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Ceo bristow, they were gold is super outspoken, so always fun to talk to him. For more on the stimulus measures, lets talk to greg valliere. Your take on the executive order that trump issued, where that leaves stimulus conversations in the u. S. Greg the talks are dead, maybe a resumption later in the week. About whetherions the states can contribute to this, whether it is legal. The legal fight could drag on for a while. Democrats and others feel trapped right now. They cannot be portrayed as suing to stop aid to people, so all parties have a reason to resume the talks. Guy did nancy pelosi make a mistake . She has a reputation for being a good negotiator. How did she end up putting herself into a corner like this, do you think . May fore had a bill in 3. 6 trillion. I think she overreached. I think she didnt realize trump would try to do something through executive action. Now she is in a bind because if she sues, those people will be portrayed poorly. She may not have calculated very well. Alix it feels like stimulus is stimulus. The fact that we got something should be good news. Im interested in the lack of market reaction. What does that signify . Greg it beats me. This could increase fears of a weaker quarter than we were hoping for. Is no money for state and local governments, Liability Protection a lot of stuff got left out of what trump did. That is not a good story for the rest of the economy. Guy how does this change the equation regarding the race in november . Greg if the election were tomorrow, biden would win pretty comfortably, and he would take the senate with him. It could change a bit iftrump could change the conversation, that he is doing something, he could spin it to his advantage. On how hee the polls has handled the virus. It is really awful for him. The death toll in the u. S. , the spread between biden gap should be wider than it is. Do you subscribe to that . Greg i do. Now all of a sudden, you look at the real clear politics number, coming down to six points or something. In key states, it is not overwhelming. But it is not an insurmountable lead. Bit . Can i just pivot a i want to fold in the china conversation that we have been having. There are areas of overlap in the venn diagram. What are you taking away from where we stand in the relationship between the u. S. And china right now . We saw the sanctions impact markets this morning. At the moment, it still feels as if we are not getting to a situation where things will break down completely. Are we going to get to that point between china and the United States . At that point, that maybe something the markets wake up to. Greg i would not rule it out. Everyone talked about tiktok, but the bigger story is we chat. People use that for every day purposes in china. It is inconceivable to me that china would not retaliate. I think we are in a deep freeze through the election. If biden wins, maybe he will be toe conciliatory, tried reenter the transpacific partnership. Therump wins, we are in deep freezer for quite a while. Alix it was all about sanctions. Mike pompeo said the u. S. Would be joining likeminded countries with the National Security law, the erosion of rights in hong kong, urging the government to hold Legislative Council elections. With all of the rhetoric, when you have the sanctions against individuals, when does it get serious . Greg i think it is serious right now. Court. L is in chinas they will do something in the next several days. I would be worried about some u. S. Tech stocks, google, apple, that could be hurt by sanctions from china. I dont see any lessening up until we get past the election. Guy do you think mike pompeo ends up on a sanctions list . You listen to the language coming out of china, and they are starting to talk about the pompeo e pence, and you wonder if that could be the ultimate direction of travel. If it was, how does washington respond . ,reg if this gets a lot worse i would not rule out a suspension of diplomatic relations for a while, we recall our ambassador. That is not out of the question. More tariffs are not out of the question. That he may fight with canada, he may be in a fight with western europe. Even more tariffs could be on the table. Alix how does that play for him in november . Greg i think fairly well. This is not just a donald trump crusade. Democrats, elizabeth warren, chuck schumer, also feel that china has not been transparent on the virus, that they must be punished. I think there is a bipartisan mood here in d. C. That china needs to be treated more harshly. Who is going to be the vp pick for the biden camp . A logical pick has to be kamala harris. She makes the most sense. Wildcard, val a demings, tammy duckworth. I do think if it comes today or tomorrow, if biden were to wait longer, there would be a real sense that he is indecisive. I think he has to pick soon. If i had to bet, kamala harris. Alix why has it taken this long to begin with . What is he waiting for . Greg you are not the first person who has asked that. I hear people all the time say that they think he should have made pick a couple weeks ago. What has happened, everyone is sort of sniping at each other, their surrogates are whispering, did you know what she did, did you look at her background . That is not constructive. He has to put that behind him. It has to come today or tomorrow. Look forward to that news, we appreciate you talking to us about what is happening. Everybody is talking about it. Greg valliere, we really appreciate it. Up, a market perspective to figure out what is going on. The cornerstone chief investment strategist will join us. This is bloomberg. In hong kong, it is the highest profile case against democracy activists under the new National Security law. Police have arrested media , and havemy lai accused him of colluding with a foreign country. 