tv Bloomberg Go Bloomberg April 1, 2016 7:00am-10:01am EDT
>> how much does unemployment really matter to the fed at this point. mideast game changer, saudi arabia will share share and set large sovereign wealth. welcome to "bloomberg go" i'm david westin here with jonathan ferro and bonnie quinn. fed chairto decide if look atle yellen will payrolls. the answer potentially coming up of minutes. 19 minutes away from payrolls. let's get you up to speed.
futures little bit negative here in the u.s. on over in europe, 1.3%.y stocks 600, down almost 8% last quarter, switch on the board. global market being reduced to what feels like one big fat trade. stronger euro. score card and treasuries ahead payrolls. yields pushing higher by two bases point. crude prices down by 2.43%. the bottom one, bought to you by saudi arabia. love these little .ponsorship we will start getting money. justt to point blackberry cents a, loss of three share. let's get a check of the headlines. starting with saudi arabia is
getting ready for the twilight oil age by creating the sovereign fund. themmed bin salman said fund will control more than $2 million. asset will be shared. at the nuclear summit in the focus will be on islamic state. president obama will try to efforts from again oh keep getting nuclearettin facilities. and new york are with the first states with the $15 minimum wage. approved in california the higher wage to take effect 2022.l by governor jerry brown approved the measure. cue mo,kumh
deal.d similar john, wages is going to be a big focus today. >> very much so. minutes away for the payroll report. wages in focus. u.s. employees forecast about month. jobs last 4.9%.oyment rate eric, we're trying to figure out, federal confusion, which is point this morning. excellent question. we find ourselves once again aoking for evidence that strong jobs market is turning into a healthy jobs market. sot's why your question is relevant. is it wage growth, which dipped 2.2% last month, will see economists whom we surveyed expect it to stay flat. there to be a monthly advance. sign.ould be a positive you now the labor participation something that muhammad is
focused on is stuck under 63%. once again the economist we expect it to stay flat. to 34.4 hour.ped every ten bases point, in other words every tenth of a points of average tors worked is equivalent 170,000 jobs gained if you gain the hours worked with the number added. you can see there are some very thertant data points beyond 205,000 jobs that economist expect to be added and the unemployment rate at 4.9%. >> i'm glad you take us beyond that 205. i'm curious how these numbers relate to one another. be we we keep adding the labor and
participation rate isn't going up? >> americans are encouraged when unemployment rate at 4.9%. tothe fed is right, dropping 4.7%, a suggest that the labor mark is strong. growth in, job monthive 200,000 per suggests that it is. unemployment rate of 4.9% is.est that it persistentlys weak. it has since slid back to but you.but you%. -- 2.2%.that's why janet yellene especially cautious stance by the fed when she spoke on wednesday win it comes to raising rates. is dialingeverybody back. here's her expectations for fed year.ncreases this >> thanks paperwork w we look tu
to get the numbers. back here with john riding. rdq economics and bob dob. john, you have a projection. saying 170,000 jobs. what i'm really interested in, line. trend do you think that we're flattening out in the job growth single datajust a point? >> the single data point is anduse february was so mild jobs pick up this time of year. someary may have captured of the march job numbers. above 200,000been jobs per month. decline. the the pick up in labor force participation between october february, the unemployment rate would now be a quarter percent. the question is how long can we to generate this number of jobs and have the people to
the labor force to openings.ose job job openings already very high. the labor market is quite tight. yet, when you listen to what the still see there's great angst about wages and why wages low. seeing the lowest productivity growth rate that we have seen over the last five since the late 1970's and early 1980's. can't pay people poor if you don't have the product to pay them. squeezing profits. devil's advocate, she's looking at global financial conditions. mandate? >> it's not the mandate. last meeting, statement earlier this week. she's paying attention
more overseas. >> what would it take in today's job report for market expectations of potential april hike or at least april or june to be really back on the table? >> i think it won't be back on table. the job number i grew with, been strong. participation rates beginning to a bit. watch the wage rate number. janet among the reasons backed off. us --n, you want to take >> we're both bald. the laborve participation rate. just wanted to show you in a chart. can chart this on your bloomberg. eric pointed out, dropped 2.2%. 2.2%.ot horrible labor participation rate, although, it's been said to
problem people are coming swack the workforce. that's a good thing. you want higher labor participation rate. it looks good as far as that's concerned. at least where we're recovering, allen kruger, i mentioned this a on, he says,comes the reason the labor force participation rate dropped so low, you can see that labor been participation has falling since the late 1990's. people are starting to retire. thee are so many people in retirement age. the demographics are the reason for that. i wonder bob if you agree. >> absolutely. this is a demographic issue, not view.ical issue in my it's not only people retiring, it's two wage earners having through school and one of them working. numbers,hn, i seen that compare us to other developed countries. japan, europe and things like that. the participation rate of 25 to 54-year-olds is actually
below what our largest competitors are around the world. can't necessarily say at countries and participation here should like -- we have to look at trends over time. massive rise in labor force the 17pation through >>student: 1960's and 1970's. female labor participation down.tarted to trend there's some season cyclicality that we maybe squeezing out here. unless we run against this tide is only to start, we have 15 more years of aging dynamics. to push towards participation -- issue, people
worried about jobs. >> just to wrap things up. at the s&p 500. rallys aggressive coincide with this. can that continue in the coming quarter? it can.nk the trends kind of got off the mark in the decline in the equity market. i don't think we'll see that the pace that we saw it before. for the market, it's about profits. john mentioned the productivity problem. the top line growth isn't there. we don't see more visibility and better earnings, it will north.ound and go >> thank you very much. rydeing staying with us. continues.y coverage
bank. the average price in manhattan apartment is more than $2 million. that reflects from the high-end frenzy. the boom began two years ago and is showing signs of slowing down. latest in bloomberg business. john, i know you're in the market. >> he's in the market. obviously. she knows what i'm up to. arabia pivot away from oil. big story this morning. saudi deputy laid out his vision $2 trilliona sovereign wealth. bloomberg joins us for more on phone from dubai. glenn great to have you. can you run through what we've that we didn't know before and answer another question, whether this is a pivot away from crude. is that black and white? learned from the interview was much about the person that's transformation of
saudi arabia. the deputy prince, he's throwing in and changing the country from the interview with him, it he's very committed to moving the country away from oil industriesing other and investment funds so they can invest internally in the country. look abroad. going to be like a 2 tiger woods fund which is more 2 --$2 trillion funds. how are we going to create jobs? >> i don't think the investments the oil industry. once the fund is up and running they're talking about, they'll create industries within the country. look at healthcare and real estate. they're going -- the public amocoments will absorb
ownership. they will create construction companies that's going to work kingdom.e that should be able to create labor for saudis. >> glenn, how much urgency is there? we heard over the last several months what could pass for austerity in saudi arabia. had to cut back on some benefits for people there. how much urgency is there in this transformation? >> i think what's indicative of need for change, is necessarily what i think and what other people think. what the saudi leadership is saying. clear in our meeting, they wanted to move the country away its oil dependency. felt that it was necessary step to do so. the measures to do it. i think they feel from our with them, and his
.fficial, they had to do it now they couldn't wait much longer. for myency is there and impression, they recognized need for change up to this story -- is itearn that the saudi review taking on future of crude here? so. don't think assets is still there and they are still largely oil. pointime i was on, the that i made is what we have is a global excess supply of production. we're finding new resources of oil, especially in north america and that is driven down the price. ultimately, that price is going where itthe point shuts out that extra production. to $100 aoing to back
since 2009. andnger japanese yen stronger euro, 114. stocks down. treasury head of the payrolls bases point to 1.78%. >> thank you very much. overnight overt global wall street. we'll kicktough -- it off with a personal favorite of chipotle. near term risks are mounting and sees ongoing costs from chipotle strategy.l she's late to the downgrade. that near termw risk, don't buy chipotle shares. price target is $500. 550.ut down from from burritos to netflix, and
chill atlantic equities upgrading their recommendations on netflix from overweight to neutral. raising their price target. favors that netflix is in the tv sweet spot and to gaints the best way exposure as tv viewing shifteds. netflix shares are down 10% this year. you can see them up half a percent here in the free market. you.to >> latest numbers on prices for factory goods in euro shows they march. the most since purchasing manager's index to 51.6% from 51.2 in february. the 50 level.ound this underlines the challenge facing european central banks which unveiled new stimulus measure this month. us.omist john ryding with
we have several numbers coming overnight in europe. do you follow these numbers closely? what are they telling us about european economy? >> i think the european economy struggles. the u.s.alking about lementing lack of wage growth. have theuld love to u.s. problems. they really need job growth, seeing.ey're not unemployment is twice what it is and th -- twice in the u.s. policy to to do something. the problems really aren't monetary. that,rse, on top of to thegrowing issues refugee problem. to $80 billion won't tackle these problem. >> looking at the data, factory
in 2009 ins dropped march. qes reluctants. if you are going to increase, they going to buy? >> what are they going to buy? ecb shows what they've been buying previously. they probably not going to their path much from this. if you see -- we were talking they buy theut most bonds from the biggest countries because they don't want to skew the picture. they try to buy out on the curve, the distribution that's there. want to skew that picture. as far as the continued program, the expansion, they will keep buying the same stuff that they have been buying. this problem with this buying. ecb not generally an purchase program. it's an individual central bank purchase program. each country is buying less.
