tv Bloomberg Markets European Close Bloomberg October 6, 2017 11:00am-12:00pm EDT
this is the european close on "bloomberg markets." ♪ mark: top stories we are covering from the bloomberg at around the world. in markets, european stocks always attend the week on a down note with the euro reversing higher. traders position themselves with uncertainty gripping western europe. we are covering two major european political stories today. prime minister theresa may insist she has cameras support to continue. more prominent tories call for her to step aside. in spain, the government is pushing the financial squeeze on catalonia. the speculations that catalonia might declare independence. we're live in barcelona. frome u.s., we hear
national economic council as he reacts cohn to the september jobs report and the u.s. losing jobs on the hurricane seeing a spike in wage growth. have a look at where european equities are trading under 30 minutes to the end of the friday session. stocks are lower for the day, up over the week led by italy, norway, portugal, and the netherlands. sterling is lower for the week, which i will come to other currencies rising bonds commodities, gary cohn in your final two columns. eichler, beating those rivals and 2017 says international money managers still lack enough confidence in the euro area's largest economy to load up on shares. the biggest u.s. etf tracking germany continues to bleed cash even as the dax climbed to its
15th peak in six months with profits such a swell of the dax is exporters. eichler predicts another 20% to 30% gain in two years. closerman gauge remains to its deepest discount relative to the s&p 500 attracting bullish calls from strategist at credit suisse. that's that chart is telling us. german factory orders rebounding that europe'sind biggest economy is set to sustain its robust pace of growth, orders rising 3.6% in august after a revised .4% in july. the biggest increase the -- since september. the 19 nation euro zone set to expand this year at the fastest pace in a decade. factories scrambling to add jobs to keep up with burgeoning orders. the german economy will continue
on its course of growth in the third quarter. albeit with slightly less momentum in the first half of the year. i want to turn to one stock, easyjet for your earnings declining 17%. earnings declining 17%. the second-biggest discount carrier. between four to four to 10 million pounds. battling foreen market share after low oil prices encouraged carriers to splurge on seating, fueling a war that led to the solvency of three major air carriers. 90 minutes into the trade, how is the u.s. looking? gains for the major averages, but it's something worth noting beyond the fact that we do have slightly bearish tone.
it's the first day the week we are not looking at record highs for the dow, s&p 500, and the nasdaq. the s&p 500's decline may be point 25%, but it's the s&p 500's worst day since september 21. dayhe s&p 500's first down in nine. we had less bullish momentum recently, big weekly gains. we have to losses were reportsre circulating right now the north korea could be planning on a missile attack, so that could be why we have stocks near session lows. very small losses for the major averages. and nasdaq,500 cosco steers trading lower, down -- cosco shares trading lower. the membership numbers are not as impressive as investors have been hoping for.
margins under pressure as well. costco having his worst day since june 16, since amazon announced its whole food acquisition. amazon's entry into the drug distribution area two years ago could have the worst effect on both walgreens and cvs. the second worst sector on the day today is energy. sharply down a 3% under session reports circulating on the possible missable -- missile strike by north korea. these are some of the worst decliners and very quickly, let's happened to the bloomberg and take a look at g #btv 2875, we could be looking at oils winning streak being in danger. it looks like this will be the case. looking at the worst decline for oil since may, the first down
week in five weeks. heard maybe even $47 soon. abigail doolittle, thank you. time to check in on first word news with courtney donohoe. courtney: tropical storm nate may become a hurricane tomorrow. it could come on shorty were from louisiana to florida panhandle and also forced oil and gas platforms in the gulf of mexico shut down. the novell these prizes been awarded to the international campaign to abolish nuclear weapons read -- weapons. it was honored on its work for the first treaty that prohibits use of those weapons. it was reached in july at the united nations. meanwhile, president trump is considering a new strategy to confront iran's nuclear ambitions very -- ambitions. the president would lead a multinational agreement intact
for now, but he would ask congress to tighten the law overseeing iran's compliance. he called the deal the worst ever, but the u.s. allies have said is effective. --tish by mr. teresa way british prime minister theresa may says she has support. she says the country needs calm leadership. the former conservative party chairman says he has a list of five former cabinet members who support his campaign to get may to step down. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe, this is bloomberg. mark: the clash between spain and catalonia turning up the pressure on spanish prime minister. he met with members of his canister -- of his cabinet. the symbol of barcelona's inancial strength may follow
