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That doesn't do it for "-- that does do it for "money moves." if you missed an episode, you can check out bloomberg.com.
"street smart" starts now . quack -- big jobs number -- big reaction in the market.
We will explain why stocks went crazy and bonds got crushed red -- crushed.
Plus, the bidding war -- a fight between a fox and a mouse for the future of the online video service.
Chaos in cairo -- what happens now that mercy is out and the military is in?
From bloomberg world headquarters in new york, this is "street smart" with trish regan and adam johnson.
Welcome to the most important hour of the session.
60 minutes until the closing bell and we will are -- we are scouring every market for your last trade of the day and we are getting set up for next monday.
My coanchor today, carol massar, a special treat, in for trish regan.
What a day, americans going back to work.
We had a great jobs report, a rally, we lost that, and now we are at the highs of the session.
People are not sure if it is good news because the fed might back off.
Three charts that put this in perspective -- look at the 10- year.
When was the last time you saw the 10-year move 21 basis points in one day?
If more americans are going back to work, it suggests the fed will begin tapering earlier than expected and therefore yields are going up.
Look at another aspect -- gold, down $37.50. if the fed pulls the plug on bond buying, assets like gold are less likely to go up.
The s&p is up almost 13 points, trading at about 1628. up and down, up and down, and finally the upside.
A roller coaster.
Let's get to the big three stocks to watch with dominic chu.
I will talk about what you just showed.
Rising interest rates -- that means mortgage rates might go higher, and housing stocks take a hit.
Watch an hour, pull see homes, toll brothers.
They are taking a hit.
Lennar is taking a hit as housing docs are sensitive interest rates talk about what you just showed.
Start to rise.
Also, on the gold front, prices falling precipitously.
My need shares are down -- newmont mounting -- mining are down 6%. they will end on a positive note.
I am watching shares of the large regional banks -- zion bancorp, suntrust thinks, huntington bancorp, they are showing signs of life as the economy starts to grow.
More people are employed.
That means the economy starts to expand and lending activity starts to get better.
Watch zion's bancorp, they're up amongst 3 -- they are up almost 3 .5%. on to our top story, june is better than expected jobs in poor creating a schizophrenic reaction in the jobs market.
We are up 100 25 points.
-- 125 points.
The issue is whether the fed will begin tapering bond purchases sooner than expected.
Goldman sachs jan hockey is issued this statement -- this is a big deal.
In other words, the fed will pull the punch bowl away at the end of the summer, sooner than expected.
We will hear about the future and what we have to do about it with our closer, jason shanker, david and michael mckee.
Jason, you are known for your accuracy on addicting job numbers and the surprised even -- predicting job numbers, and this surprised even you.
We were expecting 185,000 jobs during it was 100 -- jobs . it was 195,000 jobs.
We thought the markets were oversold.
The iso number we expected it to be better for june.
Things are looking ok.
It is not without weaknesses.
Ok, or better than ok?
Things are good, but there are some data points that concern me.
I am a little bit concerned about the fact that this is our fourth month in a row of job losses in the manufacturing sector.
Even though construction is less than numeral five percent -- 5% of jobs, it has been 10% of the gains since 2012, and that will slow as interest rates rise and the propensity for people to buy homes goes down.
That is a careful balance that takes me a bit cautious.
Three months in a row of almost 200,000 jobs, that is good.
You are more conservative.
How astonished are you?
We were 50,000 down.
It was not a huge surprise.
The markets got more sensitive to the numbers.
Overall, it is an encouraging breakdown.
What surprised us most was the rise in wages.
Wages have been pretty weak and expected wages to be week until unemployment came down below 7%. it is just one month.
We probably have a higher inflation rate work in june because -- completion rate.
-- inflation rate in june because of gasoline prices.
I think we will see the full impact later in the year, but it is better than expected, certainly.
Michael mckee, should we be encouraged?
Yes, because the headline and the revisions were higher.
12 months in a row of plus 100,000 jobs gained has not happened since 1999. fed governor jeremy stein made this point -- they will be looking at the cumulative weight of the way the labor market and the economy are developing.
