Transcripts For BLOOMBERG In The Loop With Betty Liu 20150508

Won reelection. The labour party not. They likely will have to form some sort of Coalition Government with the Scottish National party. There he is. Arriving at 10 downing street as i mentioned, with his wife. He will be making further remarks on the future of the u. K. We will be hearing you any of his comments bring you any of his comments as soon as they cross. In the meantime mcdonalds april Sales Numbers back in the u. S. , just crossing. I want to get straight to the breaking desk with julie hyman for details. Julie these number are not as bad as analysts estimated, but the beat is coming from outside the United States. The company has not yet seen progress here in the u. S. Overall, the global samestore sales number was down half what analysts estimated. A drop of zero point 6 . In the u. S. , the decline was deeper down 2. 3 , exactly in line with what analysts predicted. Looking at the beach, it is coming from outside beat it is coming outside. Exley rising 1 . The estimate was 2. 3 . In asia, sales fell 3. 8 . The estimate was for super drop of 5. 8 . Steeper drop of 5. 8 . Steve easterbrook saying in a statement as you know, he does some revamping recently. His turnaround plans he announced were not quite 80 what investors were hoping for. More sort of a restructuring than a revolution. Nonetheless, some analysts are optimistic that some of his efforts will start to bear fruit in the United States. It is not happening yet. Betty reflective of a premarket, not as bad as we expected here with mcdonalds. Thank you so much, julie hyman. Lets get to other top headlines. The Prime Minister of greece expressing confidence his country will avoid default. He told the Greek Parliament a deal with International Creditors is near. His finance minister says hicks said expects the bailout deal with it two weeks. Verify says greece will go down to the wire. It will it was a frank and from the meeting. We basically discussed about process and i encouraged the greek government to come out quickly with a consistent reform package that can be shared with the eurogroup and therefore can be approved and therefore solve this problem and allow greece to go on toward a longerterm issues and programs. Betty European Finance ministers are will discuss again on monday. On a role in the iran nuclear issue, a bill that would give congas a stay in his such deal passed in a 981 vote. Talks aimed at stopping iran from building atomic weapons are in the final stages. The Foreign Relations Committee Chairman calls it a milestone. It is a first time in eight years that ive served in the senate than i can remember congress asserting itself and taking power back that had already been granted to the president. Betty the only dissenting vote was by tom cotton of arkansas. The bill goes to the house. President obama says he will sign it. Uber reportedly was a better way to find its way around. The New York Times says the Writer Company bid 3 billion for mapping business. Three german automakers are also bidding. U. S. Look to the skies to mark the 70th anniversary of victory day. You can watch the flight streaming live i going to uv svets. Tv. And those are your top headlines this morning. Another top story, a top headline, the april jobs report due out in just half an hour. According to economists surveyed, likely adding 230,000 jobs are workers to payrolls last month following an increase of just 126,000 at the end in march. That was a the smallest in more than a year. Joining us with a preview. As you have written with your colleagues so well, this is sort of i will dont want to say do or die because it is not, but it is whether we are going up or down. It is a moment of truth for the labor market. A lot of was for customers got a shot across the bow forecasters got a shot across the bow. I think they may be missing the Bigger Picture that the factory sector is indeed slowing strong dollar part of the story. We saw a big regulation of inventories in the First Quarter. When inventories build and in factories tend to pull back further. That tells us that were off to a slow start in the early month of the current quarter. Jobs data, i believe, are likely to confirm that. And we will see march was not an anomaly. Betty you believe it will not be an anomaly. Right. We will be stronger than march, but i dont think a strong is the consensus is expecting. If we look back, and this was a big mess by the consensus in march, in the past, when we have seen the big misses the consensus doesnt learn a lesson right away and you tend to have another miss in the same direction the next month. I think the risk is here that we will fall shy of the 230000 the consensus anticipates. Betty you point out we may hear the fed thinking premuch after the numbers, because at 9 40 5 dudley speaks. He is speaking on community banking. He can reflect on the jobs data. We wont have long to wonder what the feds interpretation of labor force participation, Unemployment Rate, and the headline jobs betty if the numbers come in and there is a death or big does another big miss what do you think the feds thinking . Wondering if even moving in september or later this year is still in the courts. The feds china sell the notion of a one and done or two and done approach to rate hikes this year, but if we see more evidence the economy is really struggling against the headwinds, then another primary issue for the labor market, then they may have to start even talking down september. Betty maybe forget september and just look out to 2016. Karl, thank you so much, Carl Riccadonna chief economist for bloomberg intelligence. Her top story David Cameron arriving at 10 downing street. His conservative Party Winning a stunning majority, claimed the path for cameron to remain Prime Minister. Joining us with the latest is Caroline Hyde in london. A pretty big result. The labour party not going as big as we thought, not winning the day so what happened here . Caroline you said the word stunning. The poles got it wrong. Instead, we see before David Cameron. He will be taking to that lectern soon showing the campaign bringing the economy back to strength was vindicated. He is the winner. He is saying it is the sweetest victory of all. The markets are refork euphoric as well. This is the center right party. This is a party that promises lower Corporate Tax that also helps with other tax rates, and heard its tax laura, less regulation inheritance tax lower, less regulation. Clearly, a majority, just makes it that much easier to govern. While they will be raising their price of beer in the pubs, labor supporters will be drowning their sorrows. Three resignations. The resignation of the Opposition Leader party, also the resignation of nick clegg and of course, nigel for rush did not win his seat either. He also has stepped down as the leader of his party. Meanwhile, massive victory in scotland. The s p, nationalist party, winning that. Betty might they join together . No. But David Cameron has got to play to the snp and talk to them in a speech were about to hear. He has the outright majority. He doesnt need the snp undecided govern, but theyve won all but three seats in scotland. They have 56 out of 59 seats. Weve only just a month ago managed to keep scotland as part of the u. K. What does this mean for the United Kingdom . Will it remain united . Will they insist on a referendum of making scotland independent . In the big question for the markets going forward, weve already heard from the Rating Agency moodys saying this, their word about the Eu Referendum David Cameron has promised. This is how he came in with a campaign, how he fought off the United Kingdom independence party, by promising referendum by 2017. That now is the key uncertainty that businesses face. Could the u. S. Could be u. K. Exit the eu . He really has to woo the electorate and say, i will make changes with our relationship and make it better for the United Kingdom, but we will remain part of it. Many businesses are going to be looking at this. Today, euphoria and a majority. Laura Corporate Tax rates. Stocks are up. And so is the british pound. Betty the markets do seem to like this victory. Caroline, thank you so much will stop thank you so much. We are waiting for David Cameron to speak at any moment. He arrived at 10 downing street just moments ago. Still ahead, were getting closer to the monthly jobs report. We will hear from someone who has been optimistic about the state of the u. S. Economy and about jobs. Roger altman, the founder and chairman of ever gore. Plus, nike is a message for congress. When it comes to the trade deal just do it. Betty Prime Minister David Cameron speaking in london. Have seen that service cut short. Ed miliband wished me luck this morning with the new government. It was a typically generous gesture from someone who is clearly an Public Service for all the right reasons. The government i lead did important work. It laid foundations for a better future. And now we must build on them. I truly believe we are on the brink of Something Special in our country. We can make britain a place where a good life is in reach for everyone who is willing to work and do the right thing. Our manifesto is a manifesto for working people. And as a majority government, we will be able to deliver. Indeed it is the reason why the majority government is more accountable. 