tv In the Loop With Betty Liu Bloomberg August 7, 2015 8:00am-10:01am EDT
that, it happens to be jobs day on market makers. matt: stephanie ruhle is off today. erik: the labor department will release the jobs report and here is what you need to know. how much of a surprise we see on these numbers. matt: what economists are expecting when he numbers drop 225,000 on the jobs number that is the average in our survey. 5.3 percent, unchanged unemployment rate and 62.6%, the labor force participation rate is what we are looking for. these are the consensus numbers that have been published on wall street, we all have our own independent. erik: a veritable job stay extravaganza, a cornucopia. here is a preview of -- and react, alan krueger, rick reader and right after the number, bill gross of janus
capital all coming to you less than 30 minutes from now. between now and then we have news to bring you. here are the top business headlines. i knew a .2% stake in a natural gas company. carl icahn a well-known activist thinks this companies shares are undervalued. he wants talks with company management and might seek board seats. shares are down 8% this year but in the premarket up 5% on the strength of this new stake taken by carl icahn. a new discount website is reportedly getting the cold shoulder from retailers the wall street journal says macy's, amazon, home depot, are complaining about jet.com they say they'll using links to their site without remission and company's are withdrawing products. bank of america is planning on selling 1.2 billion dollars of mostly illiquid home loans bloomberg reports there are
selling five pools of nonperforming debt loans that have been modified and resumed payments and some have not defaulted. the move would extend a series of sales. a today -- matt: a two-day rout and media stocks is sitting high-profile ceos in the wallet, les moonves lost nearly $4.5 million. over the last two days. bob iger was also hit hard bloomberg's pay in excess he was among the 40 highest-paid u.s. executives last year. apple often blamed for killing the music business might be doing the same thing to watch is . june was the worst month for u.s. watch sales in seven years, retailers say it is probably because of apple's new smart watch. industry groups say sales of traditional timepieces were 11% lower than the same month last year, the inventor of the swatch
says apples watches could bring an ice age to the 400-year-old swiss timepiece industry, apple watches going on sale starting today at 100 best buys nationwide. if you want to help kill the swiss watch industry. erik: the you believe it? matt: not yet. you cannot tell the time from the apple watch, you glance at it, you have to shake your wrist to alert the person with whom you are talking that you want to get out of there. it is ridiculous, but someday, very likely it will take a huge chunk out of the watch industry. erik: the five things you need to know, beginning with jobs. jobs that he in america, in less than 30 minutes they will release the latest figures on u.s. employment for the month of july. the average estimate in our survey of economists is for the other employment rate to hold at 5.3%.
with more insight, carl riccadonna is here. it is a matter of debate, what number matters the most the headline number, the private payroll, the employment rate the participation rate, the average hourly earnings, what is it? carl: we have to adjust our perspective. you can ignore about half of the reports, the other employment rate is already in line with the fed year end target. erik: slightly ahead of target? carl: not slightly head, it is likely that could move. with the average hourly earnings, that is an inflation measure, and inflation is a lagging indicator what the fed is watching, trying to figure out what the momentum carryover was from the first half of the of, not so great. veteran q2 into the current quarter. you watch the total number of job gains and also focus on a
specific underlying driver of the economy, going to be consumer spending that drives the economy in the back half of the year. if consumers do not show up, we do not have the growth to justify left off and the fed will be watching aggregate income growth. the total number of workers, the total number of hours, average hourly earnings and multiply and you get an income proxy out of this jobs report, if that shows signs of rolling over, that will raise a big question as to whether we have the underlying momentum in the economy. matt: what if you want to take the focus off the fed and put it on the plight of the american worker last night we heard numbers during the debate about 6 million people in poverty, we have are 8 million people are in the long-term unemployed and have dropped out of the labor participation rate. how are american workers doing compared to the last recovery from a major recession? carl: the last recovery was jobless.
as we are looking at the plight of the average worker, we have to look at metrics i told you to ignore for fed timing purposes which is average hourly earnings gross and income growth. that is a lagging indicator. what the data has been telling us to this point we have not yet reached full employment in the economy, when we get to full employment, you will see wage pressures. it is coming, but we have to be patience and unemployment could be a low 5%. erik: shifts in the labor force. carl: we know -- will know when we get there. when he waits in place and starts to materialize, you will know that you cross do that full employment. janet yellen is looking at the scope of labor data and saying we are probably not there yet as we deflate the unemployment rate normalized.
