY WERE DOWN 30 TO $40 A BARREL. OPEC AT THAT TIME WAS INSTITUTING MASSIVE OUTPUT CUTS. PEOPLE ARE NOT QUITE SEEING THAT AT THE MOMENT, BUT I THINK THE ONLY WAY WE CAN BALANCE THIS MARKET IS THROUGH DEMAND DESTRUCTION AND OIL PRICES ABOVE $100 A BARREL WITH SUPPLY CLEARLY LAGGING BEHIND DEMAND, MASSIVE AMOUNTS OF OIL BEING TAKEN OUT OF STRATEGIC STORAGE. THERE IS NOT MUCH MORE SUPPLY TO COME FROM ANYWHERE, SO WE NEED THE DEMAND DESTRUCTION. THE BIG QUESTION IS IS THIS
GOING TO BE A FULL-BLOWN RECESSION AND ARE WE GOING TO GET THE HUGE DROP IN DEMAND LIKE WE SAW IN 2009? JONATHAN: GIVEN THE VOLATILITY IN COMMODITY PRICES, HOW DO YOU THINK THE SAUDI'S WOULD RESPOND TO A REQUEST FROM THIS ADMINISTRATION TO PUMP MORE CRUDE? >> THE SAUDI'S HAVE TAKEN A CAUTIOUS LINE THROUGH THE RUN-UP IN THEIR PRODUCTION. THEY HAVE ADDED OIL BACK DRIP BY DRIP. THEY HAVE NOT THEMSELVES KEPT PACE WITH THE TARGET THAT THEY ADOPTED FOR THEMSELVES. THEY ARE CONCERNED ABOUT WEAKNESS AND WHAT HAS HAPPENED IN THE LAST 24 HOURS IS GOING TO ADD TO THOSE CONCERNS. THEY ARE NOT HELPED BY THE FACT THAT OPEC'S OWN FORECAST ASSUMED THE GROUP WILL PUMP AT ITS TARGET LEVEL.
ALREADY IN MANG IT WAS OVER 2.5 MILLION BARRELS A DAY BELOW THAT. -- IN MAY, IT WAS OVER 2.5 MILLION BARRELS A DAY BELOW THAT. THEY SEE IT PERHAPS MORE BLEAKLY THAN OTHERS DO. IT SEEMS AS -- ALTHOUGH WE HAD THIS BIG SELL OFF THE PHYSICAL MARKET IS STILL -- THERE IS STILL MORE DEMAND THAN SUPPLY.
THAT MAY CHANGE WITH THE FIRST SIGNS OF DEMAND WEAKNESS, BUT I THINK OPEC AND SAUDI ARABIA WILL BE CAUTIOUS. JONATHAN: WHAT A MOVE WE SAW YESTERDAY, DOWN 8% YESTERDAY. BIG SELL OFF IN ENERGY EQUITIES AS WELL. THERE NOW APPEARS TO BE RETRENCHMENT OF ENERGY PRICES AND WE COULD SEE RISING EARNINGS TO REPLACE RUSSIAN SUPPLY. COULD ENERGY EQUITIES DO WELL IN A WORLD THAT YOU ARE LOOKING TO HIT A CONSUMER HARD? >> I THINK THERE IS THE OPPORTUNITY FOR THEM TO DO OK. THE BIGGEST CHALLENGE IS YOU ARE REALLY NOT IN CHARGE OF YOUR DESTINY IN THE WAY YOU WOULD BE WITH ANOTHER TYPE OF BUSINESS. LONGER-TERM, ENERGY PROBABLY