3 million apprenticeships, more help with childcare, helping 30 Million People cope with the cost of living by cutting their taxes, building homes that people are able to buy and own creating millions more jobs that give people the chance of a better future. And, yes, we will deliver that in a referendum on our future in europe. As we conduct this vital work, we must ensure that we bring our country together. As i said in the small hours of this morning, we will govern as a party of one nation one United Kingdom. That means ensuring this recovery reaches all parts of our country from north to south, from east to west. Indeed, it means rebalancing our economy, building that northern powerhouse. It means giving everyone in our country the chance so no matter where you are from, yet be opportunity to make the most of your life. It means that for children who dont get the best start in life, there must be the nursery education and good schooling that can transform their life chances. And of course, it means bringing together the different nations of our United Kingdom. I have always believed in governing with respect. That is why the last parliament we just all power to scotland and wales and give the people of scotland a referendum on whether to stay inside the United Kingdom. In this parliament, i will stay true to my word and implement as fast as i can the devolution that all parties agreed for wales, scotland, and northern ireland. Governing with respect means recognizing that the different nations of our United Kingdom have their own governments as well as the United Kingdom government. Both are important. And indeed, with our plans, the governments of these nations will become more powerful with wider responsibilities. In scotland, our plans are to create the strongest of all government anywhere in the world with important powers through taxation. And no constitutional settlement will be complete if it did not offer also fairness to england. When i stood here five years ago, our country was in the grip of an economic crisis. Five years on, britain is so much longer. But the real opportunities lie ahead. Everything ive seen over the last five years, and indeed during this election campaign, has proved once again that this is a country with unrivaled skills and creativeness. A country with such good humor at such great compassion. Im convinced if we draw on all of this then we can take these islands with our proud history and build and even prouder future. Together, we can make Great Britain greater still. Thank you. [applause] betty as you were just listening to, that was u. K. Prime minister David Cameron talking about creating a better improved u. K. It is euphoria with the conservative party victory. The markets have been reacting pop quite positively to the news. Those were his remarks. Lets take a look at some other top stories we have been following. Baltimore police facing a Justice Department investigation. The mayor asks federal officials to find out if the Police Department is committing civil rights violations. An announcement expected as soon as today. Rioting last week after the funeral of a black man who died in police custody. Nike is a message for congress when it comes to the big asian trading, just do it. President obama will push for the deal today when he visits nike headquarters in oregon. Nike says it will make more products in the u. S. Of congress oks the deal. The company says that would create up to 10,000 jobs directly and tens of thousands more for construction and supply companies. Much more on nike and the trade of coming up at 10 00 eastern time with nike president and ceo mark parker. We are than 15 minutes away from the aprils jobs report. Expected to show 230,000 payroll added for the month. Someone who has been more optimistic about the health of the us economy than its counterparts, roger altman, founder and chairman of evercore and the deputy treasury secretary under president bill clinton. Roger joins me now. How are you . We were just speaking with Carl Riccadonna who says he feels it is going to come in a little bit worse than the estimates. Maybe much worse than estimates. If that happens, are you going to reassess your outlook . I think it is an unusually important number for markets because of two things. One this big important debate about whether the slowdown was on the First Quarter is transitory or signaling a wider and longer slowdown. Markets seem divided on that. If the number comes in as expected, 230,000 or so, that would seem to confirm it was transitory. If it is weaker betty the all clear. Were seeing so much volatility in fixed income markets, currency markets, and oil markets. Remarkable volatility. A huge selloff in bonds until the last few days. Stronger prolonged dollar strength. In the dollar has retreated. Then the dollar has retreated in the last few days. Oil prices has risen further and faster than expectations. It will be more important than usual in terms of Market Reactions. I dont know with the number is going to be. Im hoping it is in line with expectations. Especially that we see continuation of the wage growth that has finally manifested itself. Betty for you just to optimistic gekko one always has to be willing to reassess. What the factors underlying were in slowdown. Or whether they suggest verizon aspects various aspects. We have to wait and see. Not just a number, but the reasons. Is the weakness concentrated in the Manufacturing Sector . Back to pertain to the stronger dollar weve seen for most of the year. Betty stay with me because we are much more to talk about. Not just jobs, but trade. David cameron. Betty roger altman from evercore staying with me. We have much i had as we count down, less than 10 minutes away from the jobs report. What do wages really tells about americas implement a picture . Alan krueger will join the conversation with roger and me. Wasnt that the name of a film . We will be back. Betty you are watching in the loop. Good morning, im betty liu. I want to welcome our global viewers joining for jobs day coverage here in the u. S. It is that important. Were less than five minutes away from these job numbers as president obama takes his trade policy push on the road to nikes headquarters. Many critics are calling trade a jobs killer, including for my senator Bernie Sanders who wrote a letter to the president still with us is roger allman, the founder and chairman of evercore who is in favor of the trade pact. In joining us now is alan krueger, professor of economics at princeton and the former chief economist at the department of labor and also the what else Council Economic advisers. White House Counsel economic and visors. I know you arent friends so i will stay out of the conversation. Youre also working on infrastructure. Lets talk trade. Bernie sanders is echoing much of the Manufacturing Sector in the u. S. Where they say free trade is going to kill jobs will stop what do you say to that . I think our manufacturers can compete with anyone. I think what will help them as a level playing field. I also think that trade agreements help by making our manufacturers more productive. We need fair trade. Acting manufacturing i think manufacturing would hurt competition with china, but this is a different type of agreement being discussed now. The transpacific trade agreement. You dont see too many fort in tokyo. I think there is more opportunity to export to japan. Betty do you feel the same way . Yes. The politics of traitor complicated, but they include the deep misunderstanding to the difference between the effects of globalized trade itself versus the effects of trade agreements. So you hear elected official after elected Officials Say look at the jobs we have lost to china. I was looking at an analysis the other day m. I. T. Dead did which includes 21 of the manufacturing jobs we lost for reasons of trade, effectively displaced by china. But we dont have a trade agreement with china. So that doesnt that is not about a trade agreement. Trade agreements have made trade more controlled and more fair. Betty if we had a trade agreement with china, because tpp does not include china do you think our balance would be much more in our favor if we had a freetrade agreement . I think that is a long way off. The deal being discussed now, i think would surly be in our favor. I think if we back away, china will have much more influence in asia, which is not necessarily in our interest. Also the passage of trade Promotion Authority and the signing of the actual tpp and if that came into effect him a it will be very close and our congress, would put pressure on china. We will see how much, but pressure on china to ultimately join this agreement. Betty are you surprised by how Many Democrats have turned against the president on this . No. Historically democrats have typically been more opposed to trade agreements that favor them. For example, nafta passed with strong republican support and few democrat votes. I think democratic support for this agreement appears to be lower, even than some of the other agreements. Historically, in the modern era, democrats have not liked trade agreements. Betty so it is status quo. Organized labor has opposed them. And that is just the reality of the world we have. If this passes, it will be with a Strong Majority of republican votes. Betty what about the argument by senator warren that any trade agreement will water down wall street regulations,. Frank . Of weve seen the administration take as firm a stent is possible. I dont consider that much of a threat. I dont, either. I dont think the tw are related. Obetty scaremongering . I dont know what her precise thinking is, but her point is we should not water down dodd frank. I dont because agreement has that effect. Betty we are about to get the april jobs report. Moments away from a senior markets correspondent julie hyman will be monitoring the immediate Market Reaction to these numbers. And our chief washington correspondent peter cook is right outside the Labor Department. Peter 223,000, dropping to 5. 4 percent. This is a report pretty much in line with expectations. We did have march turning out to be even worse than we first have reported. Wages moving higher, but not at the pace many would like to see. To wonder 23,000 jobs, right in line with expectations 223,000 jobs, right in line with expectations. 39,000 jobs from the previous month, only added 85,000 in march. Something clearly happened in that month. The threemonth average is 191,000. Six month average, 200 55,000 jobs per month. The on a planet rate, 5. 4 , the lowest we have seen in seven years Unemployment Rate 5. 4 , the lowest weve seen in seven years. The number of employed in the household survey, of 192,000. Unemployed dropping by 26,000. This is a good improvement in the Unemployment Rate. 10. 8 , the lowest number we have seen since august 2008 as well. Who is hiring . Professional and business services, up 62,000. Construction, a big pop, up 45,000. A lot in the specialty trade, a lot of rehab worked at johns, perhaps. Health care up 45,000. On the negative side, the Energy Sector. Mining down 15,000. We have now lost 49,000 in the Mining Sector alone that includes oil and gas extraction. We saw last month in terms of some negative numbers, manufacturing pretty much flat, gain of just one. Wage front up 0. 1 hourly. There was a next rotation of 0. 2 . There was the expectation of 0. 2 . March was revised down to 0. 2 . Not the kind of wage pressures some people are hoping for. This report overall right in them with expectations. Back above 200,000. Is still enough question marks for the fed to wonder whether we are completely surging ahead. Betty i think there is reaction that, oh, it is not as bad as we thought it was going to be. And now there are weston marks about what some of the details mean question marks about what some of the details mean. Julie were seeing dramatic reaction in some of the asset classes. But you do see futures which came up and are now coming back around the level they were before. This reflects the line of thinking you were talking about. The initial euphoria, if you will looking at the headline number because even though, yes the average estimate by economists was that a certain level, there were a lot of folks estimating below that level. The fact is eminent above was reassuring to some investors. Within the revision downward as well as the wage growth concerning to some investors. That is probably reflected. If you look at what is happening with yields and what were seeing at this point in time whether youre seeing that reflected in the treasury market, whether you are single reflected in the dollar, there we are seeing a little more dramatic reaction. Yields bumping up a little bit. If you see a very little bit. If you look it currencies, the euro, we saw picks bike in the euro and a big spike down in the dollar. I guess you would not call it a spike posta drop off in the dollar. Were seeing outside of stocks, dramatic reaction. One more to point out would be in gold prices, which goes handinhand with what we saw in the currency market. But that may be tempered as people take a step back and start to dig through this report and try to figure out exactly what it does mean for the fed. Initial read, ok, the fed can go ahead and raise rates and that his people to go step back, maybe that is not exactly what it means. Betty hang on, i want to bring in alan. I think this is a solid report. The topline jobs number is reassuring. I think that is the main take away from the report. Underneath, professional business services, strong throughout the recovery. Bounceback and construction suggest march was an anomaly partly because of the weather. Labor force participation ticking up, unemployment ticking down. That a solid news. The wage data are disappointing. I put more of my weight on the employment cost index when it comes to wages, but i still like to see this measure rise. I think we can breathe a sigh of relief that march was mainly an anomaly. Betty and in your mind, this means the fed to raise rates in september . I think that is probably the most likely scenario. I think that will have a lot of data between now and then. They will look to make sure they are confident that inflation is headed to its 2 target. I think this doesnt delay the actions they were likely to take. Betty roger, youre off the hook. You dont need to reassess. What a relief. I agree with alan. It is more reassuring than not, but will ultimately need stronger results than this. We need to do better than give or take 230,000 jobs a month. When you see the number at 10. 8 tells you the labor market is relatively slack. Theyre getting less slack and alan has a view, which i think its fascinating that ultimately, we will run out of workers. I rather agree with him. It is more reassuring than not, but isnt really strong. Betty it is in. The wage part is puzzling. If we are continuing to see improvement, why are wages sort of stuck at these levels, right . I think the main driver of why it is been so weak inflation is been so weak. If you look at real wages after subtracting inflation, there actually growing at about the level you would expect given the Unemployment Rate of 5. 5 or so. Nonetheless, the raises the question, why is inflation so weak . Betty whitey put more into the eci . It is designed to him to design go back to the same from every quarter. You ask about the same set of jobs. It is very much like cpi except wages. It is a more accurate measure. Betty peter, yet more data on how oil prices affected jobs. Peter this is a wildcard. Weve seen some improvement. We have lost 49,000 jobs. So far this year, wiping out all of the gains we saw from 2014. Theyre shedding jobs. I expect that will put downward pressure on investment in the sector. Betty julie has information. While we were talking, asset prices are back to where they were right before the numbers. Julie theyre back to where they were or in the case of yields, were actually seeing them lower, which is an interesting reaction. Take a look at the 10 year. We saw the yields spike a little bit. Right after we got the jobs report. Then we saw them start to come back down. They have now gone even lower. We are now seeing the yields on the 10 year right around 2. 