While there are still risks, air at a point where they feel the economy is ready to take off on its own and does not need the additional stimulus to the extent that quantitative easing is providing any.
David, you hit a key point about rising wages.
Alan greenspan famously focused on the wage price cycle.
We want inflation.
What is your interpretation of higher wages?
At the moment we have to be fairly cautious.
Given that inflation will be up, we will not see much increase in real wage growth.
Forward, maybe there will be some demand for workers and some pricing power in wages.
I do not think we will see that materialize significantly until next year.
Wage growth will remain subdued this year.
Inflation will probably start creeping up slowly through next year, but we do not think the core price index will reach 3% . we do not think the fed will be in a hurry to taper.
They will taper a little in september and they feel the market has reacted to his previous statement.
Inflation is still lower than they would like but maybe the inflationary pressures have taught him down.
--.... -- bottomed out.
You talked about inflation because of gasoline.
This could be the biggest planting season for corn since 1936. dancing corn and wheat prices get hit hard.
How do you see that playing into the inflation outlook?
Food is a minor impact.
Energy is more volatile.
It tends to outweigh food in the cpi.
I think we also have to worry about the situation in the middle east.
Gasoline prices are fairly subdued at the moment.
They were volatile early this year but have not moved very much.
If we see the situation in egypt deteriorate, that could feed into wages.
This is not really an inflation question with wages going up.
It is a question of can we afford to continue spending?
Wages went up one hours worked stayed flat, telling you americans were making a little more money and maybe we can count on the consumer to keep spending.
Spin this forward to the next fed meeting.
The next meeting is at the end of july, but there is no press conference.
Everybody is writing that off.
Look to september.
The middle of september, the fed meets again, and pretty much everyone is moving their forecast forward.
The only question now is the mix between mortgage and treasuries . you could do the mathematics, 2014, one in bernanke was -- when ben bernanke was going to be done with it, but they also do not want to be that symmetrical.
It will be a different -- difficult balancing act.
Do you think it is now september?
I have been thinking it was september, but it is data dependent.
If we get surprises, when the facts change, they will change their mind.
They will look to see if july and august were as good as the previous month.
I think it would have to be a big surprise.
I do not think 50,000 would change the view.
Maybe below 100,000, they would think about tapering.
David sloan, michael mckee, thank you.
Jason schenker, you are with us for the next hour and a half.
Next, go big or go home, and mercy out, the lee terry in -- what the fall of -- military in.
With the fall of egypt cost leader means.
We're just getting started on this friday.
? go big or go home -- time for insight and action.
This is what we are talking about.
Look at the revenue-weighted s&p 500, the s&p five -- 500 weighted toward the bigger companies, beating significantly, call it by four percentage points.
It is a big deal.
The companies that are generating the most amount of revenue are being the most rewarded in the stock market.
It makes us think -- let's zero in and dig deeper and find that group of companies.
Not just the whole index, but the group of companies.
We went into the s&p 500 and we screamed for all the companies with revenues of over $25 billion.
And, growth of over 10%. there are only 12. these are names we know well.
This group is up 22%. aetna, amazon, cigna, citigroup , duke energy, and google, morgan stanley, wellpoint -- do not worry, i will post them all on twitter.
These are the companies that make the most amount of money and they are growing the top line revenue.
That is why they are being rewarded.
Go big or go home.
Interesting mix of companies.
Our closer is the president of prestige economics, a bloomberg asked forecaster of nonfarming payrolls as well as industrial metals and natural gas.
Welcome back jason schenker.
Adam johnson was breaking down those companies making the most revenue and being rewarded.
Does that catch your attention?
You know, it does, and something investors and my clients have been asking about is where should i be.
You look at equities, there is a lot of uncertainty around tapering from the fed.
Ben bernanke explicitly said our goal is to taper this fall and end it by the middle of next year, so you know that is coming.
A lot of guys are still in cash because until things have settled from qe, from interest rates, where the market is artificially affected by what the fed is doing, they are afraid to commit , and a lot of these companies have cash on their balance sheet.
At the same time that we see strong growth, the other positive is they are somewhat defensive and they can have a large cash position, meaning they could be less exposed to higher interest rates.
They do not need to go out and borrow.
