tv Whatd You Miss Bloomberg October 27, 2017 3:30pm-5:00pm EDT
to ao rico's power grid tiny montana company in interior secretary ryan zinke's hometown. the white house said that federal officials played no role in the selection. 75% of the u.s. territory thanns without power more a month after hurricane maria made landfall. sayschigan, the judge aint has yet to secure long-term water source and may be pushed towards bankruptcy. the council's proposed two-year extension with the great lakes' what authority is not the long term plan he had ordered. flint continues to suffer a crisis. was incorrectly iraq and kurds.
an official cease-fire had not been declared. theions continue between kurdistan region and baghdad as the kurds held an independence referendum last month. in the u.k., more reaction to the harassment revelations about u.s. a movie mogul harvey weinstein. prime minister theresa may urged harassed employees to come forward after a report that women in parliament had set up a what's at group to discuss their experience -- a whatsapp group to discuss their interactions with male politicians. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪
abigail: live from bloomberg world headquarters in new york, im abigail doolittle -- i am abigail doolittle. scarlet: i am scarlet fu. and i am joe weisenthal. julia chatterley is off today. the question is "what'd you miss?" shares amtech sore for amazon and out that. -- shares in tech soar for amazon and i'll bet. dissolves the catalan parliament and calls for regional election december 21. here at home, president donald trump leaning toward appointing jerome powell as the new fed chairman. the decision is expected next week. the big story today
certainly in the u.s., the tech rally. bestasdaq on pace to its days since march of last year. relative to the s&p 500, it's best day since 2009. this on a very strong earnings report from lots of big internet names, but really a huge, huge averages,the major especially the nasdaq. take a look. all of these stocks surging. amazon, microsoft, alphabet hitting the highs of the day and take a look at amazon --above 1100 -- you knew that would happen? yesterday in the premarket, they put up that absolutely amazing quarter. not quite getting to that level. investors and a party mood. all of the growth being reported. those shares having their best day since 2015. a record and a big day for technologies. scarlet: all right, "what'd you
miss?" spanish prime minister rajoy sacking the catalan parliament and calling for new elections in december. that after catalonia gave itself independence. we have our reporter on the ground in barcelona as well as michael mckee. it's been just over an hour cents mariano rajoy surprised everyone i taking the bold move out firing the entire catalan parliament, the president, the vice president, also calling for elections. what are you seeing? what are you hearing? reporter: hi again. good night from barcelona. madeeople -- again, rajoy it clear yesterday. there will be no backtracking from this government.
declare this a republic, this is what they call an illegal referendum. that this is going to be a situation where they have to defend this hypothetical republic, and they do expect madrid to come in and sack the present. that is something everyone expected. it is no surprise. what is interesting, rajoy actually opted for an early election. he could rajoy said call for elections within six months. he has called an early election. that is interesting. barcelona -- it will come down to what can the people here in barcelona actually due to disband this republic. see arrestscould we of separatist leaders in the coming days? we could currently see arrests. are serious there charges that they could press. the rebels could go to prison
for 30 years. i do want to point out, it was another roller coaster day here in barcelona. the head of the parliament said, i do want to say before we vote, there could be legal ramifications. and they actually asked for a secret ballot because they feel that there will be a need for a legal crackdown. obviously, all of this goes against the constitution. a lot of this -- we know the central government in madrid does not want this picture, but theould have where if president locks himself up and does not want to leave, how do you get him out? i guess you could get the police to make him leave. that's an option. abigail: the financial markets affected allo be that much. we had a huge rally in the u.s. on earnings. could there be a contagion situation where investors would fear something would spread
across europe? michael: there is not any contagion at this point. this is felt to be something that will be disruptive to spain and the spanish economy, although not that much and not that long. there does not seem to be any contagion to any other country at this point. you have all of the eu countries telling the catalan government, we do not recognize your independence. spain is our only partner. you will not stay in the trade union if you were to break away. you would lose your currency. we will not deal with you. they would just let them go. it will be difficult for rajoy to immediately impose his will because the catalan government has so many powers reserved to itself. look at yeah, when you the financial response -- the euro is lower. it has been lower all day. and then what is going on in spanish assets now that the spanish markets are closed -- the white line shows a slight
increase in volume, but certainly below average volume for what you typically see for this etf. joe: there's no signs of financial contagions. no one recognizing the independence or anything like that. this is a very rich region of spain. from an economic standpoint, do we expect to see a slowdown or other things representing in the data of people being concerned? michael: yes, you have companies that have moved their corporate headquarters out of catalonia since the independence vote. and it has had a very depressing effect on the economy. it is unclear what they will get out of this. barclays is forecasting catalonia will go from plus 3% , swingingegative 2% five percentage points in one quarter. it will not hurt spain all that much.