matt: carl has been here since 4:00, we will hear a lot from him through the day. one stock to keep an eye on, carl icahn reported a new 8% stake in a company according to a filing, the activists plans to seek talks with management and perhaps board seats, which is what he does. he says shares are undervalued and will target discussions on operations, capital expenditure come up financing, and executive compensation. erik: he has been hurt by the slump in energy, thanks to oil, but natural -- prices have been depressed, it will be fascinating to see what change he can initiate. our third thing you need to watch -- >> a big focus on media stocks after the s&p media index tumbled 8.2% in just the past two days. later today, we will see cablevision reporting -- it
reports second-quarter revenue matched expectations at $1.65 billion, subscriber numbers were better than expected, video subscription only declined 16,000, versus an estimated 20,500. high-speed data customers, they added 14,000 versus an estimated decline of 6200. the media selloff is not just happening in the u.s., rochester's in the u.k. italy, and germany also falling today on concerns that advertising will decline as viewers will shift to online programming. erik: happy friday to you. number 4 -- the cfo on bloomberg says outflows from pimco's mutual fund on the verge of ceasing as a result, he believes they have overcome the bill gross affect being his departure from janice -- for janice. >> there is still a daily volatility, some in-depth on an
inflow, some as an outflow, we are on track and all hoping and planning and working hard for -- that we may get closer to breaking even in the third quarter and let us work from there. erik: the cfo they say second quarter tropic broke -- rose 15%. they are making up ground. if we look at the performance number for the pimco total return fund, still the largest one-month performance, not that great an indicator 99% beating just about everybody else, your today, 94%. if you go down, it gets worse the later years of bill gross. matt: we will hear from bill gross lift at a: 30. -- lynn at 8:30. they -- anthem has then breached
. american airlines said it is investigating whether hackers had entered its computers. nowhere to run and nowhere to hide. the chinese government linked hackers will get your data. erik: if not the chinese perhaps the russians. or -- matt: the north koreans. erik: this was the main event last night republican presidential fun runner donald trump lived up to his billing, saying he did not have time -- i should correct myself -- the first big gop debate. there was one before that. donald trump said he did not have time at political correctness, he took aim at everything and everybody. >> our leaders are stupid our politicians are stupid and the mexican government is much smarter, much sharper, much more cunning and they send the bad once over the guys they do not want to pay for them, they do
not want to take care of them why should they, when they stupid leaders of the united states will do it for them and that is what is happening, whether you like it or not. erik: mike vander of bloomberg politics was inside the arena and is outside right now. you cannot help but want to talk about donald trump because he went into this debate with such a commanding lead in the polls. is it possible this morning to look at his performance last night and say whether it helps him or hurt him? that performance from donald trump would have hurt almost any other presidential candidate on the stage, maybe any other presidential candidate that came before him. it could help him. he is at the top of the polls. in large part, because of the combatives and gusto we saw last night. he went after everyone at anything on the stage.
often with little regard for the facts. he tried to portray governor jeb bush, one of the most accomplished candidates on stage as a talker and himself, who has never held elective office as the real leader. the debate opened up with a tough question from a moderator about some of the degrading terms he used to describe women. trump gave an attempt to try to explain his way out, said it was only rosie o'donnell he talked about like that. the moderator called him out and trump said, you got me. at this point -- matt: it seemed like he owned that question, the five most watch video clips of this debate and trump supporters will love his answer, just like they love the answer that we just showed
about mexican politicians. he is playing well to his audience. it seemed to me he waffled when he started trying to be more of a politician, trying to play to the republican base, going from pro-choice to pro-life. the comet on women and a comment on immigrants were two of his strongest answers for the audience he is playing to. mike: that is what i am trying to say. calling people stupid does not portray a presidential quality that voters will eventually look for. trump is standing on stage with 10 candidates, a field of 17 and buying for a nomination of a party that is bitterly divided from the pro-business establishment and the tea party conservatives that appreciate this kind of behavior. erik: did bush miss an
opportunity? i ask because i took a casual tour of conservative websites this morning to see who they thought won the debate, and depending on who you ask, some like rand paul, on the libertarian side, some like marco rubio, but nobody talking about jeb bush's performance. mike: jeb bush is in a tough spot. he had high expectations as the son of it -- son and brother of former president, a two-time governor of florida. he is struggling with low expectations as well. he has become an anathema to the tea party base that donald trump has tapped into. bush did himself no favors. erik: did it have to do with the format? mike: that is right bush is at
his best in town hall formats, talking about policy and taking one question after the other. it takes them a little while to get warmed up, we saw that last night. he was not very crisp in the first couple of answers. he came around at the end talking about trying to expand the appeal of the party, one of the main thrusts of his campaign . people were talking about this last night, that theme was delivered better by ohio governor, john kasich in front of a home crowd. he did hit his marks. matt: i thought he was the most surprising, strongest candidate, you agree? he had the home court advantage but nationally is little known. mike: he is just getting his campaign off the ground, was a congressman before becoming governor of ohio, he won in
2010, very unpopular to start his term some of that has turned around, he won an impressive reelection in 2014. he faced a week to craddick candidate but one almost every county in ohio, including in cleveland cuyahoga county, a democratic heart of the state. a lot of democrats, that is who they are worried about. erik: thank you, very much. mike vander in cleveland a day after the big debate. coming up, the jobs report out of the labor department, we will hear from top economist alan krueger and tim kaine about what they are looking for. ♪
go to the pub. let's get a check of the latest headlines. instead of shedding light on the malaysia airline of mystery the discovery of a plane part is adding to the confusion. malaysia says more degree from inmates 370 has floated to the island where the wing section was found. french officials dispute that saying it is not proven it is from the jet, although it is from a 77 and no other 777 has ever gone missing. facebook says 700 million americans made interactions on his network during the first republican presidential debate the number of people engaged on the social network was nearly 2 million higher than during the last state of the union speech facebook accounts all posts shares, and comments as interactions. do you have the correct time is an uncontroversial question, but not in north korea. the state is getting its own time zone a week from tomorrow
clocks will be permanently moved back a half-hour, that will make their time different from the north shore regional rival japan and south korea. those are some of the top headlines we are following this morning. erik: it is friday, and addition to jobs day, it means time for the yearbook game. this man is in finance, he graduated romney -- graduated from a school in the bronx. who is this? tweet us your guesses. remember we want added values not just the name, tell us something about this individual that is noteworthy or interesting. matt: the full name of fieldstone is the ethical, cultural fields than school? erik: j robert oppenheimer went there. when we come back, we will hear
♪ erik: minutes from now the jobs report for the month of july will be released by the labor department economist, just we surveyed our -- estimate the implement rate will hold up 5.3% and nonfarm payrolls will come in at 225,000. with us now is alan krueger, the princeton economics professor. tim kaine an economist and research fellow at the hoover institution. tim, we will give you first crack. what is important to you in this labor department report? tim: the economy is in a
paradox, we are getting mixed signals, i expect that to continue. in employment rate is the most important number you will hear although janet yellen has downplayed its importance because she does not believe the economy is as tight as a lot of these indicators are saying. the biggest number we will see we saw yesterday morning. the jobless claims have been low, low again, they have not been as low in u.s. history. has been below 300,000 for 20 weeks, not a variation, not seasonal. that means the economy is tightening even though there are structural factors you alluded to earlier that are keeping things depressed. matt: you talked about the eci numbers and how disappointing they were, why wouldn't we be getting paid less? tim: -- alan: it is a mystery we are not seeing higher
wage growth. the unemployment rate is low. what we are seeing is partly a reflection of a 25 year trend, a weak wage growth, worker bargaining powers, minimum wage has been stagnant, quite low. productivity growth has been slow. those factors are curbing waste growth, but lower than i expected and i will look at the average earnings figures. erik: tim, you mentioned structural factors do those help to explain why waste growth has been anemic? tim: i think so, allen had insightful things to write about , but we disagree on the minimum wage that is one of the structural factors that makes working legal. when kids -- working illegal. we are seeing that in the 25 to 55-year-old participation rate.