11 chinese officials have been sanctioned in the crackdown over hong kong. Sanction of it will 11 american but none are members of the trump administration. The move is likely to stoke tensions with china. The most senior visit of a u. S. Official to taiwan in decade. Alex azar praised the taiwanese president for his response to the pandemic. He calls the democracy and inspiration to the region and world. President trump says they have and may beemocrats more inclined to negotiate a new relief package, but also say Democratic Leaders have had no contact with the white house since friday. The president has taken some steps to overcome the congressional impasse. He suspended the collection of payroll taxes for some workers. Record low Mortgage Rates have boosted the Housing Market but not all americans are able to take advantage. We spoke with the former fannie mae ceo. When we have seen in the last few years is all of the gains made in the 1990s, early part of 2000s, in minority homeownership have disappeared. We are really going backwards, not forward. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Thank you. Lets get back to our top stories. Democrats and republicans are trillions of dollars apart on overall spending. Chicago fed president Charles Evans stressing the need for additional stimulus to fight the slow down. He spoke on face the nation. I think Public Confidence is really important. Another support package is incredibly important. More on how the markets are reacting to all of this. Is joining uswitz now to give us his take. Is it august or is it just that the markets have seen this movie before, and as a result ultimately expect a deal to get done . Respect vestors inspecting a deal to get done. President trumps executive orders may have hopefully spend that up. Democrats have not been in touch with the white house since friday, so ultimately this will move forward to a package that will look somewhere north of 1. 5 trillion. Alix you had a great note to tie this together. Less about the Economic Impact of the bill but more about the psychological impact of a bill. You say it is a sign that stocks have become too big to fail. What does that mean, how does that relate back to any kind of Stimulus Program . We knew the stock market was an important component of the economy through the wealth affects. Saidthe last 30 years, policy and the reduction of Interest Rates have made markets ultimately a larger component of the economy. A chart that we like to look at is market cap versus gdp eat, warrenas made famous by buffett, the metrics that he often refers to. We are looking at the valuation metric but more in a way of how much the economy is leveraged to the market. Given the size of the market today relative to the economy which is at an alltime high, a drop in the market could have a much greater impact when you look at how large it is. , at a time when we have zero Interest Rates, a fed that is less effective, so these , it should have a negative impact on the economy. Guy lets talk about what happens if we go down at some point. It doesnt feel like it will happen anytime soon. At some point, this market will turn, it always does. At zero, you rates have to question the ability of policymakers to protect the downside. Normally, if we were to see the stock market tanking, bond yields would move lower. That would change the discount rate, the arithmetic around those stocks, allow valuations to stabilize. That does not exist anymore. How do you stabilize a market with zero Interest Rates . Michael the drop in Interest Rates is helping the market, just a smaller portion. Historically, when Interest Rates fell in the consumers ran out and borrowed like crazy throughout the 1980s, 1990s, to thousands. You would see not only the benefit of lower Interest Rates and higher multiples but a massive increase in borrowing which ultimately leads to more earnings. Andelped both cyclical secular growth companies, whereas today, a drop in Interest Rates is not being met with the same corresponding drop in consumer debt. That has been an issue since 2008. Now we see a disproportionate benefit to a smaller portion of the market, Growth Stocks, not only faang stocks, but Growth Stocks. This is happening broadly around the world. The reason we are seeing the fed not only drop Interest Rates but also by credit, that is an important a major