14 . That does represent a drop in yields, at least from yesterday. Interesting reaction. Take a look at what is going on in the dollar. At first blush, people thought, well, maybe this means rates are going up, but then coming back down. If you look at what happen in the stock futures, similar trajectory. A little bit of a pop up, but then came right back down again. This sort of roundtrip as people try to assess these numbers and what they mean. Betty roger, what you take away from this . That is exactly what you would expect. The number came in right on top of expectations. Erratically, markets should be unchanged. Betty so we saw a kneejerk reaction of the moment and then everybody is realizing, well, the number only came out five or six minutes ago. Markets should be relatively unchanged. By the way, in terms of energy, the thing to look at from the jobs point of view in the Energy Sector is the rig count, not the oil price. It has been falling every single week for many, many, many weeks. Rigs deployed, the fewer people devolved if you are rigs deployed, the fewer people involved working on them. Betty thank you so much. Roger, thank you for joining us on this jobs report. Roger allman, chairman of evercore and alan krueger, thank you as well, Princeton University economist and former White House Council of economic advisors chairman. Thank you to peter cook at the Labor Department was going to stay on top of this jobs report as well as julie hyman on the Market Reaction. Much more to come because we are going to get the republican reaction to the jobs report. Commerce kevin brady will be joining us live from texas in a moment. What does the Obama Administration have to say about the jobs report . We will get the president s chief economist on as well. Jason furman is joining in the next hour. All over these pretty much in line jobs numbers. We will be back. Betty as we were just talking about the labor report for april, were all digesting the numbers. The headline figure 223,000 jobs created last month. That was pretty much in line with estimates. You heard alan krueger say this is a solid report. We will be getting reaction from the white house and the next hour. First, i want to you from the republican side. Were joined by congressman kevin brady from texas. You have been so critical of the white house and the democrats for not creating as many jobs as we should. Alan krueger says, look, this is a solid report, not much to criticize. Do you agree . Well, i think we have dumbed down our expectations. I love any month we are adding jobs. That is good news. Unfortunately, the economy is still stuck very much in second gear. We are much more capable of a healthier economy than this. Labor force participation is still at a 30 year low. The number of adults in the workforce in perspective isnt even back to where the recovery began. We have lost ground in that area. The recovery overall is barely half of what an average recovery should be. So my point is if your car is running for 60 months in a row the what else will say theyre adding jobs 60 months, they can only go 20 miles per hour, is that satisfactory . My point is, we can do better than this. Betty you are in oil country in texas. Weve seen oil jobs get decimated with the fall in oil prices. What are you saying to your constituents to try to get those jobs back . We know oil cyclical in nature. I dont think energy got the credit it deserves for the economic recovery. I think it is having an impact clearly, on the economy. But it is growing strong. Going strong. Reducing strategically. They know theres going to be a bounce and rebound from this. But if you look at your overall numbers, it is Capital Investment around the country that is the biggest rack on the economy. Businesses are not investing in new building equipment and software. That usually drives jobs on main street. I think that is one of the most troubling parts, frankly, of the whole obama recovery. Betty speaking of obama, i understand you are in favor of the tpp. How do you sell that to your voters that the trade agreement is not a jobs killer and not going to cost people their wages . Well, i tell you what. You want a solution to this slow recovery, it would be more trade, less red tape to encourage investment in a new tax code built for growth. We could start in the next few weeks by getting back on the trade feel this field. Cant test countries we need to be doing more of this, not less. I want to tear down the american need not apply signs around the world. Let our companies and workers and farmers compete. We know it creates jobs here in the United States. Betty how do you sway those who are skeptical, including members of your own party and the democrats to get this through the house . I will tell you, the president will have to step up. I think hes done a good job, frankly, the senate tried to draw support, despite the obstruction of harry reid. He is a lot more work to do in the house. At the end of the day, we are to pass these new rules on trade. If america doesnt lead, we will grow weaker. Our competitors will grow stronger. And we are going to lose jobs here at home. At the end of the day, im confident while it will be close, we will lead on trade again. Betty thank you so much congressman kevin brady from texas with the republican reaction to the labor report. Staying on jobs, i want to bring in our Bloomberg Radio colleague speaking with bill gross. Theres begin right now about fed chair janet yellen. The tantrum affect. Ive suggested that all asset prices are bubbled. It is just a question of whether they continue to be inflated by Central Bank Check writing. It is a little surprising from janet yellen. Maybe she got frustrated from ben bernanke blocking every other day and taking the spotlight, i dont know. Our bonds and stocks overvalued . Certainly. How overvalued depends on the feds ability to generate in my opinion, 4 to 5 nominal gdp growth. And what the new new 4 neutral policy will be. I think it is 2 . If im right, treasuries can return your coupon without a bear market. If the fed is right, watch out. Her comments in terms of risk were echoed two or three years ago by the fed. I wondered why after two years of trying to tamp and down for agility that all of a sudden, just volatility, she said come along bonds are too low, stock prices are too high, risk spreads tom this is critical. Mike mckee, on the same check. No gross, have you ever seen fed governors, president s chairs can equity and bond markets like we are seeing now . Are they supposed to be in a prediction or valuation business stocks . Well, they werent supposed to be, but they have been for at least six or seven years since i do believe they believe not just the fed, but the doj and the ecb, the asset prices primarily equity prices are a reflection of potential growth. Wealth trickles down in their opinion and pretty slowly, in my opinion. It in their opinion, asset prices, and that includes stocks and highyield bonds are important to the real economy. Quickly, the real economy is not taken the bait, has it . Investment in the economy has not been the recipient of the trickledown as a prices or the financial market, so there is the conundrum and the problem as they have to somehow get the two together or else the potential bubble making will have a real effect. Mike lets talk about this. Youve seen the volatility driven by what is going on in europe, driven by supply questions. Should investors be demanding more compensation for taking Duration Risk now that you have these lopsided supply demand and balances and yields are rising anyway imbalances and yields are rising anyway . The quiddity is not what it was. The spread you pay as much wider now than the spread you pay several years ago because regulation is not necessarily that is the way it is. It is the same thing in terms of duration. I suppose. Although, i just talked in the past five or 10 minutes, i think duration of the moment is fairly well priced. There is no doubt the liquidity is