it will take about half a percentage point of spanish growth, but it will have a significant affecting catalonia. scarlet: that will take some time to shop in the numbers. eveningt is late friday in barcelona right now. what will you be watching for them barcelona this weekend? a goodexactly, that is question. the ammunition the regional government had, they used it. when it comes to the courts in madrid, the legal system, and the european union, they have clearly sided with the central government. the key here is -- what are barcelona and catalonia going to do and how much resistance are we going to get? the big question is, how long does it take time to answer meant and how efficient is this going to be? remember, this article has never been used at all.
there are questions about how it will be used. how long does it take to get the government in catalonia out? scarlet: questions i believe we will start to get the answers to next week. maria taddeo joining us from barcelona. thank you. to, the fed's quest get to 2% inflation being spoiled by an unknown agent. we will explain. this is bloomberg. ♪
braces. up 18%. emma chandra is here. that's a pretty gigantic move there. what stood out and results? a big move.lly is the company has a $15 billion market cap, which was surprising to me. i did not realize. -- it is the up best performer on the nasdaq 100 year to date. and those fourth-quarter earnings or externally strong. they beat on earnings per share, revenues. is driven by increased volumes in all their geographies. they also raise therefore is quarter guidance and got absolutely growing review -- glowing reviews from analysts. they beat one analyst's price target by 60 bucks on this
report. and there's room for growth. they have this thing called the smile directs love where they will send you the kit so you do not spend as much time at the dentist. scarlet: it is like the cheaper version. the cheaper version. evaluation is crazy. 65 times expected earnings. joe: is the story in the future -- i don't know much about braces. when i was a kid, they were big metal things. in the future are all braces basically going to be invisible? emma: i think that is why they like this company. it is much more -- it's a prettier way to have braces, i guess, because they really can't be seen in the same way -- they used to call them train tracks. nobody wanted those. nobody wanted to have them. and they are doing so well. we have a board showing you them and a bunch of those that were the worst performers. the medical instruments index.
and we go to morgan stanley's analyst who says that today closes the door on the competition. scarlet: wow. emma chandra, thank you so much as we all consider invisialign. abigail? abigail: is time for the business flash. facebook says it is committed to "the integrity of the electoral process" and will require advertisers to disclose their location. alibaba's executive vice -- has bought 49% of the nets. he will gain the right to buy the remaining stake in 20 joining one.
a recordis valued at two $.2 billion. what's in a name? bit for tlc. they will add block chain to surge in theira shares. it's the biggest one-day gain. -- it's their biggest one-day gain. that is your bloomberg business flash. scarlet: "what'd you miss?" puzzled hows inflation has remained below 2% while the economy has continued to grow. one of the biggest factors may be in new york and it is out of fed control. joe, let's handed over to you. joe: thanks, scarlet. joe davis, global chief economist for vanguard. you recently wrote about technology, moore's law, deflationary forces.