it's a small percentage. from above. it's very bond buying program it's akin the spirit of the euro. the germans buying germans and italy buying italian. >> biggest quarterly drop since the deaths of the financial in 2011. quite phenomenal. john, will be with us for the rest of the hour. stay with "bloomberg go." you want to know out put. seems to be the headline from that. stay tuned for more. that's next.
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he's with us now. >> that was outside. is being the brussels hampered by police. authorities are still hoping can do unlimited basis. brussels union is demanding temporary check on a check-in area. richmond, virginia, a state police officer has died after a terminal.ut of the authorities say they don't know why the gunman opened fire. trooper shot the gunman dead. first time in history, more thane are obese underweight. obesity rates are soaring. that come from a new study. the british medical journey. it says obesity rate has tripled men and more than doubled for women. access tom is greater
.heaper, unhealthy food to tom keene. tom, you broke some very important news from bloomberg an exclusive this morning. we want to revisit that with you. >> john traveled to riyadh to the most interesting person in the middle east. this is a generational change of the royal family. john and i seeing all the others family. now there's a sea change. here's part of john's confers the deputy crown prince. hise sketched out really plan for the kingdom. he has obsession about moving the saudi economy away from oil and basing it around something new. amoco$2 trillion plan which
will go is an amazing thing. buy google and microsoft. whole lot of them. all the things. change to spare. very hard as well. already cut all the substances. things.ng on to other it's a rather dramatic plan in terms of economic transformation of the country. >> john, all of us are leaned on robert lacy's book, the kingdom. their first window into the royalty. we understand this is a generational change.
in your interview? if it is a generational change, where are they heading? >> there's some generational change. his father is king. muhammad bin salman is the crown prince. manhattans -- around him. it will be some people in the royal family. from the some people religious side who will be suspicious and worried about this. is an element where saudi arabia has to change. stuck in a situation. they really needed it. >> david was striking here is photo in the bloomberg stories of a completely modern deputy crown prince. it is stunning the visual image
versus the images that we have of the royal family. >> historically this country has by very elderly senior people. prince is 30rown years old. about thisking earlier. you have the lower price in oil. they should have been diversified away from oil. have this generational shift coming at the same time as the cataclysm. look at the global price of oil and major houses citigroup, you have a terminal value in mind. a single point number of where oil is going? oil has to be at is to balance global demand and it has supply up with the new in the market. what you have is a corridor.
corridor and the price is too high. people will start drilling in u.s. again and bringing in new oil. prices probably lower because we're still pumping oil. ofcut investment in the u.s. 75%. we barely cutout puts. over supplyinge oil. i think it is more of a corridor that corridor may be 30 to 50, 35 to 60. those numbershat are. but range around where we are, have to think of in a longer term. history tell us, we don't run out of oil. the marketing how looks. >> it's interesting as we're talking about the evaluation. is it going to be worth. people saying $2.5 trillion. much isquestion is, how the market really valued the oil enterprises. panel, i havettom
than oil production more 40 million barrels of oils a day. production,on oil less than 2 million barrels a day of production. see that chevron is atued by the stock market $180 billion. doesn't put high sales on a company that's state owned >> the state can unilaterally what to do. >> they have other goals in mind simple propertiability for profitability for shar shareholders. oftom, i wonder whether some it is a discount. if they go in a public offering aramco, offer 5%
they're going to have to comply whatever security exchange trading on. it's going to be different russia.not it's a whole different feeling out there. they're very comfortable working london and working in new york. john, i would say, they can run lined upl have bankers ten deep to assist with this. huge >> in new york, talking to bankers for a while, that's a secret -- >> it's like ferro when he goes to london, his transaction will keep paris in week.ss for a >> we're going to have this change. >> precisely. that's thecisely issue. we have to remember deputy crown prince had a work in defense and
with the arch issue in saudi arabia. which is yemen. go back to shifting region.ics within the far more with the arab spring. societial change for saudi arabia. >> it is. now remembers the arab springs sort of peeked out for a in egypt. happened >> originally in egypt. it.aybe we are going to see what arabia -- problem is, is going to be done to keep society.ithin the in theigious divisions country, the kind of problems isis.e're seeing with >> we got social media on this morning. thatery real tensions
president obama has spoken about within a traditional middle perhaps deputy crown prince want to take them. >> compounded by young men out of jobs. we've seen in various countries. saudi arabia has that problem. growing young male population in is not employed. >> unemployed people are the easiest to radicalize. employed.ed to be saudi still does have reserves. >> this points to one of the problems when you're talking about a state-owned venture to a for profit publicly traded company. chevron wouldn't think about money to a free million unemployed 25 to 34-year-olds. chevron wouldn't think about plating --g aer fo
>> we have to think about the effects. a they do build up $2 trillion fund, that's big. speaks to an optimism about markets. central bank theory and the economics of the day and the jobs report of the day. absolute liquidity got to find a warm spot. >> some people will go to real estate and some people will go into huge construction companies they plan on building. >> it's where the money coming from, you have to sell the oil asset. you have to create asset in a form that it can be sold. you have to diversify a way the money come from selling more of
same. that challenge comes to saudi deputy prince muhammad bin spoke to bloomberg. boostlready said it will production. ford revenue came up short and blackberry one time leader in .martphone missed estimates the company trying to replace falling revenue. that's bloomberg business flash fan.m a big billy joel
tesla unveiled new affordable 3 sedan. since the last earnings report, 60%. stock rose will tesla's new reveal help the company's momentum in the fast lane? now is david welch. can he make it and how many need to make? >> that's the big question. he really hasn't talked about to build.e's going they gotten so many orders and that makesactory battery. he can probably meet the demand. beon't know if he's going to able to sell 134,000 of people and build them in the first year or not. this kind of demand and his ability to raise money, this is probably something that they can really do. the bigger question is, can they make money doing it. pretty successful selling cars so far.
model s did very well. >> david, you know this industry so well. does it give you some sense how many he would have to make in to make money? >> it's also a matter of getting battery costs down. aty've been pretty good that. some of the analyst reports i've seen suggest this will be a a modelle program with s wasn't. there's a lot of debate on that. over s, most of them sold $100,000. they still did not make money on that car. to sale forg $35,000 or less. elon suggest there will be some performance versions that will the $35,000ey than starring point. how quicklyepends they get up production and how well they can get their battery we'll see.
it's really -- we're kind of in the dark here. nobody in the business makes money on electric cars. got to figure 115,000 people signing to up buy one. like it's pending home steal. will all these people buy? would they have to buy? >> they don't have to. they put down $1000. the newer when mini-came out, 15 years ago. had to put down $5000 and . bought mine they're putting down real money to get it. i think they'll have a pretty good conversion rate on that. musk, they want this company to start making some money. couple of years ago, we were talking about them becoming a firm that looked at batteries and moved away from cars. what is going to be the future this company? >> you bring up a really good point. at some point investors are want to see profits.
they're going to want to see cash flow. know one is predicting that until the end of the decade. long way to go. right now, i think people are seeg to be very happy to that they're keeping production on schedule. there's 134,000 number of people putting money down to buy this car. i think it's going to really going for the stock and for the company itself. that's also very good looking car. it's got a lot of safety features. he's put out a car, a very good car and it's an car second. that's why his cars done particularly well. this is going to excite investors. this is real. it looks good. fast.retty cool and it's lot of people are showing interest and the buzz is tremendous. the way tesla has been. bas based on hype.