DOES NOT HAVE THE STRENGTH IT DOES NOW BECAUSE WE HAVE THIS EXTERNAL FORCE AND CONFLICT IN UKRAINE. WHEN IT IS ON THE BASIS OF ITS OWN FUNDAMENTALS, I DO NOT THINK THE PRICING IS WHERE IT IS NOW, BUT HOW ARE WE GOING TO REDUCE OR EXCHANGE SUPPLY IN EUROPE? THAT IS THE BIG QUESTION BECAUSE ALL OF THAT IS LONG CYCLE INFRASTRUCTURE REBUILDING. IN THE NEAR TERM, YOU CAN UNDERSTAND WHY THERE IS SUPPORT FOR OIL EVEN IF THERE IS DEMAND DESTRUCTION BECAUSE DEMAND DESTRUCTION IS GOING TO BE ON THE ORDER OF HIGH SINGLE DIGITS AT MOST. THE BIGGEST QUESTION IS THE CHANGE IN SUPPLY. JONATHAN: YOU HAVE A BIG BID INTO THE BOND MARKET. EARLY THIS MORNING, THE TEAM
SAID IF WE GET A RATE HIKE CYCLE -- YOUR THOUGHTS ON WHAT IS TAKING PLACE IN EUROPE? JIM: THERE ARE THREE THINGS. THE FIRST IS THE EUROPEAN ECONOMY IS WEAKENING. THERE ARE FRAGMENTATION RISKS BEING DISCUSSED OUT THERE AND THAT LOWERS CONFIDENCE AND THEREFORE THE ECB PROBABLY CANNOT HIDE -- HIKE RATES AS MUCH AS THEY WOULD LIKE TO. IF WE THINK OF IT THAT WAY, THE INTEREST RATES BETWEEN EUROPE AND THE U.S. WOULD SUGGEST IF EUROPE CANNOT HIKE INTEREST RATES THE EURO CANNOT GET STRONGER BUT IF THE FED IS WILLING TO HIKE INTEREST RATES THE DOLLAR WILL GET STRONGER AND THAT COULD BRING THE EURO BELOW THE DOLLAR.
I THINK THAT IS THE PROCESS OF WHAT IS TAKING PLACE. THE EURO HAS ALREADY FALLEN A LOT, SO A LOT OF THIS HAS ALREADY BEEN PRICED. THERE ARE SOME SURPRISES WE COULD STILL HAVE. JONATHAN: OVER AT NOMURA, THINKING ABOUT THE SAME DYNAMIC.
EARLIER THIS MORNING, THE SUPPORT OF RATE HIKES IS ERODED BY THE FACT THAT THE BOND MARKET IS NOT TRUSTED TO STAND ON ITS OWN TWO FEET, ALLUDING TO THE PROBLEMS THEY HAVE WITH 10 YEAR YIELDS AS PROBLEMS DIED DOWN WITH WHAT THEY ARE ABOUT TO DO WITH SOME KIND OF ANTI-FRAGMENTATION TOOL. UP NEXT, THE MORNING CALLS. 4900 WAS THE CALL. 4300 IS THE CALL NOW. JONATHAN: FUTURES POSITIVE .1%. HERE ARE YOUR MORNING CALLS. THE SECTOR CITED ELEVATED VALUATION COMPARED TO ITS PEERS.
A GOOD PRICE TARGET ON NETFLIX. FINALLY, GUGGENHEIM CUTTING ITS META-PRICE TARGET, EXPECTING SLOWER SPENDING TO DRAG DOWN GROWTH. THIS STOCK BASICALLY UNCHANGED. COMING UP, THE LATEST SLASH IN S&P 500 PRICE TARGETS.
JONATHAN: WE HAVE FACED A MASSIVE COMEBACK IN THE EQUITY MARKET YESTERDAY. THIS MORNING, WE ARE TRYING TO DO THE SAME. WE ARE DOWN ABOUT .5%, A REVERSAL. ON THE NASDAQ 100 RIGHT NOW, ABOUT .1%. GOOD MORNING. THE BOND MARKET LOOKS LIKE THIS. THE 10-YEAR CONTINUES.