things make work illegal and those things have drank the economy down and we see this paradox of a tightening labor market but a smaller labor market that is why wages are weak and the policies put in place are not helping. matt: why is this such a debate? you are all economists. you know that you do not want to put price floors into the market that screws up the pricing mechanism and so many economies are in favor of minimum wage. alan: the labor market does not work perfectly, there are frictions in labor market, we have high vacancies now. minimum wage is at a modest level, increases supply. the evidence strongly shows we have seen a drop in the minimum wage, you have not seen teenage rebound -- employment rebound. the labor force participation
rate being low has nothing to do with the minimum wage. it is probably the opposite. erik: we are just about a minute away from the numbers. we will get some forecasts, let's talk about the nonfarm payrolls, unemployed at rate. what do you expect? alan: the consensus forecast is usually best one, there is a lot of noise in the data, the typical revision is plus or -15,000. i was a arranged around 225,000, unemployment rate around by pointer percent make sense. erik: are you are -- are you able or bear? tim: the labor force participation rate continues to collapse. that is what does not make sense. it tells us there is something wrong. i think it is policy, but that is the number i will watch. erik: we do this thing. matt: 18500 -- i guess low, you
guess high. alan makes a great point. erik: the most unscientific estimate. matt: here it comes. let's go to julie julie: 215,000. that is how many jobs were added last month. hourly earnings of 2/10 of 1%. manufacturing jobs the strongest month since january. we also have some revisions higher for june and may. that means we get a net edition of 14,000 jobs through those revisions.
the underemployment rate of 10.4%. that is the lowest number since june of 2008. the labor force participation rate, six to 2.6%. -- 62.6%. that is the lowest we have seen -- this report, not seeming to show anything that would deter the fed from its current trajectory. not a stronger than estimates not that much weaker on that headline number.
erik: julie, thank you. this is the nonseasonally adjusted number of jobs. youn july is a decline of just over one million. going into this report i was told that if the number was around one million nonseasonally adjusted without would be considered very good by historical standards. >> this is a very solid report. what you're seeing with the seasonally adjusted number reflects what you just said that the unseasonably adjusted number was a good number given the clients we normally see -- the climb we normally see in july. most people were expecting workforce participation to bounce back. i was not, because i think it is demographic and primarily aging the workforce. matt: bill gross is speaking
right now live with tom keene on bloomberg radio. i want to get to that. >> there have some pretty strong signals from lockhart and others that september is the number. i think of financial conditions, we know it is close to zero. unemployment is steady, but low. there are reasons why the fed should not move, but i think that the fed will move because the financial conditions. it is a situation in which central banks are beginning to recognize that there are negatives to low interest rates as opposed to positives and the federal court last month that said there are meeting term negatives, and they include destruction of business models. so i think they would simply want to get off zero and see
that a move toward normalization as possible. town: we welcome all of you on bloomberg television worldwide as well. the jobs report was boring today except for one single issue. hourly earnings year-over-year 2.1%. there is just no wage inflation. where is it? >> it is in brazil. unfortunately. it is not in the developed countries. that, i think, is a significant break from normal thinking from the tailored model thinking which by this time you would have expected some weight growth. --- wage growth. it was suggested long ago that inflation would have to exceed 3% to raise interest rates, and
we are nowhere close to that. tom: chris no productivity it is a saudi, nominal gdp. it does bill gross look rate policy description or an overt monetary description to jumpstart the inflation that yellen and carney do not see? >> the monetary prescription is difficult. it is definitely a new neutral world. no one really knows what the possible -- proper policy reach would be. would raising fed funds to two from close to zero work? it is almost a mirror type of
image, but you think that by raising it creates you could increase investment, you could increase bank loans and margins -- i think that is a possibility. tom: this is the debate that we have had for seven or eight years. and he has nailed the great distortion. everyone wants to get out of the spiral we are in including what we observed yesterday with the bank of england. they came out with a dose date and you really believe they will act in september after what we observed yesterday from the bank of england? >> the bank of england was dovish, they are talking next year is posted this year. the markets assume number two, but if they are behind september i still think it is.