>> david, tesla has been pretty good sucking all the oxygen out to cars.when comes there are a growing number of competing.rs chevrolet is coming out strong. coming out.t is it will be out almost a year before the tesla. the issue there i think for bevy, their car is kind of ditz a hatch back. very useful and pragmatic choice by gm. to model 3, some people see it boring. service from every dealership and the price is right. useable car. chevy is going to have a lot of appeal. you can see competition for bmw i3 which is a plug-in hybrid. looking. of cool one of the things tesla has
going, that brand is just powerful. $1000, people put down they haven't gotten 50 feet within the car, that's impressive. >> david welch thank you very much for joining this program. at some ofoser look the metrics which you should be watching ahead of the jobs report. that's next. about 40 minutes away from that payrolls report. here's the market action for you. little bit negative here in the u.s. dow futures down 72. europe, thered in dax up by 2.28%. the euro heads north. it's a stronger euro story. 114, 27 and dollar 112 yen. minutes away from the payrolls report.
>> you're watching "bloomberg go." biggest weekend in college basketball. in final four tomorrow night houston. wildcats wille face oklahoma. game two north carolina tarheels syracuse on the orange. which means brackets is back in business. business and finance take their the shot of selling out perfect march madness bracket. you can get in all of the action at our websitege bloomberg.com/charity bracket. great cause, great fun, please
check it out. >> thanks so much. time now for a special jobs day edition of off the charts with matt miller. what are some of the indicators investors might be looking at? know they wrote a great article about labor force participation. the headlineat number. what i've done here, i found out bls, put together a comparison of a number of countries job participation rate. here in red, we have the u.s. everybody else by their colors. england, japan, germany and france. you can see that, although this data the latest data we have in fallen since then, we're at least in the pack. really at the top as far as force participation goes. >> this is all ages. >> that's all ages. you pointed out to
me, 25 to 34-year-olds are at a low.ar i have that chart as well. number 72. 1975 we were up. not all demographic. >> it starts out 1975. >> it goes back to 1975. >> the point here is that if it retiring baby boomer, this would not look this way. you would have flat or up with the younger people. this shows that it's coming down even for the younger people. not just because people are going out of the workforce. a 81.2% right now. that's what you would expect. someone between the ages of 25 and 34 would typically have a job. it could be that kids these littlest brother who's in this bracket, he's a musician, he's a developer. differentumber of
latest news on the economy this hour. ofs is second hour "bloomberg go." stephanie ruhle is out today. >> bonnie you said it. jobsnutes away from the number. is joining us. >> what a treat, thank you. >> i want to get to the score card. away from the payrolls report. futures here negative, we're points on dow future. european trade and dax up by over two full percentage points. where the dax goes, the euro way.ly goes the opposite
maybe it's the reverse story. euro story.r higher.ittle bit 1.78%. quarterlybiggest decline for treasury yields in years. output forcrude saudi arabia said, iran has to join. big news in the oil mark today. out of saudi arabia. that's your market wrap. let's get to bonnie quinn now. of energy, more than 50 global leaders gathered in washington. their attention to the islamic state. president obama will try to get sign on tories to keep terrorist from getting weapons of mass destruction. concern may target nuclear facilities. in chinabetween up
indies. deploy f16.ill california and new york become state with a $15 minimum wage. lawmakers in california approved wage to take effect by 2022. brown said he measure.the >> we're less than a half hour away from the march u.s. jobs report. john tell haas we're expecting. tell us what we're expecting. >> average wage look out for that. 2-2% change. year.timate year on
clarida will join us. payroll report plays out. it drops. look pretty solid and the labor market come out an actualat's not picture what the labor market looks like. what is your view of the labor market now? >> that's a good thing about releasing 22 page report. you can always find something to view.ur my view is, 200,000 jobs created on net would have been a good forecast for the last 72 job reports. what the u.s. economy has been generating. good solid employment gains. our problem is generating new we don't problem is get that extra output from those new jobs. story --ge
tricky thing, seen in a while, the labor force growth, been used to is expanding. it's slowing down. point later this year, good jobs report would have a one handle. slowing. force is not because the economy is the labort because force. >> before we go deeper, you want to show us what the bloomberg is telling us about what people think will happen? >> i want to show you where you gas.ut your we have a function, whis, that to enter a guess up to five minutes before the you among it ranks all bloomberg clients who play in this game. we'll put in a guess. function, whis. myyou take a look at terminal on chart 444.
in blue theed here whisper number from last time white, the actual number, in green is the twitter whisper number. twitter number there may be what we'reure of actually going to see. although none of them guessed how good it was last time. >> i did, actually. i was pretty close. i want to come back to you. for me.rt this puzzle as you say, the job numbers in jobs,of number of added has been good for quite a few months. much.not so maybe 2%, 2.2% a year over last that.it was below participation not so much. how does those fit together? is there something underlying numbers?with these is the economy changing the way its structured? is changing.y associated with such poor performance. we're not generating sufficient
good jobs to pull people into force.or because they're not good jobs. they're not associated with strong wage gains. fits together. part of the participation rate is demographics. that's why in a year or two, we're going to be happy if we a 75k job number. but that's not now. that's like 200 your best bet >> rich, that's partially why fed is concerned. it's taking down this idea of employment. might even -- there are certain people might be in the high to where wee we get need to be in the economy. >> absolutely. moving target. a more telling in recent meeting, they indicated their baseline views, they will push the unemployment rate below that level of 4.8 and expect to keep it there for three years. this fed want foss run the labor market high.
>> how far do we need to go get there? we're producing services jobs and wages not going up. see?do we need to >> we need to see some indication of wage increases. honest answer is we'll know when we get there. if thee yellen referred labor market is tightening faster, we'll see it and they can adjust. there's more to go. >> i want to know what this all treasury market. the trade for the first quarter, not a phenomenal quarter for the treasuries. a flatter yield curve. all the things i'm hearing about the mexicanrket and inflation here, should mean we -- is that going to continue? >> i think your analysis of the u.s. is correct. the key points to remember, there's a global market for treasuries. what happens in beijing and riyadh is just as important what the fed.t big part of the rally this year
is concerns about china, global downs. i think that's always going to be a factor when you looking at market.sury >> vince, i want to come back to you and talk about something that we don't necessarily talk with jobs. may be the big thing in the corner. productivity. we haven't seen the productivity gains that we have thought. cheap,ough money is so it should facilitate investments. required tog to be get productivity going? >> more capital spending. more technological progress. feell admit, it doesn't right given driverless cars and advances.g and all our data and what the data have been telling us over the last output perrs, is hour, productivity, isn't increasing that fast. you need? you need capital spending both in terms of physical capital infrastructure but also human capital.
