Sherry came on set. Scarlet 15 minutes before we got another leg higher. Lets check in with our reporters. Im thinking about all the themes that you and the panels are talking about. Overbought, overextended. This chart suggests perhaps at some point relatively soon consolidation could be due because of how overextended the s p 500 is. Wer the last year, in white have the s p 500 and in yellow we have the 200 day moving average. Above that moving average. In august 9 above. Above the moving average but what i would like to the point here is we have that is comingas the rsi down from its most overbought levels. Technicians like it overbought arket so long as its in series of rising highs. Here we have lower highs suggesting it is cooling off. It will be very interesting to see what the trigger will be. This chart does again suggested is probably coming. Sarah thanks. I want to rewind a bit. Pick backup on that value versus growth rotation conversation, k. Ing had on the des at the end of 2019 there was a lot of talk about value. This is finally the time that valuing was going to take over. Young, but so far that has not been the case. The s p 500 growth index versus the value etf, you look year to date, the s p is up 3. 3 . Value roughly flat. The s p 500 meanwhile is smack dab in the middle of those two. If you were to look at Market Neutral portfolios, what these do is try to strip out the underlying effects from different industries, from the market as a whole, as you can see that orangeish line, that is value. That white line is momentum. If you look back to early september, say, when we saw that rotation to value take alter we have almost given up all those gains since then. Much of that coming this year. Bloomberg intelligence saying it looks like value is reverting back to its former self, giving 2020 a factor the future field. Rounded out looking at oil. Ofse easing signs geopolitical tensions are causing crude oil to slide. Since worries over the threat of a war happening between the United States and the middle east have calmed down, attention ships back to a flood of new supplies. Wti prices are now back to the middecember low levels, when t he markets seem to shrug off the chance of more depressions in the persian gulf. The demandside the u. S. And china are set to sign a partial trade agreement this week, which may improve market sentiment. Joe thank you. Still with us, Bloomberg News reporter luke kawa and private Wealth Advisor sherry paul. Sherry, want to go back to you. What you tell clients who are diversify globally, across Asset Classes, when the big winners are still lieke apple and microsoft and alphabet. Do you feel like they should be reallocating more to big tech . Sherry yeah. It is a great question. When things get too good, people get worried. When things get too bad, people get. And then, at the security level if youre making gains too fast, based on earnings, then you should be taking profits and reallocating them to other parts of the portfolio. Decoupled from whatever your thatlist was for whta what Stock Performance may be. So, it is important to separate out what people feel like could be a great stock to own versus the reality of what p. E. Ratios and the math and the science tells us about what to do with those companies. Joe that is something that Michael Wilson flagged this morning. The top five companies. We all know them by name. Tech behemoths. They now command a higher share of the s p 500 by market cap. So, either this can resolve with, ok, we are going to pile into the names we know, continue to drive this wider. Either there is a Movement Towards more value equities or up orggards catching these names will disappoint on earnings and that will drag them back to a more fundamental stance. Go back tohink we the basic principles of mean reversion. So, we need to look at typically held stocks at how sectors and how the market behaves over longer times, and stretching out our expectations for return so we make more reasonable decisions. In terms of what we expect from an investment. The ultimate hedge to downside risk. Having a perspective and being selective, taking gains and redistribute it back into underperforming and outoffavor areas of the market, understanding that time in that sector will be the winning trade, then trying to time single politics, and a security in a given day. Scarlet speaking of earnings we have Bank Earnings this week. Wells fargo reporting tomorrow. What are you looking for here . No one wants to look at the Fourth Quarter. But the Fourth Quarter will be better compared to the Fourth Quarter last year. Are do you think the ceos likely to stress . That sets the tone for how the stock reacts. Sherry well, i think we are probably likely going to see, im going to venture out, ceos set a lower expectation than they have in the past. Psychologically people prefer to beat expectations. Investors weued are expecting low return sets across the board for most of corporate