That is right, and a lot of big companies have been borrowing more cash and what i told my corporate clients was if you could issue debts, the last 18 months was the time to do it because you could put that on your balance sheet, and save it for a rainy day when it will be much more expensive to get that cash.
Think about the century bonds -- companies like, if i remember correctly, microsoft, ge, railroads issuing 100-year bond because borrowing costs are so low.
And some would say why would you issue bonds to put more cash on the balance sheet, with the cost of kerry was so low.
A once-in-a-lifetime opportunity, like locking your mortgage at 3.5%. do you anticipate it will put a lot of this to work at some point what will they keep the nice cushion on hand?
It is a great question and it is running because the truth is we need more inflation to motivate individuals and corporations to deploy capital.
Strategically, we talk about low hanging fruit.
They want fruit that jumps off of the tree and into their basket.
In one easy project and they do not want to take the risk.
If inflation was 2.5%, 3 points -- 3%, it would change the game.
When inflation is now, they will come back down because inventory is so high.
Ag prices will come down.
Unless you get a tightening of resource allocation, his stuff with this -- which is talked with this unemployment, they will hold that cash.
Jason schenker, thank you for making the trip.
We want to show you what is happening in cairo right now.
The clashes between the supporters of the ousted president on the morsi, who was associated with the muslim brotherhood and those who wanted him out.
We will go to cairo to bring you the latest.
These are live shots.
October bridge in cairo.
We will be right back on "street smart." ? that is a lie shot.
-- live shot.
It is about 9:22 at night.
That is to the rear square in -- tahir square in cairo.
That is a live shot.
You can see the turmoil continuing after the ousting of the president.
The military is in charge, and another president has been named.
The situation is continuing to unfold and there continues to be turmoil.
It is just about 9:30 at night and folks are out there in full force.
Time for the global outlook.
We will be talking about so many different issues here and what could happen next in egypt.
Dom chu, talk us through the non-image related aspect of what is happening.
Is a tough situation, especially if you are egyptian.
The overall markets are reacting in kind.
We learn today that fitch, the credit ratings agency downgraded the long-term debt rating of egypt, six notches below investment grade.
It went from a b to a b-. as these efforts materialize, remember when you have president morsi deposed in what some say is a military coup, and others disagree, today, military helicopters and personnel were enforcing the action.
This was the first sign of strength that they wanted to show they were in control of the situation in egypt and this kind of thing will not last if the military is using its full force.
This is a show today, but you have to wonder what will happen if you see tanks or armored vehicles.
Then it becomes a different story.
It is one of the many reasons there is so much uncertainty and why credit agencies and investors are worried.
There was an editorial in "the washington post" where it was said "this is relevant for all of us.
This was a military coup against the democratically elected president.
U.s. officials should call it a coup.
In the u.s. we have a law on the book that says if we acknowledge something as a coup, we cannot allow financial support.
This is perhaps why we have not called it a military coup because we want to maintain relations with egypt.
This is putting the u.s. in a difficult situation.
In many ways, typically, you have a revolution, except the american revolution, you get a reactionary pullback and then you end up with this sort of nonsense.
What is interesting is you have the first democratically elected president and government, and now the new leadership has dissolved their parliament.
You see a power vacuum developing.
It will be the military at the front and center of this whole thing because they will fill the vacuum.
They have kind of always been there in this process.
You think about the military going back to the first revolution, they have always led.
Now they have gone down this painful, nonlinear road to democracy.
We are continuing to follow this developing situation and then we will have three takes on the surging dollar.
? happy 237th birthday, america.
The markets get, a surging dollar.
It is up against the euro and the yen as investors expect the u.s. to continue growing faster than the other major economies and we may pull back on tapering whereas the bank of japan, the european central bank and the bank of england might keep going.
How do you play it?
Michael mckee has the story.
The strategy and the trade.
Michael mckee, this is something you have been talking about all day.
It is a bizarre thing, but in the currency world we talked about current is getting stronger or weaker and weaker act like stronger is a good thing, but in this case not a good thing for the united states.
It means that it is harder to sell goods overseas and that can be a problem going forward.
The dollar is getting a boost , not only the idea the fed will taper earlier, but the more demand for imported goods.