step of the feds influence on the equity market. Credit spreads are probably the most influential market data for helping the stock market when it comes to market valuations. Credit spreads come down, valuations are almost always moving higher. Credit directly by credit, they are indirectly saving the equity market. We are all debating whether the fed will buy stocks. They are already 80 of the way there by buying credit. Alix does that mean that we s, even ifigher p e the e does not go anywhere . Michael we are seeing higher p es. Record low Interest Rates impacts that. When credit spreads tighten, the higher p e. The most overlooked component of valuations is just the index composition. In a world of slow growth, very low Interest Rates, you have tech, discretionary, all of the Growth Stocks adding up to a huge component of the market. Let me flip it around. If you take financials, industrials, energy, materials, they are less than 25 of the index today. That is an alltime low. Those cyclical sectors usually carry lower p es. The fact that they have a smaller index representation is making the overall p e go up a lot. Investors should get used to hire p es for that reason. Fed and the government will do whatever they can to keep the stock market afloat. If they dont, the cost of saving the market and potentially the economy after a big downturn will come at a really big price tag. Michael, lets say i have a portfolio. What is the risk reward of owning bonds, equities . Michael they are somewhat equal. A lot of people look back at 2000 and say the markets are looking like 2000 today, and it was a smart decision in 2002 by bonds and salt stocks. The difference is bonds were being propped up by Unrealistic Expectations of earnings growth. Today, that is not the case at all. Very differently, the market is being held up with the belief that rates will stay low for longer. Change, thatto would change the outlook for stocks and potentially hit some of those largecap Growth Stocks. But if rates are going up, you dont want to be buying bonds. I think you want to be even come in that rates are going to stay low, and that will help the growth part of the index maintain these rich valuations. Areexpense of stocks today the higherquality stocks as well, which is alix it looks like we are having some connection issues. Really good, michael. Appreciate your time. This is bloomberg. Guy from london, i am guy johnson. This is bloomberg markets. Lets talk about an interesting story. Mall operator Simon Property group reportedly in talks with amazon to use it empties faces that were filled by anchor tenants as fulfillment centers. According to dow jones, we could also see them turned into Grocery Stores as well. A fascinating story. Basically, this is the shift. Turning a brickandmortar store into an online fulfillment center. A number of implications of this. Wages . Es it do to local amazon has a huge effect on local wages. Does it just accelerate the process of stores like this going out of business . Also changes the property valuations. Too, isthink the story, that we are still over malled. Over malled. Alix it is a thing. Different areas, you go through and it is literally just a target, and then you have three blocks of a mall that is empty. The idea was maybe you could do experiential stuck with it but that is out because of covid. Also i wonder how much of this is the amazon, walmart thing. How fast can you get something to my door . Walmart has a leg up in that they have physical stores poster to you, so maybe this is amazon trying to get closer to that. In europe, we dont really have that phenomenon, but i guess these malls are operating near largescale roads, which is a prerequirement. Over here,hem sheds these fulfillment centers. Be sort of near big roads. I guess some of these sites are. Alix they are all over the highway. The question is, in the middle of manhattan, that would be terrifying. Talk about the traffic buildup. We are watching what is happening in gold prices. Talking to mark bristow, coming up. This is bloomberg. Alix live from york, im alix steel, live from new york, im alix steel, along with guy johnson in london. This is bloomberg markets. Scarlet fu is looking at precious metals. Resuminggold prices its record rally. The price has jumped from the almost 2090. Pandemic and geopolitical fears boosting demand, but investors are also seeking an alternative to bond in their portfolios. Theres also demand for etfs. The biggest gold etf saw Gold Holdings climb for 20 straight weeks, and it may break the record set back in 2012. Now lets get to barrick gold. , thereported this morning worlds number two gold miner clearly benefiting from higher gold prices. Revenue and profit beat analyst estimates. 20 sted eps up zero dollars up 0. 20. Barrigenerated 500 ck generated plenty of cash. It is returning some of that to shareholders, raising its dividend to 0. 