i think they are mentally committed to moving before year end. whether it is 25 i hope, 50 would scare the market 25 i think september is almost -- not a unanimous opinion, but a majority opinion at the moment. tom: what will happen among the markets this weekend? there's a knowledge base here you could work off of. are off indians -- our audience cannot do that. what will be the market reaction with janet yellen and stanley fischer finally raise rates? >> it spends on the language, and what the forward current concerns are i'm looking at. i'm looking at the bloomberg
page here that has the forward concerns. it is assumed to be 1.5%. if we get there in 2017, there should be no market reaction whatsoever because it is priced into the forward curve. all is says is that basically investors next expect funds to be at 1.5% two years from now. tom: are you managing for total return and fighting to keep principal? how are you managing day-to-day given the back-and-forth that we see? >> at the moment, rem managing risk off. the dominant flavor of what i am doing. for over half a century to my investors have been using finance capitalism which has always provided a near
guaranteed return. the central bank bailing them out is the dynamic movement of capitalism. now when interest rates so low we have to question whether a positive carry produces positive returns going forward. a few cents -- if you sendense a deflationary world, it is a rather negative for equities and risk market. tom: the idea of the deflationary, and what we see in brazil mexico, europe, that has to filter into janet yellen's decision dozenses it not?
>> i hope it becomes a consideration because when marcus move so dramatically, and they have in emerging markets and developing markets, that is a dramatic move data that is almost able pull in reverse -- a bubble in reverse. it has significant implications for the u.s.. >> we will focus on this. erik: that was bill gross speaking with tom keene. let's go back to julie hyman with a little more on the work released at 830. what else stands out for you? julie: the big take away from this report is just how unremarkable it is right it
really does stay on trend from what we have seen recently in even the deceleration to 215,000 jobs last month still keeps the average. it has even come up a little bit because of the couple months of revision. the other number that stands out because these are also in line with estimates but underemployment rates being at 10.4%, the lowest since june of 2008. part-time workers who would like to have a full-time position. tom keene did just point out we have a relatively anemic wage growth year-over-year. but again, all of this keeping the trajectory. tv securities had an interesting quote. why i shouldn't, not why i should. we never so i think in these numbers that had a big deviation. erik: thank you. let's go to the market reaction.
i was keeping my eye on the two-year treasury, which is seems as volatile as anything out there. a fairly unremarkable report, not a big market response. >> but an important market response, a move of about a couple basis points, but it did not break that 75 basis points. the economy is continuing to improve, and we will see longer-term strength in the labor market continues. however, nothing major, as julie said. the fact that it moved weaker, means it is a green light for the fed to go ahead in september. this is why we are seeing it deteriorate just a little bit. the s&p futures now showing a drop of a quarter percentage
point. matt: i want to bring it back to alan krueger, here with us and tim kaine out at stanford. the chief economist at renaissance macro says this is the best jobs report because of the long-awaited work week -- elongated work week. what do you think? >> it is a good report, not a great report breaks unemployment rate at 5.3%, that is pretty consistent. that is white hot. we see the labor force participation rate, which is a very low number. the lowest it has been in years. there are millions of people who are not trying to work anymore. it is a next fact. it is that great report, but a good report. matt: labor force participation was unchanged.
if you look year-over-year, it is down 2.1%. what you think about this? there's unremarkable, because it is close to consensus as we could get. but it is better than we had last one in it is better in terms of more americans earning money to spend. >> if you live in the details it looks even better. i look at the index of aggregate hours which looks at the additional hires. that was by six tenths of a percent last month. that is a big increase. under the headline, if you look the industry growth, that also looks quite solid. i take this as further evidence that the job market is continuing to heal. we have been on this path or about six years. it should not be a surprise that we are continuing on this trajectory. erik: the jobless recovery take
this law? -- long? six years since the reception and it is still backed by this data. >> it is following mainly because of demographic groups the big rise in female participation came to a halt around 2000 one and because of the aging population that is something that economists had predicted for a long time. growth of 215,000 jobs a month is a pretty decent month given u.s. population. the recession was so deep that it long time to make up the jobs that were lost that was because of the financial crisis in that is because we had the market seasonal and not created severe problems in the labor market. but today's report is for them is that we, along with -- we have gone a long way to digging out of that mess. erik: relative to comment
expectations, there is one, manufacturing payrolls were expected to rise by 5000, and it rose by 15. is that saying anything to you? >> i would wait to see a second data point and a third data point. it is good news for manufacturing. there are lots of good things going on that people do not rely as. we are still the strongest exporter of manufactured goods. a lot of that is from automation and a kind of increase productivity, but people are driven out of the labor force and we did have the fee recession, but we are still healing. that is what the ultimate surprises. this far into recession, five years -- i'm sorry, recovery, and we're still healing. it will take a ticket for economists to find out why. erik: i'm not naturally
skeptical of what you say, but the recession was empty, shouldn't surprise anything it is taking so long. >> i do not think there is much surprise. if you compare to the other recoveries that they identify after crisis april we're doing much better thanhan other countries. >> the businessman will figure this out before the economist do. they will ask why washington is making it harder to do work. the affordable care act was devastating to full-time workers. it'll take economists decades to sift through and confirm that. erik: thank you very much. we are grateful to you for waking up so early start about this.
erik: since the financial crisis, banks have made it harder for companies to get loans, particularly small businesses. that is why the ceo of our next company went to non-bank lending, and joins us to show why it is thriving. what rounded you to get a loan through his company? >> we started six years ago and are selling through a website.