nutshell, explaining your argument, how they are preventing the fed from hitting their target? >> sure. increasingnd, the use of computer technology over the entire economy is actually lowering the rate of inflation, has and will continue to by 50 basis points a year. that may not;, but that in a nutshell explains much of the shortfall we have seen in course -- in core inflation, not just over the last year, but the last decade. joe: there is something intuitive about this argument and other people have a similar argument. but i find it interesting that you have attempted to quantify say, byct, as you lowering it 50 basis point. what do you do specifically to lower the impact? >> sure. we have 1000 occupations based industries and we look at what
products they have. component ishat computers. computer technology services and so forth your it and then you just ask the question -- what if the people did not have them pewter-based technology -- computer-based technology? hypothetical. but if you strip it out, the inflation prices would be higher today, and it's because computer technology is increasing at an increasing pace and the prices of technology are falling at an exponential pace. able to idea you are look across sectors and across goods and assigned them a computer component -- >> yeah, so any industry, whether it is in auto manufacturer or utility firm or law firm, there are certain parts that are paid for by computers and that has risen
over time. as example, it takes eight cents of technology to produce one dollar of gdp 10 years ago. we now use $.20 of technology -- we know the price of technology, so the share has risen, and i think that has an underappreciated, stunning factor on the prices that companies need to charge. joe: so here is my question. inhave seen the decline prices. in theory, that should mean more money in consumer pocket and, at in theory, war money in consumer pockets should mean more spending. why don't we see that balancing out elsewhere in the economy? >> i think again, this effect is well beyond the things that they do around controlling for computers in certain components of the cpi. this is beyond amazon prime. i think what we are seeing, joe, is an higher elevated profit
margins. we can see the inflation return. i think it is a little bit lower than what the fed may even think about given this depressing effect on moore's law. joe: so, your assertion is the excess value captured by the ever cheapening technology, where it is showing up as in corporate profits? >> definitely. we certainly are seeing less price pressures on the consumer side. not to say all businesses have powerful pricing power. not many of them do. but in one since it is ironic because computer technology is all around us, and yet i think it has been somewhat overlooked. there is a limit to how much technologies can limit price pressures, but it definitely needs to get below 4% before we see meaningful price -- price joe: pressure.
interesting -- price pressure. joe: interesting. >> i think it is good. it is less slack in the economy. i would still like to see them a year from now at a higher level. where i think the growing risk is this time next year -- because i think the transitory prices on inflation may moderate. rise on corelittle inflation. if we are right on technology, the risk is a year from now the fed may be a little too aggressive. that sets up at dicey environment for 2019. got it. joseph davis, global chief economist at vanguard. thank you very much. this week has been all about learning spirit we have a chart on how tech products getting upgraded. from new york, this is bloomberg. ♪
"what'd you miss?" here is evidence -- analysts have been revising their estimates for s&p 500 earnings higher. that is the blue line. it tracks for etf's and you can see the steady increase. but look at the white line. that is for the tech sector specifically and it's climbing at twice the rate of the s&p. you can see the 12-month -- i should say over the past two years. you can see the 12-month etf for the s&p of 15%, for the tech sector, up 30%. amazon, google -- i should say i'll bet -- microsoft, intel, yesterday examples of tech companies that beat estimates, are delivering on the is higher expectations. joe: this is the story of the day. these incredible results. it really is remarkable. here's another story today, also
good news. gdp reports coming out. coming out nicely. i had a 3%. one big factor, personal consumption. that is the green line. continuing to hold up very strong. this goldline, nonresidential fiction investment. that's starting to accelerate. this has languished the last couple of years. nice business investment. a good engine of the economy. good to see that picking up. .overnment spending residential investment not contributing that much. fixed investment and the consumer really helping to power the economy along. scarlet: great -- abigail: great chart, joe. and returning to the story of the day. amazon. at the bottom in purple, we have
the s&p 500, 15% on the day. we have the s&p 500 retail index up 20% on the day and in yellow, we have amazon. look at that. that is truly a parabolic uptrend on the day. over taking its last all-time high. one question as someone who watches the charts, this has been a congestion pattern that typically breaks to the downside. it has morphed into a more irish version. the question could be whether or continues -- tum it has morphed into a more polish version -- a more bullish version. it keeps going up, up, and away. joe: a remarkable chart. scarlet: the nasdaq up by 2.2%. the s&p at a record high. laggard here.