08 a share. Gold production overall remains constrained. Second quarter quarter production down 15 . Miners will need to invest to keep production steady. The question is whether need to invest more. We saw what happened in 2012. You, scarlet. Lets carry on the conversation because any moment, we are talking to the boss of that business. He has apparently no plans for a new york or london listing at this point. Remember, this is a torontobased business. It will be interesting to see whether thatll timidly changes. This is the worlds. Econdlargest goldminer im assuming that a sustainable. We will see, alix. The gold price is certainly trading very strongly at the moment you wonder about the temptation of Companies Like barrick gold to try to diversify. There has been talk of copper. Clearly, mark bristow is good as gold. The question is if he is good at anything else. You wonder whether theres a need to resist that kind of inpatient. Alix its a good point. Lets ask him. Joining us now is mark bristow, ceo and president of barrick gold. Guy kind of teed you up there. Are you going to become a copper in the future . Mark im good at making money out of mineral resources. Thats my job, so thank you for that. Right now we produce copper. We have three copper mines, two of which we operate. They are big copper mines and they are pure copper mines. My comment about copper is that gold, you want to keep the relevance of being a Large Cap Company in the resource base, and you want to continue to replace the gold you mine, youre going to have to get your head around the importance of copper coming with the gold because we have to move to bigger and bigger deposits, which are then usually paltry deposits, and they come with gold. It is the same process. Theres very little difference in the technology. But i dont think we have to spend too much time on that. Business. T a great we have been able to deliver highquality returns to our shareholders at a time when they , and just to answer the question about are we going to by the stock price, the answer is definitely no. Guy ive put to you many times over the years, and you have always tried to play with a straight band when it comes to the gold price and talk a little bit about making sure you are andg it on a reasonable sustainable kind of metric. There are people around the world shouting at the television right now saying, ask mark where he thinks the price of gold is going. It has come up very quickly. Where do you think it is going . Mark its a good question. If you look back to 1972, there have been two gold sparks, 1980 and 2011. Of course, we are busy with one now. But what is in pertinent is if you look post each rising gold price, theres a new basis formed. I will try to its plain to you why. What happens when gold prices run up like this is the paper money is at risk, and on top of that you get a flight to safety. The flight to safe comes off as the Global Economy stabilizes. You dont have to be a Rocket Scientist to understand that all of this printing of money is going to result in damage to those core global currencies, and the measure of that is an elevated gold price. We are expecting the gold price to settle at a new base. We are going to see lots of volatility over the next while. This is an unprecedented global event that is going to take some time, and certainly more time than what we saw in the post 2008 Global Financial crisis. But at the end of the day, there will be a new base, and we will wait to see what that base is. In the meantime, sticking with 1200 is the right thing to do. We have allocated our business for us toar plan change the gold price in which we allocate capital. It, and take away from we do not want to do that. There is opportunity for production on the margin outside of the plan, and we are definitely looking at those opportunities going forward. But that would be my point. The goldwant to change price mid spark. See tohat do you need to make that decision . Ive known you for a long time. I covered gold in 2011. Your more conservative when it comes to that kind of stuff. See . Do you need to our 10tenure plan year plan resulted in us moving releasesnd, and it some of the Processing Capacity for offsite oil, for instance. Probably 18 months, two years ahead. As we go underground and we , or use on higher grade more focus on our smelters come our roasters, we release some capacity. That is the marginal capacity i am talking about area the same with our projects. Theres no restriction on capacity, so we can use we can put Different Oil into those leach pads. Other, we have already announced weve got a new plan that could go out another four. Ears it is a different margin as we can take the higher gold price and still deliver more value than our current plan, which was going to close next year. Those are the sort of opportunities. We weret in 2009, when marginal at 1000, and suddenly and itvery valuable, really delivered some extra revenue. Of our 10 year plan rather than replacing anything within our current plan. Mark, you said earlier on in this conversation that your shareholders are looking for any help they can get right now. What did you mean by that . What kind of conversations are you having with your shareholders at the moment, many of which will have many other stocks in their portfolio . What are they saying to you about