america. And we are favoring emerging markets right now as an example. So i would expect to hear that. But i think there is also going to be a hint of optimism, because we continue to see l ow unemployment in the u. S. , a strong consumer, accommodated feds around the world. Things are still there for things to be pretty good. They might not be as fantastic as they were last year. A change in fed policy. But that does not mean that things still cannot be good. When things are great people become fearful of good. We should embrace the good. Right now the set up for the stock market over other Asset Classes looks pretty good. You surprised the year that is starting up so fast luke sort of yes, sort of no the starting point was that ridiculous in treasury that gained a lot of momentum heading end. Year having the risk off episode we had, the crazy reversal we had leased week last week, tells you about the range of can expect. In the treasury market. Before we had the big risk off overnight. We see the potential between escalation between iran and u. S. A lot of people were thinking that 180 was the floor. 180 to 195 range. We were at 170 in a manner of minutes following these headlines. Ended up closing the next day above 180. It reinforced peoples beliefs that we will be kind of flirting we digest0 to 195 as just how much the rest of the world is going to soften that compared to the u. S. Being the only resilient story. Sherry i think it is just, we talk about the treasury, one fun fact. If you can own communication services, which is one of the sectors we favor, at 18. 5 times earnings and get 70 of the 10year treasury. If your mindset is geared towards that longterm, why wouldnt you take a look at the market particularly with these cash flush companies that can increase the dividend yield . Scarlet sherry paul, thank you so much. Ubs private Wealth Advisor. And, of course, luke kawa. That does it for the closing bell. Whatd you miss . Is up next. We will look at the white houses plan to lift the tag of china as a currency manipulator. This is bloomberg. Bloombergs will headquarters in new york i am scarlet fu. For the s p 500 and nasdaq and apple and tesla and microsoft rising to new highs. Joe the question is whatd you miss . Scarlet steady as she goes. Tech leads stocks as earnings season gets ready to kick off. Days away from signing the phase one trade deal the white house says it will lift the currency minute later label on china. Trader versus machine. The tides turn for global wall street starting with big bonuses. Kick things off with one of todays top stories. After three years the phase one trade deal between the u. S. And china is set to be signed wednesday. As part of that agreement, bloomberg learned the white house is planning to lift its designation of beijing as a currency minute later. Former insight we are joined by leland miller. How significant is this china, currency manipulator label on china . Leland it is not significant at all. The entire reason that china was made a currency manipulator was because that determination was pressured into it as part of the trade war. They never really satisfied the criteria to be a currency manipulator. Now that we are not calling them a currency manipulator you have to it now is the fact the entire region is not seeing a decline. Thehat the pboc does back currency. They manipulate the currency that in a way that is positive for the u. S. Economy. The entire debate, i know what has implications for portfolio managers, it is a bunch of nonsense. Joe what about the phase one deal period. At this point, is there anything interesting about it that youre looking for in the days ahead, or this is through Rearview Mirror . The most interesting thing is how much it would scale down in the days running up to its agreement. Originally they were contemplating a bigger deal. When President Trump tried to socialize this idea with friends and allies there was not much support for it. They settled for a smaller deal. There is always the possibility that the phase 1b later this yera, if the economy is not doing that well p review can have President Trump talk about tariff rollbacks later. This was a baby deal. The significance is not the substance of the deal. It is simply that it is a trade truce. For now the u. S. And china are not fighting on train. Joe when you read that intro, after three years, my god, has it really been that long . Scarlet it has been that long. In some ways they have to have something to show for it. There will be a lot in terms of symbolism. We can see that with the currency minute later tag removed the currency manipulator tag removed. We are hurrying a lot of big names and big people showing up at this. Leland they want to put together a nice cast of coes to to show this is a big meaningful event, face one. Phase one. The entire story has been next phase we will get the big stuff. Were not holding our breath for that. Joe big picture, when trump really