abandoning catalonia as the region continues to device name. ,ith the latest in barcelona there seems to be some division, maria, within the secessionists. what do we know? maria: we broke the story yesterday. ago allroup of parties the way from upper-middle-class conservative to radicals and anarchists. the latest is the more radical side is really piling on the pressure. to have this unilateral declaration of independence ready to go next tuesday. situation, difficult being pulled from all sides. parliament has to enact this law , it's never been elected into office. he was parachuted to this job and i was really struggling to keep both sides together. vonnie: as a matter of breaking news, catalonia's posting the
definitive results. 2.2 9 million votes were counted were in favor of independence. we know that 5 million were eligible. madrid seems to be closing ranks. is this the way forward even for the catalan president to get out of trouble if he backs down? and that everyone gathers around him again? for madrid, the message is crystal clear. the don't care about the vote or response to the vote. reporting to the central government, there was never a vote, it's always a legal. -- it is always illegal. to the head of the spanish central government and catalonia and he made it very clear that they have to drop this plan and then we can talk. but otherwise there will be serious consequences. >> the president of the regional
catalan government must give up and returned to legal order. thisormons -- the moment occurs, we can begin a new journey. he has to return to legal order and stop insisting on taking a path they can only serve to trigger consequences that are very difficult to predict. vonnie: we will be keeping all eyes on banks that are based in catalonia and thanks maria for recording all week from catalonia. euro paring as losses and the crisis in catalonia continues with a resolution -- , howno resolution in sight it could have an impact on spain's economy. it's been the best performer in the eurozone in recent years. let's bring in michael bell. thanks for joining us. how are you viewing the
catalonia situation and its implications are the economy, and its applications for local asset markets eurozone wide. mr. bell: the wider implications are quite small. you have they did declare independence, it doesn't mean anything. it's going to cause short-term volatility. the spanish economy is doing very well and you look at the latest survey of spain as a whole, 75% of spaniards want to be part of the euro. there's no real risk of spain leaving the euro. as people were concerned about france or italy. it's a lot of noise, but not more than that. mark: is it time to snap up spanish assets, whether it be bonds are equities? mr. bell: we are nothing to do with this. we're just slightly underweight with spanish equity. that's not because of the poll. mark: are we over the worst of
the european this will cycle? now we are looking to austria and italy. it seems as we are never appeased when it comes to the political cycle. are we over the worst? can we now focus on the underlying health of the euro zone economy? mr. bell: i think we should be. i think we are over the worst. if you look at the improvement in the data, over the last six months, the latest euro drama to you saw improvement in support for the euro. that included in the weather , six monthsred previously, it had been 53%. now it's 58%. that is a significant shift. we haven't releasing polling words gone a percent wrong. i think it means investors should be focused on consumers confidence in the eurozone, the highest i've seen since 2007.
the pmi data suggests growth is quite strong. that she -- that should mean pretty strong earnings. vonnie: what to derail the recovery in the eurozone area? what is the biggest risk in your view? mr. bell: we could see markets as we head into next year and , onto then election horizon. because the markets seeing some kind of short-term volatility. i don't think there are major risks. i think the major risks of the eurozone really come from outside of the eurozone, were there to be a recession in the u.s. --ession risk in the u.s. recession risk in the u.s. is very low, but in the european economy, it's that the u.s. may eventually go into recession and that would provide an external shock. the notion of a stronger euro is a bigger risk is not true. 2003 throught 2007, you have quite dramatic appreciation in the euro, much
more than we have seen recently. european equities did very well on the back of earnings doing very well as well. vonnie: how does mario draghi continue to keep this recovery on track and make sure that ormployment improves disapproves. you are still suffering really quite badly. what you arelly seeing is a pretty marked improvement in unemployment in most of the eurozone countries. is still high unemployment, but an has been falling rapidly, and with it, support for the euro has been rising. it's an inverse relationship and it is the same across most of the eurozone. it's not the level of unemployment, what matters is the change in unemployment. unemployment going down to supporting the eurozone economy and a good thing is the positive feedback loop. as unemployment falls, they feel better and spend more. companies a more demand and they hire people to read i don't
vonnie: live from bloomberg world headquarters in new york city, i'm vonnie quinn. mark: counting down to the european close is roughly 30 minutes. equities in europe and the u.s. are read today. the stoxx 600 taking a bit lower mid political tensions. the s&p is due for an eight-day rally after market shifts 33,000 jobs last month. michael bell with jpmorgan is still with us.