better.ucate our kids >> these issues -- answer.s not an easy it's not a short answer. it's not something the central can do. >> what can the fed do about this? fed yelleny the recognizes these are trends. part of hope having low interest rates is that companies would use that as an opportunity for capital spends. as we look back in the last five years, lot of companies used low rates for financial and engineering share buy backs and the like in capital spending has been weak. factor. feds done its part by lowering rates. >> exactly. this all leads to the idea that we need more demand. more global demand. the consumer is going to provide that demand for companies need to hire? >> well, we hope europe will be
providesng as ecb additional accommodation. the administration will finally hit their target. officials write their economy, they can grow 6.5% and meet their plan. in that environment, that's to generate sufficient global demand to have not a stellar expansion. can't really have much -- we can't have a stellar expansion if aggravate supply is growing 2% pace. plain fact is, we've been stuck in a 2% gdp growth channel for the last few years because aggravate supply growth is so to work downenough resource slack. >> i wonder whether the shift to has had a more profound effect on the economy. investment is and coming in relatively modest companies in terms of
employment. are not big manufacturing firms. ofy don't employ hundreds thousands of people. that's where all the innovation and the creativity and energy is going. >> i think that's exactly right. there's two parts to it. is, where we are -- innovating, we don't use much physical capital. of stuff a bigt plan. that manye not hiring people. thend part of it is, do national income account status statistician do the best they can. >> if i can jump in on that point. the thing about economist, we're economic history on productivity. we're not good at turning points. computers everywhere
except in the productivity statistics. david's point, five years from now we may look back and say this is the point when productivity took off. am, it's -- amount set.difficult to thank you very much for joining this program. clarida is sticking with us. less than 30 minutes away from the u.s. jobs report. 205,000 expected to be added last month to the employment number. march u.s.ge of the job growth. including bill gross.
>> this is "bloomberg go" with 15 minutes away from the payrolls report. futures little bit negative here in the u.s. by 65 points. byking off q2, the dax down 2.55%. it's a stronger euro story. a weaker dollar. to 112.en drops yields go higher. what a quarter it was for treasuries. best quarter since 20121.77% on the ten year. matt miller now with big analyst calls ahead of the payroll report. a couple rip through of analyst notes that came out overnight and early this learning. airline, american, delta, hawaii and united air, this morning.
sees more challenging traveling based on recent economic indicator. profitsn in quarterly can cut into corporate travel. against theetting house. gaming revenue there dataase 16.3% according to macaw gaining inspections. finally i want to talk financials. just got a number of analyst calls on financials overnight. appear to be buys. a buyty national raised at goldman sachs. market.ng in the
look at companies year to date were allbe waries they moved up to buys. >> we're about 13 minutes away from the u.s. department of the jobs.ing us about with 205,000 jobs to have been created last month. us now carl. tell us what you're looking for. >> the consensus is 205 on the headline payroll gain. the thing is march has disappoint. the a sube looking at intoumber here which goes this perfect storm that's blooming over a weaker economy. the fed will not budge this year growth.ft gdp this quarter corporate profits thete this notion that
economy is soft. i don't think that's really the case. softnk that we could see a payroll print. we'll see a recovery in the second quarter.nd to carl's point. the spread that we've seen here.ment stays up how do you see that spread reconciling? >> what has been going on, that radar screen, that incomehare of national has been growing up. it's been falling to a 50 year low. remember whenever you see a about slow down of corporate profit, it's going somewhere. as. workers are getting raise. we don't want to forget that piece of it. >> 67%, you take a long term trend line, where is it? high 60's.the 69 got up close to 70% a decade ago. in fact, labor share of income
was constant. down in therend late 1990's. here.e seen a rebound rare good news. >> is there anything that take june off the table? >> i don't think there's onthing that put april table? the fed is waiting for smoke to clear. they need evidence. have thaty won't until deep into the second quarter. today'sould watch in report, is hours worked. that seem boring. we all watch the unemployment payroll change. hours worked declined significantly in the last report by .2. .1 decline in the workweek. six minutes on the workweek. is the equivalent, we have a payroll oftor 122 million. payroll equivalent.
that has big implications for implications for consumer spending. watch the length of the workweek. aggravate hours worked. numbers.usy crunching that's quite phenomenal work. rich, going back to carl's point smoke clearing for janet yellen continue doing something. the feds currently using what's happening abroad as an excuse to while.ngs hot for a does that resonate with you >> it does. i think they're making the right call. chair yellen deserves credit for communicating a complex message. to get back to carl's answer to question, if there was any chance april is on the table, in her speech in new york, took that off the table very clearly. >> they're hardly running the economy hot now. growth below 2 per.
report. over to matt miller. managing director. he's watching currency all the time. now around the u.s. jobs report. brad, let me ask you first of if we get a blow out number. mean that the diverging trade is back on? should we look far stronger u.s. against the euro and the yen because it puts the fed back ?n track >> definitely in the short term. knee jerk you have a reaction in that direction. i don't know that it will be of put it back on the full dollar trend that we're there.a long time chair yellen was very doveish. in a doveish mindset. blow out number will take some of the pressure we've been seeing on the dollar off temporarily. i don't know it will be fluff -- on trend.put us back
we still need a couple of more data points. saying, theople last meeting press conference was the most doveish janet yellen been. tuesday in her speech, she was doveish. how does that affect the trade that you're putting on? dollar.been backing the it's obviously put a big boost into some of the higher the commodity currencies in particular. the dollar has come off quite a bit. we haven't broken trend yet. if you look at a chart, we're still in a range in the dollar. broad range has been holding for several weeks. we're still in the range nonetheless. thatven't broken out of trend. but it is putting a bid into a higher beta commodity currencies. i expect that will continue to the extent we hold doveish line in the near term. we're going to continue to see rally.urrencies especially higher currencies locallye fundamentals
will benefit. >> brad, thanks very much. appreciate your time this morning. much.nk you very we're just a few minutes away from the jobs report. expected it will be 205,000 jobs will be added. still with us to discuss this is clarida. he's pimco managing director. thet doesn't likely affect fed very much. which is normally on jobs day it. we're on hook about what will it tell us about the economy in the united states and globally? back to fundamentals? >> as the number comes in at consensus, it the says we continue to grow around 2%. soft.a little the moment muppet in -- momentum 2%.he u.s. is if the number a s a long way away, we get more information. you never want to put too much weight on any one release. >> rich, if you and had a
conversation with the market, the d word would have come up so times. ecb made a pivot away from the credit channel. yellen doing this. >> i think there's less divergence many expected. the fed saying they will hike times it will hike two times. you mentioned some adjustments in ecb policy. also the fed balance sheet on hold. there's still some divergence less than folks expected. >> rich, you know the way banks operate. if you were going to speculate, learn something from happen?rgence that they decided they would have to coordinate? since that g20 ofting, you do get a sense
less disagreement among the central bankers. whether or not it's coordination all in their interest to do these policies. the markets have embraced that that there's more communication among central banks. out.ldn't rule it significance to the mix of jobs? manufacturing jobs created and households? >> i think so. bonnie, you want to look at the trend. any one month it's going to be that trend.d obviously manufacturing has been hurt for some time because of dollar.ng the oil patch has been hurt. those factors have been dragging sectors.ain >> rich clarida, one thing you're looking for the payrolls report? looking at averages hourly earnings. i'll going to be looking to hours worked in addition to the headline number. labor force participation. in folksme pick up reentering the labor force in the last several reports.