LAST WEEKEND, THE CLOSE WAS ABOUT 325, SO THAT IS A TURN IN THE BOND MARKET. HAVE WE SEEN THE TURN THIS YEAR? MORGAN STANLEY SAID I THINK WE HAVE. THE LOWS THIS MORNING, YOU HAVE TO GO BACK TO 2002 TO SEE THESE KIND OF LEVELS. AND CRUDE BREAKING DOWN AGAIN. WE HAD AN 8% MOVE YESTERDAY. BASE CASE, BACK TO THE 80'S. WE CAN TALK ABOUT THAT AGAIN LATER. LET'S GET YOU SOME MOVEMENTS ON
THE BREAKDOWN. ABIGAIL: WE HAVE THE S&P 500 HEADING TO A POTENTIAL THIRD UP DAY, IF SO THE FIRST THREE DAY WINNING STREAK GOING BACK TO MAY. A BIG PIECE OF THIS IS APPLE. APPLE HAD BEEN DOWN NOT LONG AGO, BUT WITH YIELDS LOWER PERHAPS INVESTORS TAKING A LOOK AT TECH HEAVY STOCKS. AMAZON FLIPPING BACK AND FORTH. THEY HAVE STRUCK THAT DEAL WITH
GRUBHUB TO OFFER GRUBHUB MEMBERSHIP TO PRY MEMBERS FOR ONE YEAR. THAT IS DRAGGING ON UBER AND THEN TESLA WELL UP OFF ITS LOWS. PERHAPS A DELAYED REACTION TO THAT DELIVERY MESS FOR THE JUNE QUARTER. AGAIN, APPLE FLIPPING HIGHER AS YIELDS ARE LOWER. LET'S SEE WHETHER THE BULLS CAN STICK AROUND FOR THE FULL DAY. JONATHAN: STERLING IS BOUNCING BACK A LITTLE BIT. AT THE LOWS OF THE SESSION,
DOWN ABOUT .2%. THE STORY FOR STERLING, POLITICS AND THE U.K. RIGHT NOW ARE NOT GREAT FOR THE PRIME MINISTER. ANOTHER FIVE U.K.
MINISTERS HAVE RESIGNED IN A GROUP. YOU ARE GETTING USED TO THIS IN THE LAST 24 HOURS, STARTING WITH CHANCELLOR SUNAK AND OTHERSS S O -- OTHERS SOON FOLLOWED. PRESSURE IS BUILDING ON THE PRIME MINISTER AND WE WILL TOUCH ON THAT THROUGH THE DAY. THE PRIME MINISTER IN A TOUGH SPOT.
I WILL TELL YOU WHERE HE WOULD RATHER BE, SUN VALLEY. I CAN TELL YOU WHO IS AT SUN VALLEY RIGHT NOW. ED GOT YOU HAVE A GOOD GIG. WALK ME THROUGH IT. -- ED, YOU HAVE GOT A GOOD GIG. WALK ME THROUGH IT. >> WE ARE TALKING ABOUT DEALS AND VALUATIONS THAT ARE DEPRESSED AND YET EVERYONE I AM TALKING TO IS UPBEAT.
THEY SEE OPPORTUNITY IN ALL OF IT. WE ARE GOING TO TALK ABOUT THE NEWS FLOW, WHICH HAS BEEN HEAVY. IN THE CHIP SECTOR, U.S. OFFICIALS HAVE BEEN PRESSURING
DUTCH COUNTERPARTS IN THE NETHERLANDS TO PREVENT A CHIP EQUIPMENT MAKER FROM GIVING SOME OF THEIR LEGACY AND OLDER EQUIPMENT, A SYSTEM FOR MAKING BASIC CHIPS, PREVENTING THEM FROM SELLING IT TO CHINA. CHINA'S RESPONSE OVERNIGHT WAS TO CLAIM THIS IS TECHNOLOGICAL TERRORISM. I LOOK ACROSS THIS MORNING AND THEY DO NOT SEE AN OUTCOME IN WHICH THE U.S. COULD ORCHESTRATE ANOTHER EUROPEAN NATION FROM NOT DOING BUSINESS WITH CHINA. THE THEME HERE TIES CLOSELY TO WHAT WE ARE SEEING IN THE CHIP SECTOR. THERE IS A CONVERSATION AROUND
BOOM AND BUST. YOU LOOK AT THE PERFORMANCE YEAR TO DATE, THE UNDERPERFORMANCE RELATIVE TO THE BROADER TECHNOLOGY SECTOR. THIS HAS ALWAYS BEEN A BOOM AND BUST INDUSTRY AND YOU DRAW PARALLELS TO STREAMING AND WHAT WE ARE HEARING FROM EXECUTIVES HERE IS WE ARE NOT CONVINCED THE CONSUMER HAS GONE HOME YET. THERE IS STILL MONEY TO SPEND, SO WHEN WE LOOK AT THESE INDUSTRIES, WE ARE LOOKING AT THE SAME FACTORS. PEOPLE HERE SEEM UPBEAT. JONATHAN: LOOKING FOR MORE FROM ED THROUGH THE DAY. I'M LOOKING AT THIS NOTE FROM
JORDAN ROCHESTER. TARGET ON STERLING, $1.15 BY THE END OF JULY, TOWARDS ONE DOLLAR $.10 BY THE END OF SEPTEMBER. RIGHT NOW, AT ABOUT .1%. REASON STERLING SHOULD DO BETTER THAN HIS PEERS INCLUDE LOWER GAS FLOWS, A LOWER EURO, LOWER RISK SENTIMENT, AND GLOBAL RECESSION FEARS.