started to go after china on trade there was kind of this weird mixture within the sort of a, this is long overdue on some level. Of doing it wrong, even if they agreed something was necessary. Is this an improvement . Is the trade relationship between the u. S. And china improving under President Trump . Can give the administration the benefit of the doubt for now. This is a to be continued story. If this is all we thought the trade war for . It is not worth of it it is important that there are structural reform in china. They will say that ip regime in china is changing. They will say best of ips is gone by the wayside. As long as the relationship between the u. S. And china stays pretty good, you will probably see improvements, some notable headlines that show that china is making progress. The test will be when some of the other areas are pushed. Trade, not so much. On the the coupling side, tech side, when they have stresses in the relationship there, will the chinese adhere to their side of the deal . Scarlet all of that is up in the air. We do not know what that will for months if not years. In the meantime we have seen u. S. Company shift their entire supply chain, moving away from china and moving it to other parts of asia, in some cases back to the u. S. Wasnt that worth it . Topic of the coupling is confusing because it means a whole a whole bunch of different things. Financial decoupling is very serious and we have not seen that yet. Scarlet when you say financial decoupling, youre talking about buying treasuries . Leland u. S. Government for having china u. S. Companies from investing in chinese markets. A breakdown between free freeal capital flows. On manufacturing youre seeing a breakdown. This is something that is making progress. Joe setting aside trade, even before the Terror Threat did it up there was a lot of anxiety about the slowing growth in china even before the ren ratcheted up. Are you expecting to see any kind of reality celebration in chinese growth reaccerlation in chinese growth . Leland people are used to surges in growth. Datawe are seeing in our is extraordinary provision of credit to corporate. Our corporate borrowing numbers are off the charts. Our bond sales are off the charts. We show shadow financing having come back. Ampleseeing this provision of credit to corporate and seeing the economy not fall further. That is not exactly a bullish story. It shows that things are not falling too much and they are paying a pretty heavy cost to do it. Joe got a stock somewhere. Thank you very much to china beige books ceo, leland miller. We have breaking news. The firm is said to take a 17 toke in medical manufacture interventional cardiology and radiological procedures. A 2 billion company. You see the stock surging 10 after start board confirmed building that stake in merit medical systems. Scarlet a 9 stake in the company. Coming up coming, sheehan are reshaping wall streets bonus culture. Techs growing dominance on banking. From new york, this is bloomberg. Joe wall streets bonus culture is going extinct and you can thank the robot forcing traders basic assumptions about making money. For more read bring in bloombergs financial reporting. So, what is the deal . Bonuses, used to go out and hustle and drama business. Drum up business. Now that it is all machines, it is not the same . The swashbuckling trader who isnt ablee kills to do that because machines are doing the work for him. The whole desk has to recalibrate what it is doing and share the profits. Scarlet share the profits. What about the traders who have no link to machines . They are not coding, they are working with the machines. The cornell professor that i talked to makes this point, which is that you need to get up to speed with what the machines are doing. If you have no link to the machines at all you have to figure it out. New skills and try to figure out how you can interact with machines or manage the people who use machines. Joe but on some level because someone is trading, so much trading is algorithm, and quantitative and so forth, if you do not have a skill basically, that on some level facilitates that, you are not going there are plenty of managers who do not know how to code. I dont think it is tapped out completely, but i think it is really important to have some fluency with the future of trading which means you have to know what data scientists are doing in order to really steer those desks. Joe scarlet oldschool traders may not be able to make as much but does that mean the traders are the big guys who bring in the bonuses, or woman . Are tablekills stakes. That is the new reality. It does not mean they are going to command these huge salaries and bonuses. So, no. Joe what do you have to have in addition to that . You have got to have that first of all and you have to be able to manage people. You have to be able to sell strategies to people who are not quants. You have to be able to do the heavy quant work yourself. It