said, it's 22 page single page report. chairemember when the fed first took over and she delivered that speech in march 2014. she delivered that word slack again.d over it's no longer about slack it's all structural. acknowledgesen that slack is narrowing. she's still of the view an running hot.s absolutely. pimco. clarida thank you very much. 45 seconds away from the payrolls report. here's your markets score card. futures little bit negative this morning. futures up by 56 points, s&p futures negative 8 points. switch on the board for me. fxll get a check on the market. dollar yen down .5 of one percent. it's a weaker dollar story throughout the fx market over
weeks.t couple of u.s. yields up a bases point 1.78%. at front end of the treasury curve ahead of this report. brent crude down. >> 215,000 jobs created in month march. that is more than the economist aboutveyed expected by 10,000 unemployment rate ticking up to 5.0%. first increase in the unemployment rate since may of 2015. once again, john, david, rich clarida, i heard you talking, a mixed picture for the u.s. labor economy. positive side, wage growth. and 2.3%h over month year over year. that is greater than what was expected by the economist we bloomberg.re at
as well as labor participation rate of 63%. that's increase from the month of february. is the best labor force participation rate since march 2014. on the negative side, a loss of manufacturing jobs. that is the biggest decline ande december 2009 continues along.long running trend. inre was an increase underemployment rate to 9.8% to 9.7%. on the neutral side there was no change in average hour work per week which stuck at 30.4. you may wonder why are we seeing rate to of unemployment 5%. first time of may 2015. an increase in the labor force almost 400,000 laste 59ed the labor force month. not all of them found work. there was a slight increase in unemployed.f there are about 8 million unemployed americans now.
important point to mention. revisions very little. they total a drop of one over months.ious two havee net job growth we it,000, subtract one, call 214,000, versus what we had end of february. mentioned 29,000 in manufacturing. also 12,000 jobs loss in mining and logging. plus side, construction, retail, education, healthcare, leisure and hospitality, john, david, gon knee and -- bonnie and rich clarida, that is the picture in america this morning, april fool's day. >> thank you very much. i want to show you how this is playing out in global market. 215k. a market that's trading on the wage growth. coming in 2.3%. the 2.2 previous months makes futureper. doing pretty much nothing. switch on the board i will show fx story.
yield is higher by three or four point. euro dollar coming down back to 114. cross over to bloomberg radio where you can from bill gross being interviewed by tom keene. >> right now on bloomberg radio and bloomberg television, we welcome all of you as we speak with bill gross of janus. pricesd market yield up down. not make aoes report. this shows some of the resiliency that chair yellen dealed the last week in her speech. >> i think so. it's a good report. than expected.r of course jobs are doing about the same. at 200,000 plus. domestically.
what strikes me about the fed, fedss your question, the whethercounted the ecb intentional or not. by 5%llar is weaker against both euro and the yen month.the past and say, they focus on jobs unemployment rate which is what we saw for the moment. opposed to as domestic conditions. markets fore the being confused. are confused are whether to be bullish about this report. >> the moving averages of can slightrolls, down to 211 six months, right months 234,000. by any standard, those are good
numbers review with us again the reticence that chair yellen has act which you wrote about so janusly in your latest report? recognizes, ihe think she does, she's in charge there. recognizes that those jobs are not necessarily translating economic growth. seen it flat. forecast of first quarter gdp at .6%. numbers that suggest robust growth despite the jobs situation. i think she has some domestic caution, although she doesn't express it. has some global caution in terms of emerging markets and euro situations. >> bill, is to america's.
you wrote your report last week and what we see today and thelenges we have seen over last international week, to bring it back domestically, is two americas that janet yellen trying to manage and deal with? >> well certainly. we know she's trying to do it by herself. to the extent that the fiscal policy side has been absent for now. probably will continue to be absent. yellen's all on janet shoulder. she's trying to balance that out. doing itw, she's incorrectly to the extent that -- interest rates are lower. has negative implications for job growth and financial institutions. seen cut backs because they the sameerate profitability. insurance companies, pension household savers
affected. but not only two americas it's two conceptual ideas in terms of what works and what doesn't work. reset now for bloomberg radio and bloomberg television worldwide. us from janusning capital. gross'sgher and portfolio lower. 1.79%. two year yield, .75%. futures negative 8. i want to bring in berry with perspective. >> very simply, is there anything in this report that should dissway chair yellen from june? come the centers,know, of them, would
point to wage growth. roada potential down the for a june move. i think several of them have in 2016 onwo moves what we should expect now. minds and theyir are data depend i want. -- dependent. it's my way of thinking some of them realize that they get the interest rates or else. to the extent they have an of highery in terms wage growth to the extent they have an opportunity in terms of jobs month after month. june looks like a likely month of those two hikes. modestly wages tick up .3%. this is the political year. sillys a political season. a lot of the angst that's out there, maybe attributed to the lack of wage growth. when as an economy are we going
to see that pick up? >> well the fed claims we're to see that. it will continue to see that as stays 5 or moves lower than 4. that's the old phillips curve tightenlogic which you the unemployment rate and ultimately wages go up and has produced. to my way of thinking, that's outdated model. of thew that because participation rate that's sort entire equation. level tore realistic my way of thinking. what talk about productivity. we will bring up actual gross'sph of bill monroe trader from 1964.
here it is. this is productivity when gross is in the mail room at pimco. forward, bill. on radio worldwide, all i can mystery ofody has a productivity moving from bill monroe trader to the slide rule. he uses today. productivity is it really there? jobs?t create >> that's critical one for the fed. it's subjected. but the numbers as you're arenning to point out dramatically down. a five year on basis, only five years ago at economy and now .5% average annually for the last five years. withll, let's come back bill gross -- >> this is "bloomberg go." with janusmuch more
and euro treasury sterlings. futures. to show you i have s&p futures here as well , nasdaq futures. you can see they're down. the reaction was slightly negative at the number. you don't see a jump in the s&p contract. to look also at sterling. you see a chart that goes back to the middle of 2014. seen 80 since since 2014. headline.red sticky >> thank you so much. report.the jobs more reaction from the janus capital next.
>> this is "bloomberg go." we continue our coverage of the payrolls report. in 215,000. a beat on the headline number. unemployment little bit higher to 5%. want to cross over to tom januswho is speaking to capital bill gross. >> we continue with william capital.janus let's talk bonds now. earlier with call of global slow down. wea ad the same idea of a weaker global economy lower prices.gher bond you got terrific performance in bond.nconstrained that's old news. give me the new news for the
second quarter and into this year. how will you position given down? slow >> i think you have to position for rather static monetary policy. havedoesn't mean we don't one hike or so in 2016. you position with policy and what does that get you. ten it get you 1.8% on a year treasury for the next 12 months? that's not very much. i think rather than buying bonds, certainly you don't want bonds yieldn negative rates all the way up to years. volatility, you sell around the yield in order to what i perceive a rather gradual interest rate hike. if it's gradual, then volatility will be low.
want to sell it and generate higher yield that way. i very important, before bring in barry, without question, theme of the week in interview, is the difficulties in china. again professor powder of the dire saying it is straights of china. bill gross on the quality of chinese and merging market debt now. what have you reserved in the action? >> the chinese debt increasing at levels. that's an exaggeration. higher corporate gdp in china is 240%. which is probably twice what it is in other countries. problem downial the road to the extent that china can't continue to forgive the debt. here's the incredible thing about a month ago, they
swap.policy of debt in the united states we call that bankruptcy. that a debtey call swap. they have significant problems there. which is underneath carpet. we know.er know until i don't trust china. global it's mystery of economies being a mystery. it's incumbent on an investor to observe. >> it's amazing. bill gross, uses the phrase mystery meet, which is they at the yellen lunch. about money talking pythons spam all morning on twitter. ask you ane important question. it's something tom and i have discussing all week about investors who are looking for put theirwhere they
money. a quote in the bloomberg column about your great performance finishing in the top 10% of unconstrained bond funds. you said, if we can't make money bonds, let's make money on these other things. these other things? >> the other things are incumbent to all financial markets. they are credit risks, volatility risks, economy mentioned -- which i mentioned few minutes ago. liquidity risks. incorporate to me, all of the total risks within the market. take a risk want to in the bond market, there's risk. duration buying five or ten year treasury. take or if youo want to take credit risk. you want to take or sell volatility or take or sell liquidity risks.