THEY LOOK FOR A MOVE TOWARD $1.10 BY THE END OF SEPTEMBER. WHAT WE ARE LOOKING FORWARD TO IN THIS EQUITY MARKET'S EARNINGS NEXT WEEK. IS THAT THE NEXT SHOE THAT COULD DROP FOR THE MARKET? JULIE: THAT IS THE QUESTION. IS EARNINGS SEASON GOING TO MAKE MATTERS BETTER OR WORSE CONSIDERING WE DO GET THOSE REPORTS STARTING SO EARLY IN THE SECOND HALF? THE MARKET IS SO FOCUSED ON THE RISK OF ECONOMIC RECESSION WHEN YOU LOOK AT EARNINGS EXPECTATIONS NO EARNINGS RECESSION IS CURRENTLY FORECAST. GROWTH IS EXPECTED TO SLOW, BUT THEN IT IS PICKING UP AGAIN, MORE THAN 10% ON THE YEAR.
ACCORDING TO RESEARCH, WHEN YOU LOOK AT PROFITS IN A RECESSIONARY PERIOD, IT USUALLY FALLS ABOUT 25%. EVEN IN A DOWNTURN THAT IS MILDER THAN MOST, YOU COULD SEE EARNINGS DOWN 15%. IF YOU APPLY AND 18 TIMES EARNING MULTIPLE, YOU GET A MILD RECESSION SCENARIO. IT RAISES THE QUESTION OF WHETHER THE BAR IS TOO HIGH.
ANALYSTS ARE HOLDING STEADY OR RAISING EARNINGS ESTIMATES INSTEAD OF CUTTING THEM. THE WHITE LINE IS THE PERCENTAGE OF COMPANIES BEATING EXPECTATIONS, AND THAT HAS MOVED LOWER. OUR INVESTORS UNDER CONFIDENT --ARE INVESTORS UNDER CONFIDENT? WE WILL GET THE ANSWER NEXT WEEK. JONATHAN:
JONATHAN GOLUB WRITING, OUR TARGET IS LOWER TO REFLECT THE HIGHER COST OF CAPITAL AND VALUATIONS. IT IS NOT ABOUT RECESSION CONCERNS. JONATHAN JOINS US RIGHT NOW. GOOD TO CATCH UP AS ALWAYS. RECENTLY YOU HAD -- SAID PERHAPS DOUBLE-DIGIT GAINS. WALK ME THROUGH HOW THE THINKING HAS CHANGED IN THE LAST COUPLE WEEKS.
>> THERE ARE TWO STORIES. THE FIRST IS FROM JANUARY 1 THROUGH MID JUNE THE REASON STOCKS WERE UNDER PRESSURE, THE FIRST 15% OR SO OF THIS DECLINE, WAS BECAUSE INTEREST RATES ROSE MORE THAN ANYBODY THOUGHT THEY WOULD. ANY CASH FLOW THAT GETS DISCOUNTED AT A HIGHER INTEREST RATE IS WORTH LESS MONEY.
