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Asian equities are mixed on the back of accelerating inflation in Japan for the first time in four months. A four-day truce between Israel and Hamas takes effect. The first set of hostages are due for release at 1500 CET. In Germany, the ruling coalition has eased its foot off the debt brake to unveil a special budget following last week's constitution court ruling which left Berlin's spending plans in tatters. Barclays reportedly eyes a plan to cut as much as £1 bn in costs which could translate into 2,000 job losses.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Za levnějším máslem jsou Češi schopní cestovat i desítky kilometrů. Z banky do banky však kvůli úspoře na úrocích necestují. Bojíme se a jsme konzervativní, u mladé generace to bude jinak, věří ekonomka Jana Matesová.Vysoká inflace s sebou přinesla vyšší úrokové sazby, které se pozitivně propsaly i do vkladů českých střadatelů. Na změně trendu však mohli Češi vydělat mnohem víc, kdyby nebyli tak věrní svým bankám.Rozdíly v úročení mezi konty bank jsou totiž zásadní. „Konkurence na trhu je tu dobrá, ale kdyby se lidé nebáli měnit banky, byla by tu ještě větší,“ říká v podcastu Ve vatě ekonomka Jana Matesová.Takhle mezi sebou na bankovním trhu, kde mají hlavní slovo tři bankovní obři Česká spořitelna, ČSOB a Komerční banka, soutěží hlavně „mladé dravé štiky“.Pár příkladů. Nový účet od Trinity Bank nabízí úrok 6,28 procenta ročně, slovenská VÚB inzeruje pro český trh spořicí účet s 6,15 procenta a Max banka nabízí 6,01 procenta. Přes šest procent drží „na spořáku“ i UniCredit Bank a Komerční banka. Naopak Česká spořitelna má pro klienty, kteří v bance neinvestují, úrok pouze čtyři procenta.Ekonomka Jana Matesová však upozorňuje, že jen podle vysokého úroku by se klient rozhodovat neměl. Zvláště u menších bank je důležité sledovat i další okolnosti, třeba jejich majetkovou strukturu.Pozor na to, kdo vaši banku vlastníTrinity bank je bývalá kampelička Moravský Peněžní Ústav. Zdědila kolem 9000 bývalých družstevníků, nyní akcionářů. Zhruba ze 30 procent ji ovládá zlínský podnikatel Radomír Lapčík, který se netají tím, že by chtěl banku pro sebe.„Můžeme čekat významné vlastnické změny v průběhu příštích let. Střadatel se musí zajímat o to, jaká je stabilita té banky,“ říká Matesová.Max Banka vznikla z bývalé ruské Expobank. Příští rok se patrně spojí s dalším hráčem na bankovním trhu, s Creditas. „Tam je potřeba hledět na to, abyste neměli 250 tisíc úspor u Max Banky a 250 000 u Creditas na výhodných spořicích účtech. Protože jakmile se banky spojí, nemusíte už plnit podmínky pro výhodné úročení,“ varuje Matesová.VÚB je velká slovenská banka s dlouhou historií. Ovšem slovenský domicil banky s sebou nese komplikace. „Výhodné je, že se vám úrok připisuje každý den. To je velmi neobvyklé. Většinou se připisuje jednou za měsíc. Nicméně jako zahraniční banka vám z výnosu nestrhává daně běžnou srážkovou daní, jako to dělají české banky, ale musíte na ně odevzdat daňové přiznání,“ upozorňuje ekonomka.Proč český klient nestřídá banky?Český klient není zvyklý přecházet z ústavu do ústavu, podle toho, kde zrovna nabízejí lepší úrok. Je konzervativní a nedůvěřivý.„To se nese jako historická zkušenost té doby, kdy na celém českém trhu byla jedna státní banka československá, která plnila roli i komerční banky pro podniky a spořitelny. Lidé měli vkladní knížky na celý život a ani nebylo kam přejít,“ zdůvodňuje českou stabilitu Jana Matesová.Řada klientů si navíc pamatuje krachy bank z 90. let. „Přenáší se tam i zkušenost z devadesátých let, kdy byl trh velmi nestabilní. Starší a střední generaci tak stačí, když mají stabilní banku, která je nikdy dramaticky nezklamala. I když je ani nikdy dramaticky nenadchla.“S nástupem mladší generace se však podle Matesové postoj změní. „Myslím, že budou ochotní přecházet s penězi z banky do banky podle toho, kde to bude výhodné, a více si také budou své peníze spravovat. Většina z nich už tuší, že se musí zajistit na důchod.“Poslechněte si celou epizodu. Ve vatě. Podcast novinářky Markéty Bidrmanové. Poslechněte si konkrétní rady investorů a odborníků na téma investic, inflace, úvěrů a hypoték. Finanční „kápézetka“ pro všechny, kterým nejsou peníze ukradené. Vychází každý čtvrtek. Poslouchejte na Seznam Zprávách, Podcasty.cz nebo ve všech podcastových aplikacích. V podcastu vysvětlujeme základní finanční pojmy a principy, nejde ale o investiční poradenství. O čem byste chtěli poslouchat příště? Co máme zlepšit? A co naopak určitě neměnit? Vaše připomínky, tipy i výtky uvítáme na adrese audio@sz.cz.
"Pamätám si, ako sme sa dohodli a prestali sme chodiť na tlačovky. Okrem redaktorov Slovenskej televízie, ktorí tam chodiť museli. Väčšina normálnych novinárov tam ale nechodila. Časom sa to zmenilo, aj keď mne Vladimír Mečiar odmietol odpovedať vždy," hovorí dlhoročný novinár, Eugen Korda. "Boj s médiami sa dá vyhrať, ak zavedieš diktatúru. Pokiaľ sa bude chovať Fico aspoň trochu civilizovane, tak boj s médiami nevyhrá. My novinári si s tým poradíme, ale nie je to dobré. Bude to mať zlý efekt aj na samotnú stranu Smer a pána Fica. Veď on by mohol prezentovať to dobré, čo je v ňom. Škodí ale sám sebe. Musel by zrušiť denník SME, denník N, Markízu a nakoniec JoJku. Jeho boj je prehratý. On to skúša, ale bude neúspešný," dodáva Korda. Aké bolo robiť novinárov za Mečiara? Podobá sa to v niečom na dobu, ktorú žijeme teraz? Čo by odporučil novinárom dnes? A čo hrozí novinárom počas štvrtej vlády Roberta Fica? Pozrite si rozhovor Zuzany Kovačič Hanzelovej s novinárom Eugenom Kordom. Newsletter Zuzany Kovačič Hanzelovej: https://komentare.sme.sk/t/9122/zkh-pise – Ak máte pre nás spätnú väzbu, odkaz alebo nápad, napíšte nám na podcasty@sme.sk – Všetky podcasty denníka SME nájdete na sme.sk/podcasty – Podporte vznik podcastu Rozhovory ZKH a kúpte si digitálne predplatné SME.sk na sme.sk/podcast – Odoberajte aj denný newsletter SME.sk s najdôležitejšími správami na sme.sk/suhrnsme – Ďakujeme, že počúvate podcast Rozhovory ZKH
Zolitūdes traģēdiju pirms desmit gadiem mēdza saukt arī par “Maximas” traģēdiju, jo tieši lielveikala “Maxima” komplekss 2013. gada 21. novembrī sagruva pār cilvēku galvām. Bojā gāja arī pieci veikala darbinieki. Turklāt pircēji un darbinieki no veikala netika evakuēti, arī skanot trauksmes signalizācijai. Drīz pēc traģēdijas sekoja veikalu tīkla ķēdes boikots, - ļoti daudz iedzīvotāju atteicās iepirkties “Maximā”, un kādu laiku “Maximas” veikali patiesi bija tukšāki. Vēlāk “Maxima” atvainojās par notikušo, un traģēdijā bojāgājušo tuviniekiem un cietušajiem izmaksāja kompensācijas aptuveni deviņu miljonu eiro apmērā. Lai runātu par mācībām, kas gūtas, atskatoties uz pirms desmit gadiem notikušo traģēdiju, Vita Anstrate uz interviju aicināja Karolīnu Zīgmantaiti - “Maxima” grupas valdes locekli un “Maxima” vadītāju Latvijā.
Autor rozważań: kl. Franciszek Dobija Czyta: kl. Franciszek Dobija Mt 25, 14-30 Jezus opowiedział swoim uczniom następującą przypowieść: «Podobnie jest z królestwem niebieskim jak z pewnym człowiekiem, który mając się udać w podróż, przywołał swoje sługi i przekazał im swój majątek. Jednemu dał pięć talentów, drugiemu dwa, trzeciemu jeden, każdemu według jego zdolności, i odjechał. Zaraz ten, który otrzymał pięć talentów, poszedł, puścił je w obieg i zyskał drugie pięć. Tak samo i ten, który dwa otrzymał; on również zyskał drugie dwa. Ten zaś, który otrzymał jeden, poszedł i, rozkopawszy ziemię, ukrył pieniądze swego pana. Po dłuższym czasie powrócił pan owych sług i zaczął rozliczać się z nimi. Wówczas przyszedł ten, który otrzymał pięć talentów. Przyniósł drugie pięć i rzekł: „Panie, przekazałeś mi pięć talentów, oto drugie pięć talentów zyskałem”. Rzekł mu pan: „Dobrze, sługo dobry i wierny! Byłeś wierny w rzeczach niewielu, nad wieloma cię postawię: wejdź do radości twego pana!” Przyszedł również i ten, który otrzymał dwa talenty, mówiąc: „Panie, przekazałeś mi dwa talenty, oto drugie dwa talenty zyskałem”. Rzekł mu pan: „Dobrze, sługo dobry i wierny! Byłeś wierny w rzeczach niewielu, nad wieloma cię postawię: wejdź do radości twego pana!” Przyszedł i ten, który otrzymał jeden talent, i rzekł: „Panie, wiedziałem, że jesteś człowiekiem twardym: żniesz tam, gdzie nie posiałeś, i zbierasz tam, gdzie nie rozsypałeś. Bojąc się więc, poszedłem i ukryłem twój talent w ziemi. Oto masz swoją własność!” Odrzekł mu pan jego: „Sługo zły i gnuśny! Wiedziałeś, że żnę tam, gdzie nie posiałem, i zbieram tam, gdzie nie rozsypałem. Powinieneś więc był oddać moje pieniądze bankierom, a ja po powrocie byłbym z zyskiem odebrał swoją własność. Dlatego odbierzcie mu ten talent, a dajcie temu, który ma dziesięć talentów. Każdemu bowiem, kto ma, będzie dodane, tak że nadmiar mieć będzie. Temu zaś, kto nie ma, zabiorą nawet to, co ma. A sługę nieużytecznego wyrzućcie na zewnątrz – w ciemności! Tam będzie płacz i zgrzytanie zębów”». Jesteśmy również na YouTubie: https://www.youtube.com/@rozwazania
In this episode of our Week Ahead podcast series, we look at the main themes driving global markets over the coming week. In the US (01:30), we have the FOMC minutes, durable goods orders and the Thanksgiving holiday. In Europe (06:04), it's the UK Autumn budget, European flash PMIs and the Riksbank meeting. Then it's the latest from Asia (11:56) with Japan, Singapore and Malaysia CPI, Indonesia policy rate decision, and the RBA minutes as well as global markets all to discuss.