going to be a problem for all markets going forward. Tom you are way out front on that. The mask is the money question. Your produration hedges fancy derivatives strategy betty tom keene and mike mckee speaking with bill gross on the reaction to the labor report what it means for the fed. Gross reiterating his view on the fed. Heres a look at our top stories. While beating firstquarter estimates, having to post another website got a boost from increase Global Advertising. Profits came in ahead of projections. Revenue up more than 7 . Aol expanding its Digital Advertising business. Almost half the online display ads at its website are sold through automation. Tim armstrong will be joining us in the next hour on in the loop. The Worlds Largest maker of agrochemicals is projected to 45 billion takeover offer from monsanto. Syngenta says it undervalues and would carry risk. And we will have much more ahead. Barack obama crossing a big item off his bucket list to become the fourth president to visit every state while in office. That story much more coming up. Betty much more ahead. Uber wants to branch out, willing to spend billions to buy one of the worlds biggest digital mapping services. That trini thing, fitzpatrick, plans to go public. We will be back. Futures indicate stocks will open higher. Wall street is studying the jobs report out about half an hour ago showing a rebound in payroll growth last month. Last month was also worse than what was reported. David cameron is planning major steps for the u. K. He is outlining his agenda today after scoring a surprise election victory. He says he will cut taxes, defer powers to scotland and wales. 3 million apprenticeships more help with childcare, helping 30 Million People cope with the cost of living by cutting their taxes building homes that people are able to buy and own. Creating millions more jobs that give people the chance of a better future. And yes, we will deliver that referendum on our future in europe. Betty his conservative party won a clear majority in parliament and easily defeated his opponent of the labour party. He can drop his coalition and the Scottish National party won all but three seats in scotland almost shutting out the two major parties. The primus tro greece today is expressing competencies country will avoid default. He told the greek element there are no more technical reasons for europe to withhold aid from greece. His finance minister says he expects a bailout deal within two weeks. He says greece will go down to the wire to settle the standoff. The italian finance minister sees progress in the talks. It was a very frank and friendly meeting. We basically discussed the process. I encouraged the great government to come up quickly with a consistent reform package that can be shared with the euro group and can therefore be approved and therefore solve this problem and allow greece to go on towards a longerterm issues and programs. Betty the European Finance ministers will discuss the crisis again on monday. America will look to the sky today to mark the 70th anniversary. World war ii planes will fly over washington, d. C. And you can watch it Live Streaming live. The german surrender to the allies was on this date in 1945 and those are your top stories. I want to return to David Cameron on returning retaining his grip on the Prime Minister in the u. K. After the stunning election win. Carolyn hyde joins us from london. Stocks here continue to rise on this jobs report and the markets there applauded what happened overnight in the polls. Caroline it is euphoria in the market when it comes to british bonds and british stock particularly the banks rising. It was a stunning result, the polls got it wrong, a conservative majority. The conservatives are the center right party and probusiness. Business leaders like this result because it means no regulation and no newer Corporate Taxes. The market is rallying because David Cameron has a second term and wins it out and out with a majority in the houses of parliament. He can now drive forward and thats with the entire campaign was based upon, keeping the growth in the United Kingdom economy. Many people are raising their pints of reddish l but you will probably of british l but youll probably have some drowning their son their sorrow spris. Betty now there is some uncertainty . There is a question about britains membership in the eu. You heard David Cameron say he is going to gauge how the voters feel about this. Caroline exactly right, we will be questioning how long this rally will last. Uncertainty is bound to creep in. Moodys is highlighting this. The question of the in out referendum. David cameron promised the u. K. In the you in the eu by the end of 2017. What does that mean for business . The other areas scotland, the other big winner. We have seen 56 out of 59 sees one by the nationalist party and they could question the scotlands membership in the United Kingdom. Betty thank you so much. We are under 30 minutes away from the start of trade so lets cant youre down to the open with the top eight headlines before the bell. Matt miller and bob emery are joining me. Matt its a random number . Betty we like to keep the viewers guessing. Number eight is uber who have submitted a bid for an app that is a mavs business with a price tag as much as 3 billion. Matt it seems like a waste of money for me. Bob google has a great mapping service. I am conjecturing that they want to get the best possible mapping system. Matt someday when we are this could happen. Betty i am not that impressed right now with ubers Mapping Technology because sometimes my car will say its here and one second later, it will be over there. Bob i love the little graphics for the cars moving down the road which is cool. Matt sometimes they take the wrong route to get you and they are late. Betty number seven is fit bit it has filed for an ipo and plans to list on the new york stock exchange. Sales of multiple blaster on the Company Posted a profit. I think they just want to get in the market before apple watch takes off. Bob it is a sucker ipo. Betty that is a really good conjecture. Matt i was stunned by the numbers that came out in a filing last night. Cory johnson looked over them and i was looking over his shoulder. He was quizzing us what would you guess is their annual revenue . I thought maybe 200 million. 750 million they made. Bob thats a huge margin. Matt how many did they sell . They sold more than 10 million last year. People are buying jawbones and all of the other things but they sold 10 million of them . Bob 40 of the users drop out within six months. Betty because they get fat and lazy. Matt they start out fat and lazy. Betty i mean they get fat and lazy. Bob i want to know what they will do next as an investor. Are they going to be able to tell me when to genuflect to our robot overlords . Betty i love that. Numbers six is spotify. The online streaming Music Service plans to enter the web video business to take on youtube and facebook. It has approached Multichannel Networks that specialize in creating an disturbing video. When is kmart going to start creating original videos . Matt i think kmart and jcpenney are definitely going to. These big retailers are creating their own original video. Betty its for a purpose. Matt this is probably good news for record labels and creators of content that would normally want to get paid. They are shutting down the Free Services on the internet. Groomshark was shut down last week and i have not shut down youtube and probably never will and thats the best place to get free music. You can get any song or album. When spotify comes into this, maybe they will being the they will bring the pay for content model. Bob my conjecture is that spotify can charge more for video ads then it can for banner ads and thats why they are doing it. Betty all right. Speaking about video ads earnings are out for aol and momentum is gaining in its advertising business. We will hear from the chairman and ceo of aol tim armstrong, next. Betty we are counting down to the opening bell. Its time for our deep dive at number five. Shares of aol are rising more than 5 in premarket trade after the Company Reported a firstquarter beat. They are benefiting from an increasing Global Advertising sales. Tim armstrong managed this after or reorganizing his sales staff in the First Quarter. Tim q1 was great because we had accelerated Revenue Growth and we did a