to generateys income. you got to be on the right side and you got to have the right forecast. that's what strategy can do for you back and put that into even larger context. you said something recently of veryminded me similar quote. onad both you and howard masters and business. but the quote that you said that put together a 16-month period where you're in the top 75% and years, when everything is said and done, that puts you in the top 99 percentile. the tophow finishing in quarter tile put you in the top percent? mathematically
simple. let's take an nba playoff game. warriors win state each quarter by four points, at nearnd of the game, it's a blow out 16 point victory. it's the same way in many aspects of invest. if you finish near the top over period of time and combine that in terms of quarter, ultimately at the end game, you got blow out victory. >> bill, years ago on this your commitment to bloomberg surveillance, you made clear there was a place for dividend growth. what changed, some of the induced, we have dividends popular in high stock.e consumer can you change where you say a yield proxynot a and there's risks dividends stocks just because they've been perfection? >> you can in certain areas.
large companies like 3m, proctor or coke. those dividends have been years.ent for we've seen that in the energy patch. dividends whether they're specialized vehicles or in oil production or in drilling companies, those dividends are risks. that's at the margin. as the economy slows down, if it slows down to the point where is trending profit, then dividends are threatening. not a perpetual thing. >> what is front and center of global wall street. challenge of european banking. largecap too big to fail banking. your to do list for european banking so that they creatively destruct to creator stability that helps all
worldwide? >> well, they like american 2009, need more capital. in the u.s., we observe that and recapitalize banks. >> that was bill gross of janus speaking to tom keene on bloomberg surveillance radio. ticks high to 5%. wage growth beats as well. we'll get more reaction from the march jobs report. that's next on "bloomberg go" as we count you down for the market open.
the crude pivot, in bloomberg exclusive, saudi arabia reveals mega fund$2 trillion and ipo. away fromt 30 minutes the opening bell here in new york. go."is "bloomberg jobs report out, janet yellen, what changed? this jobs report has diminished in its importance. just a little bit. >> only thing that change, it looked really good at the beginning. the more we looked at it, worse it got. i'm not seeing that so far. >> definitely positive and negatives. the trend is continuing to be very strong. to 10:00,ooking ahead
which is more march data. the first of the march data. -- tonteresting toasty see that. mcclellane is, megan global head of consultant of j.p. morgan. breaking down the jobs report with her. 29 minutes away from the open here no new york. want to get you up to speed on futures. negative 115 this morning. 114 changing up. negative 14res 7 cents.wn by dax just goes deep in the red, by 2.8% in euro. equities lower. getch on the board now and you to the fx market. 1140.ollar dollar yen breaking through 112, 11199. unchanged.w yield higher initially off the
jobs report. brent crude getting absolutely this morning, 38, 91. raising 2016 gains as we bring you that bloomberg exclusive. saudi puts a freeze. morning.this >> thank you so much. more than 50 global leaders in washington to turning their attention to islamic state. president obama will try to get sign on to ans to effort to keep terrorist groups getting weapons of mass destruction. in richmond, virginia, state police officer is dead after a shooting at a terminal. they don't know why the gunman fire. natally -- trooper shot.y obesity rates are soaring. has tripled for men and
more than doubled for women over the last 40 years. is greater access to cheaper unhealthy food. dayal news 24 hours a powered by 2400 journalist around the world. i'm bonnie quinn. >> thanks so much. we just got jobs number about 27 minutes ago. we'll have recap of the latest payroll report. the news.zker broke here with us here in new york is mcclellan. erik, reset the table for us. easy for the 21st months we 25 past have seen amazing u.s. economies create more than 200,000 jobs. 215 jobs were created in the month of march. expected. the economist were looking for 205,000. than 400,000 people entered
the labor force. that caused the unemployment tick up 5%. it allows labor force participation rise. positive piece of news to share with you from labor department. jobs report is wage growth. wage growth of 2.3% on a year over year basis. 0.3% month over month. reversal of the decline that we the month of february. those are really the high points. there are some low points a loss in manufacturing. includes oil services and oil inld distraction of 12,000 the month of march. it is a positive and negative picture. you like.xed if it is consistent what we have seen. sort of mixed jobs picture over months. several but for different reasons this month. most people seem to be pointing the fact that wage growth is picking up again. it in a small way.
one month does not make a trend. that's important thing to underscore. is just a snapshot. there are some trends at work. >> stick with us. i want to bring in j.p. morgan's mcclellan. i said the jobs report looks solid. i'm going to play the role labor market trucer. unemployment rate up 9.8%. the participation rate increased. that's tells me there's still a lot of flak. is that your picture? >> what is positive is the view they can try to go out and look for jobs. are depressed typically not looking. decreasedinto this confidence. now people feeling confident about the labor market. i think what's more important, mentioned, is pick up in wage growth. oil prices kind of picked up for first part of the year,
inve seen in decline discretionary spending. people feel more confident to economy.ey in this >> labor report is very much yellen's view of the economy. no major surprises. treasury market reacteding ad -- hasn't more? >> the treasury market is in step with the fed hikes.'s not pricing in how is it in lock step with the ?eds reques >> the fed say we're looking at the markets. market is saying, okay janet, we understand what you're saying, we're dependent on the central bank. to show you a number of things from the bloomberg. in wirp here and go back to jolt.
the trend has been up janet yellen pointed out. are means that people confident enough in the job market to leave their jobs. job openings have crossed up higher as you can see. the white line, then highers. this is a very bullish sign. currentsee in the report any bad signs. here.t see any negativity let's take a look at wirp. the chances of the fed 50%ing rates up more than as forecasted by the futures market. now comes in november. remember, yesterday we didn't see it until december. so the market sees interest rate increase as coming sooner than later after this jobs report. finally i want to show you just futures. continuing to come down lower since this report. a very the report is positive report. it should lead to increased and it's not fantastic news for the stock market. that's why you see futures moving lower.
>> erik, i want to come back to new washington. numbers are interesting but they are really interesting when they story. tell a story. the wages have gotten high enough now that it's bringing people back in who were on the sidelines. that should be good news. they were always on the sidelines. it should be a good thing for the economy in the long run. >> david, the trouble is, it's enticing people back into the workforce. but all they can find for the most part are the lower paying jobs. that we haveion seen over the past several months has largely been in among industries ining america. in march, for example, increase of 48,000 jobs in retail, increase of 25,000 jobs in restaurants. that those are low paying jobs. see job to where we losses, manufacturing for example, i talked about the fact
that 29,000 job loss in manufacturing was largest since of 2009 we have negative wage growth trends at least in 2016. in construction. logging, durable goods, manufacturing, utilities, finance, information technology and professional services. those are the highest paying industries in america. furthermore thehe information driven america more and moreving people. there was increase in unemployment rate with people diploma, 7.4%ool in the month of march, relative in november. as you see people and angry gravitating towards donald trump and gravitating sanders, these numbers explain it. sign up tick in
construction. we've had unseasonably warm winter especially here in the area.rk some of those construction jobs are likely transitory. agree with erik, this is not jobssarily a super cause of report. again, just like i said before, don't read too much into this one jobs report. yellen isn't. >> treasury curves is flattening. years down two bases point. the marketl me that is thinking that the fed may later.oner rather than again, two bases points in the swing of things. dramatic.hat >> we need better wage growth in order for the participation rate to increase. >> we need continued wage growth. it started to pick up towards year.d of last that's what's enticing. people are back into the market. excited about trying to get jobs first time.