it is a new generation of the bags, they are of little different, they mold to your body and have no pressure points. matt: how do you reinvents the beanbag? i am old, how do you make it different? >> we make and mold your body it feels completely different. that was the point. in order for people to fall in love with them when needed to reignite the whole experience. erik: you went to a number of tanks, tried to get a loan. >> we opened the first retail store five years ago. today we are in 25 retail stores. erik: we went to the bank and? >> they wanted collateral. erik: they wanted to put a lien on your house? >> yes.
we went to a good amount of banks. matt: i think i read 97? >> that is a lot. i do not think i know 97. erik: frustrated by the banks, how did you find out about funding circle? >> i saw asking that they did a good job of marketing, we applied. the process was very smooth and our account manager was amazing. very customer oriented is interviewed by underwriter. even though the interview was very thorough i will it was very customer oriented, and were looking to see how healthy the business was. we got approved very fast, less than 40 hours we opened a couple more -- in less than 48 hours. now we can open a couple of stores.
matt: i was mistaken, it was sam that was projected 97 times. >> yes. was great to see is that we can take this money and turn it into new stores added new jobs. erik: your story disproves a couple of ms. that people have about non-bank lending, which is to say it is all online, is a slow touch with very little due diligence from what you describe, getting a loan was not all that different from getting a loan at a bank. it were interviewed by underwriter at the very least it is not this online application process of putting numbers and you're off to the races it is a little more involved. >> basically we see this as a substantial business needs a
little more. you have to dig in gift understand the business, look at reviews, and as we were looking at his business we saw a tremendously successful business that were growing atn -d customers loved. erik:matt: how did you start this and who is funding it? you have all of the street credit, did you get the hedge fund guys to invest in this? >> finance circle is a marketplace. we are bringing investment capital were a mix of different ons, const -- for a mix of different institutions. erik: great to see you again.
it is great to have u.s. well to share your story. it is friday, time for the yearbook game. this man is in finance. he graduated from the ethical culture school, class of 1969. very little twitter activity. i know it is august, a friday. i think i know who it is. matt: our coverage of jobs continues to payrolls in july came in at 215,000, the unemployment rate held steady. next hour we are talking to the mayor of atlanta. ♪
> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. erik: good morning once again. it is friday, jobs day in america. matt: stephanie ruhle is off today. let's take a look at our top stories from bloomberg terminal. signs of progress in the u.s. labor market. it could keep the head on the road to raising rates. employers added 215,000 jobs in july with the unemployment rate holding at a seven-year low of 5.3%. for more realogy blinged and julie hyman -- for more we want
to bring in julie hyman a. julie: it has been uniformly positive in the commentary on the report. a month earlier revision, also higher for the month of may. an additional 14,000 jobs higher than what was deviously counted. -- previously counted. one of the other important numbers, hourly earnings of 2/10 of 1%, but only 2.1% year-over-year, which is worse than estimated. and our fragile average hourly wage only up slightly. we heat losses in the mining and logging industries and the energy in intendustry.
game being led by manufacturing, and retail. little bit better news on the underemployment rate, that is the part-time workers who want to work full-time, 10.4%, lowest since june of 2008. overall, looking like a report that shows the trend is intact. erik: the economist say that is what is supposed to happen as we get closer to full employment, and it put it in quotes because i do not know what that looks like in the new world. the jobs report should become less and less surprising. julie: even though overall we had a slow down and went over month growth this year versus last two, that is also what you would expect as you get to full employment. erik: julie hyman at the labor
department this morning. coming up, the chief investment officer for fundamental fixed income at black rock overseas, an excess of $700 billion. the first republican presidential debate last night focused on the wildcard, the top 10 spots scrimmage in front of a national television audience. >> is there anyone on stage, and can i see hands, who is unwilling to lunchpledge support for the eventual republican nominee? >>erik: and it was the first of 12
to the republican national committee. debates. 7.5 million interacted, while only 5.6 interacted in the state of the union address. matt: did you see it all over facebook? erik: facebook is a platform for people. for everybody. for conservatives and moderates alike. matt: i feel like they are at opposite ends of the spectrum. erik: a smart move by facebook. matt: it turned out to be. erik: cyber security firm
imperva has vowed to take the gloves off in its fight to win business away from rivals, including ibm. looking at earnings to have come out swinging. the company beat analyst estimates both on revenue and profit. the ceo joins us from san francisco. you had some big ambitions for your company. you seem to be fulfilling them. what is working. ? >> our marketplace is moving rather rapidly. we continue to predict ada and applications -- protected data and applications. at the drumbeat of major breaches you have seen over the past year has changed the cyber security landscape. the first thing we should be doing is protecting data and applications. it is important in that landscape. erik: just this question of everybody in the cyber security business. to what degree do orders and
interest increase as major headlines, about security breaches the latest one -- like the latest one? they come almost every day. >> if you go back about a year, you saw target, home depot jpmorgan chase, sony. at some point they momentum began and it just continues in the data. these new breaches are interesting. we get calls about them, but i think what is done is it has raised the awareness of that risk. unless they guard their databases and their applications, there is problems ahead. matt: is it difficult to focus on the one hand strictly the business, and the other hand the
strategy to build the business to a bigger size? you're making a lot of acquisitions, i assume you intend to continue to do that. >> we have grown tremendously over this past year. last year we were a 19 percent grower this year so far with guidance we will be a 31% grower , and we think there is room enough as well. we think our focus is solving customer problems. and following that allowing that to scale the company. erik: why is it that you have your sights set on ibm specifically? >> i know the article came out about the trash talking ceo. ibm feed about 203 times between 2010, and the first quarter of 2015. we won 39 of those back, and we want them all back.