u.k. equities, knowing what we don't know, what don't i know? mr. bell: when investors look at the u.k. market and u.k. acids in general, they don't know very much at all. the economic outlook is very uncertain. is very low employment and the drive on real wages mr. to dissipate. on the other hand, consumer confidence is low and you have weakness in the housing market, particularly in london and a lower savings rate than you had before. given that sort of very mixed picture and the fact that it's almost impossible to see what's going to happen to the politics, it makes us want to be pretty neutral. neutral when it comes to midcap relative to large cap. you look across the fund management industry and on average, we are 20% overweight and rate -- two mid-cap stocks.
that seems pretty bad when midcap is on the domestic economy. it seems unwise. mark: let's talk about the eurozone and the equities side. one of the big questions out there is to what extent is the strong euro come off its highs and impacting earnings growth. -- what havevered you discovered? mr. bell: another get does. ms. the euro was to appreciate --m here, anyway the drastic -- atic cyclical stocks doesn't mean exporters can continue to grow earnings. ,rior to the financial crisis you saw a rapid appreciation of the euro over a multiyear period, and you saw strong growth for european companies, including exporters. i think of it as the engine is
global growth, that's what drives exports higher. coming from euro strength. it prevents them going as high as they otherwise would. there's quantitative tightening, you say get ready for rising bond yields. we know it's a challenge. how you navigate it as an investigator -- as an investor? mr. bell: you need to be able to go across the whole fixed income universe. if you are starting no caps on upd -- if you are stocking on bonds, it's not a good place to be. you need to be dynamic and flexible and move your duration around and even take duration out of your portfolio completely. it's not a case of being short the whole time, it's dynamically moving the whole duration. i think you've got to be able to dynamically move that.
that can go across the whole of the fixed income universe, we still sees opportunities in credit, for example. even though the spread is quite but beit's flexible, able to move the duration around. expense?, who's an mr. bell: yellen is probably the most dovish candidate and she will put rates up in december, and quite possibly two or three times next year. the market is under price relative to the most dovish candidates. if you get a more dovish candidate, the market is even more underpriced. michael bell with jpmorgan asset management global market strategist. still ahead on the european close, british prime minister she has ay has quarter of her candidate, despite a campaign to oust her. what you told reporters next. -- what she told reporters, next. as is bloomberg. ♪
world headquarters in new york, i'm vonnie quinn. mark: live from london, i am mark barton. with the european close. electric car races heating up. they double electric car offerings in the next five years and whiten their presence in china to protect its global ranking in building factory powered autos. following theem present -- presentation of the company's new 2022 strategy. >> one of the reason of the strong growth that is forecasting is electric cars. why we think we have an advantage on electric cars? in fact, we have it because 50% of the cars sold in the world are made by the alliance. ult is i therena
best-selling electric car in europe. the reasons we are leaders today is going to stay for a while. while other call manufacturers are coming to this -- car manufacturers are coming to this technology. our offer is going to continue throughout -- to outpace competition. >> what is the need for the eu to have electric batteries? >> i think it's good. he automotive industry for europe is such an important activity. about 10% of the workforce in europe work around the car industry. i'm talking only about automakers, but supplies and distribution as well. it's huge. have new technology coming, like electric cars and the battery is the main component of electric cars, and you don't have a supplier of batteries, it's very strange
whenever it is such an important activity for the economy of europe. i'm favorable to it. this being said, is not for the sake of making batteries. with theto compete koreans and japanese and chinese who are investing massively on batteries. take a look at where european markets are trading as we head to the close in a matter of minutes. only germany is -- only the u.k. is rising today. we are up over the week for the stoxx 600. i will leave you with the currency board today is sterling's weekly decline was. this is bloomberg. ♪ is this a phone?