IN THE LAST COUPLE WEEKS, YOU HAD SOMETHING VERY DIFFERENT, WHICH WAS WHAT YOU ARE TALKING ABOUT. THIS RECESSIONARY FEAR IS OVERTAKING THE MARKET AND CONVINCING US THERE IS GOING TO BE SOMETHING CATACLYSMIC THAT IS GOING TO HAPPEN, AND WE THINK THAT IS NOT GOING TO PLAY OUT AND YOU GET THAT MONEY BACK AND THE STOCK MARKET WILL RISE. JONATHAN: YOU ARE NOT LOOKING FOR A CATASTROPHE BUT ACKNOWLEDGE WE COULD GET A MEANINGFUL SLOWDOWN. THE PUSHBACK YESTERDAY WAS HOW IS HE NOT REVISING LOWER HIS EARNINGS ESTIMATES? HOW CAN YOU ACKNOWLEDGE THE SLOWDOWN AND THAT DOES NOT TRANSLATE INTO CUTTING EARNINGS ESTIMATE? >> FIRST YOU HAVE TO LOOK AT THE DATA.
THE THING WHICH CORRELATES THE MOST WITH CORPORATE PROFIT -- NOT CORPORATE PROFIT BUT ACTUALLY EARNINGS SURPRISES -- IS THE ISM. EVEN THOUGH IT IS LOWER THAN IT WAS, IT IS IN EXPANSIONARY TERRITORY AND HISTORICALLY CONSISTENT WITH THESE AND EARNINGS FOR THE REMAINDER OF THE YEAR. NUMBER TWO, WE LOOK AT ANALYST ESTIMATES. THERE IS A LOT OF DISCUSSION ABOUT ESTIMATES, BUT IT IS BAD MATH, THE WAY PEOPLE ARE THINKING ABOUT THIS.
THE WAY THINGS NORMALLY WORK IS AS YOU ENTER EARNINGS SEASON COMPANIES PREANNOUNCED NEGATIVE NEWS. IF THEY HAVE GOOD NEWS COME A THEY HOLD IT UNTIL THEY HAVE ANNOUNCED IT, BUT NEGATIVE NEWS HAPPENS EARLY. ESTIMATES ALWAYS FALL GOING INTO EARNINGS SEASON AND THEN YOU GET A BEAT WHEN THE GOOD NEWS COMES OUT LATER.
THE SIZE OF THE NEGATIVE PROVISION, THE NEGATIVE ADJUSTMENTS TO EARNINGS, IS SMALLER THAN AVERAGE, MEANING THE DATA IS COMING IN BETTER WHEN YOU COMPARE IT TO HISTORY FOR SECOND QUARTER PROFITS. THE THIRD ISSUE WE ARE LOOKING AT IS WHEN YOU START TO SLIDE INTO A PERIOD OF WEAK EARNINGS ANALYST ESTIMATES STARTS TO BREAK APART. YOU START TO SEE THAT ONE ANALYST AND ANOTHER START TO VARY WIDELY. ONE IS CONFIDENCE, ONE IS NOT.
WE ARE NOT SEEING THAT KIND OF DISPERSION THAT IS CONSISTENT WITH AN EARNINGS RECESSION. WHEN I LOOK AT THE HARD DATA RATHER THAN LISTENING TO THE NEWS FLOW OR PANIC, IT ALL TELLS ME WE ARE IN A SLOWING ECONOMY BUT NOTHING THAT LOOKS RECESSIONARY AND EARNINGS HOLD UP FINE. JONATHAN: I WANT TO COME UP WITH SOME COUNTERPOINTS QUICKLY. YOU MENTIONED THE ISM. NEW EARNINGS COMPONENTS DROPPED BELOW 50. FORGIVE ME FOR CHERRY PICKING, BUT I WILL ANYWAY. FOR SOME OF THESE COMPANIES, THEY HAVE NOT BEEN PRE-ANNOUNCING. A MAJOR ONE HAS BEEN MICROSOFT.