our technology is superior and our liability is better. we are terribly effectively in this marketplace. it is just a large marketplace, and these breaches have caused an awareness that these data are russia's. so if you bad actors that graham from one database and another, they won't to get $20 -$500 record there is a wish list and not market place and that is our sweet spot and i want to own that franchise. erik: i cannot imagine that the only things you lost word to ibm. well? who else? >> we have a world-class infrastructure company, and we compute them for these large solutions, where we stop these 240 gigabits attacks to take down websites. you have seen reports of past
about the fbi being notified about ransom being paid for sites that do not want to be shut down. we have a cloud-based offering for those. if we think about our web firewall business, we have a great company. but imperva was the only one for the second year in a row in the leadership quadrant that led that category. in the third major competitor that we think about in compliance solutions is ibm. those three companies coming and think about them as some of the best infrastructure companies in the world. but they are not security companies. matt: you talk about the marketplace as big. the market is right for consolidation. they are said you are preparing the company for a sale although you had a price target that is only half of what your stock is today. are you going to take part in consolidation in this market? >> i think there was conjecture when i joined the i was brought
in to sell this company, and i do not need to do this it is a great company. this is a growth is ms. we're talking 31% to two 32 percent. we have unfettered access to the marketplace. we are setting our sights of being a $.5 billion company rat. we are consolidator, but we also look at shareholder value. erik: before we go, how many people do you plan to hire in calendar 2015 and what about 2016? >> have about 820 employees right now, we will probably end the year as 950. we're still building our plans were next year perhaps 200 additional staff. erik: that is big growth. thank you for joining us this morning. matt: we have been talking jobs all morning.
matt: for me one of the newborn places i would like to work, if i had my druthers, there's a bridge. but a lot of people are choosing different cities. we'll talk about this right now. the economy created 215,000 jobs in july. many of them are in atlanta. the number of companies creating new opportunities there is impressive. atlanta is getting another 900 jobs from kaiser permanente. what is their secret to all of this job creation? let's check in with the
atlanta mayor and the kaiser permanente representative. are you moving to atlanta? >> i am not. but i like the opportunity we have to work with atlanta. matt: you hear monthly reports of a new company relocating to atlanta. what is it about allegedly gets other companies to uproot the moment, and hire their? re? >> we have a very large collection of fortune 500 businesses. we have an opportunity to do business. and with potential car lines, it makes it strong cases -- with a
potential client, that makes a strong case for us. we have a talent pool that is one of the best and when the most affordable. we have traffic institutions in our city's core, like georgia tech which provides the best training for engineers and individuals does any university. more universities are along the spine of our city. that creates an atmosphere that if you want to get very well-trained employees and have a high quality of life for reasonable cost, atlanta's winning more and more. erik: let's go back to you in san francisco, the mayor highlights a number of things i portability. is that what draws kaiser permanente to atlanta? that you have this talent pool, but also cheaper?
>> it is not the only reason. we think about the 10 million people that we served in kaiser permanente. it is very important that we are good in place to serve that membership. as we look across the country the things that we saw in atlanta were that they have a highly held workforce, they already an established technology hope to which is very important they have a great environment to live in, and they had some strong universities. we want to be a will to recruit an entire spectrum of people including early true technicians -- early career technicians and seasoned managers. matt: who do you feel -- which city you feel atlanta is most closely competing with? what jobs are not going to?
you? >> we are typically competing with dallas. we have the fastest growing job numbers and dallas was first. when i'm not going on calls, and jealous is generally on the short list -- dallas is generally on the short list. we dominate anything east of the texas border and up to maryland and virginia. that is my battlement for business. our region's economy is wednesday\\\\ -- is bigger than 33 states in the union. we want to make the case of the south is where you should be. but dallas, fort worth, at arlington is competitive. erik: one of the things that we have been talking about this morning, specifically in reference to the most recent jobs were on the labor department is the slow pace of
wage growth. hourly earnings are up 2% on a month over month basis. what is happening inside kaiser permanente? is there a war for talent? do you have to pay more for the people you want, or are those jobs being filled easily? >> there is clearly a war for talent. no doubt about that. we have technology centers in california, oregon, and colorado and frankly, we're seeing a growth in demand for our i.t. services as we look for ways to expand. we wanted to diversify the locations where we have our i.t. the located. we saw this is a great location, and we think it is going to be a perfect fit for us we think it will be competitive in the marketplace, when it to salaries and benefits. erik: thank you for joining us.
matt: congratulations on those new jobs. let's take a look at some of the top stories. carl icahn is revealing a new 8.2% stake of a natural gas company. he thinks the shares are undervalued, and he wants talks with company management and my sissy board seats -- and may seek a more deceit. apple watches are on sale today as of 100 best buy stores. it is the first time they have been offered outside of apples on retail ireland. outlets. last month sales of traditional watches bell lost in seven years. erik: disney's bob iger was hard
hit among the 40 highest paid executives last year. a daily show along how john stewart say goodbye. >> i know you're not asking for this, but on behalf of somebody people whose lives changed over the past two years, thank you. and now i believe your line is we will be right back. [applause] >> that cameo by stephen colbert among the highlights of the hour-long show from comedy central.