Napi találós kérdés: vajon MI lesz az USA hadseregének új tömegpusztító fegyvere? IT Business 2023-11-16 06:07:55 Infotech USA Mesterséges intelligencia Az Egyesült Államok Védelmi Minisztériumának kutatásokért felelős részlege, a Darpa milliókat költ olyan mesterséges intelligencia kifejlesztésére, amely segíthet stratégiai fontosságú, harctéri döntések meghozatalában. Az említett katonai kutatási ügynökség finanszírozza a Strategic Chaos Engine for Planning, Tactics, Experimentation and Resilienc Az Űrhaderő rejtélyes űrrepülőgépével új megfigyelő technológiákat tesztelnek Rakéta 2023-11-16 07:03:01 Tudomány Kiterjesztik az X-37B űrrepülőgép működési körét, ami legközelebbi, decemberben induló bevetésén az űr megfigyelését is végzi. Ahogy az a korábbi missziók során is történt, az Űrhaderő és a Légierő most sem árult el sokat a program céljáról. Idén tíz hónap alatt 240 ezer embert küldtek el a techcégek Bitport 2023-11-16 09:40:00 Infotech Több mint másfélszer annyian veszítették el a munkájukat, mint tavaly egész évben. Pedig hónapról hónapra csökken az elbocsátottak száma. Renderképeken a Red Magic 9 Pro Android Portál 2023-11-16 07:33:37 Mobiltech Kína Telefon A nubia nemrég ígért néhány dizájnváltozást, amelyekkel a közelgő Red Magic 9 Pro kiemelkedik majd a korábbi játéktelefonjaiból, a legújabb hivatalos renderek pedig megerősítik a vállalat állítását. Közel egy hét van hátra a Red Magic 9 Pro hivatalos leleplezéséig, a kínai mikroblog weboldalon, a Weibo-n már több kép is megjelent a telefonról. A Re A világ egyik legnagyobb állata sodródott partra 24.hu 2023-11-16 10:08:28 Tudomány Még nem tudják pontosan, mi okozhatta a pusztulását, de ránézésre elég betegnek tűnt. Jóváhagyták Nagy-Britanniában a világ első olyan gyógyszerét, aminek a forradalmi genetikai olló az alapja Telex 2023-11-16 14:19:50 Tudomány Gyógyszer Nobel-díj A CRISPR-eljárás le tudja nullázni az örökletes betegségeket, ezért járt a kémiai Nobel-díj 2020-ban. Most két vérzékenységhez kapcsolódó betegségre alkalmazzák majd. Folytatódik a KiberPajzs Mínuszos 2023-11-16 04:33:01 Infotech Telefon Az első évét ünneplő KiberPajzs együttműködés tapasztalatait konferencián összegezték az együttműködő felek. Bejelentették a KiberPajzs folytatását. Hamis banki hívások, megtévesztő online kereskedelmi ajánlatok, hívószám-hamisítás (spoofing), visszahívásos telefonos csalás (wangiri), adathalász e-mailek: csak néhány azon megtévesztő cselekmények k Minden eddiginél pontosabb időjós Mi-t készítettek a Google kutatói Player 2023-11-16 14:00:10 Infotech Google A GraphCast pontosabb az eddigi csúcsmodellnél, és minden korábbinál hosszabb időre előre jelzi a szélsőséges időjárást. Jön a ChatGPT új, személyre szabható verziója Igényesférfi.hu 2023-11-16 06:08:53 Infotech ChatGPT OpenAI A népszerű chatbot mögött álló vállalat, az OpenAI november 6-án megtartotta első fejlesztői konferenciáját. Deepfake- és hanggenerátort, saját chipeket és mást is hozott a Microsoft AI-eseménye - itt van minden bejelentés PCW 2023-11-16 12:00:20 Infotech Mesterséges intelligencia Microsoft A redmondiak rendíthetetlenül hisznek a mesterséges intelligenciában, így számos izgalmas szolgáltatással gyúrnak rá a témára. Az emberiség első űrcsatájára most, az izraeli-gázai konfliktus miatt kerülhetett sor Rakéta 2023-11-16 14:00:03 Autó-motor Izrael Palesztina Világűr Gázai övezet Az Izraeli Védelmi Erők a Kármán-vonal, tehát a világűr határa felett fogtak el egy rakétát. Mivel az esetet videófelvétel is bizonyítja, ez lehet az első dokumentált katonai összecsapás a világűrben. Megváltozik a Google keresője ATV 2023-11-16 10:44:00 Infotech Mesterséges intelligencia Google A mesterséges intelligencia már a Google keresőmotorjában is teret hódított, nemsokára pedig nálunk is elérhető lesz a már több mint 120 országban bevezetett fejlesztés. Bojár Gábor: A karizmára, ami egy vezetőt vezetővé tesz, az AI soha nem lesz képes Forbes 2023-11-16 11:12:01 Cégvilág Mesterséges intelligencia Forbes Bojár Gábor A techvezetők szerepeiről és kihívásairól és természetesen a mesterséges intelligenciáról beszélgetett Bojár Gábor, Birmacher Barnabás és Balogh Petya a Forbes Tech Summiten.
Napi találós kérdés: vajon MI lesz az USA hadseregének új tömegpusztító fegyvere? IT Business 2023-11-16 06:07:55 Infotech USA Mesterséges intelligencia Az Egyesült Államok Védelmi Minisztériumának kutatásokért felelős részlege, a Darpa milliókat költ olyan mesterséges intelligencia kifejlesztésére, amely segíthet stratégiai fontosságú, harctéri döntések meghozatalában. Az említett katonai kutatási ügynökség finanszírozza a Strategic Chaos Engine for Planning, Tactics, Experimentation and Resilienc Az Űrhaderő rejtélyes űrrepülőgépével új megfigyelő technológiákat tesztelnek Rakéta 2023-11-16 07:03:01 Tudomány Kiterjesztik az X-37B űrrepülőgép működési körét, ami legközelebbi, decemberben induló bevetésén az űr megfigyelését is végzi. Ahogy az a korábbi missziók során is történt, az Űrhaderő és a Légierő most sem árult el sokat a program céljáról. Idén tíz hónap alatt 240 ezer embert küldtek el a techcégek Bitport 2023-11-16 09:40:00 Infotech Több mint másfélszer annyian veszítették el a munkájukat, mint tavaly egész évben. Pedig hónapról hónapra csökken az elbocsátottak száma. Renderképeken a Red Magic 9 Pro Android Portál 2023-11-16 07:33:37 Mobiltech Kína Telefon A nubia nemrég ígért néhány dizájnváltozást, amelyekkel a közelgő Red Magic 9 Pro kiemelkedik majd a korábbi játéktelefonjaiból, a legújabb hivatalos renderek pedig megerősítik a vállalat állítását. Közel egy hét van hátra a Red Magic 9 Pro hivatalos leleplezéséig, a kínai mikroblog weboldalon, a Weibo-n már több kép is megjelent a telefonról. A Re A világ egyik legnagyobb állata sodródott partra 24.hu 2023-11-16 10:08:28 Tudomány Még nem tudják pontosan, mi okozhatta a pusztulását, de ránézésre elég betegnek tűnt. Jóváhagyták Nagy-Britanniában a világ első olyan gyógyszerét, aminek a forradalmi genetikai olló az alapja Telex 2023-11-16 14:19:50 Tudomány Gyógyszer Nobel-díj A CRISPR-eljárás le tudja nullázni az örökletes betegségeket, ezért járt a kémiai Nobel-díj 2020-ban. Most két vérzékenységhez kapcsolódó betegségre alkalmazzák majd. Folytatódik a KiberPajzs Mínuszos 2023-11-16 04:33:01 Infotech Telefon Az első évét ünneplő KiberPajzs együttműködés tapasztalatait konferencián összegezték az együttműködő felek. Bejelentették a KiberPajzs folytatását. Hamis banki hívások, megtévesztő online kereskedelmi ajánlatok, hívószám-hamisítás (spoofing), visszahívásos telefonos csalás (wangiri), adathalász e-mailek: csak néhány azon megtévesztő cselekmények k Minden eddiginél pontosabb időjós Mi-t készítettek a Google kutatói Player 2023-11-16 14:00:10 Infotech Google A GraphCast pontosabb az eddigi csúcsmodellnél, és minden korábbinál hosszabb időre előre jelzi a szélsőséges időjárást. Jön a ChatGPT új, személyre szabható verziója Igényesférfi.hu 2023-11-16 06:08:53 Infotech ChatGPT OpenAI A népszerű chatbot mögött álló vállalat, az OpenAI november 6-án megtartotta első fejlesztői konferenciáját. Deepfake- és hanggenerátort, saját chipeket és mást is hozott a Microsoft AI-eseménye - itt van minden bejelentés PCW 2023-11-16 12:00:20 Infotech Mesterséges intelligencia Microsoft A redmondiak rendíthetetlenül hisznek a mesterséges intelligenciában, így számos izgalmas szolgáltatással gyúrnak rá a témára. Az emberiség első űrcsatájára most, az izraeli-gázai konfliktus miatt kerülhetett sor Rakéta 2023-11-16 14:00:03 Autó-motor Izrael Palesztina Világűr Gázai övezet Az Izraeli Védelmi Erők a Kármán-vonal, tehát a világűr határa felett fogtak el egy rakétát. Mivel az esetet videófelvétel is bizonyítja, ez lehet az első dokumentált katonai összecsapás a világűrben. Megváltozik a Google keresője ATV 2023-11-16 10:44:00 Infotech Mesterséges intelligencia Google A mesterséges intelligencia már a Google keresőmotorjában is teret hódított, nemsokára pedig nálunk is elérhető lesz a már több mint 120 országban bevezetett fejlesztés. Bojár Gábor: A karizmára, ami egy vezetőt vezetővé tesz, az AI soha nem lesz képes Forbes 2023-11-16 11:12:01 Cégvilág Mesterséges intelligencia Forbes Bojár Gábor A techvezetők szerepeiről és kihívásairól és természetesen a mesterséges intelligenciáról beszélgetett Bojár Gábor, Birmacher Barnabás és Balogh Petya a Forbes Tech Summiten.
APAC stocks traded mostly firmer following a similar lead from Wall Street; Chinese markets saw more of a muted performance.DXY traded flat within a tight range on either side of 105.50, USD/JPY remained just under 151.00, and Antipodeans outperformed.European equity futures are indicative of a contained open with the Eurostoxx 50 -0.1% after the cash market closed +0.6% yesterday.US military forces confirm it conducted a self-defence strike on a facility in eastern Syria, according to the Pentagon; the strike was a response to attacks against US personnel in Iraq and Syria by IRGC-Quds Force affiliates.Highlights include US IJC, NZ Manufacturing PMI, Speeches from Fed's Powell, Barkin, Bostic, ECB's Lagarde, BoJ's Ueda, ECB's Lane, Banxico Policy Announcement, Supply from US.Earnings: Deutsche Telekom, Hannover Re, AstraZeneca, Taylor Wimpey, National GridRead the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk
The bounce is back and in their alté bag! Your favourite hosts FK and Jollz are joined by BOJ, independent artist, all round fresh boy and alté music pioneer as well as Odunsi The Engine, multi-talented, singer, producer and artiste. They have a riveting, hilarious conversation about being creatives, they gist about what happens in the lives of artistes and of course they help some you solve some pesky dilemmas with sage advice.Enjoyy!Don't forget to use #ISWIS or #ISWISPodcast to share your thoughts while listening to the podcast on Twitter ! Rate the show 5 stars on whatever app you listen and leave a review, share with everyone you know and if you also watch on YouTube, like and leave a comment! If you want us to solve your dilemma on the podcast follow the link: https://forms.gle/FiQ7q5sm2T5dequY7Make sure to follow us on Twitter: @ISWISPodcastInstagram: @isaidwhatisaidpodYoutube: @ isaidwhatisaidpod Hosted on Acast. See acast.com/privacy for more information.
In this week's episode of Afrobeats Weekly, Tunde and his co-host, Showontstop discuss Morravey's debut EP Ravi and more. They also touch on news making the rounds in Afrobeats this week and all the major songs that dropped this week.OUTLINE00:00 - Introduction01:45 - Catch up04:44 - Rema becomes the first African to perform at the Ballon d'Or ceremony (Is he part of the big 4)08:05 - Seyi Vibez's 'Billion Dollar Baby' is the longest #1 album of 202309:44 - Afro Nation cancels December concert in Nigeria21:38 - New SongsOnly God Can Save Me by JobeboySweet Life by BOJ and AjebutterMalaika by Teni Apala Disco by DJ Tunez and Terry ApalaNew AlbumsRavi by Morravey32:10 - Spotlight of the week33:20 - The Charts36:50 - The Five42:25 - Sign outFollow the podcast on Twitter and Instagram for more information. You can also send fan mail to fanmail@afrobeatspod.com.
Daniel talks about the recent Bank of Japan meeting, potential developments of the BOJ's policies and possible paths for USDJPY.Speaker:Daniel Lam, Head of Equity Strategy, Standard Chartered BankFor more of our latest market insights, visit Market views on-the-go or subscribe to Standard Chartered Wealth Insights on YouTube.