see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. mark: live from london and new york, this is the european close. i'm mark barton live with vonnie quinn. we're showing you the biggest and worst performers on the
stoxx 600 which did rise for the week, the fourth week of gains. the best run since march of last year. printable concerns weighing on markets on both sides of the atlantic. the pound dropping more than 2% against the dollar. the worst performance since the that crash last october, speech by prime minister may raising stipulation -- speculative a challenge to her position. the weekly pound dollar performance going back a year or so. gold is interesting, poised for a fourth drop as well, the worst streak of losses this year. prospects for higher rates, rising dollar, strong american economy and rising equity markets and fears over potential u.k. conflict with north korea, cooling somewhat, reducing demand for the haven. prices of slumped more than 6% from that one year high back in september. gold floundering also a lack of support from chinese markets during this week long national
holiday. ,e started the week with spain this is the 10 year spread, the difference in yield between the french and german. the yields are widening of it today, 1.25%. we did narrow nine basis points yesterday, the biggest narrowing since july. catalonia's president requesting to address lawmakers on tuesday and have sought to evaluate the results of the independence vote in a session of the parliament on monday, which was suspended by the spanish constitutional court. this week, the difference in yield is widened by 11 basis points. i wednesday, the spread widened as much as 19 basis points, the biggest three-day rise since february. the highest spread since april this year. this is the chart to watch. spanish equities down over the week, the euro was in hit so bad , but the threat between germany and spain, the asset class to watch. vonnie: we can get to the data in just a moment. breaking news now, the attorney
general jeff sessions has advised federal agencies to follow 20 principles of religious freedom, including recognition that religious businesses can discriminate in hiring. on executive order president trump signed in may. the u.s. in the form attorney general jeff sessions has advised federal agencies to follow 20 principles of religious freedom. ingives leeway to employers who they may like to higher. mark: let's talk about u.k. politics, theresa may bowing to carry on as prime minister despite members of her own party calling for her to step down. >> what i think is necessary for the country now, with the country needs is called leadership and that's exactly what i'm providing. i'm providing that with the full support of my. with what seems to be a
plot to oust her, can may keep calm and carry on with plans for brexit? i want to bring in tim ross in london. to get lawmakers needed the process going. we hear there is 30. cling on? tim: i think she can. it's not really quite the movement against her that you would need to garrett of her, but it doesn't mean that she's going to be safe forever. the geithner has been leading this move against her says his group is growing. we will have to see just how big it gets. it's been a series of bad weeks, the election is number one and that's got a be difficult to surpass. where does this fall? tim: possibly equal first, a very close second. after the election it seemed she couldn't possibly cling on. but you she is facing another leadership challenge.
she is saying she's determined to stay on and talking about what she's going to be doing next week, talking about brexit and capping energy bills for household. there's no way she wants to give up. mark: i was looking at the wonderful politics coverage and the later story was the tories are calling for may to go, who could succeed her? let's play that game. it was 1, 2, and three? it's a problem for many conservatives, they look around the cabinet and they think who is a better option right now? boris johnson, one of the biggest in the party company rock the boat recently and that hasn't endeared him to many of his colleagues. david davis is the brexit secretary who is another key has talkeder rudd about it. but there are problems with her, her own majority in her constituents the is tiny. she could lose her seat at the next election because she is so vulnerable. mark: what about the idea that
it's going to be someone, you will the knife never gets the crown. it's often someone would never even considered. let's go through some of those names. davidson, the leader of the scottish tory party. in big drawback for her is she is not in london and doesn't have a great big following in london and the u.k. parliament because she is not a member of the london u.k. parliament. she's based in scotland, but she's charismatic and a passionate and very compelling sort of character who could be the sort of person to take over as you don't have that many enemies yet. mark: you are one of the leaders of the eu in the european union. what are you thinking? are you thinking mays week? -- may's weak?
what does this do to the raising negotiation process? they will presumably hope to carry on and hope that things don't change to drastically. the worst case scenario is a leadership election and then someone else coming in at the conservative party is prime minister with a totally different regular agenda. mark: avery johnson r davis. who wants torexit cut and run and no transition. the difficulty europe has always have, or so they claim, is trying to understand exactly what britain says it wants. they completely new leader would make that even more difficult. mark: fascinating times. tim ross, bloomberg u.k. government supporter. u.s. attorney general jeff sessions has issued guidelines to federal agencies on interpreting religious liberty protections in federal law. it's a fascinating memo which has 20 guidelines and it comes
then earlier idea that trump rule limiting obamacare's birth-control coverage requirements is now also going to be put into place. let's talk about all of this breaking news with alex lane who joins us from the washington bureau. there are two sides to this. it puts into play some protections for some religious minorities, but it also bolsters religious conservatives that back donald trump for president. alex: i'm not sure this is directed at religious minorities, and he gets traded at a religious and majority. specifically christians. there are two different things the administration has done today. the justice department issued this memorandum that lays out 20 principles of religious freedom that federal agencies are expected to observe. but ionbinding guidance, think that any federal agency that doesn't follow it would be in for a hard time.