what they want from your business and what they want down the road as well . Them right now, i told that i would deliver, and i am sticking to that story. If you go back to the merger with randgold last year, and then the subs would the subsequent transactions, the stories always stayed the same. That is we want to build the most valued Mining Company in the world because we want people to want to work for us. We want countries to want us in their country. We want shareholders to be owners rather than just traders. We have seen a big improvement in our generalist investor across the board. , it is funds that own us not just anymore the precious metal fund. It is many other generalist funds within those big institutions. For twonvest in gold things, and what ive always wanted to do, and ive done this my whole career, is you create a value. To get what i set out to do is to create a gold company where our shareholders could get value throughout the cycle, but in the peak of the cycle, the peak is all raise is always related to a downturn in the Global Economy, so you balance with investment. It has been proven since 1999. Weve already been through two significant spikes, where investors can benefit. What you have seen so far in the gold industry today, relative to the equities are outperforming the gold price for the first time because theres a renewed focus on discipline, and i hope we all stay the course. But that is what its all about. Our shareholders can now maximize and leverage the gold price and a time when maybe some of the other investments are not doing as well. Alix it is like big oil learning that lesson now, too. Mark, always good to catch up with you. Mark bristow of barrick gold, president and ceo. Some breaking news for you. There is an official resignation in the lebanon government. The Health Minister is now resigning. This is has the overall government is inching closer to collapse. There have been reports off the record that several ministers have resigned or are close to resigning. There were reports earlier in the day that the finance minister had resigned, according to a local news source. The International Institute of finance has also been running the numbers in terms of the that this blast will have on the economy. The blast may deepen lebanons recession from 15 to 24 . This is a country that was already struggling, and it is pretty clear that there is seismic change that is needed. Weve seen the blast. It has shaken the entire country. Now that needs to reverberate through the political class. Itll be interesting to see what role the french will play after mr. Macrons trip last week. Alix coming up on this program, colleges and universities are now set to open. We will discuss the cost up occasions of Remote Learning with michael ashton, Enduring Investments managing principal. This is bloomberg. Alix live from new york, im alix steel, with guy johnson in london. This is bloomberg markets. It is that time of year when students prepare to head back to school, and classroom will definitely look different this year. We will take a look at how the virus is impacting various aspects of schooling around the world. Today we look at the cost of college and student debt. Some colleges and universities have offered a reduction in tuition, room and board as a way to appeal to students being offered Remote Learning. Joining us now is michael ashton, Enduring Investments managing principal. Youve spent a lot of time looking at inflation and how to protect portfolios against inflation when it comes to college tuitions. Do they go higher or lower from here . I am struck across the board by Ivy League Universities cutting tuition by 5 , 10 . Michael the colleges, like every other service having to deal with covid19, are facing the same kind of problem on cost side. It is just a much more laborintensive production to go offer in Person Learning. So colleges already have this sort of natural cost pressure, but unlike with a lot of other services and goods that youve started to see prices rise, colleges really cant increase their prices because they are changing products. The in Person Learning is not the same as virtual learning. As a consequence, youve got caught betwixt and between, trying to decide what product they will offer. Those have different prices. How different are they, michael . How much less is Online Learning , how much less valuable is it then in Person Learning . How can we quantify this . Collegesthere are some that have historically offered both in Person Learning and elearning degrees. One example is Arizona State university. State offers virtual degrees, their online degrees that cost about half as much as the in person. [indiscernible] if you find out it at the same price, or maybe percent cheaper maybe 20 cheaper, that means the real price went up a lot. So even though you are seeing lower sticker prices from these universities, they are offering a lower quality of goods. Actuallyly means it is a higher price, and that is why you are seeing more kids take cap years and things like that rather than take what they feel to be an inferior product. Alix