u.s. closing higher this friday after a surge in tech shares. the nasdaq and s&p 500 closing a new record highs. tuning in live on twitter, we want to welcome you to our closing bell coverage every day. scarlet: let's begin with our market minutes. a stellar day for the nasdaq. also see the s&p 500 hitting a new high. the dollar rallying. you can credit it to gdp, the tech earnings we got , google andt microsoft. joe: showing how concentrated. overall, but how
concentrated the day was in tech. intel was up 8 percent on the day. lifted: a rising tide all tech boats. scarlet: it is having its best day, closing at an all-time high. 2.9 percent and the gap between the nasdaq 500 and other major avenues, the biggest since 2009. that is how much investors are getting up these -- bidding up these tech shares. amazon andicrosoft, intel. amazont, microsoft and all trading at all-time highs. is thennective fiber
cloud. big influencea for all of these companies. for amazon, their most profitable unit. alphabet, big numbers. 24% year-over-year sales growth. by the cloud. joe: all about the cloud. scarlet: let's look at some things that are cloudy. these are the big losers. all declines.ney, baidu.lth and retail, earlier today, jcpenney was below three
dollars. below 25%. it's worse a day since 1980. this is after they announced an inventory liquidation. cvs health on the possibility of amazon coming into the drug distribution space and investors not liking the possibility of a merger. and look at baidu, forecasts missed. investors bailing out. joe: let's take a look at the government bond market. yields in the u.s. today lower on the day. you get this massive risk on surge but lower yields. part of the explanation being the news that trump is leaning towards choosing jerome powell to head the fed.
if you look at two-year yields, you can see that drop just before 10:00. right around 10:00 when that news came out. the basic idea is if you thought the alternative was taylor, this dovish futuree policy path. a continuation of the yellen regime. scarlet: some argued that no matter who becomes fed chair would be a continuation of the yellen regime. you have reports that the president favors jerome powell helping the dollar advance. the 3% gdp might be because it --might be the reason they got higher. the euro weakening. not much of a reaction to the breaking news on spain.
prime minister mariano rajoy sacking the entire catalan government and calling for regional elections. emerging-market currencies, dipping lower. trend interested me. they are down for a 7th day. not partaking in the selling was the brazilian riau. down is the dollar losing ground versus the riau. joe: let's look at a intraday chart of oil and gold. supply is going to remain limited. on west texas intermediate. gold futures ticking a little higher. let's look at a five-year chart of brent crude. barrel back above $60 a
or the first time in a couple of years. breaking out of a little bit of a range and getting momentum in the oil space. those are today's market minutes. scarlet: here's some insight into the positive sentiment and whether it is sustainable, gina / . the nasdaq closing at a record high. nasdaq sincethe november of last year. these tech companies are delivering. post they are expected to 6% earnings growth year on year. it was expected to close at only 4% growth. tech is on pace to produce even stronger growth and by itself it is pulling index earnings higher.
thes almost entirely due to reporting out of tech. a week ago we were lamenting not so great earnings. ge came out not so great results. that is all reversed this week and is largely due to tech. joe: here is a chart showing tech's share of the s&p 500 price versus tech etf contribution relative to the total. you see the good old days in the bubble where the s&p had a share in price but it was not contributing to earning. gina: tech is selling higher because earnings are going higher. this is a different situation than what we saw in 2000 when higher.aere moving
there is a lot of sentiment around tech that is in the negative. these tech stocks are going to high and contributing too much to index momentum. tech continues to rise. scarlet: tech is the biggest sector for the s&p 500. the s&p 500 bigger for the second week in a row. there are some indications the index could be over bought. someone i follow, she is saying that a signal flashed earlier this week and seems to be sticking with it. thinking it is going to cause a near-term pullback and refreshes the uptrend. you have another chart that suggests the s&p 500 is ever ball. -- is overbought.