On this episode of “On The Tape,” Guy, Danny, and Dan talk about the rally off the lows (2:00), yields vs. stocks (9:00), commodities (16:30), the BOJ meeting (18:00), bank stocks (21:30), why Dan thinks it's a good trading environment (24:30), and Danny's NFL picks (27:30). David Rosenberg of Rosenberg Research joins to discuss the rally within the bear market (32:00), why the bond market is more attractive than the stock market (36:00), what would make him “very bullish” (39:00), the economy (41:00), what happens to the stock market when the Fed stops raising interest rates (44:00), the possibility for a recession (47:30), positioning in the bond market (49:30), cracks in the housing market (55:00), the stock to bond ratio (59:30), and credit (1:01:30). — About the Show: On The Tape is a weekly podcast with CNBC Fast Money's Guy Adami, Dan Nathan and Danny Moses. They're offering takes on the biggest market-moving headlines of the week, trade ideas, in-depth analysis, tips and advice. Each episode, they are joined by prominent Wall Street participants to help viewers make smarter investment decisions. Bear market, bull market, recession, inflation or deflation… we're here to help guide your portfolio into the green. Risk Reversal brings you years of experience from former Wall Street insiders trading stocks to experts in the commodity market. — Check out our show notes here Learn more about Ro body: ro.co/tape See what adding futures can do for you at cmegroup.com/onthetape. — Shoot us an email at OnTheTape@riskreversal.com with any feedback, suggestions, or questions for us to answer on the pod and follow us @OnTheTapePod on Twitter or @riskreversalmedia on Threads — We're on social: Follow @GuyAdami on Twitter Follow Danny Moses @DMoses34 on Twitter Follow Liz Young @LizYoungStrat on Twitter Follow us on Instagram @RiskReversalMedia Subscribe to our YouTube page
Randy Kroszner, University of Chicago Booth School Professor of Economics, and Jeff Rosenberg, BlackRock Portfolio Manager of the Systematic Multi-Strategy Fund, discuss the softer-than-expected October US jobs report. Gene Munster, Deepwater Asset Management Managing Partner and Anurag Rana, Bloomberg Technology Senior Analyst, recap Apple's sluggish 3Q earnings report. Terry Haines, Pangaea Policy Founder, discusses the rift in Washington over government spending and aid to Israel.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. What you need on Jobs Day more Newtonian calculus. We'll do that with Randall Krosner of the Bus School, Chicago, of course, the former Fed governor, one of our great and giant financial economists in America. What's the second derivative of the jobs market look like? Randy? When it moves? Does it move? Ah? And that's the key question exactly what you were talking about. What does this pretend for the trajectory going forward? Certainly we're seeing a slowing pace over the last few months downward revisions. And then the question is will this be nice and smooth or will this pretend something that is going to be As at LISTA mentioned before, nonlinear, very difficult to predict any nonlinear moves and things. But I do think it's consistent with a somewhat softening labor market. I think the FED will certainly be heartened by the wage growth coming down a bit over time. I think this takes the wind of the sales of those who wanted to go further. I think it makes it much more likely that we will just hold where we are for a while. But so far, there's nothing in this to suggest that the FED is going to be eager to cut or be even talking about cutting anytime soon. Do you think, Randy is some people are pointing to manufacturing as a point of weakness, that that is a leading indicator in the way it has been in previous times, just because of how many people were hired during the peak of the pandemic. It is certainly one area that there was a lot of bounce back, because of course people want to things, but now people want services, and so the services part is still extremely important. I wouldn't put too much emphasis on any one particular sector. I think you have to look over overall, and as Mike had said, you know, we're seeing a little bit of slow down broadly, but not enormous amount of slow down. But I do think that is consistent with in somestance where the FED wants to go. They want to see the uneployment rate go up a little bit, not too much. They want to see wage growth come down a little bit, but not too much. And I think it's just going to be tougher to be hiring people going forward. Until just a few months ago, real wages were not growing, they were actually negative. Real wage growth was negative. Now real wage growth is positive, so it gives less of an incentive for firms to hire. Real interest rates are now positive. They had been negative for a very long time. That combination is probably going to lead firms to be less eager to hire, less eager to invest, and I think that's going to be leading to what I think is potentially a hard ish but not hard landing. This is an important jobs report. This November report of the October data just absolutely extraordinary. Randy Krasner, thank you so much, Professor Krasner with the Boost School the University of Chicago. If you're not part of the global Wall Street gang, you've got to understand it's hard to look at the Bloomberg screen and frame it out from where we were two weeks ago, which gets us to canes and when the facts change, I change. Jeffrey Rosenberg studied as Maynard Keynes at Carnegie Mellon. He's a black Rock portfolio manager systematic multi strategy fund for all of us. Jeff Rosenberg, are the facts changing? Great question, Tom. You know, the narrative is changing and the facts are driving that. And so Lisa asked the kind of the key question, You know, how do you rally in front of a slowing labor picture? And that's because it's where we are. Equity markets were weaker while the economy was strengthening, and that was really about the rise in the denominator, in the discount rate and the interest rates. So as you ease off the pressure in terms of the interest rates, there's a little window here where the narrative changes and there's relief because the discount raid is expected to be a bit lower, and you see it in the bond market. But that's about horizon and so the near term horizon narrative will shift, but the longer term horizon about that hardish landing that Randy just mentioned. That'll be for future conversations. Right now, the market's pretty excited about lower discount way, Jeff Rosenberg, people would say, Blackrock is part of that wall of money that's out there. Okay, we got a short cover here, a short cover there, I got futures up eighteen. Rosenberg knows the numbers better than me. Are we underestimating Jeff Rosenberg? How many people here are off sides and need to get in and play? Now? Yeah, you know we talked about this after the FMC. You know, the near term volatility is all about technicals and positioning, and so you're going to have that and you're going to see you're going to see those moves. The longer term positioning is going to be about trajectory and fundamentals. But certainly, you know, after a report that you know pretty much convincingly across the board, as you highlighted earlier, you know, this is a report that helps to support the narrative of slowing in the labor markets, slowing in wage inflation, even though that's a mixed shift probably in the AH number, but across the board, especially with the revisions, you know, it just looks like this is coming in slower, and so that helps to feed the near term narrative that you get to the soft landing. You know, as Randy said, whether it's soft landing or hardish landing or hard landing will remain to be seen. When do you go with groupthink and when do you push back? Right? I mean, when do you go with the crowd if sentiment is shifting and you're seeing people go into risk, if you believe that essentially bad news will be bad news for risk acts. Yeah, you know, it's a lot about kind of what's in the looking at what's in the price, and how much cushion you have against the consensus move and where the asymmetries lie. So I think right now the momentum and the sentiment around soft landing is going to be pretty hard to push back against. But you know, as we see successive waves of data, we got a couple more here in terms of before we get to the December FOMC, there's going to be a little bit of momentum here around the easing off of financial conditions, the easing off of tightening from the FED, and I think that's going to provide a little bit of a tailwind for a short horizon trap. And definitely the momentum tends to overshoot, and there is this feeling that this does set the market up for more fragility heading into a print that could be a big surprise on the downside. Jeff, how much is that sort of the play right now is to lean into the momentum, go at the flow, soft landing. Sure you can celebrate, but the music will stop eventually, and each one of these economics prints are going to have that much more heft and importance in markets. Yeah, and you know, the main issue here is really about long and variable lags. And Tom, I know you hate when every time I say that, but it is where do you see that pressure coming in? Randy talked about the pressure in terms of easing off of hiring because real wages are no longer negative, it's more expensive. You talked about funding costs, and maybe there's a little bit of an opening up in terms of the bond market, but I think you got to remember here, these are much more expensive funding costs. And so if you don't have to issue that debt because you've termed it out, you don't want to issue that debt. And so even though the market may be open, it's at a much higher cost. And that lagged effect of tightening in terms of interest expenses something you know, the market is still going to have to figure out where are the vulnerabilities, and there are vulnerabilities to that impact on Bloomberg Television and radio. Jeffrey Rosenberg with us is Blackrack really timely, and of course we thank him forst fed work as well well. He's going to stay with us at right now, I can't do it to complete data check because Jeff Rosenberg is too important. But Lisa, there's some real nuances here. Futures up nineteen continue to advance down, futures up one thirty nine. Can I get to a VIXA fourteen, I'm not there yet fifteen point two six. As Bramba mentioned, folks a two year yield in thirteen basis points, we continue to see lower yields and a higher prices ten year in his stunning eleven basis points. And just you know, outside the box here, I got weaker dollar, I got euros through one oh seven. I've got yen dynamics, but euro yen. What does the Japanese institutions do this weekend? Off what Jeff Rosenberg says? Because I got euro yin one sixty point zero one. If they're not going to act now, Lisa, when are they going to act. That does raise a good question and Jeff to that point, does the move that we're seeing in the US a sigh of relief open up possible monetary disruption elsewhere hint hind Bank of Japan that could be disruptive on the other side. Yeah, I mean that's a big global story and one we've been talking about for a while waiting for. We got a little bit of it in terms of changing the definition of yield curve control, and there's an expectation that there's going to be more. And there's an incredible amount of fiscal stimulus coming out of Japan that is really going to push the BOJ even further. And so that's been a global impact. It's dampening term premium It's part of the term premium steepening story. You know, the refunding you know, certainly is pushed back on that and positioning you know, a bit off sides for that surprise somewhat surprise refunding. But really the big story there is going to be global term premium steepening and that's I think long term going to come back to the US. But near term this is going to be about softish landing and slowing of the Fed, and the market is going to run with that. We're looking right now at two year yields just tanking. I mean, honestly, this is quite a move fifteen bas points nearly from top to bottom in this trading session as people parse through this, Jeff just want to finish up with the Fed's reaction function, this concept of what it takes for the Federal Reserve to cut rates. Right now, there is base into the markets in real time, a sense that they will be cutting rates in much sooner than they're saying. Do you think that's accurate that the bar to cut rates has somehow come in as a result of just the general feeling and the public and the lack of willingness to tolerate much higher on employment rates. Well, it's tricky, Lisa. I mean, I think the reaction you're getting right now pricing out the kind of probabilities, the limited probabilities of the last hike. Right. So, you know, you go back to Wednesday, and you know you remember the question, and you know you talked about we're not even you know, talking about cutting rate now. Obviously the market is because the market is looking forward here. I think you got to see a lot more development on the inflation side before you get there. And then the other the problem we're going to talk about, I think is the reflexivity. I think you mentioned it is that you know, well, we the FED could do less because the market's doing more. But the more the market does more in terms of using financial conditions, the more then the Fed has to do. So you kind of get yourself chasing your own tail around that story in terms of whether they can cut. So it will come back to does the inflation really fall fast enough to that two percent level that gets real interest rates high enough that gets them concerned that they're too tight where they really need to deliver those cuts, and that I think is still way out into the future. And Lisa, where do you get to show where jeff Rosenberg channels George Soros on reflexivity. I mean, there's nowhere else in the world you can have this much fun. Jeffrey Rosenberg, thank you so much for joining us. That's the way it works, folks. The street only focuses on revenue dynamics, and if they're brave, they go down the income statement and they'll find that and then it's what I call concept concept concept China, worry, worry, worry, yep iPhone worry where iPads omg and thank god. Gen Monster, with all of his work on Apple and technology, says, you know, maybe they're rock solid. Maybe they're running this thing for profit. Gene. I saw a record third quarter gross margin. I saw the persistency of services maintained, and critically, I saw cash generation in the gloom of Apple this morning. The second guessing, is there free cash flow growth going to EBB. No, Tom, I think it's just going to flow and flow higher. And ultimately they showed, as you said, some of the most impressive margins, most impressive gross margins that they've ever printed a mikeed environment where component costs are rising, of labor costs, shipping costs, all of that, and they've been maintaining price that shows operation efficiency. That's what drives free cash flow. And you said it right. One big X factor around free cash flow that we've observed with big tech over the last nine months is they all say we're going to be investing more into AI. Tim Cook talks about that but says he wants to do it responsibly, which means he wants to protect margins and do that that is a unique perspective. John from his house, looking down on the Helix and New Jersey emails in and says, is it a time to buy Apple? If there's all this worry about legitimate things like China, is gene monster saying load the boat. So this is not investment advice, but I do think that this is a time to own Apple. And ultimately is you have to play this picture forward for one, two and five years. And what we've seen in the near term is that the importance of their devices in our lives are central and that shows up and effectively. The guidance I think it's misunderstood is for seven percent growth, up from one percent last quarter. So that's the baseline. The second is just the opportunity that they have to continue to sell that engage base more products. And third is that they have opportunities to go into new markets, whether it be spatial computing or what potentially could come out of automotive. And so I think when you put all this together, this is a unique dynamic and I think that this will power shares higher in the years to come. Paul, you know this. I mean you've lived this where you're like, is it a twelve week quarter, thirteen week quarter of fourteen week quarter. I mean it's like death exactly. Hey, Gene, you know, going into the quarter, the pundits were saying, you know, the primary focus is going to be China. So let's approach that from the perspective of competition. Talk to us about the Huawei phone. How much of a competitor is that. How much is a concern about nationalism weighing on potentially future demand for Apple products. So the first is the Huawei phone that's picked up a lot of traction during the quarter, a lot of speculation this was going to weigh on the China numbers, and China was down two percent year over year, at a similar rate that it was down back in March when before the new Wuahwei phones came out. It was down seven percent December of twenty twenty two, and so it fluctuates as the bottom line, China's up and down, and I don't think that the Huawei phone is having an impact. Apple gained share in China in the September quarter, and Huawei may have gained share too, But Apple is gaining share, and so I think that it is not having an impact on their business. And if you look at their China business, and I look at this on excluding the FX on a constant currency basis, it was up four percent. I'm reluctant to do that because I want to give but it's worth noting that China's doing okay for Apple. Yeah, Paul, Code of the day, Aniograna genius. Apple has eighteen percent one eight eighteen percent of the unit installed base. And yet you just heard g monsters say they're gaining share in the training share. All right, let's go to the other side of the income statement. There a gene on the cost side here. I guess you know, when I look at the operations of Apple, I just don't see any scenarre where the d couple from China. Now, they can, I guess, reduce to some extent their dependency on sourcing and manufacturing in China, but they really can't decouple. So did how do investors, long term investors like you get comfortable with that side of the equation. I don't think you do. And I think that I mentioned everything is good in China. I was talking about on the consumer side. I think on the production manufacturing side, it's a different