great job and growing consumer traffic and we were able to update the structure of the company while we did those other things. It was a quarter where we improve the business while we performed in the business and that was a solid quarter. Betty i know you restructured the sales force. Is that done . Is there more to do . Tim throu q2 is what we are making sure is that that is put through the whole process of the changes have been made but we are making sure that goes all the way through our customers. There is to more work to be done but from q1 we have done a good job of making that change and connecting with the customers in the process. Betty you have said this so money times that you have put so much investment behind Programmatic Advertising. Why do you think that is such a big growth driver for aol . Tim Programmatic Advertising is focused on the same thing as what you do as a consumer. As the power of consumers with phones and Automated Systems which has improved everything from mapping to travel to commerce. That same ability in automation is now coming to advertising. We have been a big investor because it allows you as an ad agency or a client is to really have your people spend the time on the creative side of things and not so much on the manual side. It helps automate advertising and brings more data to the advertising part which makes the ads better and more effective and consumers like them better. It has been a flywheel for us. Betty how come more advertisers are not embracing it . Tim they are if you talk to the top 100 advertisers, about 58 of the customers are running cross screen campaigns and many of those are programmatically run. We launched a really large system which is the most up to date programmatic system in the world for advertising. We have some of the biggest advertisers and ad agencies using it. I think its a process of them migrating their old practices into the new practices. It will take time but we grew 80 in our programmatic space this past quarter so it is tremendous growth. Betty 1 i know video content is huge. We had a conversation with the ceo of vimio who says they are going into original content but it is paid premium content which is the right business model, not advertising. He noted that advertising is not growing. You are advertising heavy so what do you say to that . Tim vimio is doing a great job but mainly in the paid version of video. Thats like asking an eskimo if they like to go to florida. Betty is it . Tim we are in the business of advertising. The market is growing strongly and its projected by 2020 that about 40 billion from the tv advertising business will go to online advertising. Betty hang on, you dont see any potential in paid premium content . Tim thats not what you asked me. You asked me if the ad business was growing. I am a really big believer i Say Something different than the vimio ceo. I think the dual Revenue Streams of having great advertising and great a video content is where the future is. Im a big lever in paid Video Services and a big believer in appetizing. I think the combination of those two things will be really powerful. I am bullish on both. Betty before we go, i know you are big on Live Streaming. Do you wish you had put money in periscope . Tim i have used periscope around the office. I think its a really disruptive idea. Its not even spring training in that area. You will see us do more and more live video programming and that is a personal passion for us at aol. Betty that was tim armstrong, chairman and ceo of aol earlier. Ever had problems with an outdated Credit Report . Two big banks are taking steps to help more than one million americans. We will be back. Betty lets bring you the most important stories matt miller and bob every are joining me. Number four is bank of americas is looking to put to rest debt bills that are alive and Credit Reports. The move could provide relief to more than one million americans who have had to deal with marks on their Credit Report. Bob the reputation of the big ad banks we had them crash the system in 2008 and now the support from Sylvia Jessica greenberg. They have been accused of a Debt Collection tactic effectively holding Credit Reports hostage and refusing to fix the mistakes unless people pay money for debts they dont know. Matt because theyve gone bankrupt . Bob the debts have been swept aside legally in the banks want to make them pay. Matt what you are saying is that people who went bankrupt in the past will have better Credit Scores now question mark bob the banks will not be allowed to charge people for money they dont know. Owe. Matt they are not charging them for that. Betty i think the credit scoring thing is outdated. Bob i agree. Its more about them not being able to get jobs. Betty number three is a hedge fund facing 2. 7 billion in redemptions from its 5 billion fund. They lost 3. 5 this year through april. More than half of your money being redeemed by angry investors. Bob this was the hedge fund blue crest who are backing meredith whitneys venture. They were pulling the money out of their and we said this is bad news for her. We did not really think about blue crest. Maybe they needed that cash back. Matt or maybe they thought meredith is not doing very well and we need to cut our losses. Even though she made the right call and citibank. Bob before we were born. Before noah and the flood. Betty come on. Matt it was a great call and well documented. Bob as much as lou crest is having problems, i bet they are thinking champagne because David Cameron is still the Prime Minister. Betty whole foods is looking for a younger crowd. They are gearing up for a chain of smaller scale stores to bring lower prices. The new format will be unveiled this summer. They said it would be hip and cool and hightech. Matt i learned a lot from julie hyman yesterday. I thought the problem was that whole foods its such an Upper East Side or soccer mom kind of store. Apparently, they have them in williamsburg and on the Lower East Side and grungy kids with tears and tight jeans will not shop there. Bob they cant afford it. Matt its all about the price. Betty i feel like young people, younger people, are willing to pay more money. Matt for their kale. Betty exactly i think its the middle class thats not going. Matt you dont have any more money. Its expensive to shop there regardless of how organic and cruelty free the food is. Bob im picturing whole foods and their evil spawn going everywhere. Betty we are near the opening bell and futures are up. We will be back. Bob welcome back to in the loop. Get back to bringing you the most important stories you need to know before the bell. Joining us is mike. We were sick of matt miller. We want to bring in mike. Matt, go away. Our number one story, of course is jobs. Jobs report came out earlier today. 223,000 jobs. The lowest rate in seven years. Who is excited about this . Mike futures are going crazy. Its threading that needle between being not weak enough to make people worry and not Strong Enough to make people worry about the fed moving up the Interest Rate hike. Usually up is down on the stock market. Oh, no. They are going to raise rates. The market is down. Mike probably the Global Advisors really interesting work he does. He looked at it yesterday and said basically the bigger the miss in the jobs report, the better its been for the stock market. You kind of intuitively know. He put numbers to it. Its funny how it matches up almost identical. The bigger misses equal better stock returns over the next month. Bob well have well have to see. So the markets are just about to open in a few moments. Well see how they react l they carry on this rally . In the meantime i want to bring in someone who is huber bullish on stock. The chief Investment Officer of equities at federated. Steven, after the jobs report, where do you get your optimism from . Steven the whole week has been last two or three days has been we have seen counter in everything. U. S. Dollar, oil. U. S. G. D. P. Number which came off in the first, jobs reports establishes that. We are not falling off a cliff there, either. Those were what was giving the stock market cause at this 2100 level. Turns out its not as bad as people thought. Bob after today you think its clear . Steven now you have a period of stability on the dollar. The dollar grows higher from here. More stable. U. S. Interest rates have peaked in the near term. In the two 