gina: momentum reached very rarely seen levels this week. it reached above 80. joe: what does the rfid? -- rsi mean? gina: relative strength index. underlying indication of how strong this price momentum has been. the last time this happened, the market did punch above its trend channel and then it corrected. it corrected nearly to the bottom of the trend and that tale has been very consistent throughout this year. we are seeing that after we priceabove 80 on the rsi, keeps moving higher.
that is a divergence. we have to close by divergence. is pretty short and shallow compared to some bearish expectations. julia: -- abigail: this is when it was ever bought in march. -- over bought in march. maybe he goes back down there or it will refresh -- maybe it goes back down there or it will refresh. the trajectory a little concerning? 2.2% is not a setting, gigantic move -- sudden, gigantic move but in this market has become one. in the short run you have
seen such a narrow momentum surge and the result is we are over bought. but the channel has been strong all year. joe: the chart we are s gapng saw the biggest overall the s&p and the market. what is this gap saying? gina: i hesitate to draw conclusions from one day's trade. we still have more than 60% of names trading above their 200 day moving average. the index is very supportive of the long-term trend. one-day measure, we have a lot of concentration in gain on
tech. we have a lot of tech earnings with players who are less tied to cloud computers. abigail: in other words, more to come. thank you so much. speaking of tech, no zuckerberg for sandberg, the witness list has been released for the congressional grilling of tech companies. no ceo names are on it. what to expect next. this is bloomberg. ♪
regional government, dissolving parliament and calling for a new regional election. firing thesaid he is foreign affairs department and dismissing delegates in brussels and madrid. the move came as catalonia's parliament voted by secret ballot to create his own country. dozens of pro-independence supporters gathered in front of the capital in barcelona. demonstrator shouted you are not alone. voting planned for saturday in some opposition strongholds has been postponed as fighting continues between police and protesters. authorities say at least six people have died in violence linked to the latest presidential election. it is not clear when the voting will take place. had to the polls for
the country's second snap s, comingin two year after the resignation of the country's prime minister involvinga scandal granting of clemency to child molesters. this comes a year after iceland's last national vote, called after the prime minister resigned in the aftermath of the panama papers leak. president trump is considering jerome powell as the next president of the fed, that's according to people familiar with the matter. is considered one of the front runners. the president says he will make his decision before he leaves for asia, a week for today. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
scarlet: "what'd you miss?" silicon valley gets ready to get grilled on capitol hill after the industry's biggest companies made top earnings. they are set to testify after revelations that russians exploited their platforms to interfere in the presidential election. self policing be enough for washington? our chief officer for bloomberg news joins us now. >> it is going to be a huge week out of thd.c. there was going to be a hearing on november 1? >> there's actually 3. one of the ceos of the legendary tech companies are
going to show. it will be the general counsel's and if you want to hear from lawyers, you will love it. joe: will there be a lot of but do weestioning, expect to see fireworks at of republicans? are they concerned as well? social mediathat helped -- you will see partisanship in these hearings. a lot of the members of congress use social media themselves. they have to be careful about calling on restrictions for things they use for their own advantage. having strongare
results, will do strong financials make it bigger targets -- make them bigger targets? >> i don't think anyone will call them out for the shares in the companies they own. i i do not think they will be called out but it is an interesting context to talk about regulation and the threat. julia: next week we are expecting the famous or infamous tax reform bill from the republicans. think it is such a secret process? does that has something to do with all the failure of the repeal and replaces? >> that was one of the issues with repeal and replace, it was done in secret. we heard a report about all the lobbyists and special interests, they did not want to get
bothered when they are crafting the bill. they were making it possible for them to do their work without outside interference. joe: let's talk fed. scarlet: nothing has happened yet. joe: we always figured that next week was going to be the week but now it is official. >> it is official. sarah huckabee sanders said at the meeting. announced the name as he is boarding his plane to asia, one does not know. it is a big moment for him and maybe he will do something very orchestrated. joe: we have talked a lot about this. the only person who really knows, no one can speak for trump on this. he can still say anyone. saysr own story on powell
he is not made up his mind. given everything we know about donald trump, he could. justd not send it red for that reason. scarlet: red, the reference to the bloomberg news hot headlines when we confirm. no matter who the president nominates, at the end of the day, whether it is powell, or warsh, -- yellen'sng to be policies. >> this is definitely going to continue and less economic conditions take a turn that none of us can anticipate. scarlet: then it is a new game
they stack up with previous mega hype phones with apple? >> we are seeing a way of six weeks for these phones. we are seeing a bit of an extension this time around. julia: the new retail tease angela aaron --retail chief, angela aaron, she has arranged for the iphone to be given in advance. >> when it came out in 2003, it was exclusively for in-store purchases. if you wanted one in the first few weeks, you had to wait in line. people were quote unquote camping out. they continued that strategy of preorders until 2009.