story. And the story is that Apple needs to get out of China or at least reduce its exposure. Right now, we estimate that about forty to forty five percent of their revenue is manufactured in China. Now it's down from sixty percent a few years ago, so they've been reducing their exposure there. But the bottom line is that I don't think investors until that number gets down to twenty percent, I don't think investors are going to rest easy because this is as a geopolitical element to it and is a wild card when it comes to some of the confidence that investor have in the company's ability to produce products to meet this sensational demand and gene does a company have a strategy or are they articulating any confidence that they can in fact get down to that twenty or twenty five percent exposure they do, it's predominantly India. India's right now about two percent of their production, and they've talked about ramping production there and so it'll go tell a lot of other areas, even like you probably will see something in Mexico in the next five years too. Jane, quickly here services up sixteen percent. It's a persistent vector. Do you have a terminal rate on services or does it just grow out, you know, until Frozen eight comes out for Disney. I mean, you know, does it just go out forever. It's gonna keep going out forever because they have pricing leverage. It's not just in what they've raised the pricing with Apple TV Plus, but they raise pricing with the storage. You get those notifications. They raise it at buck a month. You don't think much about it, but that's a fifteen percent increase. And so I think that this business is generally a ten percent growing business for the foreseeable future, which can put three to five years ten seconds. Gene Monster, what's your terminal some of the parts on Apple right now? Some of the parts some of the parts is two forty And I think that's based on as we think about just ultimately what they can earn in twenty twenty five, Gene Munster. Not investment advice, but that's where we're at. It's not investment advice. But Tucker's got his by order out right now. G Muster, thank you so much. Luke Vencha. Well, let's say the show now. You can always do that with anarog Rana. He is truly expert on the cloud and has a partial interest in an Apple computer as well, Anna Regan, why you to explain to the audience how a tech company runs their company for profit versus running it just at the top line. To me, Apple is a profit cast generating juggernaut. Why is that so odd, so strange? Yeah, I think that goes back to the foundation of the company. It really believes in having high margin products. It does not believe in gaining market share. You know, even after all these years, it has only eighteen percent of the unit market share of smartphones around the world. It can completely change that overnight if they drop the price of the phone, but they will never do that because they believe in gross margins more than anything else. Over time, they will gain enough market share in every market. But this is not something that they do is try to gain market share just for the same It's the journey on a rag. As you know. Before we start talking about lower prices, can we talk about the absence of higher prices? Have they lost pricing power? No? No, I don't think so. The problem over here is people are keeping their phones for a longer period of time. If you are keeping it, let's say for an average three point six years before, you're probably keeping closer to four years. So what that does is it just elongates the time it takes for you to refresh your phones or for that bat at any other product. So I don't think it has nothing to do with the pricing power. The Promax is unbelievably expensive compared to the older models, and it's doing very well. Clearly the revenue mixed growth shift is moving towards services and IRAQ. How does that change your approach to value in this company? Yeah, I mean it has been a true surprise to see that number grow still in double digits. I expected that to be back into the high single digits by now. It has a high gross margin. It has a seventy percent plus gross margin compared to products, which is in the thirties. So over time, when you see the revenue mix shift towards services, you can expect the overall company gross margins to trend up inch, you know, inch by inch growing up, and we have seen that already in the last few years. Anor do you think that analysts are overplaying or underplaying the declines that we saw in China? I think you have to sit down and think what kind of company this is and I think this is really evident, and you know, I've discussed this with Tom and Paul many times, that this is not a company that's going to grow sales in double digits. This is at best, at this point, you know, mid to high single digit company. And I think people are getting used to that fact. Yesterday when they guide it for December quarter, which the estimate was it's going to grow about five percent, they said about flatish sales, and that's when the stock drop. I think people need to come to that point that you know, refresch cycles are going up and it's going to be a time before things are going to grow at that same pace, which then leads to a question of how much growth, how much future growth is baked into the valuation of the company that's seen a thirty seven percent rally. You're todate, Yeah, I think valuation is something that we talk about a lot with investors, and you know, sometimes you have to really ask yourself is this a technology company or this is a consumer stables company, Because if you take the heart of a consumer stables company, you know, something like a Coca Cola or a Costco, then you see things with a very different lens because those companies also are not growing, you know, eight to ten percent top line. Ana, I want to look at something beneath the radar. This week, it's a Friday, and in the world of Microsoft is a different Friday. It's a copilot Friday. What is the importance of this announcement that Microsoft's making where we actually do AI with a modeled marketed program for global corporations. What does co pilot mean to Microsoft? So, copilots is basically an AI tool that goes with your original software package. In the case of Microsoft, it's launched that with their Office Suite, which started setting yesterday. It's about thirty dollars per user per month, and they're hoping that, you know, the serious worker in the office that's probably somewhere in one hundred and fifteen million to two hundred million people around the world that currently use the Office Suite will opt some portion of that will opt for this particular feature to help gain productivity. Copilot can also be used in writing software. So it is just a tool that everybody has. They are the first ones to come out with it at such aggressive face. What's your prediction on this? I mean, come on, you've nailed the cloud. You got a cloud view out three years or five years, which is just absolutely remarkable. What is your prediction on how copilot will will do? I think, and I argue it's going to be very slow and steady because the thirty dollars per user, you know, per month is a very steep price. We think, you know, adoption rate is not going to be more than three to five percent in the first year of coming out, so you know, perhaps at two to three billion dollar upside on that. On the on the software coding side of it, which is getthub co Pilot, we think the adoption rate is going to be very high, you know, close to seventy five percent, because I don't see any developer out there that can afford to right code without this tool right next to them. And Rex, thank you, sir. In Washington, Terry Haynes joins US now founder of pengea policy Terry with great cheer for the exhaustion of our secretary straight. Does Shuttle diplomacy for Blincoln work like Shuttle diplomacy worked for Kissinger? I think it's very different for a couple of reasons, one of one of which is kind of bubbling under here. You know, Blincoln's mission this time, as opposed to the last few times, is designed to try to get to try to convince the Israeli government of some kind of pause or humanitarian something like that. And it calls into question a couple of things. It calls into question the degree to which the United States continues to support the current Israeli government. The Biden aids are running around Washington briefing against net Nyau right now. And Secondly, it calls into question whether or not and to what extent the US still supports the Israel's war aims in Gaza, and that's a concern. All this also complicates the Israel the Israeli aid package, because Congress is not going to pass the Israel package if they don't clearly understand what administration policy is. So we've got a lot of a lot of problems here that complicate Lincoln's mission. Terry, unfair question, but I got to go there. It isn't the zeitgeist end of the weekend as well. Then you were there with Lord Kitchener and Mark Sykes when they divided up the Middle East after World War One. I understand that all of a sudden we're talking about a partition of God, we saw a partition of Vietnam, a partition of Korea. Is that the easy way out here is whatever this word means, A partition of the Gaza strip. Yeah, there's a partition, and you know, it's kind of international administration or all the phrases that go together. These are phrases that go back, as you quite quite rightly point out to post World War One League of Nations mandate style governance, and and they tend to bury the harder realities, which are then the nature of the terrorist organizations, the nature of their funding, and you know what sorts of proxies they are, and they tend to bury, you know, kind of kind of regional responsibility for the problem. And all those are going to have to be dealt with, and you know, we haven't even started to deal with any of those yet. Terry, what do you make about the strife within the Republican Party stemming from Senator Tuberville of Alabama, this idea that he will stall with the affirmation the confirmation of some of the military promotions at a time of expanding conflict overseas well. You know, I'd give you two points about that. One is that it is obviously providing some strife within the military. And at the same time, the Senator says directly, and to my knowledge, has never been countermanded, that he wants to have a dialogue with the Department of Defense about all this stuff and come to some sort of resolution, and that he's not got it. What I think is going to end up happening is this gets resolved somehow in the defense spending legislation that comes up by about the end of the year. One way or another, this is going to get dealt with in the next two months. There was a resolution that passed the House offering support to Israel, but also tying it to cuts to the IRS, which some have suggested would actually cause a bigger deficit because it would reduce tax revenues that the US government gets. Does this progress the issue or actually push it back in terms of the debate, Well, two things. One is that the you know, only in Washington, would the I R S get beyond being rough here, would get eighty billion more dollars and then have it cut by fourteen and have that considered by anybody to be a cut in IRS spending. You know, But there you are Secondly, I think the funding is the help is really is funded is almost beside the point. The bigger problem that we have right now really is this. You know, you ran Admiral Kirby and your lead in Admiral Kirby says that the administration has four priorities and they all need to get dealt with together. Well, these are Biden's priorities. These are Biden's foreign policy. Biden's going to have to get all this stuff done and in a way that funded properly, and right now, whatever else Secretary Blincoln's doing. The apparent change in Biden policy towards Israel is making that more difficult because now Congress doesn't understand exactly what Biden's foreign policy is. Hey, Terry, great to get your input as always, Terry Hanks there of Panchaea policy. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern. I'm Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can watch us live on Bloomberg Television and always I'm the Bloomberg terminal. Thanks for listening. I'm Tom Keen, and this is BloombergSee omnystudio.com/listener for privacy information.
Manpreet speaks to Rajat about what we can learn from the Fed and BoJ meetings this week, why we still see an opportunity to add high quality bonds and why capped bond yields could support a year-end equities rally.Speakers:Manpreet Gill, CIO of Africa, Middle East & Europe (AME/E) and Head of Fixed Income, Currency and Commodities (FICC) Strategy, Standard Chartered BankRajat Bhattacharya, Senior Investment Strategist, Standard Chartered BankFor more of our latest market insights, visit Market views on-the-go or subscribe to Standard Chartered Wealth Insights on YouTube.
European bourses & US futures are benefitting from a continuation of the post-Fed/Powell price actionDXY pressured to a 106.15 trough with fixed income bid and long-end yields under pressureUSD/JPY pressured on the latest BoJ sources while the NOK is ultimately softer after the Norges BankCommodities lifted given the above with specifics somewhat light thus farIran warned of “harsh consequences” if a ceasefire in Gaza does not occurLooking ahead, highlights include US IJC, Factory Orders, BoE Policy Announcement, Speeches from BoE's Bailey, ECB's Lane & Schnabel. Earnings from Apple.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk
Tune in to this week's episode for a comprehensive #MarketWrap, dissecting the unexpected moves of BOJ that left investors scratching their heads. We'll also dive into the Fed's surprising inaction and its potential impact. Get the latest #EarningsUpdate and stay ahead of the curve. Plus, don't miss our expert analysis on monsterously better #NFL tips for savvy sports investors. Whether you're a seasoned pro or just starting out, this episode is packed with insights to level up your investment game. Join us for a deep dive into the world of finance and come out wiser!
US futures are a touch softer ahead of Tier 1 events while European bourses have recovered slightly from initial downside with overall action fairly containedUSD bid with the index eclipsing its end-October peak, JPY attempts to claw back post-BoJ downside while NZD slips after jobs numbersFixed benchmarks cautious but have managed to benefit modestly from the risk toneCrude lifted by Iran's Khamenei reiterating his call for Muslim nations to stop exporting oil to IsraelThe Rafah border crossing has opened from Gaza into Egypt; for humanitarian purposes to allow the transit of foreign nationals and those with severe injuriesLooking ahead, highlights include US ADP, ISM Manufacturing, Construction Spending, JOLTS, BCB Policy Announcement, FOMC Policy Announcement & Chair Powell, US Treasury Quarterly Refunding Announcement, Speech from SNB's Jordan. Earnings from Norwegian Cruise Line, Kraft Heinz, PayPal & Qualcomm.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk
Seth Carpenter, Morgan Stanley Chief Global Economist, and Mark Cabana, Bank of America Head of US Rates Strategy, break down the US Treasury's refunding announcement. Dom Konstam, Mizuho Securities Head of Macro Strategy, previews the Federal Reserve's rate decision. Win Thin, Brown Brothers Harriman & Co. Global Head of Currency Strategy, expects Japanese yields to continue to rise after the BOJ's decision. Jennifer Flitton, Invesco Head of US Government Affairs, discusses the latest in Washington on US aid to Israel.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Where this seth Carpenter at, the chief global economist at Morgan Stanley. Is this just about in our start? Are we all John Williams this morning and we're readjusting? I clared it with me last week at a Bloomberg event. At two point zero percent is not two point six percent? I mean, are we really talking, as Mike aludes tou there about a new inflation regime? I think you want to separate out a couple of things. One is the new inflation regime, and there if you're comparing it to where we were from the financial crisis through COVID to say, yes, right, the FED was consistently missing it's inflation target to the downside. I call it a quarter percentage point. We're above, clearly above target now and over the next several years they want to bring it down, but I'm not sure they want to go back to the old days of you know, being below two percent on a regular basis. So if they're going to be averaging a little higher during expansions, call it a tenth or two above. You know, you're talking about twenty five to fifty basis points high inflation, so that's got to be there. I don't think we're talking about the difference between two percent inflation and three percent of I want to tell you on radio on television where we're heading here, what half are we have. We have Dark Carpenter with this on the broader economics of this moment. Ira Jersey schedule to join us just exquisite here on fixed income dynamics, and then we do even better. Mark Cabana is going to darken the door. Who's just expert on your world about you know, the different tranches of the auctions. I want to dig into what the implications are of this announcement sas and to me, I'm looking at the idea that they're really going to force the front end to a lot of the heavy lifting here. Does that pose a greater risk than people realize. So my view is no, the way I would think about it. There was a speculation that back and forth a little bit earlier, did the Treasury just react to the market. And I think you want to remember that the folks there at Treasury, Josh Frost, the assistant secretary, the career staff in debt management, they have a structure now, they have a framework for how to think about what to issue, and they're looking at what is the market saying about where the market wants to pay up and where the market's demanding a discount, and at the margin, they'll lean a little bit more to where the market wants the paper and lean a little bit away from the place where the market's pulling back. And we've seen over the past several months a big sell off in the long end. It showed up, you know, in models speak and the term premium, and they're paying attention to that. It's not that one week to the next, or one month to the next, or even one quar to the next, is it sustained. What we are seeing is very much a strong move on the long end in that thirty year yield plunging back below five percent. As we were talking about do you think I think that this