220 range now. The oil has established, i think, a nice range between 40 and 60. That might be the sweet spot foreoil. Good enough to keep growing, low enough for the gasoline tax dividend. I think we are in a kind of a really nice period for equities between here and the end of the year. Mike why do you think the analysts were so pessimistic about the earning season. I have remembered a lot of people said Energy Companies all cut their forecasts. Analysts are some degree beholden enslaved to what the company forecastses are. The first of lower oil hasnt done the opposite as much. Is that as simple as that . Stephen that and the dollar. The dollar, the analysts always have trouble with the dollar. People really overestimated the impact the dollar would have on the u. S. Exporters. They were bringing down numbers altering the First Quarter. December of the First Quarter, we were projecting plus 12 consensus for earnings in the s p. By the time we got to the end of march, we were i think minus three. It was a big downgrade. We are coming out better than that. In fact, x energy, the earnings were up 11 in the First Quarter. People really, i think overestimated. They overreacted. That gave stocks a plus along with everything else. But now we are looking through the end of the year. We think earnings probably end of the year 125 on the s p. More importantly, 135 next year. And on that basis, stocks at 17 18 times earnings, we think are pretty cheap. If you look at a lot of the large cap stocks, there is still a lot of value in this market. People think theres no value. Especially relative to bonds. Mike where do you see it . Stephen Consumer Discretionary macys, amazon. The health care names which had a nice bullback here, as have the discretionary news. The Health Care News have all pulled back. Gill yad trading at 10 times earnings. The tech stocks look good to us. And the financials. J. P. Morgan trading 10 times. Big beneficiary of higher rates and improving economy. I think i think people are pessimistic. 2008 2009 was a crisis. Everyone thinks we cant keep lasting. Bob you think we are haunted by what happened. Stephen i think we are haunted. Bob im haunted. I see you say clear sailing. I want to know whats the one rock up ahead that you are a little concerned about. I dont want to rain on your parade, but whats that one thing mike the iceberg. Stephen there are plenty rocks out there. One is china. A crash in china would be bad. Slow growth is fine. We are not big investors in china right now. Other than some of the smaller caps stocks. Generally speaking china is not a great destination for equities. But we do have a giant amount of money out there to engineer a soft landing. But a blowup in china would be a problem. We dont see it happening. Europe could blow itself up with greece. Bob you dont see that happening . Stephen i dont see that happening. I think the emerging markets have come through a rough time now. We are not overly bullish on emerging, i think we have kind of made through the worst there. I think we are ok. Bob whats amazing to mee, every time youre selling, somebody else is buying. Im the guy who is selling and youre buying. Stephen you have been doing that all the way up. You went all the way equities back in 2009. Good for you. Bob no. Betty go grab a pier. Stephen, thanks so much. Investment officers equities at federated. Thank you to mike regan as well as bob ivry going to the bell on this friday. Staying on jobs, jason furman, the chairman of the council of economic advisors, will join us to share his take on the april jobs report. Why wages have not moved up enough. Betty markets are rallying on this jobs report. The dow is up over 200 points right now. The jobs report coming out this morning. Just to reiterate again, 223,000 jobs created in april. The Unemployment Rate dropping to 5. 4 , the lowest level since may of 2008. I want to dig deeper into these numbers, get the white house reaction. I want to bring in jason furman, chairman of the White House Council of economic advisors. North lawn of the white house. Jason, great to see you. We had the republican take about an houring a. Congressman kevin brady, one of several republicans in the house, who is reiterating the g. O. P. Position, which is, look, jobs are being added. Grateful for that. But wages continue to stay stuck. How do we get wages going . Jason first of all definitely agree on the jobs. This is 62 straight months of job growth in the last year we have seen three million jobs added to the economy. The Unemployment Rate, you said at the top there, is nearly the lowest its been in seven years. That is just really substantial progress in our economic recovery. Thats a recovery thats continuing. We should all be excited about that. When it comes to wages we have seen wage growth over the last 2 1 2 years in excess of inflation. Consumers are able to spend more, so you have seen a general pickup over the last year in consumer spending. But theres no debate whatsoever that we can and should do even better on wages. Whats important though, is to figure out what we can do. Jobs in exporting pay higher than average. We are trying to have more of those jobs, the president s talking about that today. Infrastructure is a great source of jobs. Raising the minimum wage. Theres a lot of steps we can take to raise wages. Betty i want to talk about the trade agreement in a moment. Speaker john a. Boehner to reiterate this point about wages, he says wages stagnant wages combined with rising costs means the middle class continue to lose ground and the wage gap jason, in the United States is getting worse and worse. Jason lets put it in perspective. Wages grew faster than inflation in 2013. They grew faster than inflation in 2014. And so far in 2015 they have grown faster than inflation. Take those three periods collectively, and youre rising at about twice the pace of the realwage growth we saw in this economy from 2001 through 2007. So we are seeing faster wage growth now than the last recovery. But i agree its not fast enough. And that is part of several decade long problem we had with wages. We are making some progress on that several decades long challenge. But definitely agree we need to make more. Betty on the Transpacific Partnership, the trade agreement i know the president will be speaking on today, you have several members of both the republican and particularly the Democratic Party who are opposed to this. Say its going to be a jobs killer. Bernie sanders, the vermont senator, writing a letter to the president saying this is going to decimate manufacturing jobs. How do you sell this to congress . And the voters . Jason the president is out today on the west coast at nike. What hes pointing out there is that when you tear down the barriers to american exports that we face overseas, youre going to get more of those exports. Nikes committed to adding jobs if the Transpacific Partnership goes through. The types of jobs in manufacturing in the United States tend to be better paid. And so well have more better paid jobs if we have this trade agreement. Thats the argument the president is making today that he has been making and will continue to make. Betty how are you going to sway the democrats in particular to support the president . Jason the president tells them we understand. As he he said in the state of the union. The past trade agreements havent always lived up to the hype. Thats why we are trying to do a new type of trade agreement. One with higher labor standards hire environmental standards. The other point we make is that the American Economy is already very open. Our tariffs on average are only 1. 5 . 