they are now promoting and more, turning it into something that is a brand-new initiative even though it has been around for almost a decade. even though they are urging people to wait in line in stores, they miss some of the crowds and the tea cameras -- the tv cameras. scarlet: the people who do go to the physical stores tend to be tokers or people hired stand there. >> people have been using it as an advertising initiative because of all the tv cameras and the spotlight. but as you have seen for the most recent apple launches, the watch, you see a lot of people ordering online and having it delivered to their home instead. joe: we've talk in recent days about the supply issues. just for a demand standpoint,
people really want the iphone 10. >> people really do want the iphone 10. change was back in 2014, which is not a fast pace of rapid change for a smartphone design. you are seeing the bigger screen. now it is here. scarlet: next friday we wanted to see that iphone 10. thanks so much for joining us. you can check out mark reviewing on his website. up next, crunching the numbers from the most unlikely places. this is bloomberg. ♪
♪ news.2004 first word republicanh profile to be retiring, utah senator orrin hatch. meanwhile, the lenox also reports former presidential nominee mitt romney has told allies he plans to run of senator hatch steps down. jim mattis visited a south seoul military base in where he looks at north korea. it was created after a truce
halted the korean war 1953. he added america is prepared to take military action if the north doesn't halt its missiles that could strike the united states. australia's high court has -- that restrict dual citizens from serving in parliament. marvin: -- >> i respect the verdict of the court. with all the checks and balances so i think the court for their deliberations and a respect the verdict of the court. will be able to stand for reelection. -- immigration
naturalization applications are up. ofs year, the volume applications is said to be 2016 figures. it is the first time in 20 years applications have not slept after a presidential election. i'm mark crumpton, this is bloomberg. ♪ >> let's get you a recap of today's market action. the nasdaq coming to a record high of 2.2%. the nasdaq 100 at its best day since march of last year. on the back of stella profits at amazon caps
off. >> good news all around. >> big rally on the day for sure. joined the latest, we're atthe founder accu macro -- q macro. right now, you are developing something around bloomberg news. can you talk to us about that? >> basically looking at news generated by all of your journalists. machineing at it it in
-- at it in machine readable form. the idea you might be able to get additional insights. it seems like other attempts of machine learning we have been hearing about for a while and everyone wants to find hidden .ignal in the noise where are we today compared to five years ago? >> i think we're moving in the right direction. still a lot of room. encompasses tself things --ot of
encompasses a lot of things. whatever it is, how do you protect against false positives? one of the techniques used to distinguish between real, predictable things? i think, particularly in my -- you do get a situation where stuff stops working so one way to look at that is to look at the distribution. he said something unusual, i would say something somewhat of an art. someone trying to gain
anything over their competitors. you talked about collecting a lot of images operating their businesses. >> i've got ideas. one is to look at garbage collection. the more people are buying, the more people are throwing out. >> there are some hedge funds that do that now. >> that is something you might -- look at.