indicates that really what we're seeing in yields is entirely a supply driven story more than anything in terms of an economic read on strength and inflation in the US. So no, it's so hard depending on any single thing. When I talk to our clients here in New York, in London, around the world who are trading in treasuries, there are a whole set of different narratives, one of which has been supplied. People have been worrying about the deficit, which is exactly why Secretary Yellen came out and said it's not the deficit. People are worrying about stronger growth. Q three GDP data was very strong, There's no two ways about it, and so that contributed to it. Other people are worrying about is there going to be a pullback from risk by global investors. Other people are looking at the back of Japan. We just had that meeting right where they effectively de facto got rid of yield crop control. So it's not just one single thing, it's everything coming together. So what's your compass at a time where we're expecting the FED to come out today too in varying shades of we have no idea and we will see just along with you, what is your guiding loadstar. So we're trying to figure out, along with the Fed, sort of what's going on with the economy. The strong Q three data and notwithstanding there are some signs of the economy slowing down. The last jobs report super strong, but if you look at the trend over the past eighteen month, clear downward trend. If you look at the GDP data, consumption spending holding in, but a lot of the strength was in inventories. Capex was not very strong at all, and so we are seeing that slowing. And so what we think is the Feds look in the same data we are. They're driving by feel a little bit and they're not going to hike today. We don't think they're going to hike in December because inflation just keeps undershooting their own forecast for where they thought inflation was going to be this year. What does the job dynamic look like with an ellen Zetner's sub one percent Q four GDP, Well, I think there This is where we want to keep in mind that there's so many swings from one quarter the next to some of the spending data. Like I said, the inventory, the numbers, that was never going to be the primary driver. So she starts giving you gloom on the job economy. Not at all. I will say that we have a Morgan Stanley Ellen and I and the rest of the team have been consistent from the beginning of this hiking cycle to say, the Fed's gonna hike, They're going to bring down inflation, but we are not going into recession. It is not doing gloom. Well, she's expert on the American consumer. What is Zenner when she gets fired up? You know she does. When Zender gets fired up about the American consumer, what is she saying? Lots of things, but in particular, one of the key risks that maybe people are overlooking for why there should be a slowdown in the fourth quarter is student loans. Right, there is a moratorium on student loans that's been lifted. We're starting to see that payback starting to happen, and that has to crimp consumer disposable incomes. That matters durable goods. Right. Interest rates are high, credit card rates are high. People financing cars and other things, it's just costing more and so they'll pull back on the spending. It just extraorded her. Seth Carpenter, thank you so much, really really appreciate it. With Morgan's stay, he writes piercing notes for Bank of America. There's no other way to put it. Out of US rates strategy, He's aged in the last ten minutes. Mark Cabana joins us this morning. So I'm like refunding, so what, I don't care. Everybody's in a ladder. It comes out, and to me it was sort of I don't you know, I really don't care. Jenny Allen said, we're gonna do short paper. Yeah, we're gonna do long paper. But we're the United States. Our listeners are viewers who are not sophisticated. Do they need to fear the fiscal system of America? No, you shouldn't fear the fiscal system because the US economy is still going to be very robust. There will be buyers for treasury paper. It's just a matter of at what level will they step in, And we've had a relative lack of buying recently, but that's meant that yields have had to adjust, and as they've adjusted, that should incentivize more investors to think about owning bonds and we do think that rates are going to keep rising or they're going to stay elevated. Really, until you see one of two things. Number One, until you see the macro data slow, we don't think that you've really seen that yet. Or two until you see d risking, until you see investors who think, you know what rates are kind of high, really yields almost a two and a half percent at the tenure point. That's a decent own and maybe I should think about de risking in my portfolio. This is such a valuable conversation. Then I got to get to what we see on balance sheets right now, mark to market and the rest of it in bonds. But let's stay on this theme right now of our new higher yield regime. How far out are you in the longer? I mean, if take any given yield, any given spread, is there a cabana one year, is it a cabana three years? How do you see the regime of longer? Well, we just think that rates are going to have to stay higher for longer. Not to reiterate the Fed mantra, but we really believe it because we've seen an economy that's been so resilient in the face of relatively elevated interest rates. And as long as that happens, that just is going to mean that the f it doesn't have to cut for a while. Now, when I think about longer, I personally think about five years plus. Oh wow, okay, my attention, just because you know, most investors who really focus on liquidity and liquidity management, they think generally two years, three years. But when I think about intermediate to long end, I think about five years plus. Okay, And I'm going to invent this phrase right now. I haven't seen it anywhere else. I want to copyright on this if you use it. Is it normal for longer? Is that really what we're talking about, is we're back to a normal rate regime. Well, it's certainly we're back to a regime that looks a lot more similar to the pre financial crisis than the post financial crisis. You've got a five year window on that. So what maturity do you buy? I'm in cash, I'm really comfortable at Bank of America. What maturre do you buy given a five year normal for longer view? Well, it really depends upon what your overall investment horizon is and where your preferences are. We think that if you're focused at the front end, you probably we want to be neutral to slightly overweight your benchmark. And if you're a more long term investor, we think that you at best want to be neutral right now, and you want to stay neutral until you see those signs of feedback that tell you that higher interest rates are finally slowing the economy, not just one data point here or there, but in the tier one stuff in labor more clearly an inflation. You want to stay neutral until you see those signs, or until you believe that there's a clearer and more definitive negative feedback from risk assets, which I don't think that we have really seen sufficiently yet. I love to bust Brian moynihan's chops because he, like no other CEO, quotes his research staff and I'll go blah blah blah about Bonzi and his own Cabana says, So let's get the report from Cabana that you would give to Brian moynihan right now. I got balance sheets, nationwide, mark to market I get, and I got everything else with massive bond losses, priced down, yield up. Should our listeners and viewers be afraid of this non marked market garbage on balance sheets. Well, I think you're talking about bank balance sheets, and we do appreciate that. Brian reads our research. He's a staunch supporter, and we really do appreciate that. We think that what banks are doing right now is that they are really prizing liquidity. They really want to hold as much liquidity as possible. They're choosing to hold cash, they're keeping reserves with the FED, and they're not buying bonds, they're not buying treasuries or mortgages, and they're prizing liquidity because they know that they need to meet their outflow needs. They know that their securities book is not particularly liquid because it's so low in value. You don't want to sell and realize the loss. We saw what happened with some of the regional band. So what do you do? This is the key thing. So what do you do if you're a bank? What do you do if your bank? If you've got all this out there and you don't want to sell, just like you said, but things can happen, things can change. How do you process that reality? If you're a bank, what you're doing right now as you're holding that is the game. That's why the Fed shrunk their balance sheet through QT by a trillion dollars, and you've seen bank cash holdings not move down very much at all. They are bidding up on the liability side of the balance sheet. They're issuing CDs, time deposits, etc. To take in more money because they're seeing retail outflows. And then they're holding cash and they're going to continue to do that until they see signs that the economy is turning, until they know that their loan growth is really slowed down and maybe negative on a year over year six month average or whatnot. And they're gonna wait until the economy slows more meaningfully to extend out the curve and buy those bonds. Right now, banks are not buying duration. They've been shrinking their treasury and agency holdings, and they're going to wait to add duration until they see definitive signs that the economy is turned. And so again, what banks are doing right now, it's holding out liquidity because that is the most valuable thing that they seem to believe that what does holding out liquidity mean for mere mortals that can't hold out liquidity? Small business? Torsten Slocke at Apollo talks about ten percent small business loans as well. I saw a thirty one percent charge card the other day. It wasn't Bank of America, of course, thirty one percent charge card interest rate the other day. What does the public do given price down, yield up banks saying I'm scared stiff, I got a whole cash. Look, it's a tough time to be a borrower. I think we know that, right. It's tough time to move, it's a tough time to buy a home, it's a tough time to be a business if you need a loan. And that's exactly what monetary policy is trying to do, right, It's trying to slow down activity by reducing demand for loans and borrowing. And so if you're a small business and you do need a loan, well you need to think about, Okay, what other liquidity sources do I have? Can I draw on any other type of liquidity? And then you've got to ask yourself do I really need to expand? Do I need to make that next investment? And you got to make sure that you can clear a much higher hurdle rate in order to justify those costs. That's how monetary policy works. It should slow down activity through the lending channel, and to some extent we're seeing that, but it hasn't happened, I think to the extent of the FED, like Mark Commander, thank you so much. With the Bank of America joining us now to begin strong on this day of a Federal Reserve meeting is Dominic Constem. He's head of macro strategy at Mosile Americas. For years literally iconic Credit Suite were thrilled that doctor Constem could join us today. Dominica, I give you the phrase super restrictive. Is Jerome Powell's FED combined with market action a super restrictive FED. Well, yeah, in the context of the sustainability of the US consumer, and if you like the overhang of debts refinancing in the corporate sector really beginning in twenty twenty five, you know, clearing the front end is super restrictive, and it's going to have to get first quite aggressively. As some stage that the issue is a timing, and you know that timing has been pushed out because the consumer who's got great balance sheet, has decided that even as they spent all their fiscal excess that they were given after COVID, they're deciding to leverage up even with interest rates as high as they are, but they can do that because of the balance sheet, So that kind of delays the impact of this super restrictiveness, which is kind of a bit of a conungrum for the Fed. So that's the price for longer, not higher for longer, but just longer. What is the cost did your own power of a longer strategy at these levels? Well, I think what's happened in the last couple of months really has been that the Fed has decided that, you know, because effectively they are super restrictive, they didn't want to keep on pushing up short rates, you know, don't not quickly go to six percent. So they've emphasized this idea that they're just going to hold at a high level for that much longer. But ironically that directly feeds into a sell off in the back end, the idea that what we call term premium, this risk premium that's short rates you end up being higher than the equivalent tenor of a longer dated treasury. That's term premium that gets priced into the market, which is why you've had this enormous sort of bare steepening going on with the tens going up to close to five percent thirties, nifiing the corter, et cetera. And in a way that that's not a bad thing if you want to slow the economy, but because that will undermine and is undermining risk assets, and it will help to tighten financial conditions overall. So that's the impact of what the Fed is doing. There is a risk though, that they run because you get people concerned about the as you mentioned earlier, the refinancing of the Treasury. You know, when they decide to issue longer dated debts that now it is coming in at much higher interest rates, and you start worrying about a vicious circle where if you can't reduce a debt so through spending cuts, well you've got another problem because your interest service costs are going up at the same time. And that's kind of get people worried about this idea that Treasury isn't going to be able to sustainably fund itself down the road, particularly when you get those sort of you know, bigger issues coming up, the structural issues coming up that will mean higher deficits. There's always been a sort of uncomfortable tension, especially now between the Treasury Department and the Federal Reserve, especially because the Treasury Department is helmed by the one and only Janet Yellen who used to head the FED. How much is a treasure you're going to try to game out the market and kind of give a helping hand to the Fed by not concentrating some of those debt sales in the longer end, sell tea bills and hold a pad and wait for things to normalize. Well, I mean, it's obviously a great question and issue. I mean, strictly speaking, I don't think Treasury really should gain things too much. You know, they're not really traders as such, and if they were, then you know, maybe God help us. I mean, the idea I think is is, you know, you do have rollover risk, so you know, no one really knows how quickly long term rates might might reverse, even if we go into some slowing you know, where is this sort of mutual rate It might you know, might be higher and maybe ten years trading around you know, five percent is the sort of new norm. So I think it wouldn't be appropriate for the Treasury to really try and game the markets or a near term and sort of second guests that short term rates are going to come crashing down and they'll be able to refinance themselves down the road by extending maturity later. So I think they'll they'll probably extend the duration. I think the estimates are kind of you know, you know, seem about right, this sort of one hundred and fourteen billion and putting it in coupons. And because of the announcement we had earlier in the week, they can cut bill supply bits. So that's our expectation and no gaining of it. Basically, a lot of people expect this to be a boring meeting, sibad or Jappa calling it a placeholder, Steven Linder saying, how many ways can you say we'll see? I mean, this is basically going to be a holding kind of pattern. And yet we see a dissonance growing where the market sees and escalating's chance of excelling, reaccelerating inflation. At the same time that the Feds kind of seeming to subtly agree with Janet Yella and saying that yields are going to go back down. Do you think they're going to bridge that gap today? Well, they could do. I mean they've always got the option to. I mean that there are a couple of interesting things going on. I mean, obviously this sell off in the long end is very interesting, and I think they can definitely address that in the conference call and basically say that's doing some of the work for them and be a bit more optimistic. They can also be actually, even though inflation has been a bit sticky on the very latest prints, they could be a bit more optimistic on that. We've done some background analysis on that, and the reason why inflation has been a bit stick is it's really been on the demand side, less on the supply side type thing. And I think that's encouraging because that's something a little bit more understandable and sort of indicative that, you know, the underlying trend lower is still in place for inflation, and obviously the global inflation picture has been looking a bit better, so I think they can basically, you know, I don't think it'll be an uninteresting meeting or press conference. It's just really a question of how far power wants to go down the road and try and sort of reassure markets. One interesting thing I always think is that you know, to what extent to the FED really anticipate or understand that their actions at the September meeting was going to lead to this sort of you know, near one hundred base on itseel off in the long end. I mean, it's been quite dramatic, And did they really expect that way? Yes, this is a question dominic and why this is outside your remit. But we've known each other for years, So I'm going to go from the macro of constant to commercial banking. Bernanky taught us at Princeton that financial structure and strength matters. I'm looking at the technical construct of the American banking system and I don't like what I see. Should the FED fold in what's happening to the banks right now? Should they today pay attention in their meetings to the weakness that we see in commercial banking equity prices? Absolutely? And I think the thing that so many people miss is they think that banks are kind of less important now than they were before because of alternative banking, you know, fintech, private equity, you know, other forms of leverage if you like, in the system that they people think seem to think, you know, credit is created elsewhere. Credit is that there's something called outside money, which is a central bank, and they start