separately, the department of health and human services issued to regulations today that go into effect immediately, apparently, which is highly irregular, that would end the obamacare mandate that employers provide birth control to their workers free of co-pay. whocally, any employer expresses either religious or moral objection to doing that would be able to get out of it. vonnie: will there be court cases taken pretty much immediately? alex: we expect lawsuits to be filed by the end of the day regarding both actions. the sessions memo and the hhs regulations on birth control. vonnie: give us a few more details on the sessions memo to gives employers the right to employ whomever they would like and maybe even to service as a client whoever they would like. i don't think that is an accurate interpretation to say that this guidance directs federal agencies to allow
private employers to discriminate in their hiring practices. one of the principles, principle number 19, says that religious employers can choose to hire people who follow their beliefs and practices. this could, in practice, mean that a religious employer, for example, a christian employer could decline or refuse to hire gay people. the memo says that discrimination is not authorized by anything in the document, but it also doesn't say that discrimination by a private employer is for britain. theie: lawyers all over country opening their notepads. let me ask you one more thing about reaction from other members of the administration and from congress. this just happened, so reaction will be trickling in. have you heard anything yet or seen anything yet? alex: i haven't seen a lot but i
imagine it's pretty predictable. elon the right, social conservatives will be happy. right, -- people on the left, nancy pelosi is not to be happy. alex lane,nnie: thank you. we will be covering this all day right here on bloomberg television. coming up, we hear from donald trump's national economic council director and potential venture candidate terry cohen. -- gary cohn. what he is calling for an increase in labor participation rates. that's bloomberg. ♪
we are looking at costco, it beat estimates, but the share price is falling. the share prices falling and one analyst issued a downgrade. emma chandra is here with more. it's a very good fourth quarter. they saw an eds needs, revenue beat, sales beat, but investors are saying all this is underwhelming and the stock is down. you mentioned the analyst downgrade. they've been zeroing in on membership renewal. which is something that's very important for costco, because the huge amount of their revenue comes from that. we have a chart which will show you how membership rules have been falling. , butare still very high they've been going down slowly and with these analysts are saying is is a slow and steady decline. if you take a look at my terminal, have the function for costco and you can see how big a part of revenue or how much
revenue was brought in by membership fees for costco. it's very important to them. i must say that cosco has tried to shrug this off saying the drop in renewal rates is largely down to a credit card switch, you can now pay with a visa and that's just taking a little bit of time for customers and members to get used to. vonnie: how is the rise of grocery of amazon impacting this? emma: we talk about this all the time, when we discuss how competitive the grocery landscape has become in the u.s. and amazon is obviously a big part of that. there is some crossover between whole foods customers, which are not part of amazon, and costco. we should take a look at costco's fourth-quarter earnings. we saw there was a 13% rise in e-commerce. that's quite soft when you compare it with someone like walmart. if you take a look at my terminal here, this is walmart
e-commerce growth and what you can see is right here, the last couple of quarters have been over 60% e-commerce growth. there are some investors and analysts who are concerned that cosco isn't keeping up with that. is sam's at walmart club, which is very similar to the costco membership model and what people are saying is sam's club has been ramping up with friendly services. things like in-store pickup from line orders and etc. which costco has not been doing as much of. it was a very good earnings report. vonnie: stock down 6.1%. emma chandra, thank you. jobs day andit's last month, 30,000 of them were lost in part due to hurricanes harvey and irma slammed in texas, florida, and other southeastern states. on the upside, the jobless rate fell to in your 16 year low as labor market participation is up in average hourly pay as well.
,ose 2.9% from year earlier with the establishment survey theh was perhaps because of hurricanes in the household survey this month. in highlights, let's bring julie hyman joining us from the washington bureau today. what are the caveats we are getting with this jobs report? are thehe hurricanes big caveat in this report. it was a very unusual report as a result. if you take a look at the bloomberg, we have that change in on form payroll with the standard deviation. you can see that drop of 33,000, more than two standard deviations from the norm that we have seen over the last five years. the last time we had a negative rating was back in september of 2010. this was quite unusual. was indeedk like it just because of the hurricanes, because you have to look at these two surveys. you have the household survey on the one hand, which looks at
whether people have jobs, whether they got paid or not. and what we learned through that survey is that 1.5 million people did have a job that didn't work for that week. then you have the establishment survey or payroll survey which looks at how people got paid during the survey. that's why of the drop in payrolls of the same time you also have a drop in the jobless rate. something else that could have been affecting the average hourly earnings in particular was the fact that economists say of the people who didn't get paid because of the hurricane, many of them were lower income workers. there may have been caused a skew upward in average hourly earnings. we couldn't be too much into the earnings, .5 on the month and 2.9 on the year. might ask the question is this evidence that earnings are finally gaining traction? there should be a little star by that. julie: they should be.