he promised viewers you will not stay away. erik: he has had such a stellar career. he has done well. i would go make a few documentaries in africa and to just chill a little bit. perhaps get a boat. right now it is time for the morning brief. after the bell, berkshire hathaway reports earnings. matt: this afternoon, president obama and his family had to martha's vineyard for their annual two-week vacation they will not be attending the wright state gathering atlanta --
wright state gathering in atlanta. president obama will not be making a lot of calls from martha's vineyard to try to convince senators and congressmen to go with the iran deal. he will just let them do it. erik: chuck schumer are saying he will not back this deal that john kerry recently arranged. noteworthy. we will return our focus to jobs in a moment. on the other side of the break, the chief investment officer at blackrock. ♪
i just need to get out, away from the traffic, building, and the people. i will do that this weekend. erik: i am pulling up some charts because i want to start the conversation with the negative editor of bloomberg markets about the three things we need to be looking at minutes away from the opening bell. rick from blackrock is also here as well. "are three things. >> we actually a special th edition of three things this morning, school simply talking about the doctore jobs report.
the headline figure was kind of warring. it came in consensus. but when you dig into the arctic gets interesting. slack and the labor force. this is unemployment, one of yellen's favorite measures, it is a broader measure of labor wars. -- force. this includes people who are not actively looking for work but would like to have full-time jobs. it is going down. it looks like it is disappearing from the labor force. that is something yellen will look at and moves us toward a september rate hike. >> some lesser skilled employment improvement in young people. it is pretty solid. if you go back 10 years ago, and think about the volatility and we used to get about a monthly
variance. and now you have compress that. and you can get similar numbers every time. it is just a solid employment market. you also when you look at things like jobs, hard to fill or job openings there are very permanent placement hiring at close to all-time highs. you have a glowing appointment market, a good number of people that can be employed. you also will see these numbers trending lower overtime. many people have been hired, and a lot of those qualified workers 5.5 million people in the last five years, that is pretty good. erik: getting closer to full employment? matt: what do you think about the labor participation rate because 8 million jobs are part of the slack.
we just had dr. alan krueger on. he says it is just demographics. we all know that america is getting older. more people are retiring. we can't keep them in the labor force forever. but the bears disagree. participation rates now lower than 2007 men and women between the ages of 24 and 54. that is not retiree age. >> there are a series of things that can be done to improve employment. we have room to go in terms of a planet that can take place. i do not think it is doing anything for the fiscal initiative. demographics are a big deal. benefits are also a big deal. it is a series of structural reasons that are keeping the space rate lower than it has been historically. it is not just that we've
reached a point, it is that the momentum of the limit will continue to be good enough participation rate: roof over the next couple of years. erik: that is a good segue into number two. there are more jobs to be had and more hours. >> average hours worked has been increasing. if was from 34.52 34.6 that is a multiyear high, the most since 2007. that is at some point going to eat into wage increase as well. we do not see it at this juncture it, but in theory people working more hours. that is another good sign for the fed. >> there is a series of assad influences that are taking place today. that gives you a sense -- you have to caveat a few things. skeptics want to talk about the economy is not growing. growth is going to be slower than it has in and demographics,
leverage, and china. this reduction of slack is ready impressive on a global scale. that is goal. erik: this figure four average hours worked, 34 point six is the second-highest sin the data series i am looking at. matt: it is a pretty amazing chart. >> the importance is very significant. matt: 2005,-2015 -- erik: it was just one point have her back in september of 2006 that factors directly into income. >> even a 10 point move is a serious dynamic. and to aggregate that, it brings out big levels. >> we can fee - toppled a healthy
fed will feel about this. let's talk about how the market feels about this. it is pricing in a september rate hike at this point. take a look at the intraday chart of the treasury yields. the short end of the curve is more sensitive to prospective rate hikes. it seems likely market is expecting some sort of move in september. erik: i would like to bring up my screen again. this is implied probability. this shows, based on fed funds futures, what the market thinks is going to happen. this is no a 58% of -- now a 58% probability of a rate hike in september. i was told by many people that this was a pro broken tool. now that we are out of quantitative easing, is this tool useful again? >> it gives you a measure of the
sentiment out there. and also has positioning that affects theft. the entire marketplace takes the front end of the yield curve as too low. the fed has been clear about his being 2015. so there's a lot of market sentiment in shorting the curve. erik: is the front end of the curve to cheap? >> rates should be trending higher. we think that rates will continue to drift tire, it will be too expensive. race will trend of led by the front end of the yield curve. one thing that is really important, the times last year yellen talked about gradual and the humphrey hawkins address. erik: it helps to illustrate the point. where things are at. it is going to be gradual. >> we are not going to see a
rate shock. it is not going to hit all the risk markets, it will not gradual. the economic data that does not support it, means that they will stop. erik: we will let tracy get out of here and enjoy your weekend. matt: she can work from home. 2015. >> it is a new labor market trend. erik: you just heard the opening bell. we will find out what stocks are on the move. early winners and losers? scarlet: > up by 4.7%. this is because of a leaner investor carl icahn's moves. he has a new eight .1 8%
activist stake in the company and he is looking to seek talks with the management and potentially get a couple of award exceeds -- board seat,s, if appropriate. it could be the first company to export large amounts of gas from u.s. a shale. earnings that are out over the past morning. noodles and company, a small cap, but it missed estimates for the second quarter brady can see the reaction here, down the percent. missed by two cents, coming in at $.10. the company have actually fallen by 43% year to date. we also want to take you to zynga. it-based estimates, but groupon missed estimates. that stock ticking higher, even as we speak and the revenue rose