the credit creation process there's in something called inside money, which is the banking system, and they continue the credit creation process. And to be honest, that pretty much is where how credit is created. Money it can only be created by the FED and the banks to the bank multiplier. It cannot be created by private equity. They have to get their leverage from somewhere. And so I think you always have to go to the banking system, and you always have to focus on if the banks are kind of doing their job, even if the leverage overrule in the system is getting higher and higher, and the relatives of the banks, they're the ultimate ones who if they pull the plug, let alone the FED putting the plug, then the whole kind of system can start to implode. So I do think it's very important what's happening in the banks, and I think it's a big concern that obviously lending is slowing down. There is obviously regulation and there's some credit some cattle restrictions taking place, but that's all part of the cycle. And as long as the FED is there to pick up the pieces at the end of it, we're fine. But those pieces will need to be picked up. You sound like Alan Meltzer, the late Great Alan Meltzer, lender of letters. Who are dom I got thirty seconds? Are you concerned the massive shift from deposits to money market funds? Is that going to destabilize the system. Well, it's been a challenge, but to be fair, that TGA build up that the Treasury has done has actually come at the expense a lot of the money market funds and the repo there. So I think, you know, the Fed has actually managed this process relatively well with the help of the Treasury rebuilding TJA with all that bill issuance, so you know, you know, it's it's a relatively orderly process, but it's obviously something that you've got to keep watching. You don't want excess reserves to get too low in the banking system. Is that to Constant? Thank you so much, Dominic Constant with the Missouri Are they just a terrific brief Therey joining US doctor Wynn Thinn, global head of Currency Strategy around brothers Harriman win Thin. You were at the altar of Robert Mundel at Columbia who invented our international currency dynamics. Is there a theory to what Japan is doing? Are they making up original theory? Well, first of all, thanks, thanks, as always a pleasure to appear here with you guys. To me, it's an experiment, it's an ongoing experiment. You know, Japan has been fighting deflation for decades and they've thrown everything at the wall to see what sticks. The latest iteration was negative rates and he locor control and by hooker, by crooked, it's it's finally getting out of deflation. It's obviously the positive makers are very nervous there getting you know, starting these poses is the easy part. Getting out of them is always the hard part. We saw the FED struggle with getting out of q back after a great financial crisis. So what we've been seeing unfold over the last year is just a really haphazard so again throwing stuff at the wall to see what works. It's been again more out of fear and concern than anything else. They don't want to upset the opera card that the recovery is, by many measures, you know, quite modest and vulnerable, and so that's what we're seeing. I do think that that Japan will exit accommodations fully in early times, and by that I mean a ray hike. Why should our why should our viewers and listeners care in the Western world, it just seems to be removed and over there. For example, comparing the yuan the ren menbi in China to Japanese. Yeah, and even with we you want versus a dollar, it's studying how weak the Japanese yen is versus ren memby. Why do I care in America? Well, I think, as you guys pointed out just earlier in the segment, Japanese investors have been have been basically leaving Japan and chasing yield and returns elsewhere. And that's because of the zero rate interest policy and heal com control. Domestic eiels aren't attractive enough. So we've seen massive capital outflows of Japan over the last years, if not decades. If we get that infection point where things change and actually rates are allowed to go back to market based levels, I think the fear of at least in Japan and others, is that that wave of capital will come back from crashing back. And already seen announcements some of the Japanese life insurers that they planned the second half of this fiscal year to underweight foreign investments, foreign bonds and overweight jgb's in anticipation of normalization. So there's also the capital flow stories that I think, you know, coming in a time when we don't know what the Fed's doing, we don't know what's going on in Europe with the Middle East. It's just another sort of added uncertainty that Marcus had that jests and I think that's what I think investors in general are worried about. It's almost deliberate ambiguity. Is deliberate ambiguity by the Bank of Japan going to actually create some sort of soft gradual increase in yields and some sort of controlled departure from yaled curve control. Yeah, yeah, at least I think that's what we're seeing. In fact, in my opinion, Yeald curve control is dead. It's deader than Elvis right now, as far as I can tell, they've they've introduced this ambiguity where it's now one percent is now reference point. Who knows what that means. So the market will will prod and tested the Bank of Japan not just on heels but also on the dollary in and it's gonna be a cat and mouse game. But really, for all intents and purposes, jgbills are going up. They have been going up. They will continue go up. We'll go above that one percent sort of reference point within days, and you know the upside I think natural sort of target for the markets. Where we go from there well dependent what's going on in other global market, especially US treasuries. But again, this is normal. This is you know, we've been it's very what I would say, an abnormal period. And it's been going on for decades in Japan of zero rates, negative rates, year clear control and it's abnormal. And I think that they're trying to exit that, but are obviously very very scared of the ramification at least some moments ago, the d X y unraveling. Right now one oh six point ninety one, we're really buttressed up here against the one oh seven on DXY and is clearly yet led by en dynamics. And this goes like the banking stocks. I'm sorry, you just have to look at the Bloomberg screen and it's screaming a certain level of tension out there this morning without being you know, a toxic brew of gloom. I mean, it's just the markets are speaking before this FED meeting, and it's not all the managed message of the elites. When to that point. How disruptive is the fact that the dollar has continued to strengthen and not weaken as so many people thought this year. Well and for the for the US, it's good because the stronger currency helps to limit important inflation. What we were seeing particularly stress is with emerging markets, especially in Asia, that's being double whemmed by the yen, n by the dollar. But basically we've seen many many emerging market center banks intervene to help support their own currency. We've seen surprise rate hikes, we saw that from Indonesia last month, and we've also seen countries that are cutting weights slow. They're easy because the currencies are coming under pressure. So it's to me it's really a toxic root for emerging markets. That is a height height money conditions in the US, slowing global growth slow in China, and easing cycles in emerging markets, and that's all to be a very toxic row for emerging market currency. You should have seen Tom King's face when you said toxic brew. His ears perked up and he was fully into Robert Mondel used to say, Robert Mandel would be in a lecture and he say, look, you know the Mundell triangulation and in partically ununified currency. It's one big time. This is a difficult time because people have been throwing around people have it thrown around where it's like toxic brew for quite a while. And yet we have been in a sort of uneasy equilibrium all year that's really been tapped off by a US dynamism. You go, what do you mean? I don't think it's been an an easy equilibrium. I think the markets are talking here. You know, I'm going back and forth, Doug cass here on the banks, you can rationalize us all you want. Yen one Fifty's why we're talking to win thin so win way in on that. Are things breaking down in a more material way that'll lead to more traumatic moves in effects. Well, I think was the main driver that's really taking anyone by surprise. This is the continued strength of the US economy and by that extension the US dollar, the FED and all that. I'm of the opinion that the Fed will probably get us into a recession next year. But I don't look for anything quote unquote break by break, we mean like a financial crisis, banking crisis some sort. We had to scare back in March with SVB but we found that was, you know, to me, an idiosyncratic situation with SVB and signature. So to me, you know, all the stress tests suggest that that the global financials remains fairly resilient. Now look, that's like we all know that. That doesn't mean you know, a whole lot when when when push comes to show. But I do think that we are sorting this post gred financial crisis uh so situation where yes, the institutions and and overseers and regulators are all sort of on the same page and and hopefully uh willing and able to head off a crisis. Now, well we see pockets of stress. You know, we've had frontier markets blowing up, emerging markets or Canade remain in the stress look UK, uh Europe or into recession. But you know, nothing again, nothing sort of broken. This is sort of a normal thing. I used. I'll leave this, you know with the final thought is that, let's say, normal sort of situation terms of down town going too faster in the US, that's hiking, We're gonna slow, we maybe go into recession, but then the whole cycle starts over. It's not something to worry about. I've got to leave it there. Doctor, Thank you so much, he says Brown Brothers Harriman. There's been an issue in the US side of things, first of all how deeply the US troops will get involved, but also how much aid can actually get passed to go towards supporting both Israel and Ukraine, which no one is talking about. Jennifer Flytt and covering all of this fantastic guests to really analyze it for US head of US Government Affairs at INVESCO, Jennifer, what do you make of this split that we've seen with the House proposing a separate bill to fund Israel that yesterday President Biden said, Vito right, he issued a veto threat. That's correct. Yesterday. We're going to see what the House can do. I think it's still an open question if they have the support because they have paired the Israeli funding with an offset that directly sort of impacts that Inflation Reduction Act and of the irs, and so they will lose the vast majority of Democrats. Could they gain a couple while they lose a few of their own Republicans? I think that's the question, and we'll see that play out on Thursday. What does it tell you about the nature of funding agreements. If funding Israel comes at the expense of cutting the agency served with collecting taxes, well, first, I would say this is an opening salvo for the House because they will have to negotiate no matter what with the Senate. Schumer has the majority leader in the Senate, has already stated that this is dead on arrival, so there is an expectation that there will be further negotiation. But when it comes to offsets, this is a reflection of what is happening in America right now with regard to our own domestic debt our, own deficits that we're running right now. And that's what Republicans and their districts really feel a need to answer to. Jennifer. I believe it is November first. Count it down sixteen days to November seventeenth. It's been left in the debris. We've forgotten about November seventeenth. Give us a brief of the importance of November seventeenth inside the Beltleigh, it is coming upon us very quickly. That is an excellent point and it is not lost on most members. Also, most members that want to get Ukraine funding through the House, Republican and Democratic members and the Continuing Resolution, which is that stop gap that runs out on November seventeenth that has to be extended. The Ukraine funding may have to ride on that continuing resolution. However, they work it out and we'll see that over the next week. They're currently drafting another continuing resolution in the House. Jennifer, there's real dissonance and a headline Stiffe been reading and I am trying to square them. I'd love your help. Basically, on one side, you see the fight that's escalating in Congress, it's escalating with the White House over how to get financing to back these efforts. And then on the other hand, we're talking about US troops potentially being in Gaza indefinitely after the war to keep some sort of peace. What is the appetite in the United States to have a protracted role in some of these conflicts that seem pretty intractable right now? That's right. I think there are a number of steps though that we have to get to first, right because US troops are in the region, of course, they are in Iraq there in Yemen. This was discussed a little bit at the hearing yesterday with Secretary of Blincoln and Secretary of defense Austin. They have been attacked over the last week two weeks. They have had to retaliate in those attacks, and the expectation is to deter further escalation. That I think is the immediate issue before we get to the longer term issues in Gaza. Israel is able to contain that area. There's also a really short term kind of issue with respect to President Biden's approval rating in some of the swing states. And there was a poll that recently came out that more than fifty percent of Muslim Americans used to support President Biden and now a fewer than twenty percent currently do. How significantly is this going to color the entire debate next year? That's an excellent point. I think the tension there within the Democrat Democratic Party and seeing some of those polls, but even seeing the streets right, I mean, we've seen the protrust across America, not just among Arab and Muslim Americans, but also with young people, young progressives on college campuses, and they do see that as a threat. So how they're going to diplomatically work within their own party and their own voters. I think we're starting to see that play out. Jennifer Thank you so much. Jennifer flintne with this with Invesco there on Washington and the war in the Eastern Mediterranean. Subscribe to the Bloomberg Surveillance Podcast on Apple, Spotify, and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern. I'm Bloomberg dot Com, the iHeartRadio app tune In, and the Bloomberg Business app. You can watch us live on Bloomberg Television and always I'm the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, and this is BloombergSee omnystudio.com/listener for privacy information.
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Mark McCormick, TD Bank Global Head of FX & EM Strategy, analyzes the Bank of Japan's decision to loosen its grip on government bond yields. John Stoltzfus, Oppenheimer Asset Management Chief Investment Strategist, says the Fed's sensitivity has enabled the resilience of the US consumer. Aaron David Miller, Carnegie Endowment for International Peace Senior Fellow, discusses the latest in the Israel-Hamas war. Stephen Stanley, Santander Chief US Economist, says the Fed has overstated the importance of the recent surge in US treasury yields. Emily Roland, John Hancock Investment Management Co-Chief Investment Strategist, says the US economy hasn't yet felt the sting of the Fed's recent rate hikes.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business App. We are living it right now. A brief from Mark McCormick, Global Head of Foreign Exchange in EM Strategy TD Securities. Mark, and why don't you to explain to our audience why a super strong dollars from twenty twelve and a super week yen is disturbing? Well, I think of what it does is it just shows the massive divergence you have between central banks. I think one of the things that you can unpack is there are certain currencies that care about growth, there's certain currencies that care about commodities, there's certain currencies that care about different relative central bank functions. The thing that the end cares a lot about is the ten year point to look at euro. Euro cares about the two year point of the curve. More than say the ten year and if you take the combination of what we had, and this is one of the most important things going on effects is the relative terms of trade shift. Japan is also a massive importer of energy and other commodities. So you take the commodity story, you take the great differential story, and now you take the aggressive bear steepening of the US curves this summer, and you've got basically a trifective things that will weaken the end quite considerably unless the BOJ does something well to the trifecta. Let's go to Mondel of Columbia. I mentioned this with Vice Chairman Clara to the other day. He will join US folks for our special FED coverage. Look for that? Is that tomorrow? Yes, it's tomorrow. The FED meeting is too more might people have just briefed me and Mark I'm looking at that. I want to echo what I talked to Professor Clara about, which is something has to give here. When something gives, what is the instability our audiences should be worried about? Well, I think of the context of the end, what needs to give is the actual the currency itself. As you mentioned, there is a very interesting policy mix where fiscal policy is actually quite favorable in forms of in terms of growth, also inflation. You see the BOJ is expecting higher inflation to kind of be a bit more sticky, I think, than markets are looking for. And they've also basically said we don't have a cap anymore. It can go above one percent. So I think what they're trying to do is synchronize themselves a little bit, which which has been US yield rising, which would contain the weakness in the end, But this is not a policy mix that is coherent and it is no longer sustainable. So I think a big thing is what we're going to see is things are going to change. It will change abruptly, but I think the movement that we had overnight where they said there's no longer a one percent cap, is actually quite a significant change. But it will take time for this to work through the market. So again i'd say that the thing that needs to break is yields needs to be higher, yet needs to be stronger. It's just going to take more time because we also