is everything, really. Scarlet no wonder this is the most widely read story on the bloomberg. It is a slap in the face for everyone who has been trading for decades. On a programming note, one of the most recognizable brands is back. Bloomberg wall street week recaps the week with compelling conversations led by heavyweights in business and finance. No machines but people who work with machines. And ifsodes every friday you missed last weeks premiere episode, it is now available on youtube, the bloomberg terminal and in bloomberg. Com. Lets get you to some business flash headlines. Amazon founder jeff bezos likely to face unprecedented protests on a trip to india. Thousands of small time local retailers pledge to oppose amazons price and selling practices. India is one of amazons fastestgrowing markets. Its a milestone for tesla. Rging, briefly topping 500 for the first time after oppenheimer boosted its price target to 617. Chinas government signal it continue to cut electrical vehicle subsidies as the same rate as last year. Nissan is examining the possibility of breaking away from renault. Relations between the partners have turned his functional since the ousting of former chief carlos ghosn. It is unclear how a separation would work. Nissansis largest shareholder. And that is your business flash update. Now, joe, this is a story that has been capturing peoples attention. Those people who watch tv and actually go to the leaf eaters because Oscar Nominations were announced. Netflix is going to get two shots at best picture award with irishman as it looks to become one of the big players in hollywood. It missed out on the Golden Globes because it did not walk away with anything of note. Joe they give nominations to websites . That crazy. Scarlet it is not a website. It is a movie studio. That made a lot of money. Joe my Favorite Movie of the year uncut gems got totally snubbed. Im angry. It was really great but too bad. Scarlet maybe angry movies do not work this year. We have got a lot more coming up from new york. This is bloomberg. General william barr today released more information about last months deadly shooting at a u. S. Naval base in pensacola, florida. The shootings, authorities said, was carried out by a saudi aviation student. Thehe evidence shows that shooter was motivated by jihadist ideology. We learned that the shooter posted a message on september 11 of this year. During the thanksgiving weekend, 9 11en visited the memorial. Posted messages on social media, including two hours before his attack. Barr alsorney general announced that the United States is removing nearly two dozen saudi military students from a Training Program and sending them home. It was announced today that the two people who storm day Kosher Grocery last month planned an assault for some time and were involved in another shooting of a jewish person a week earlier. State officials in new jersey revealed details about the months leading up to the shooting in notes left in the grocery shooting scene and in online posts. Eruption for state Mass Evacuation in the philippines. It is located about 40 miles south of manila. There are plans to move up to 200,000 more people. Was closed. Irport Houston Astros manager aj hinch and the general manager were fired today. The firings were announced hours er robball commissioner manfred announced the discipline currentngly hinted that boston manager alex cora, the astros bench coach in 2017, will face equal or more severe punishment. The astros will forfeit their next two first and second round draft picks. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Scarlet the visa is buying glad for a totalg plaid consideration of plaid is a network that makes it easy for people to securely connect financial accounts to the apps that they use. 5. 3 billion. Plaids products allow people to share Financial Information with other apps like venmo, acorns. Visa continuing to dive deeper into fintech. Lets talk about the labor market. Fridays job market showed signs of labor market easing. Pace rose at the weakest since 2017. For more, lets bring in the ,hief economist at upwork joining us from villanova, pennsylvania. What did you make of that wage number and how concerned should we be that already there are signs that wage momentum is starting to fade . Overall is report good but not great. It is slower than we would like but the economy is still moving in the right direction. Ands a volatile data series if you follow it closely, it has led people astray. I would wait to see what the Employment Index looks like at the end of this quarter. It is still heading in the right direction. Is there anything that could make it accelerate faster . Have we figured that out yet . I think it is a matter of waiting for the headwinds to fade. We had the trade war and also the Federal Reserve raising rates quickly. It takes a while for the economy to sort of work through that rate path. As those headwinds fade, we will see growth pick back up. Joe we are at 3. 