WHEN IT COMES TO RETAILERS, THEY HAVE NOT BEEN ABLE TO FORECAST ANY OF THIS. THEY COME OUT AND DOWNGRADE THE OUTLOOK AT A MONTH LATER SOME OF THEM HAVE HAD TO REVISE GUIDANCE ALL OVER AGAIN AND THAT MAKES PEOPLE NERVOUS. WHAT YOU SEE OFF THE BACK OF THAT IS MASSIVE GAPS LOWER IN EQUITY. NOT A LOT OF THIS IS PRICED AT ALL IN THAT REGARD. WHAT IS THE COUNTERPOINT TO THAT? >> LET'S LOOK AT LAST EARNINGS SEASON. WE HAD A 6.7% PEAK DURING EARNINGS SEASON, WHICH WAS
ABOVE NORMAL. IF YOU LOOK AT WEAKNESS, LET'S DIG INTO FIRST QUARTER BECAUSE IT IS THE BEST PREVIEW WE HAVE. THE S&P WAS UP 14%, EARNINGS UP 12%, WHICH MEANS SOME NEGATIVE MARGINS. THERE WAS NO SINGLE UNDERLYING TREND. YOU HAD A NUMBER OF AREAS, LIKE
ENERGY AND MATERIALS, WHICH WERE GANGBUSTERS. THEN YOU HAD A COUPLE AREAS, LIKE CONSUMER DISCRETIONARY WHICH WERE TERRIBLE. WHAT WAS SOMEWHAT CONCERNING ABOUT THE CONSUMER DISCRETIONARY SECTOR WAS THAT THE DEMAND -- CONSUMER SPENDING IS WEAKER AND THE SECOND QUARTER THAN THE FIRST QUARTER, AND YET THE FIRST QUARTER HAD POOR EARNINGS FOR THE CONSUMER SIDE. SO YOU COULD SEE IN THE SECOND QUARTER CONTINUED WEAKNESS ACROSS CONSUMER SECTORS, BUT IT DOES NOT MEAN YOU ARE GOING TO SEE IT EVERYWHERE.
ANOTHER AREA OF WEAKNESS -- BIG CAPS DID POORLY. YOU MENTIONED THIS A SECOND AGO. IF YOU LOOK TO THE SECOND HALF OF THE YEAR, IT IS EXPECTED TO BE BETTER AND THE DRIVER OF THAT IS A REBOUND IN FINANCIALS IN THE SECOND HALF OF THE YEAR.
JONATHAN: I WANT TO FINISH WITH A QUESTION ABOUT YOUR PROCESS. IT HAS BEEN A TOUGH YEAR SO FAR ON THE S&P, DOWN ABOUT 20%. IS THERE A POINT ON THE CALENDAR WHERE YOU WILL BE ABLE TO ACKNOWLEDGE THIS IS NOT GOING TO BE THE REBOUND I HAVE BEEN LOOKING FOR? CAN YOU TELL ME HOW YOU WOULD UNDERSTAND AS YOU INTERPRET THE DATA WHEN AND HOW YOU MIGHT BE WRONG HERE? >> I CAN TELL YOU NOW WHERE WE ARE RIGHT AND WRONG.