need to see a peak in the US yield story, which again is not even about the FED anymore. When we talk about the ten year yield. It's more about supply and demand for ten year bonds. This is a big mishmash. Do you have a sense of what the response mechanism from the Bank of Japan is, what the lines in the sand are, what they're sort of looking at. I mean, we were talking about some of the opacity that they put forward overnight. It's very tricky because I think obviously most central banks it's very common language. At this point, they care more about the currency movements. So the end has not been as volatile. So as you can see, we have not the report came out this morning like they did not intervene last month. So I think I don't think there's a red line per se. I think they're all kind of doing what everyone in the market's doing. They're very confused about the drivers, They're very confused about the actual themes in the market. FX has become very challenged, I think for many people. So I think the line in the sand is you're kind of thinking it's loose fiscal policy, loose monetary policy, weakest currency on record. It deviated from our longer term models by you know, magnitudes, you know, our longer term fair value model and dollar again is in one twenties. So what you're kind of looking for is like the pressure points that will cause these things to break. And again, I think a big part of it is US data needs to roll over, US yields need to come down a little bit, and the BOJ I think the one thing that we're very out of consensus on is we are looking for them to move out of NERP next year because of the wage pressure we're seeing in Japan right around the Shuto wage negoiation negotiations, we should see higher wages and as a result of you know, essentially higher wages and higher nominal rates coming up, we should see real rates in Japan move substantially in their favor versus the US next year. When you take a step back, there's a question of slowly or all at once, And you were saying it will be all at once at some point. How disruptive is this going to be at a time when so many people were talking about Japanese flows underpinning are basically suppressing yields globally and really keeping things a little bit more in sync. Yeah, I think that's a that's a big component because I think since the summer, since the BOJ let the the you know, kind of opened up the yield curve control the suppression they had on it. We have seen term premium rise across the world. We have seen the US ten year rise. So I do think that there is a blowback here that's happening slowly behind the scenes. And again, I think a lot of people will make the point that the ten year yield is now advanced above FED expectations for twenty twenty four. It's above data surprises, it's above US data trends. It's no longer reflecting the correlations we saw in July. So I do think that the BOJ and the fact that they're kind of moving out of it. Obviously quantitative tightening has a component of this as well, but the BOJ does have the ability to kick start, you know, rises in the US ten years. Well, bring up this board again on television and radio. I have to review you this. I didn't do this. Simon did this in the control and he's been reading. Michael Rosenbergen for inn Exchange. Bring up that board again here. Yeah, one fifty one week week week end two year yield finally above zero ten year yield almost one percent. Those are unimaginable numbers to pros mark. Is this going to end stochastically? I talked to Martin Feldstein about this years ago, Like Looney, let's go to Toronto Dominion Bank. Looney goes up one thirty eight, you get up to one forty two and it gets fixed. Is that where we're heading, where the system just fixes itself. No. I think the system's quite dynamic. I think that that's the interesting point. Like we brun out variations of lots of different types of tools and models and different things. We're trying to understand what's going on in the market. As I mentioned, the things that are driving a weaker yen are fundamentally based. They make they make a lot of sense. And again the commodity story behind the scene is quite quite important, especially from the handover to last year, because what it does is it eliminates the trade surplus and the trade surplus plus the current account plus the balance of payments that is FX. You know, essentially everything we talk about every day is trying to think about how do we predict the balance of payments? So for the end, I don't think any of this is stable. I think is very unstable. Equilibrium even the shorter term models that we look at that we use for trading ideas Dollar Interview one five based on redifferentials and equities and risk and these kind of things. So it's even deviated now because you know markets are looking for a trend to trade in dollar again, is the only one that makes any sense right now? Three people just drove off the Garden State Parkway. There's your Global Wall Street Brief and foreign exchange. If you only understood half of that like I did. He's Mark McCormick of TD Securities. John Solstice has been listening to this and wants to weigh out on the Bunker Remo and beyond. And I'll let you get to that, but first I want to start to say how much are you basically saying we've just a run out of time to get to that forty nine hundred mark? Yeah? Really, really is? We We had to right size our expectations. We always suggest that to do investors as they as they consider what happens when markets are are in royal and so to speak. And what we've got to consider here is the calendar is telling us that we're getting close to a year end. The average rallies are positive. You know, we get positive rallies after a dip like we've seen traditionally or historically, but it's smaller amounts and there are still lots of uncertainty that bears and nervous investors and those who are skeptics can use to take more profits out of the fabulous rally that we're still living off from the lows of October twelfth of last year. I feel like one just after another is basically coming on and saying give investors a prozac, because frankly, there is a lot of optimism. They're just not seeing it. How much can you really hinge unfundamentals if the sentiment is just so gloomy and prepared for the worst. The problem is, I think that when you're in a FED funds high cycle, it takes a while before the marketplace gets a sense that the FED is indeed not trying to destroy things, and that the FED might actually succeed at its goals. The Fed isn't it isn't infallible, but the FED has a remarkably simple a mandate essentially, you know, stable economic growth with maximum employment. Of course, what is it. A few weeks ago, I think was the daily quote on the Bloomberg was Martin Scorsese, and it was something that like simple is the best, but it's the hardest to achieve. Well, that's what happens in a FED funds hike cycle. But what happens is eventually the marketplace. And you can see it related to higher prices being accepted by consumers and business in that you were just mentioning before there's a sense, Okay, we can deal with this now and we keep moving forward. The FED has been so set in applying it's mandate that it hasn't knocked a part the resilience in the consumer, in business and the overall economy. That's just an extraordinary John Michael McKee with a brilliant idea on the Magnificent Seven. He's going back to the movie. He's looking at YOU'L. Brenner, Steve McQueen, Charles Bronson, Robert Vaughan, James Coburn, Horse Bucklets and Brad Dexter. I mean they were the Magnificent seven. What do you do with the modern Magnificent seven? Is Apple going to deliver here? And if you're going gloomy forty four hundred, do you sell your big tech Well, I'm not gloomy of four hundred at all. I'm just saying it's more realistic from here to the end of the year. Just wait until we put in our Brice target for next year. That'll be later on. Oh good, and no one's watching here, Come on compliance at opcos not watching. Give me a number. Can you pop a five thousand for next year? To do it? I got, I got compliance breeding down my back. But when we look at things are getting better and we think we're going to see competition return in a lot of spaces, and competition is when all of a sudden you've got everybody is passing on the old higher prices getting away with it. And then some guy in business or gal discovers the idea of well maybe if I give up a little bit what I get in per unit costs, maybe I can make it up big time and volume. And that'll happen across the sectors. But in the meantime, tech is empowering everything, and we don't mean it like in some kind of a moonshot, but it exists. Today. Corporations are doing better navigating very tough environments. Well, it's the financial advices. Whether it was the pandemic, post pandemic, the supply chain stabilization, the getting away from one country centricity in terms of the global supply chain. All of this technology is enabling a lot of things both for the can consumer as well as for business. And it's it's a dramatic change that combined with sensitivity by the FED communication transparency that we think is you know, the branking legacy that is still being practiced by Jerome Howell in his own way. Yeah, you know, positive effect. I keep thinking the economy is not the stock market, and this is not necessarily a stock market that's representative of the broader economy that really is maybe the Russell two thousand or the banking index, the regional Banking Index. Does your optimism bleed over to small caps, to the KBW index? Well, I'd say not necessarily to the k b W. Yet we've got to wait for the economy to show a greater sustainability going forward and not as many concerns in terms of commercial real estate and subbrime auto loans and things like that. But what we would say is when we when we look at this picture where all things are getting better, it's been led by the large caps but if we get to that point where we get to see the sustainability of the economic expansion, of becoming predominant in the picture, you're going to want to own smalls and mid caps, and you probably want to consider, for instance, we're near market cap agnostic in some ways because our goal is beyond we're intermediate to longer term investors, and the valuations are ridiculously low in many quality indices of the small caps and mid caps. Joss Dolphis thank you so much, greatly appreciating this should be a two hour conversation. I can't say enough about the work of doctor Miller. He is Aaron David Miller. He's a senior fellow the Carnegie Endowment for in an national piece. The signal is from the University of Michigan Definitive and International Relations. And he wrote a book in two thousand and eight. It was shockingly, shockingly prescient fifteen years on about the mess we're in in the Eastern Mediterranean. Aaron David Miller, thank you so much for joining us this morning. When you wrote your masterpiece in two thousand and eight, did you expect the tragedy we're living now? I expected John at an unresolved Israeli Palestinian conflict driven by a proximity problem. Israelis and Palestinians are living on top of one another, and frankly, I think it was Mark Twitter said that proximity breachs contempt and children. I figured that this conflict would endure, It would go through periods of accommodation, perhaps as it did, but also periods of conflict that we've seen. But I think I, for one, I'll put myself at the top of the list, never anticipate paid the kind of trigger to this particular phase of the Israeli Palestinian conflict. That is to say, what happened on October seven, with Hamasa's brutal and savage attack and it's wilful and intentional, indiscriminate murder of men, women and children. I did not anticipate that, and clearly, in what probably one of the two greatest intelligence failures in the history of the State of Israel, neither did the Israelis. Aaron David Miller. Robert Gates writes a piercing essay and the New Foreign Affairs magazine. I read every word of it. The former Defense Secretary and head of CIA on a dysfunctional America, a dysfunctional superpower. You are someone that straddled the line. I would say, within the politics of Washington, what's Aaron David Miller's best practice? Now for the Biden administration come to this particular crisis. Remember, we now have an archa crisis. We have a major crisis in the Middle East with the potential of escalade. Even further, if you end up with in Israeli his bull of war, You're going to see, not to mention the prospects of Iranian involvement and direct conversation between Israel and I Ran, which would lead to spiking oil prices and plunging financial markets, and even more uncertainty with respect to the global economy. You've got Russia's invasion of Ukraine, You've got tensions in the Indo Pacific. Look, I long believe you know. I'm a follower reinhold Nebe approximate solutions to insoluble problems. This is a world that cannot be resolved. That is to say, I'm not sure there is one conflict factor you could identify that had a definitive, a comprehensive solution. This is all about smart, smart management and a judicious and very balanced view of the projection of American power in air is that in fact we can, we can and effect. But no, this is not a world to be redeemed or resolved. It's want to be managed if we're lucky and smart. Aaron David Miller Robert Kaplan's new book, The Loom of Time is my book of the year. It's just a sprawling treatise from Morocco all the way over to Persia, indeed on to Afghanistan as well. And what permeates Caplin's real politic is the basic idea that we have a human rights led foreign policy. Is our human rights led foreign policy at risk given what we see in the Eastern Mediterranean region. You know, Caplin's you a really smart guy. Based on my experience John working for Republicans and Democrats over a thirty year period from Jimmy Carter to Bush forty three, I don't think we have a human rights based policy. In fact, human rights democracy promotion, responsibility to protect, the intervention, to to prevent or even respond to mass killings, from the Holocaust at Cambodia to Rwanda to Dartford to Sauth, Sudan to Syria. Where has the United States been with respect to the protection of human rights. I'm not saying that that is a role we need to play and can't play all the time, but I think human rights is a factor. But based on my experience from Carter to Bush forty three, it's rarely at the top of our agenda. There's been shades of isolationism there, even off of the shock of Jimmy Carter and the Iranian hostage crisis. And I believe seventy nine, what does our new isolationism look like. I'm not sure. Well, clearly we're not there now. I mean, I think the America first notion, although I think that largely would translate into putting America last. We've got to find the right balance, John, between doing too much in the world and not doing enough. One of my former VOUSE bosses, medal In Albert, referred to the United States as the indispensable power. You know, and I remember what de gaul said about the cemeteries of France. They're filled with indispensable people. We can't be the indispensable power if indispensability means that we need to be everywhere, to everyone all the time. We have a dysfunctional political system. That's the strength, by the way repairing that is critically important for our capacity to lead, not by the what it was, Joe Biden says, not by the example of our power, but by the power of our example. There is something to that. From where you sit in international relations. Is our pentagon properly funded? And specifically does the Navy have enough ships and submarines? Probably know, and no, I suspect, even though there some will argue that our defense budget is way out of whack, It'll be fascinating to try to see how we're going to resource going forward because each of these problems I referred to what you're seeing in the Middle East right now, Russia's warview against Ukraine which seems to be forever, and the prospects of arising China in the Indo Pacific. All of these things have to be properly resourced. And that's a concern that I have, given the nature of our domestic politics. One final questionnaireon to circle back to your two thousand and eight treaties, there is a much too promised land. What should we advocate to Israel and the Palestinians in this November You know, a lot of people I respect John believe that the so called two state solution has gone the way of the Dodo. I understand the argument, but frankly, it's the least bad solution to this conflict. Israelis and Palestinians need to separate from one another through negotiations. There's no precedent that I can think of of two two national movements, one of state, a nonstate actor seeking to become a movement living happily ever after under one roof. It's Cyprus, Lebanon, Syria, Iraq. I mean, the beat goes on, so it's not it's just a hop, skip and a jump to understanding that if in fact you're going to have anything resembling a conflict ending solution, I'm choosing my words very carefully here. You really do need to have separation through negotiation, maybe into a confederation at some point, but you need to satisfy the political, territorial, emotional, psychological, and religious underpinnings of this conflict. The only thing that does that, in my judgment, is to separate through negotiation state of Israel living peacefully next door to a Palestinian polity. That to me is the only way to even begin to think about fixation. Aaron David Miller, thank you so much for the brief. Hugely valuable with the Carnegie Endowment for International Peace. Stephen Stanley joins us at right now with Santander or US Capital Markets. You are acclaimed for analysis and GDP. How does the bond market affect your analysis? You know, I think the Fed is overstating the importance of this little backup in bonnials that we've seen over the last month. As we talked about the last time I was here, I see it maybe as a little bit more of an excuse than a reason. I think they wanted to hold off, and that provided them with a convenient reason. Financial conditions have tightened a little bit. But look, you know, as you all discuss, the economy is still rolling at this point. So I think it's wishful thinking that the last twenty or thirty basis points on the on the bonyold is going to roll the economy. But the I'll go with this easy, easy question here. It's a cliche, but unfortunately it's apped right now. Are they fighting in the last war? I think it's too soon to say that, because you know, the idea I assume what you're suggesting is well, inflation has