5 unemployment. A few years ago, that would have been perceived as an extraordinarily low number. It is certainly below were a lot of economists and fomc people thought. Could we get to 2. 5 . Could we get to 2 . The labor market is going to get better. It could come in the form of better participation or it could come in the form of the Unemployment Rate continuing to fall in Participation Holding steady. 2554, aref adults they working or not . Scarlet one thing that we saw with the latest jobs report is majorityn make up the in the United States. What do you think could be the second, third, fourth order effects . And how highable could it get if that is the case . If you compare the u. S. To other developed countries, we do ofe room to improve in terms the share of women in the workforce. Those are more of sort of longrun run structural things that you need policy to change. That, if we can make policy changes, there is room to improve compared to other countries. Joe adam, you are the chief thinkist at a freelance tank. Do you think there are things that can be done on the regulatory side or the tax code that could make the economy more dynamic and further create opportunities for some people. I think it helps businesses be more dynamic. Rather than policy makers, i would focus on businesses as those who need to focus on it. Businesses will need to look outside their labor markets and higher people in the terms they want to work. That is why they should be andng a hard look increasingly. Scarlet we have a lot of question marks over what kind of employees are considered permanent staff employees versus outside contractors. In a way, they are kind of freelancers. Are we going to get any clarity on that in 2020 . When you talk about the gig a corner of the economy. A lot of this wont be affected by those regulatory changes. It is important when you are talking about the gig economy. Thanks so much. Surges, leaving analyst targets in the dust. This is bloomberg. 11 coin jumped more than last week, a reversal from a sixmonth downtrend. A reversal has opened the doors for a retest of some of those recent highs. I am joined by now from one of the first vcs to participate in the space as an investor and advisor. 2020, what excites you about the space . We are appearing to see some of the progress made in 2019 be adopted at a core protocol level. Really steadyr of development and work. In 2020, we should be reaping some of the benefit of that. Joe people who mostly focus on the price do not know what is going on in terms of core protocol or development. What is going on that is making it more robust . The metricsone of we focus on, but it is certainly not the most important. What we are really interested in is the pace of development happening at core protocol and second layer infrastructure, then just the operation, the stability, the dependability of the core protocol. We have not had a protocol update since august of 2017. In 2020, we will hope to see introduction from signatures, the core protocol level, which will give us some opportunities in scaling and smart contracting that companies can take advantage of. Joe 2017, that enabled some addition to the block size and also layer two networks. These new enhancements, what will they allow that they can do now they cannot do now . As we see second layer infrastructure grow and mature, we can reach greater scale. The Bitcoin Blockchain can serve more users, provide greater transaction through the second layer infrastructures. The other thing we can do is extend the use case for the Bitcoin Blockchain. That is something i am paying attention to. Joe so you are an independent board member of blockstream, one of the independent contributors to bitcoins code base and core protocol. What other kinds of businesses excite you . What i am excited to see in 2020, businesses that are addressing the acute needs of users. It is possible to address just those needs and still reach trillion dollar valuations. There is an opportunity in other areas. Andinstance, in custody security. For in addition to helping people safely store the bitcoin, you see your own bank providers can offer things like inheritance planning, the ability to take out a loan in bitcoin, or the ability to produce a return. Joe right now, would you say that still the state of security tech is still too complicated for most people to get their heads around . That is one of the most exciting advancements of 2019, more Services Offered for custody such that High Net Worth individuals could begin to feel that they could safely store their bitcoin. Through to see that not Institutional Advisors but through consumeroriented applications. Joe last question. , the pacehis spring , is itbitcoin being mind priced in . I dont think the market is mature enough yet for that consistency in pricing. We have not yet been able to have the opportunity to see a firm trend develop great i also believe, because of bitcoins higher volatility, it is harder for Market Participants to take advantage. Joe great having you on. Really appreciate you coming in and talking all things bitcoin. Doeset Research Firm mkm not think much of predictions from marijuana companies. Mkm thinks investors would do just as well to flip a coin. 29 of the predictions were correct. 