that is interesting. I wonder if you walk that outcome, does it get more inflationary on the sticker as those students come back from their gap year, and as it seems like theres a lot of money being thrown at schools to fix things, and they have to recoup those losses in some way, comefically when sports in . Michael we have to keep in mind that covid is hopefully a oneyear thing, but some of the social distancing and other aspects may stay with us for longer. But this may actually reduce a peoplee effect that some have been looking for for a long time, and that is a differentiation in the cost of different degrees because if you think about it, there are some learned t can be can be elearned reasonably effectively, and some that cant. It may be that you can learn languages in a virtual setting fairly well, but chemistry, you probably cant. It is hard to see things go boom on the screen and get the same impact. So it may be that what colleges and up having to do is offer a different range of prices depending on what degree you have going forward. That probably makes good sense. It hasnt been the way the model works in the past. Guy quick question. I am wondering how employers are. Ooking at this how important is it that you an input degree versus a virtual degree . Michael this going to be a range of answers to that, and again, i think it goes back to what they degree is. I can tell you that for the same degree, two equally qualified candidates, one that has an inperson degree and one that has a virtual degree, the inperson degree is a lot more valuable to me as an employer. Partly it comes with the socialization aspect of the inperson College Experience that is important, but theres also lots of learning that goes on outside of class. Chasing down professors and sitting with your mates and talking about things, talking through problems, that are just much harder to do online. Athink if you are hiring for translator, it probably doesnt matter nearly as much as if you are hiring an engineer. Think probably in most cases, it makes some degree of different. Herbalst so many pond in this issue right now. I suspect it will take a few years to all come out of the wash. We really appreciate your time. Thank you for sharing some of it with yesterday. Michael ashton of Enduring Investments, thank you very much. This is bloomberg. Guy welcome back. Youre watching bloomberg markets. I cant talk today. Its too hot here. It does seem as if we now have in lebanon that the whole government has resigned. This following that massive blast which devastated the country and will have effects. Ing this has been part and parcel for some time. This was a known risk, and no one in government did anything about it. Alix i also wonder how you move on from there. Theres been tons of protest. Government officials havent really even set foot where the blast was because there has been so much anger over it. Even if you get government that has some sort of confidence of the public, now what . Theres also the covid issue, as well as the economy that was sinking to begin with. I just wonder what kind of leader the public is going to need to see to have any confidence in that government. Really tricky to see where help could come from. This is a country that desperately needs help right now. Who is going to step up on an international basis, on a regional basis to provide that help . This is obviously a difficult art of a difficult region to deal with, and it was becoming more difficult as well. So this has just been an accelerant in terms of all of those kind of issues, and has brought them to a head. But as you say, the vector, the direction in which the country goes in is really difficult to call. Horrorser vividly the that this country experienced in the past. You just hope that we are not going back down that kind of road. Alix check this out. Lebanon appealed for International Relief after the explosion, and they just got about 300 million at a virtual donors conference, but the estimated damages are as high as 15 billion. Who is going to plug that gap . Guy yeah. Youve got to hope that at some point, we do put this country back on stable footing, and you would have thought that it could be a good investment for the region and the world to make sure that happens. Alix it looks like it is going to be right at the imfs feet again. We will assess that in the next hour. Cfo coming up, saxo banks will be joining us with his take on politics in the markets. This is bloomberg. Alix live from new york, i am alix steel with guy johnson in london. It feels like august in the u. S. The s p really flat. It is the cyclicals, you have energy, industrials, materials leading the way. It is monday in august. Lets trade it. Definitely monday. The nasdaq i was a bit surprised about. The nasdaq now down 1. 4 . Is why weteresting are seeing an incredibly low august volume in europe the volume on the ftse 100 is down the nasdaq is trading on a 100 day average basis upon the volume, but down 1. 5 , which i think is interesting. The s p is only down. 5 . The u. S. Markets are begin

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