>> let's say i wanted to quit get intoand quantitative trading. someone inyou say to terms of their math skills, computer language skills. >> i think there is several. cold --rned how to code. >> which one? >> python. try to understand what goes on in the market. ont to understand what goes in the market -- >> something interesting happened yesterday, shares of cvs started to plunge and it appears to be as president trump was mentioning cvs in a positive
manner. it turned out in article talking thet amazon getting into junk business. was a company that trades every time president trump mentions a company. >> maybe people expect it he names accompany it would be in a negative way. more broadly, people look at the news articles and they will use that to trade as well. it is not just tweets, ok? thank you. cuemacrco, thank you for joining us.
one question is even if they want to make a payment, we don't really know how they go about doing it, do we? >> a managed to make it. actually the money is not in the funds yet. we have been tracking and have not had confirmation of money is -- has been moved. basically this was a deadline so period.e no grace they do not save money so they were able to make the payment today. they have paid -- blame the payments on the u.s. sanctions are slowing the payment stream. maybe that is true.
maybe the reality is the money is coming from all these random locations some of your client is slowing the process sound or maybe they don't have the money until the last minute. they have been telling investors in the essay today the problem sanctions so -- that should not be the problem. >> do investors care where they get the money? of theydo in a sense are trying to piece together as many clues as possible to figure out their capacity to pay it going forward. they want to know where it is coming from so they know how sustainable it is going forward. it is like living paycheck to paycheck. what about the payment next thursday? >> they definitely have a lot
more confidence. thereas interesting is really was not a dramatic relief rally. presumably, they still think there's a high probability and just a reminder, venezuela printed a 99% probability of default. i don't think i saw that. they have made a point to say renesola does not default on its bonds. the government has made clear it is not going to do that either so you have a disconnect. they wouldd think prioritize medicine, but they don't.
is -- is they have to do what they can with it. they are really down to their and they knowoney if they don't pay their bonds, it could imperil future revenue streams. >> it has been a long wait for you next week will probably be busy. for traders, how do they go about it trying to weigh the odds? >> i read a great story yesterday about some traders having the ministry on speed dial and having to learn the names of people and their back-office. withof these institutions
thousands of people, you never would have to pick up the phone and found out -- find out if the payment came in, but now you actually have to and again, there have been several bond payments that have not come in this week. confusing so it is really fascinating. >> great perspective. thank you for joining us. up next, the 10 year treasury yield is sitting at the 2.4% mark. we hear from this years
but i don't think it will be the end of the world in terms of the amount. growth,there is good just inflation is not high enough to say it is going to go out of control. gdp and i said 3% said around 245, 240, i would be shocked. wouldn't you? rates will only rise gradually, maybe two and level -- to a level of 2.1%. we still have to accommodate a monetary policy around the world and people will continue. >> ray dalio was on bloomberg earlier and he talked about the risk in treasuries.
the risk in the bond markets as well. it does to 40 makes sense for you on a 10 year? >> absolutely not. higher andare going are seeing -- when you look at some the actions around the world, if rates go higher come that money can go home and i am specifically thinking about japan. gdp.inking about 3% flattersitioned for a yield curve. can see how much that has spread between the short and long in. that is a big consensus trade right now. is that something you go with or go against? towardsnk we are moving a flatter curve.
banks are being less accommodative and are not tightening. they can be very self in their tapering and that i think is the key, is that it is quietly happening in the market, but when money starts to flow back to home, that is when things can change. the treasury market started to move and then we had a headline that the president was leaning towards jay powell to be the future fed chair and we reverse the move around u.s. gdp . could you make sense of that? puttingss people were probability that taylor would have been less of the status quo
, so i think that explains the reversal. i agree the numbers were pretty strong and they were something that should have been for higher yields. >> misses is what i see in front of me. regardless of the pharaohs are -- federal reserve, they are hawkish versus the market and you see that there 18 through 2020 as well. jay powell is in the next rate therefore, he will be more hawkish than the market expects anyway. >> think themark probability -- why? -- inhink the probability this respect, powell is getting means there will be
some continuation and in this it would continue to the run in the middle. if you look at the median, it is 2.2%. that is the policy rate. that is 30 basis points below the 10 year. either we get this flat yield curve or something and not happen. >> we will definitely move towards flattening. i think what the market is saying is we believe -- we prefer howl over taylor.
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