but certainly the market reaction on this is taking heart from the average hourly earnings number. as well as from the 4.2% jobless rate. it's important to look at where the jobs ordered and lost. you saw the biggest loss from food and drinking places, these are folks that work to restaurants who are close because of hurricane irma and harvey. health care added 23,000 jobs according to labor department because of an delivery care, that was one of the biggest games. transportation and warehousing added 23,000 jobs. construction jobs rose by 8000. it's interesting, because economists were focusing on that is another area of potential weakness in the immediate wake of the hurricanes. i want to mention we are going to get many more details, there's a state level figures that are due to be released on october 20, that report doesn't usually get a lot of attention, but it likely will this time around as we get the
state-by-state breakdown. vonnie: julie hyman washington, d.c., thanks for that. spoke with bloomberg this morning. he talked about september reports and the future of the federal reserve. >> the administration is sensitive to everything. we are sensitive to all the policies. the president thinks about economic growth and he thinks about middle-class americans and middle income americans every day and hard-working americans every day, and how we can put them in a better position, economically. how we can help improve their life. that's what the president thinks about. mark: i want to know what you think about. more specifically, the next fed chair. are you sensitive how the markets may interpret that individual and their policies? callista klay about everything. we are not myopic on any topic. we in the white house have to think about all the topics together.
that's our job is to think realistically about everything. mark: do you think the next fed chair requires a phd in economics to really got her the respect of those on the fomc? >> are not going to talk about this is a vix of the search that's going on right now i don't think that's appropriate. david: talking back to your tax plan? you say get a 3% sustained growth. could you explain to us exactly what in the tax plan will generate that? economists say growth like that comes from two sources, more people working, demographics, and productivity. taxes, if youe get your plan the way he want it, how would i do generate more people working or increase productivity? >> we couldn't agree more. when you lower the business tax on the pass-through entities incorporates, we make ourselves were competitive. we make it the businesses want to locate in the united states. when a locate in the united
states, they have the higher labor. they go out and compete for labor and they hire people. because wes increase hire people. we also see enormous amounts of productivity in these numbers because as we build new factories and new manufacturing, a lot of this sort of a technologically driven. the productivity numbers are really going to grow by leaps and bounds, because we are a technologically driven economy here. we think we increase productivity dramatically by creating a tax code that allows businesses to compete here in the united states with other countries around the world. david: one last question. with 4.2% unemployment rate, where do those workers come from? >> we can increase the participation rate. the usage never went down we are excited to see those numbers. we believe there are more workers willing to come into the workforce in the united states. mark: gary cohn, national council director earlier today
mark: time from the global battle of the charts, where we take a look at some of the most telling charts of the day and what they mean. vonnie, even to those charts on the bloomberg by running the function feature at the monitor your screen. kicking things off today, alex harris. while we looking for today is not want take you back a week to the end of the quarter with the u.s. dollar funding market. something adjusting a starting to build. even though the debt ceiling has been resolved and we have a short-term suspension through december 8, the money market funds still don't like treasuries. what usually see in purple is
the spikes and the backup in the repo rates as money market funds all caps out of the market to buff up their balance sheets. we weren't seeing that this time around and there was a bit of a damper on that risk. we stayed within the fed 1.5% target range. like nails, supplies is not coming as fast and furious as everyone thought with a resolution of the debt ceiling, and bill rates are still trading rich to the rest of the market, so they are rolling the dice and keeping their money and repo. which we should start to see until october. vonnie: thank you. is 7434 in the bloomberg charge library. it's a keynote in london. >> thank you. the fed is getting its golden moments. he may have gotten a not very clear signal from the jobs report today, but gold and silver are giving us a much clearer signal on fed tightening. gold has been battered recently because traders are bracing for
fed rate hikes. the underperformance for silver is important because silver tends to do better during cycles of economic upturn because of its industrial usage. the most important part of this chart is actually the bottom panel, the correlation between gold and silver cost and treasury yields is the most negative level this year. that means there's cost as a conviction in fed rate hikes. #btv 7558. mark: just by a whisker, i'm going to give it to christine. vonnie: by a whisker, i'm going to give italics. -- give it to alex. congratulations to you both. "real yield," is next. ♪
jonathan: 30 minutes dedicated to fixed income. this is bloomberg "real yield." ♪ jonathan: the jobs report shows payrolls falling and wage growth surge. the short list for the next fed chair reaches the president's desk. the divide between madrid and barcelona continues to grow, sending spanish funds lower and lower. we begin with a big issue, wage growth surging. >> this is