already licked well. Dominicq constum in MISSOUI is calling it super restrictive. I got people say in the five percent reality lay on the bond market is a seven percent reality in the economy as well? Are they? Are they working now? They go to the meeting tomorrow in a restrictive milieu. I think policy is restrictive, but is it restrictive enough? I mean, until the economy actually slows down, until inflation really comes off. It's it's hard to say that, and so I think that's why that at a minimum, they're certainly going to want to keep their options open. You know, they they've signaled another pause, but Pallas certainly kept the door open to further hikes. So I'm not throw this question at you what I was asking before, which is how long can the US continue surprising to the upside with economic data and showing momentum at the same time that you see Europe running into recession coming out recession around the world a lot of pain, maybe not to be overly glib, but basically forever. Because the US is a domestically driven economy, and I think economists and particularly the FED, have systematically over the years overestimated the importance of the global economy for the US economy. We're, you know what, between ten and fifteen percent of our economy is trade, whereas for most of the other major economies it's thirty forty percent. Okay, I'll challenge that in one way, And this is something that a lot of people have been talking about, and I would love for you to push back if this is the case, people say that the international transmission transmission mechanism is the US yield is how many international buyers are going to be coming in and picking up treasuries at a time where the Bank of Japan's not going to be buying, where you're going to have or not going to be really pushing investors out of that nation's asset market. Where you have certainly around the world yields going higher and China not buying how much does apply change that narrative and create more of an international transmission mechanism than ever before. Yeah, that's an interesting angle. Actually. I think the root of the problem there, of course, is the fact that we're that we're running such large deficits. If we had a smaller deficit then this would be so much of a problem. But the fact that the Treasury is to borrow on extra to two and a half trillion dollars a year, they need demand anywhere they can get it, so that that actually does bring a good point, which is that the it feels like the international community has pulled back a little bit for various reasons, and I think you know that's that's part of it, a piece of why yields have backed up recently. Well, Mike McKey summarizes for us we've heard this twice today and surveillant Shill Moweko accent Stephen Stanley of Santandra agree the United States is a relatively closed economy. Are we an economy a fiscal stimulus thinking of refunding and all the other debates versus Europe in austerity stimulus? I mean, are we living a fiscal stimus that makes us different? Well, yeah, I mean we as Chris says, we're, as Steve says, we're a sort of closed economy. We don't have to worry necessarily about what's happening in Europe as much as Europe has to worry about what's happening in the United States. And China their biggest trading partner, and so we can stimulate the economy and we can run deficits for a lot longer. Nobody knows exactly how high or how long, but it doesn't have the same kind of effect. Interesting to note where we are with yields these days is where we were in the nineteen nineties when we were growing at four and a half percent a year. So can we live with this? I mean for now we can't, right, Steven Stanley with us, So I'm not going to go higher for longer. But just pick one of them. Are we going to go higher or are we going to go longer? Well, I think the more important thing is the longer part. You know, they may go one more time, but we're pretty to the end, so I don't think the higher part is the more important of the two right now. I think is the more important issue is how long are they going to stay? Can the American economy equilibriate through a higher nominal and real rate or almost equal calibrate? I would said yes, I think We're in the process of that. I think that in my mind, the neutral rate is you know, anywhere from fifty to one hundred basis points higher than it was before COVID. So give me a ten year real rate, which is going to be a run rate. I think it's probably you know, one to one half percent something like that. Okay, when we look right now at the data that we've getting this week, you said that the Fed seems to be looking for an excuse, and it's not really that they're so concerned about what you call this little backup and yields. So what data could make it difficult for them to use the backup and yields as some sort of excuse. Well, boy, we're really testing that right because since the September meeting, we've had a blowout payroll number, a high inflation number, stronger than expected consumer spending, and now we get a firm wage number. So you know, you're pretty much a clean sweep, and yet they're clearly going to pause. So I think it's going to have to be not so much a particular data point, but a duration of a stretch of good data. If we continue to see good data for another month or two, then I mean it just becomes increasingly compelling. So tomorrow, based on what they say and based on the economic data, what are the chances from your view, that they've got to go significantly further than currently markets are pricing. Yeah, so significantly further is a really important part of that question, because, as I said, I mean my base case, I have one more hike. But that's I mean, you know, whether they do one or not, it's not that important. But there is a scenario where inflation reaccelerates and they end up having to go multiple times. That's the I think that's the scenario that you might have in mind. I mean, to me, that's the biggest risk fact. I see that as a bigger risk than the risk that the economy slides into recession and they end up easing much sooner than people expect it. But it's at this point it's for me, it's a risk scenario, not a base case. Are Is it true you're going for Halloween? You're going to dot plot that. That's a room, right? I can't confirm you had bullered up at the tippy top of your head. There you go. Okay, I have a lot of room on my head for you dods. So do some of us is well? Also? John Ferrell, going as you'll Brunner, I don't know if you knew that one of the mania for seven John. It was good to hear Stephen Stanley with his chief US economist of Santander, Emily rolling this morning from Boston here on a Halloween. What's your biggest fear out there besides trigger treating, what's your biggest fear, Emily in this market? My biggest fear is that we're actually in a scary movie right now, but it's not over yet. You know. You think about the villain kind of being wounded but still alive, and the villain is higher borrowing costs and the wake of the FED raising interest rates in the shortest amount of time and the greatest extent in several decades here, and we really haven't felt the sting from that as far as consumers pulling back, you know, as far as earning's getting hurt by that profit margin's getting crushed. So everything's fine right now. We're sort of running to the safe part of the house as we're getting chased by this villain, but we need to remember that the movie simply isn't over yet. Oh my god, Emily, I'm just thinking about you at the sleepover with a bunch of eleven year old saying it's a scary house and the bond villain is coming to get you at some point. I'm wondering, Emily, how much we're looking at a scenario we're yield to kind of reach to a peak, and that really the uncertainty lies. And I keep harping on this, but it lies with the deficit financing and what we get tomorrow from the Treasury Department. What we got yesterday actually underwhelmed with the amount that the US would have to borrow in the third quarter, and arguably that's what's leading yields lower this morning. Yeah, certainly fears around supply have been a key to the narrative around rising bond yields, but it's not like we woke up one morning over the last few weeks and all of a sudden found out that the treasure was going to have to issue more debt. That's been a known issue. So for US, that's not really the primary reason that bond yields have picked up. It's been just this unrelenting strength in the economic data in the US, and certainly fiscal spending has played a role in that. Excess savings have played a role in that. In twenty twenty and twenty twenty one. But really it's been the strength of the data. There's something really really unusual happening in the bond market right now. One, we're facing down potentially the third consecutive year of negative returns for high quality bonds. That's never happened before in history. We're also looking at an environment where if the FED was done in July, and we can talk about that, it's really unusual to see the ten year treasure yield continuing to rise. Typically what happens is that the ten year peaks right around the same time, are just before the FED pauses, very unusual. And then finally the elusive bear steepener another very notable dynamic here that is not consistent with what we've seen in recent history. So our view is that we could be getting close here to the peak and yields. This doesn't sound like a scary story actually. Arguably, and as Gina Martin Adams yesterday was saying, this really speaks to a pain trade of more momentum of gains of a rally and risk assets. Because if yields are rising because of growth, isn't it a good and beautiful thing? Yeah? I mean, I think our standards for growth have seemed to be shifted a little bit. Yes, there's a lot of strength in the labor market, but we all know that that's lagging data and those cracks are starting to form. I think this week's going to be really critical in terms of the jobs report on Friday, initial claims, which have stayed stubbornly low. We've got to remember that that data is subject to heavy revisions, and we're seeing a lot of cracks in the consumer stories starting to emerge. There's a lot of heads out there, the resumption of student loan payments, credit card interest rates at twenty five percent right now, auto loans at seven percent, mortgage rate over eight percent. That's a challenge. How do you get out thirty six months? You're going to tell me part of a carefully managed portfolio is so look out three years, five years, years, maybe when the red SOX go above five hundred again, Emily, the basic idea here is people are scared stiff. How much cash at five x percent should they own? Versus having the courage to reach out thirty six months? Yeah, I think the critical the scary part I guess about being in cash right now is that your subject to significant reinvestment risk. Our view is that the normal relationship with the economic cycle and bond yields remarries as we head into this economic contraction into next year, and in that environment, you want to move out the curve and just really be able to capture the five six percent income that you're seeing in high quality bonds right now. I know we've been talking about this for a while. There's been these significant odd dislocations in the bond market, but if you're in cash right now, you might not get that yield next year. We have an opportunity again to lock that income stream in for years, and I think we're going to look back on this is quite an incredible opportunity to unlock the value in bonds. Thank you, Emily Rowland, John Hancock Investment Management, Boston. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern. I'm Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can watch us live on Bloomberg Television and always I'm the Bloomberg Terminal. Thanks for listening. I'm Tom Keane, and this is BloombergSee omnystudio.com/listener for privacy information.
BoJ maintained NIRP and the 10yr JGB yield target at 0% but widened the reference range to 100bps up or down from targetEuropean bourses & US futures in the green, with Europe unreactive to CPI & GDP dataAction which followed mixed APAC trade given numerous data release incl. disappointing Chinese PMIsUSD/JPY to 150.76 peak, DXY below 106.0 with EUR bid while Antipodeans divergeFixed benchmarks underpinned into month-end and largely unreactive to EZ dataLooking ahead, highlights include US Employment Costs & Consumer Confidence, Speech from ECB's de Guindos & Nagel. Earnings from Pfizer, SYSCO, AMD & Yum China.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk
APAC stocks traded mixed amid a deluge of data releases at month-end including disappointing Chinese official PMIsBoJ maintained NIRP and the 10yr JGB yield target at 0% but widened the reference range to 100bps up or down from targetEuropean equity futures are indicative of a slightly softer open with the Euro Stoxx 50 -0.2% after cash markets closed higher by 0.4% yesterdayDXY is firmer and just below the 106.50 mark, JPY lags post-BoJ, EUR/USD has pulled back beneath 1.06Looking ahead, highlights include German GDP Flash, French Flash CPI, EZ Flash CPI & Flash-Prelim. GDP, US Employment Costs & Consumer Confidence, Speech from ECB's de Guindos, Supply from Italy.Earnings from AB InBev, BASF, Stellantis, BP, Marathon, Caterpillar, Pfizer, SYSCO, AMD.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk
Today we talk about the three major central bank rate decisions this week (BoJ, Fed, and BoE) and how the bond market is pricing policy rate trajectory long-term in the US and Europe. we also explain the barbell strategy as one way to approach the bond market these days, with Peter Garnry and Althea Spinozzi. Read daily in-depth market updates from the Saxo Market Call and SaxoStrats Market Strategy Team here. Click here to open an account with Saxo
Indian benchmark indices — Sensex and Nifty — are likely to open marginally higher in the trading session of October 31, following an overnight rise in equities on Wall Street. Asian markets, meanwhile, were subdued ahead of the Bank of Japan's (BOJ) policy decision. India's GIFT Nifty was down 0.05% at 19,216 as of 7:32 a.m. IST, but still above the Nifty 50's Monday close of 19,140.90. Wall Street equities gained over a percent each overnight, ahead of the US Federal Reserve policy meeting and US monthly jobs data due later this week. Asian markets were muted amid expectations that the BOJ will raise its inflation forecasts and tweak its bond yield control in a higher-for-longer global interest rate scenario. For the domestic market, it seems the market may continue the momentum that it had over the trading session on October 27. In the previous trading session, the Indian market started off lower due to global jitters but recovered all losses led by Reliance Industries and HDFC Bank, among others. Stocks to watch: Tata Motors, Marico, DLF, Oberoi Realty Tune in to the Marketbuzz Podcast for more
Vistazo a los datos de IPC de España y Alemania, reunión de dos días del Banco de Japón (BoJ) y reunión también esta semana de la Reserva Federal. Lo comentamos todo con Manuel Pinto, analista de XTB.
US futures are indicating a higher open as of 04:05 ET. European equity markets have opened positive, following mixed levels in Asian markets. Attention turns to this week's key macro events. In addition to the 2-Nov FOMC meeting, for which markets have priced in another pause, Treasury Department quarterly refunding is also seen as potentially bigger swing factor than Fed. BOE is also on radar, with markets expecting hawkish hold. BOJ meeting may discuss YCC tweaks.Companies Mentioned: International Flavors & Fragrances, Clariant, General Motors, Stellantis
HSBC launches a new $3bn share buy-back programme after posting Q3 profits of $7.7bn. The S&P 500 closed last week in correction territory, All three major U.S. indices are set for their third consecutive week in the red. Investors now await rate decisions from the Fed, BoJ and the BoE. Israel expands military manoeuvres in northern Gaza while thousands break in to a UN aid warehouse. In autos news, the UAW agrees to a pay deal with Stellantis and also approves a tentative deal with Ford regarding a 30% wage increase for full-time workers.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Chief Investment Officer of Bleakley Financial Group and Editor of The Boock Report, Peter Boockvar, joins us this evening for some post-market commentary. Before the Federal Reserve meeting this week, we have the Bank of Japan decision coming tonight. It is an important one which could show a more hawkish BOJ as they continue to fight inflation. We also talk about gold allocations in a portfolio given the volatility and uncertainty of economics and geopolitics we are currently witnessing.
In a week where the hour changes in Europe but not in the States, all the scheduled times in the US will be different to the usual release times, including the US rate decision. This is for the period until the US time change comes into effect the following week. On the calendar are three rate meetings. First is the Bank of Japan, which has been monitoring USD/JPY above ¥150 for the first time in a year. No change is expected from the BoJ. There is also no change expected for either the Federal Reserve or the Bank of England whey they announce their decisions on Wednesday and Thursday respectively. Elsewhere on the economic agenda there's the first look at Q3 GDP in Germany, France and the eurozone. All of those releases are expected to see a wide divergence from the recent strong number in the US. Earnings finally start to abate, with the highlights in the week ahead being oil companies Shell and BP, brewers Carlsberg and Ab-InBev, retailers Sainsbury's and Next, and tech giant Apple. Apple trades all-sessions on the IG platform and so represents a trading opportunity when it releases its numbers on Thursday. Any opinion, news, research, analysis, or other information does not constitute investment or trading advice. Follow us on Twitter, Instagram, and YouTube
Swings in the 10yr UST bond yield reverberated into the FX markets this week with the EUR/USD intra-day high-low weekly range the widest since mid-July. Derek Halpenny, Head of Research, Global Markets EMEA & International Securities, talks to Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales, about the continued resilience of EUR/USD and what might be behind it. Derek also looks ahead to next week with the BoJ, FOMC and BoE all meeting and explains why the BoJ needs closest watching after USD/JPY broke higher through 150 this week. Disclaimer: www.mufgresearch.com (PDF)