>> bloomberg eric schatzker thanks for breaking down the jobs report. on "bloombergd go," quick check on the futures market about 19 minutes away. futures largely negative. we stayed there we're down around 15 points on the s&p 500. dow futures down by over 100 points. lower, euro stronger. down commodities "bloomberg go."
volkswagen recalling about 91,000 passats with the engine. the body can reheat. covers mid-size passats from 2012 and 2014 model years. customers will be notified to bring their vehicle into service in june. revenue came up short for blackberry. the company is right to replace fallen revenue from hardware and fees.e that's our latest bloomberg business. >> just over 15 minutes away from the open. to bring you some headlines from financial markets this morning. wti can trust this morning 1/2%. 37 mark, down by 3 headline raising 2016 gains off the saudi arabia. out put freeze depends on iran's
involvement. reaction this morning doesn't look likely. sellingthe treasury off. payrollsadline in the report, 215 versus 205. wage growth better than expected. in the fx market, euro dollar 114.ing with euro sterling one full percentage point move for if the -- for the first time since december of 2014. discuss. let's toss over to matt miller. >> tesla announcing affordable 3.el first rivers ar river -- raves g from wall street. preorders were about ten times higher than expected for the model 3. it calls the higher sales number a game changer. puttinge people $115 million without having seen
the car. model 3 will be more affordable compared to other vehicles like mercedes. dougherty calls the tesla most disrupters. smacks on a street high price of $500 a share. we're seeing really almost all reaction. i haven't seen one negative tesla's reaction to unveiling of model 3. shares up 7%. preordereople say about 232on can add per share to the price. let's also take a look at chipotle. the red after goldman sachs cut the stocks finally cut the stock from a buy. a buy at goldman sachs. the analyst saying a near term risks are mounting here. risks fromg cost chipotle promotional strategy. she's late to the downgrade.
>> just a couple of interesting charts to tell this story. the magnitude of this company, the potential magnitude is i think the most interesting part of the story. a're talking about $2.1 trillion enterprise value. take a look at this closest competitors. exxon-mobil has $388 billion value.ise chevron 208. all of these companies combin combined, end value still far than what we will see audi aramco. to look at bloomberg chart he put together this morning. this is number 773. what's this shows you, a bete-owned oil company won't valued at nearly as much as profitly traded for enterprise. here. look at ross net
produces more than 4 million-barrels a day. chevron produces less than two million barrels a day. however, the market value chevron at $180 billion in cap, it values $46 billion in market cap. big differences between russia and saudi arabia. as you guys pointing out, the is to for example subsidize all of these out of people. >> it does not take away the of the enterprise. they can do whatever they want. shareholdery other can. how does comparison of the aramco tooming from the value compare to a chevron? i don't know the answer to that question. that's what i'm curioused -- about that. >> we don't know the price earning. at the totalok revenues coming into aramco.
how does that compare? comingsee the revenues into aramco. the saudis are fairly secretive to sayn't want secretive, they don't release all the numbers you see for heavy reason. -- chevron. point.is not so much about what that with thatrrer will do profit. exxon maybe cutting production. saudi aramco sitting there with strategy just to keep volume and keep market share high as well. i think that's the real state private dynamic that in the years to come. let's say we get it in 2017 and 2018. -- how does this company develop? is it going to be moving alined with stag state strategy?
look at it as needing to be competitive. going to dwarf the rest of the market. i agree with you. i will be watching closely which with.gy will be aligned that's going to early us how the rest of the market will trade. thing with me for the story is more why they're doing it. that is to diversify their source of revenue. i think they're being responsible like anyone that portfolio, saying we have reliance on oil. >> we're witnessing of the end of the state? so.t seems >> privatization has been done in other places. with meg here. change of topics. high yield. shift thisn a
quarter from cash >> it is related to oil. high yield selloff started oil pricesllapse in last year. it led to panic in the market happening next. thatve not seen materialize. high yield bond issuance is down over year. we are starting to see that tick back up. counter topletely the types of inflows we've seen the first half of quarterback. inflows.cord week of that's continued over a about six weeks. what we see in the high yield market after a giant inflow, we tend to see influence follow int, it leads to momentum prices. that tend to see depreciation. we will see appreciation in the assets especially given yellen's
comments. up.ssuance should go then the last part of second half of mark. did pick back up. we are seeing it pick back up. the creditnce crisis. >> the index was bounded to extend. i wonder how much that's distorted by what's happening with energy. it distort that a lot of those credits and debts index are the trading? them.e of this is where i think the case for being active in terms of allocations coming in. again, in april when we get the weduction cuts potentially will not know when that will
stabilize. you want to look to the higher of company which are dependent on commodity. that maybempanies double b or haven't jacked up their leverage and still yielding 150200 outside what been.ould have >> megan mcclellan head of consultant at j.p. morgan investment management. us.ticking with wages expected as well. stay negative, dow futures up by 104 points. down by 254hammered points. the market open is next.
open, let me give you up to speed. futuristic negative. down 105 points on the dow. deep in the red in europe. nasdaq down 2.5%. through 114. sincet that move -- up december 2014. strong euro story against the pound. treasury yields of about three basis points. a lot of moves across. >> let's take a look at the major indexes. we have losses across the board heard the market not reacting positively to this job number. if her first reaction.
the jobs number brings a rate increase closer, so that is not good for stocks. take a look at the 10 year note. change, but a quick spike up, and then a drop down. people buying treasuries. very interesting move, especially if you thought that the interest-rate increase was coming forward. that is what you see there. take a look at the dollar. the currency reaction has been interesting. it a gain of 3.5% right now. this suggests there is an interest-rate hike being brought forward. across currency, take a look at the order of pairs here. euro weakness. pound weakness. a little bit of yen strength against the u.s. dollar. let's take a look at gold.
gold has been in a bull market at the beginning of the year. it is been fairly strong on central-bank action come on volatility, -- on volatility. it seems like this jobs report may remove some of the tin hats. does that make sense to you? everybody that is screaming that it is a horrible, it is all bad, under limit is skyrocketing. those people have been proved wrong to some extent by this jobs report. everything you say make sense to us, matt. >> i grasp and what you were saying earlier. we don't have access to saudi aramco's financials. but we do have access to their oil revenue.
-- saudiok at my arabia reported oil revenue, $913 billion a year. , $365s exxon's revenue billion. vonnie: thank you, matt. month anddded in the an increase in wages. us, ceo of blackrock. what are traders focusing on now? >> i sm number that is coming out. a lot of the regional surveys have been strong, which is interesting. when you look at the jobs report this morning, you continue to see the same trends. softness in the manufacturing sector. the service sector continues to be strong. retail is strong.
construction a strong. it will be interesting to watch ism. globally, how are fixed income markets holding up? nursing softness in china. we do not know how that will play out. give us the view? remarkableg that is that change the sentiment in the markets is a lot of focus on oil, rightfully so. i think there was a decision made in and around the g-20 from do ahinese of not significant evaluation. out,ols grow your way let's leverage build. postpone the reform dynamic. you'll not see a significant
deflationary impulse coming from china. you will press on the growth channel and press on the service sector to grow your way into the increase in leverage. use a tremendous amount of liquidity. it is a big deal. i just wonder if that changes your mind about the investment strategy? if we are looking at the china that is going to say less on reform, more on growth. what does that mean for the fed share in treasury? >> this employment report was solid. i think this that is going to be very patient. at the was a tremendous the newt in and around york economic club conference that yellen did. the focus onound global financial conditions, the economy, and the dollar were really big deals. for many years, the dollar was not a specific outward focus.
i can china and the emerging .arkets -- 60% of growth china being half of that. it is bigger because of the intertwined nature of china. it is a really big deal. the impact they will have a tremendous. vonnie: matt, you're looking ahead to the isn? >> we saw the isn contract in the last report for the first time since the beginning of 2014. services are where the majority of jobs in this country are created, right? is definitely a concern. if there were all positive signs in the jobs report today at 8:30, there may not be all positive signs for the isn at 10:00. >> what your thoughts about rick has been talking about and in china? emerging markets are really in
disfavor, but seem to be coming back. >> we've seen some huge, huge moves in brazil. i agree with rick's, the about china. stabilizing impact of china enhancing their communication policy around the reserves, around for an exchange, convergence policy has settled the markets around em. it gives us confidence to put more money in e.m.. e.m. note looking at just because of the stability component. where in e.m., rick? world wheree in a if you look at the data in japan overnight and the rate dynamic in europe, where you get yield?