70 of the goods come into our country tariff free already. What these trade agreements are about are overcoming the barriers that our businesses and thus the workers they employ face when they try to sell overseas. We are really pleased that the past got vollingts from democrats votes from democrats and republicans from both the Senate Finance committee, the house ways and Means Committee is moving to the floor in both chambers. Betty can you guarantee that a new trade agreement is not going to depress wages though, here in the United States . Jason what i can tell you, and the council of economic advisors put out a report on trade a week ago, it showed a lot of the benefits in terms of better quality jobs making more opportunities for consumers, helping the labor and the environment. But heres what ill tell you. You know what . When we are done with the Transpacific Partnership, it will be out for 60 days. People will have 60 days to review it before the president signs it. Thats an unprecedented degree of transparency. And they can look and judge for themselves. We are going to be making the case. We are only negotiating an agreement that meets this test. People will have 60 days to look at it. Betty jason thank you so much for joining. Great to see you this morning. Jason furman chairman of the down civil economic advisors. Trading now, the markets are really liking what they have seen with the jobs report. Senior markets correspondentent julie hyman is looking at early action. We are up a third mcdonalds is up a Third Straight day. Stocks overall are up again today as well because even though as you were talking the jobs report looks relatively strong, but people are taking it away as strong report, Strong Enough to get that to rise once again. If you look at whats going on at mcdonalds in particular, that company is op the rise as well and thats after the Companies Sales last month on a comparable basis fell but fell about half of what analysts estimated. Julie even though there was a drop in the u. S. In match estimates, it did show slowing declines. So not quite so bad. In europe it saw a gain. In the Asia Pacific Region it saw declines that were not as bad as stumented. Take a look at invida as well. Large maker of chips for Computer Graphics cards. Gave a forecast for Second Quarter sales that fell short of analyst estimates. Its been hurt by the persistent slump in p. C. Demand. Monster beverage earnings and sales falling short of estimates. The company had to pay some termination cost to some of its partners ahead of its bigger partnership with cocacola. Betty thank you so much, julie. The breaking newsdesk. Staying with consumers nikes president and c. E. O. Ahead of his conversation with the president on trade. Hes going to join us. Much more in a moment. Betty president obama will be heading to nikes oregon headquarters on this friday, jobs day. Hell meet with the companys c. E. O. To discuss how proposed trade agreements will benefit u. S. Workers. Stephanie on the road. A lot lately. Shes sitting down with mikes chief partner. She join us now. Self good morning, betty. It is a big morning here in beaverton, oregon. As you said president obama is here. Hes sort of making the rounds. Really working on this t. P. P. Trade agreement. And nike really has come out in support. People well know that nike produces millions and millions of their shoes and their Athletic Apparel overseas. Vietnam is one of the countries that would be affected by this agreement. They produce 43 of their shoes there. Nike has come out and said they support this agreement and it would really help innovate and bring more jobs to the United States. Many labor activists are saying no way jose. There are already protestors when president obama made his way to portland last night. We heard from president ial candidate, independent bernie sappeders who is out there saying ridiculous. What we need to do is create jobs in the United States. If nike can sell lebron james shoes for 320, they should be able to make those shoes here in the United States without having these changes to trade agreements and tariffs. One could say that sounds great betty. People love to make the argument, these shoes are being paid overseas for pennies and sold here for hundreds of dollars. A lot more goes into making that suit. Im going to find out from mark parker all thats involved. If this trade agreement does go through what it will mean for nikes bottom line and innovating in the United States and creating jobs which we need so much of. Betty do they give any ipped cases how many you jobs this might how many jobs this might create . Stev we dont know yet. Its been a race to the bottom in terms of retail. Consumers want to buy the cheapest products they can in the world of walmart and amazon. They are asking for minimum wage to be waged. If youre mark parker you are walking that line and you have to figure that out. Betty stephanie in oregon. Market makers. Be sure to catch her full interview with nikes president , mark parker coming up on Bloomberg Television. That does it for today on in the loop. To all our loyal viewers these last eight years, there will be amazing changes on this net work we cant wait to show you. Part of the changes include my moving to noon to give your daily lunch time mark reports. Instead of breakfast, youll have lunch with me. Get your salad in front of the tv or mobile phone or ipad, whatever you do to watch in the loop. Starting monday hosting at noon. Bringing the latest Market Action news analysis, new time, new sleep schedule for me. It will be a great show. Join me. Have a fantastic weekend. See you back here on monday. Goodbye. We are coming up on 56 minutes past the hour. That means Bloomberg Television son the markets. Im julie hyman. Jobs day. Lets look at where stocks are trading and reaction to that jobs report. Julie we are seeing a rally across the board. The dow up nearly 250 points. The s p and nasdaq both better than 1 . Now, we did have the march job less rate at its lowest in quite some time 5. . The addition to a little lighter than estimated by economists. There was relief it was not a worse number. Its the end of the week as well. As we mentioned that means one thing. Only means that doesnt mean its the weekend. Bond t. F. Dtf got hit hard. Etfs built to profit when bonds decline. They are getting hit again today. Here to explain is eric. Bloombergs e. T. Analyst and resident expert on e. T. F. Its been really interesting in the bond market, right . There has been call after call after call for rates to go higher and thats when these kinds of e. T. F. s would benefit if im reading it right. Eric thats right. There are about two dozen e. T. F. s ready and waiting for rates to rise. We have seen this movie before right . Treasury gets sold off a little. Follows the overly dramatic headlines, selloff in the bond market, they get bought up again because of a bad economic number. If you look at the one i think is a great example, the proshares ultrashore 20year treshry. Two times the opposite of t. L. T. , the treasury bond everyone uses. When you look at this, it jetted up 9 earlier this wreak. Week. Its given it all back. In about 2007, this e. T. F. Has burnt through more money than any e. T. F. Tout there. Its taken in 9 billion since its inception, but only has 3 billion to show for it because its lost 83 over that time period. Whats interesting about that is because you have seen these little like the paper tan rum and variety of other minor versions of that, people have gone into this endlessly as insures to hedge their portfolio. Julie its not just insurance. Its insurance and then some. Eric hedge funds like to play tactically. The volume tillity of the bond market makes this an attractive e. T. F. But the insurance angle does come in if people put this in your portfolio, boom, its duration of negative 20 years. It immediately pushes all of your bonds and average duration down. Its almost like a bit of duration killer. It has been used. 3. 2 billion now. The trace has not been working. I imagine if the trace starts working, this could be far and away the largest e. T. F. Ever to exist. Could grow to 10 billion. Julie there are a lot of them. So one of the others on your list the barkleys, we dont have time this early to go through all of them. Another proshare. Wisdom. What other distinguishing characteristics . Eric tapr, it shortens the entire curve, a lot of people have been calling for the flattening of the curve that will stet up the shortterm rates. This is one that shorts the two year all the way to the 30 year. Its a small product and e. T. N. But its the only one that does. The high yield bond market. There is e. T. F. For that. Julie thank you so much. Really appreciate it. Good stuff on this job friday. Dont go anywhere, market managers is next on Bloomberg Television. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Erik payrolls rebound after a disappointing number in march. Stephanie british Prime Minister David Cameron gets a second term as he wins a surprise majority. Erik president obama once the asian trade deal on the fast track. He now has the right ally, ceo mark parker. Good morning, everybody