30% to $200 million. the loss was one cents a share. pacific crest it says it does not see any type of blowout mobile game it should be doing to bounce back. erik: let's go to our fundamental fixed income investment officer at blackrock. we want to introduce a number that are brought up earlier with dr. alan krueger and tim kaine. i'm curious to know how much attention you pay, nonseasonally adjusted nonfarm payrolls. you see a negative number because these are nonseasonally adjusted numbers. july is typically a month where the plans are idle events and other things -- for maintenance
and other things. it is just over one million. shockingly, this is the best july 1 since 1999. >> yesterday i went through not only july, but also august. last year on the show august was an incredibly disappointing number. we had been trending over 200,000 jobs for two months prior and then all of a sudden you had 142,000 jobs in august. 13 of the last 15 august reports have been revised higher. what happened is a real sees double -- real seasonal adjustment. you tend to get people nervous about this slowdown. august has been amazing about how consistent and has shown disappointing numbers. you have to follow the seasonals and see what is happening. the trend, in terms of where you look and where we are moving is
good. matt: four people out there who see that big red number, we lost one million jobs in july it sounds bad, but i realize you are saying it is the best we have seen since 1999 and typically will will lose many more jobs. >> we have to adjust to smooth out the numbers, otherwise it would wildly volatile. the methodology is very much -- it is an important additional measure of is happening in the labor market. >> given teachers, schools, it has to be adjusted. you do not see a lot that goes on this time. erik: i took a look once again at your numbers, and you can
have the total return fund which is celebrating its return. what is working? >> there is nothing cheap in fixed income anymore. it is being tactical and trying to do a lot of little things on a regular basis. what are we doing today? given what is happening in this jobs report economies were investor in other parts of the world. the fed is going to start moving. where you take your interest rate exposure? read like it in europe europe is going to stay low for a long time. places like india are going to keep low rates for a long time. we like taking some of our interest rate risk outside of the u.s. and we will take some of our riskier assets, things like security products in
matt: as summer begins to wind it down, back to school shopping for mimicry to jcpenney is looking to reinvent itself along with your kids wardrobe. stephanie ruhle spoke with a company's senior general merchandise manager about how it is raining to top last seasons sales. >> we have lots of strategies. last year are back to school sales were terrific.
last year we had lots of plans to win in the back-to-school space. we have a new initiative in shoes, we have expanded the women's issue flow. we move men's into the man's syria and -- ne;s -mens'selling area. we should be ready for the right goods. stephanie: do you need to consider in different marketing push? how was the non-core jcpenney customer going to know about that? i am on normal jcpenney customer, how am i going to know about all the new gear? >> we will love to have you come into the store, we have lots to show you. we spend lots of time and energy both on tv and radio, digital
social and the newspaper, inviting customers, but also taking care of our existing customers. stephanie: you are very big on offering in-store promotions rate, but you have online customers you to do they both work are you? >> one of margins big push is to become more modern how we service the customer. whether it is going to their home, shipping from store picking up in store, picking up in-store. our promotions both online and in-store are often congruent. you are able to get the best deal wherever you go. stephanie: how hard is it for you to go on this reinvention and? bill that an initiative -- reinvention and build out that initiative? how hard is it for you to get new energy?
>> yes, it has been an interesting ride. retail is never boring. serving our customers is really something that gets a merchant of every single day. every year this new challenge this year it will be driving her business and helping to continue the momentum that mike and marvin created over the last year or so becoming a healthy retailer. that is what gets us all excited. stephanie: is there retailer you look to today are crossed or across history that has done it right that you would really like to see jcpenney follow suit? >> it is interesting, we have looked at everyone. to be a good margin you need to be a student of the industry. i think there is a lot of great competitors of their home of denigrating a they need to be the most relative jc penney for
a customer, and we look at that every single day. will the competitors we have, to offer the right assortment with style and value for our customer. stephanie: is there collaboration you have going on right now that you believe will come in to play with the most customers? >> our national brand and our own brand assortment is really what resonates with our customer. brands like nike and levi in addition to arizona or total girl really resonate with our customer or. we have some exciting initiatives coming out in september that will continue that idea that jcpenney is a great ways to come and ask more. also, our association with the for a has in a terrific foray for a disparate customer to come into the jcpenney and experience udf find out what else is great.
erik: would you believe that one of the best-known, most frequently sung songs of all time is not technically public? the licensing wrirights too happy birthday is on by time warner. and nearly century-old songbook could prove that the song's copyright is no longer valid and if it becomes hard of the public domain commission -- and could become part of the public domain. matt: we put together a little bit of compilation of bloomberg employees singing it. ♪ happy birthday ♪
power of apple and dds. apple is in 106 ats, more than any other stock or does ats account for 25% of assets. if you look at the top eight largest etf's, six of them have apple as the top holding. cannot understand it. apple has more ats the whole continent of europe. we are talking about a major situation . certainly, apple is a big deal. performance was down 10%, and that wiped out about 3 billion or 4 billion of asset. s. >> let's dive into the white house. which ones were hit the hardest? >> the s&p 500. that is double almost the next stock that is having they have got it.
it goes both ways. apple has contributed more than three times the stock. but in the last three weeks, we are accounting for the quarter of the s&p slide. the powershares qqq , that is for about half of the slide in the past two weeks. it is a big deal in any of the tech ats. -- etfs. >> thank you. erik: it is friday. time to reveal the answer to our weekly yearbook game. men graduated from the ethical culture fields to school in the bronx way back in 1969. the answer is leon black. he is the founder of apollo
hopefuls debated last night in cleveland and we bring you the highlights as well as the low jabs. scarlet: u.s. employers added 15,000 jobs in july in the unemployment rate is 5.3% in a building momentum for a potential rate increase in september. erik: arch coal tries to evade bankruptcy in its plan to cut debt is not going over very well with lenders. scarlet: good morning, everyone. erik: we had the jobs report this morning with 215,000 jobs created in the month of july.