the high-yield market is attractive. it e.m. is also attractive. we think mexico is undervalued in terms of the rate dynamic. argentina is a pretty good story. quiet, but a rally in brazil in and around the neck from politics. aroundnd -- in and politics. we are feeling more comfortable in places like mexico, indonesia. the rate market in brazil, at some point, you are going to transition into an easier policy. those rates are pretty darn attractive as long as you believe you can stabilize his school dynamic and the economy, dp.don't run a -4.1 g we didn't a tell in and you
always run a risk of losing that tell. [laughter] >> there was a concern about capital flows that dominated thinking about not wanting to be in emerging markets. when you look past when the emerging markets had dollar-denominated debt, they have taken that back and there is less of a risk of event. when you see positive global growth and a interest-rate for, the emerging markets outperform in these environments when they had an overreliance on too much currency exposure. -- it seemser if the like there is something of a convergence of the central banks since g-20. we like e.m. this is the fixed income side we
are talking about. it is a different call. the growth is disappointing in the emerging markets, and the hope is, and china is stable, and i think people underestimate how big a deal that is to brazil and other economies, the paradigm improves from here. i think the dollar dynamic -- 43% of the world is either soft or hard paid to the dollar -- soft or hard pegged to the dollar. the impact on the end is profound. reserveis the federal -- china isforward, still, the concept is you are taking leverage up to levels that are dangerous. you are pushing reform further off. you have a window, but it is something you have to watch.
we are going to begin in manhattan. but the first time, the average price of the manhattan apartment is $2 million. reflects a move in high-end bind spending. a three weeks bidding war for starwood hotels appears to be over. anbang withdraws its bid. that leaves it open for marriott . tesla motors is making a bid for the mass market. it the electric carmaker unveiled its model 3, a $35,000 sedan. elon musk said the company has received thousands of reservations in 24 hours.
that is our latest business flash. the line seems to have shifted from the apple store in front of tesla with a serious to $35,000.500,000 spots around 6/10 of 1%. my car to be driven by explosions. i am old enough that i appreciate internal combustion engines. tesla motors is a fun car to drive and one investors love. thisve been talking about -- tesla shares in the past five years every invested dividends of 800%. total return is good. hotel stocks -- we have the marriott starwood news. anbang has backed out. you can see the deal go through
with starwood and marriott. five point 5%.wn there is no more bidding war so investors are not going to be looking for more of a premium. air-lifted also on the move -- airline stocks also on the move today. american up 4%. delta all -- delta is down. to be fair, stocks are down across the board. ofyou have the slightest bit hard news, it will hit you harder today. the auto companies are feeling that especially hard because all of these companies -- gm, ford, and yet chrysler missed their monthly sales. estimates ande getting taken down hard today. fiat chrysler down 5%. >> now it is time to go down to the nasdaq with abigail doolittle talking about a couple of movers. abigail: thank you so much.
urban outfitters shares are trading higher. supporting the big turnaround that investors and analysts had been hoping for. it something that is also supported by the chart, the downtrend ahead of what the potential impact of the company 's acquisition will be. resorts -- macau casino fell 60.3% year-over-year. analysts continue to look for a turnaround after months and months of decline in that revenue, but the charge, similar to urban, showing signs of life and a downtrend reversing. >> let's take it from the stock market to the bottom market. euros on bonds have been
rallying. a german 10 year yield checking the most over the quarter since the depths of the eurozone debt crisis back in 2011. a moment to shift in qe from 60 billion. even more eagerly anticipated, the ecb calls for a bond program scheduled to begin later this quarter. close to a record in europe on a monthly basis. you and i have talked about the economics. you can expect it to flatten with growth and inflation going nowhere. one thing i have learned about markets is supply and demand usually wins. fed to the infinite qe, they were going to keep going until they solved the problem. said, $80i has
billion -- 80 billion euros a month. there is not enough bonds or assets. it wasmentioned, brilliant to expand the credit channel in two different ways. one, to buy credit in the longer part of the curve, which is a big deal. then, the program and help the banking system that has a revelatory dynamic and helps with lending. i thought it was pretty thoughtful in terms of the credit channel. >> but the proof of the pudding will be what happens to the money. where will it go? one of the thing that strikes me, negative interest rates from central banks is extraordinary. we have negative yields and corporate bonds in europe. what does that do to a company? >> it makes your financing more attractive. you think about your business and where companies look at their business is the return
relative across the capital. your feasibility study of whether it is an acquisition or taking on a new project, is significant. the negative interest rate, there is not a significant transmission because the overnight funding rate. -40, it does0 two not impact consumption. you are reducing the cost of financing, it is a big deal. the proof is in the pudding. europe is in a tough place. you are seeing better growth data and have to give credit to the monetary policy initiatives. vonnie: what are you targeting in terms of returns cholester? to think about where you can get yields and where is the opportunity. europe is an attractive one because of the supply and demand . credit markets are interesting as we just talked about. -- still givess
you the ability to create positive returns. i described this before, this is a year where you want to own and carry. we think it is going to be a moderate growth year. equities can still rally, but if you can get carry in some of these markets in that were percent to 7% range, that is a winner where negative rates pervades the system. >> we have seen many days in japan where the 30 year has not traded once. is that what we are about to experience in germany? what do we expect from germany now that the ecb is ramping up qe? >> you see the german liquidity is much stronger than u.s. bond liquidities. why is this, rick? i get the are kicking up their qe program. but we still hold a ton of bonds and continue to buy in order to keep the level steady, right?
rick: one of the things that we have shown interest before, the running treasuries have been extraordinary and people pay for that. whether it is reserve managers around the world, people who want to have active duration -- the off the run market is soggy at times. jargon alerts a that tom would ring the bell on. on the run means the fresh treasuries that are still on the benchmark numbers. run are secondary. a betteralways conversation when you are here, rick. markets", "bloomberg with betty liu and mark barton. betty: we will continue the
market conversations. if you got a job and money to spend, you might want to spend it on that model 3 that was unveiled by tesla. finally, matt miller is going to tell us the nine reasons why the masters is the greatest sporting event ever. that is quite a statement from matt miller. [laughter] vonnie: betty, thank you so much. it needless to say i am very envious -- needless to say i'm very envious. next, what to watch up for next week.
market is see in the the treasury curve. equity staying in the red globally. s&p 500 down by 6/10 of 1%. quinn, can we really beat this week, next week? vonnie: a lot of people are going to be manufacturing. isn services on tuesday. thursday, janet yellen, alan .reenspan >> stick with bloomberg tv. "bloomberg markets" continues.
oh, hi! micky dolenz of the monkees here, getting ready to host the flower power cruise. (announcer) we're taking the love generation to the high seas and reliving the '60s. we'll celebrate that unbelievable era with the music that made it so special. there'll be over 40 live performances featuring eric burdon & the animals, micky dolenz, the monkees lead singer and cruise host,
the 5th dimension, the lovin' spoonful, rare earth, spencer davis, three dog night, and many more! imagine enjoying all that great music on the fabulous celebrity summit, leaving fort lauderdale and making ports of call in jamaica and the bahamas. you'll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 fun-filled celebrity interactive events. cabins are filling up fast, so come on, relive the era you remember so well. the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. >> it is 10:00 a.m. in new york and 10:00 p.m. in hong kong. it i'm betty liu. and live from london, i'm
caroline hyde. this is "bloomberg markets." ♪ betty: we are going to take you from new york to london to saudi arabia. we are 30 minutes into the trading session. stop the lower after this morning's job reports. the u.s. economy and it 215,000 jobs last month, more than expected. does that never make the case for the fed to lift rates in june? tesla make the play for the mass market coming in at $35,000. it has elon musk shaken up the future of the auto industry? saudi arabia reveals plans to create the largest wealth fund. the giant fund could eventually control more