43 were tbd. It is enough to drive napa valley to drink. For the first time in a quartercentury, americans drink less wind last year. The amount of wine consumed in 2019 dropped. Millennials are going for drinks cocktails,eltzers, and nonalcoholic drinks. Lets talk about shares of tesla, at a record high. They briefly hit 500 for the First Time Ever today. Analysts tripping over each other to catch up with the share price. Insight,s with more her Detroit Bureau chief. Teslasctly is carrying stock . Is then continuing to drive it . That is one piece of it. They had very good sales in the Fourth Quarter. The said that they got plant in shanghai up and running. It was a lot faster than people thought, mainly because it was on schedule. Tesla is known for missing targets all the time, either not getting production running when they say or taking a long time to getting it up to levels where they can meet sales. That is big for them because there is a big opportunity for them in china even though the market is shrinking. Tesla has not sold that much there thanks to the big tariffs they had to pay. They can meet more demand here in the u. S. They have momentum because the cyber truck was shown off and people said they want to buy one. They are getting growth in european markets. The analysts who really like the stock are pushing their valuation higher and higher. Joe everyone is coming out with evs andt competitive pretty soon tesla will not have the space, where are all those cars . Killersr, the tesla have kind of gotten killed. It is still early days for them. Vehicle, it isdi pretty new to the game. Fourdoor electric sedan appeals to a certain type of buyer. He only has about 200 miles of range whereas the tesla goes 300 or more. That is one advantage tesla has, that their cars just go longer before you need the charge. Markete cars come to from daimler, folks what volkswagen, general motors, we will see if the novelty of having a tesla vehicle wears off a bit. Scarlet speaking of luxury carmakers, here is one not doing as well. Aston martin is looking to hold funding talks with a billionaire. Why does aston martin need cash so badly . This is a tough story. Even though they have a prestigious brand, james bonds original car, sales did much worse than expected last year. That has hurt their profitability. To give the money to build their suv. They are expecting that Sport Utility vehicle. Where porsche has gotten all of its growth. Selling sedans and sports cars to a luxury market that has been walking away from those suvs furry long time. Thes really tough in nichetive market being a carmaker. Welch,oombergs david thanks for joining us. Scarlet tens of thousands of people in the philippines being evacuated after an erupting volcano south of the capital. Earthquakes could signal further eruptions. Here with more is shery ahn. How bad is this situation . Shery we are talking 24,000 people already fleeing their homes. Authorities saying that could toband could expand 300,000 people. We are talking about an eruption only 40 miles from the capital, manila. This volcano has dozens of craters. So far, the ash is spewing upwards. Expertsht, some volcano think this could be affecting more people. Joe what are we talking about in terms of economic ramifications . Close to manila. The Manila Airport has partially reopened. They are going to reopen again on tuesday. Areeconomic ramifications expected to be big. Are wellg that they prepared financially to deal with the damage and fallout. This chart shows that the stock market in the philippines has not been great. Valuations at an eight year low compared to asian peers. Scarlet it is, what, january . Typically, this is when a lot of people head out to the philippines. Lunar new years coming up. Talking about january being the best month for philippines. It is beautiful. They have about 20 typhoons annually. Everyone who lives in asia or close to the philippines knows that the tourism is huge. This could take a hit. Joe for more on these stories, dont miss daybreak australia and daybreak asia starting at 6 00 p. M. Eastern. Scarlet the College Football championship tonight in new orleans. Bothjp morgan and citi reporting fourthquarter earnings tomorrow. Scarlet Bloomberg Technology is next in the u. S. Joe this is bloomberg. Riggs in sanaylor francisco in for emily chang and this is Bloomberg Technology. U. S. Banks post earnings this week. Wells fargo says he needs to be a tech company. We will have a preview. Plus, what it means for bonuses. The heartbeat of health care. Technology and health
comparemela.com © 2020. All Rights Reserved.