THE EARNINGS NUMBERS, WHEN WE PUT OUT OUR EARNINGS ESTIMATE THEY WERE WAY OUT OF THE PACK IN TERMS OF BEING VERY STRONG AND THE ARGUMENT WAS THAT HIGHER INFLATION AND STRONG GROWTH WOULD DRIVE STRONG PROFIT. THOSE NUMBERS LOOK LIKE THEY ARE ON TRACK WITH TREND, SO THAT HAS BEEN DEAD ON. OUR SECTOR CALLS -- WE TOOK DOWN TECHNOLOGY FROM OVERWEIGHT AT THE BEGINNING OF THE YEAR. THAT WAS A GOOD CALL. WE WENT UNDERWEIGHT FINANCIALS THIS YEAR, WHICH PROVED TO BE A GOOD CALL. WHAT WE GOT WRONG, THE INTEREST RATE JUMPED WAY MORE THAN WE ANTICIPATED AND VALUATION GOT DEMOLISHED. I THINK THE FACT THAT WE
LOWERED OUR NUMBERS -- THE FED TALKS ABOUT BEING DATA DEPENDENT AND AS STRATEGISTS WE HAVE TO BE DATA-DEPENDENT AS WELL. WHEN YOU HAVE A MEANINGFUL INCREASE IN YOUR DISCOUNT RATE, YOU HAVE NO CHOICE BUT TO ADJUST YOUR NUMBERS AND SAY THIS PART I GOT RIGHT, THIS PART I GOT WRONG. THAT DOES NOT MEAN WE ARE GOING INTO A RECESSION BECAUSE STOCK PRICES HAVE NOT PERFORMED. THAT IS WHERE I REMAIN CONSTRUCTIVE. JONATHAN: I APPRECIATE THE TRANSPARENCY AS WE WORK THROUGH THE YEAR. IT HAS BEEN A TOUGH YEAR,
GETTING PUSHBACK RIGHT NOW ON THE BLOOMBERG WITH WHAT SOME BULLS MIGHT BE MISSING. ONE TAKE IS THAT ENERGY ESTIMATES HAVE REVISED UP. ONCE ENERGY ROLLS OVER, PUT A FORK IN IT. COMING UP, A HOST OF U.S. ECONOMIC DATA ON DECK THIS WEEK. >> I EXPECT A HORRIBLE SUMMER. UNTIL THE FED REALLY SWITCHES AND GETS OFF FIGHTING INFLATION AT ALL COSTS, I THINK WE ARE MISSING ALL THESE HANDS.
-- HINTS. JONATHAN: WE HAVE PMI'S TO TALK ABOUT. THAT CONVERSATION NEXT. -- STRATEGIST. THAT IS AT 3:30 P.M. IN NEW YORK. JONATHAN: GETTING SOME ECONOMIC DATA FOR YOU, HERE IS MIKE MCKEE WITH THE LATEST. MICHAEL: THE WEB SOLVE YOU OF WHETHER WE ARE IN RECESSION GETS ANOTHER WHIP TODAY.
THE GLOBAL PMI INDEX FOR SERVICES RISES INSTEAD OF FALLS IN THE MONTH OF JUNE. THE COMPOSITE INDEX IS 52.3. SO WE SEE THE S&P PMI'S RISING, SETTING THE STAGE FOR THE SERVICES INDEX AT THE TOP OF THE HOUR. JONATHAN: MIKE MCKEE WENT TO THAT DOWN FOR YOU.
ALWAYS GREAT TO CATCH UP WITH YOU. GIVEN THE DATA COMING IN, CAN YOU SAY WITH CONFIDENCE THAT WE MAY HAVE ALREADY SEEN A PEAK ON THE 10 YEAR YIELD OR NOT? >> IT IS A DECENT CHANCE WE HAVE SEEN THE PEAK AND THE PEAK IN FED HIKING EXPECTATIONS. WE WILL SPEND A BUNCH OF TIME CIRCLING AROUND A 3% 10-YEAR NOTE. THE BIGGEST ISSUE IS THE FED HAS BEEN -- THE FED IS REALLY FOCUSED ON CURRENT DATA AND INFLATION.
AND IF AND HOW THE FED WILL MOVE TO LOOK AT CRUDE OIL AND INFLATION RATES AND SLOW DOWN THE PATH OF HIKING. THE BOND MARKET IS STARTING TO PRICE THAT AND WRESTLE WITH THAT, AND THAT HAS BEEN A DRIVER FOR WHY WE HAVE HAD THIS 70 BASIS POINT FALLING IN RATES FROM THE PEAK IF YOU WEEKS AGO. JONATHAN: IT HAS BEEN A MASSIVE MOVE. I WONDER WHETHER A BET ON THE TREASURIES -- IS THAT A BET AGAINST THE FED? ASHOK: IT IS A BET THAT THE SOFT LANDING THESIS, WHICH IS OUT-OF-FAVOR NOW, IS A HIGHER PROBABILITY THAN THE MARKET EXPECTS. OUR BASE CASE IS STILL THAT THE U.S. ECONOMY CAN HAVE SOMETHING TO AVOID THE RECESSION OR ANY SORT OF SIGNIFICANT SLOWDOWN, DIFFERENT FROM OTHER REGIONS OF THE WORLD.
A LOT OF THINGS ARE GOING ON NOW. IT IS INTERESTING THAT INFLATION RATE IS CLOSER TO 2% THAN 3%. WE HAVE SEEN THEM MOVE LOWER IN ENERGY PRICES AND GASOLINE PRICES. TO THE EXTENT WE SEE WEAKER DATA AND THE FALL IN INFLATION, INFLATION IS PRETTY MUCH GUARANTEED IN THE SECOND HALF. THE DEBATE IS ABOUT THE SPEED OF IT AND WHERE IT ENDS UP. THOSE THINGS COME TOGETHER. DEPENDING ON HOW THE FED REACTS, IT COULD ALLOW THE FED TO BE -- BRING MORE STABILITY IN THESE FINANCIAL MARKETS.
JONATHAN: I WONDER WHAT THAT ACTUALLY TELLS US. DOES THAT SAY THE FED HAS ALREADY DONE THE DAMAGE? IF I THROW IN CREDIT, IT IS A LESS CONSTRUCTIVE VIEW. CREDIT SPREADS HAVE BEEN BREAKING OUT, NOT COMING IN.
WALK ME THROUGH WHERE YOU ARE ON TREASURIES. CAN YOU WALK ME THROUGH WHERE WE ARE ON CREDIT? ASHOK: FOR CREDIT, OUR VIEW IS THE NEXT THING IS BETTER PERFORMANCE FROM CREDIT MARKETS. CREDIT MARKETS NEED RATE STABILITY. THEY DON'T NECESSARILY NEED LOWER RATES. THE HIGH-YIELD INDEX IS JUST UNDER 9%. CREDIT MARKETS FIRST NEED STABILITY IN INTEREST RATES, AND THAT WILL BE THE BIG DRIVER. SECOND IS HEARING MORE OR
GETTING MORE CONFIDENCE -- THE SPREAD LEVELS WILL CONTINUE -- RATES. OUR EXPECTATION IS EVEN IN A RECESSION CREDIT IS GOING TO HOLD UP FROM A FUNDAMENTAL PERSPECTIVE, BETTER THAN THE MARKET SEEMS TO THINK. WE THINK THE NEXT PHASE OF THIS FOR THE BOND MARKET WILL BE STABILITY AND TIGHTER CREDIT SPREADS. JONATHAN: THAT IS THE HOPE THAT EQUITY
INVESTORS HAVE AS WELL. A BIT OF A TECHNICAL ISSUE THERE AT THE END. THAT IS THE SECOND GUEST THIS HOUR WHO THINGS WE MAY HAVE ALREADY SEEN A PEAK IN THE 10 YEAR YIELDS -- THANKS WE MAY HAVE ALREADY SEEN A PEAK IN THE 10 YEAR YIELDS. YOUR YIELDS ARE JUST BOUNCING BACK A LITTLE BIT OFF THE BACK OF THAT BETTER-THAN-EXPECTED PMI. THE IMS -- SERVICE READ IS JUST AROUND THE CORNER. THIS IS BLOOMBERG.
WE ARE ABOUT 25 MINUTES INTO THIS THIS MORNING. GIVEN THE SIZE OF THE MOVES THIS YEAR, THIS IS NOTHING. WE ARE NEGATIVE ABOUT .2% ON THE S&P. GOING TO GET SOME REALLY IMPORTANT ECONOMIC DATA OVER THE NEXT 48 HOURS OR SO AND PAYROLLS FRIDAY.
THE ISM SERVICES AND JOB OPENINGS COMING UP. GUY JOHNSON WILL BREAK THAT DOWN. PRESIDENT BIDEN SPEAKING THIS AFTERNOON FROM OHIO. WE WILL GET ANOTHER ROUND OF INITIAL JOBLESS CLAIMS TOMORROW. FRIDAY, IT IS THE PAYROLL REPORT.
265 THOUSAND FOR THAT NUMBER. FRIDAY MORNING, TOM KEENE AND I TOGETHER IN D.C. TOMORROW.
2022-07-10 04:25