We see the dollar higher against all major trading partners and it is not just the dollar index.
The trade-david dollar is taking -- trade-weighted dollar is taking a big leg up, meaning it will import some inflation into the country.
It is all because the european central bank, the bank of japan, the bank of england are all talking about he berates low or cutting -- keeping rates low or cutting them.
The silly , -- when i was in economics major at instant, alan blinder called it a macho theory.
What is your take on what all of this means?
I think it could be a concern down the road, but the answer depends on how many steps away from the charting board you take.
If you look at the u.s. dollar from a long-term perspective, we are at the end of a multiyear bear cycle that started in 2002. the dollar has been stronger this year though we are very far from a long term bullish dollar trend.
I think the divergence he -- divergence is key.
Things change fast on the foreign exchange markets, and it looks like the fed is really what is boosting the dollar, whereas the ecb the bank of england and the bank of japan are waiting on their currencies.
What do you tell clients?
Our current recommendations are it is a good moment to sell the euro.
I think markets are adjusting to the new ecb and the new ecb communication policy we heard yesterday.
With u.s. yields moving higher, the arguments are strong for that trade and we are still strong with the long dollar- yen.
There is probably not much more to come from the japanese side of the story, but with u.s. 10- year yields up that 2.7%, i think the long dollar-yen story is/. -- bullish.
Strong u.s. growth.
I like the sound of that.
Jerry leavy, you are the traitor.
Put a trade around everything michael mckee and vassili serebriakov are telling us.
I agree with the sentiment.
About one month ago, i was shorting the treasury with a puts bread and i am sticking with it.
I think it will remain positive with europe.
We are starting to talk about portugal and greece, and the headlines alone, even though they are miniscule, able drive euro lower, and my trade again is in the fx the.
That is the etf for the euro, and if you are buying a spread, you are betting the euro is going down.
What i like is the fxe is like a stock.
It is a nice way for the average investor to participate.
Shorting the fxe means i believe the euro is going lower versus the dollar.
What i am looking at is the 1.33 puts bread in september.
I can do that for three dollars $.60. the most i can loses $360 per spread.
I believe the euro will continue to break down.
I see the fxe breaking down below a key level.
The reason i am using this red in -- the spread is anything can happen.
This is predicated on the u.s. news 12 continuing to be somewhat positive, which i believe -- the u.s. news flow continuing to be somewhat positive, which i believe it will be.
Vassili serebriakov , can you put numbers on the euro and the yen, where they are going against the dollar?
I think the euro is around 1.26. the downside is about 1.20. for the yen, most of the moves are in the past, but we are targeting about one -- $1.08 for dollar-yen.
It sounds like we should convince the boss is to set up shop in europe, it will be cheaper.
We can go all the -- all around the world, japan.
Vassili serebriakov, jerry leavy, michael mckee, thank you.
Coming up, hulu bidding wars and that dell dual drama.
Relax and enjoy the holiday weekend because monday second- quarter earnings season starts and it will not a pretty.
We have the names to watch and watch out for.
That is coming up on "street smart." ? starts and it will not a pretty.
We have the names to watch and watch out for.
This is "street smart" on bloomberg television, streaming on your tablet, your phone and on bloomberg.com.
Tonight is the deadline for suitors to sit at their -- submit their bid for hulu.
Cristina alesci is our deals reporter.
Let's start with hulu.
A three-credit field of contenders.
The first time we saw seven people show up.
This time we will see three real bids, but the deal has been complicated i do that that the new -- complicated by the fact that the new owners will have a relationship with the old owners.
When you are talking about hulu plus, the $7.99 per month service they offer, abc, disney and news corp.
Has agreed to extend the contract for another tw oh years, but what happens after -- two years, but what happens after that?
Thus, you have this idea that hulu has been a mess for the last year and a half with executives leaving.
In the meantime, netflix and amazon have it the market share -- have picked up market share and users.
Whatever buys them will have to have deep pockets to compete with netflix and amazon.
Exit will cost a lot of money.
Who will likely be the winner?
Deep pockets, directv, and the problem, of course, going with directv, time warner, news corporation or disney, you are tying yourself further with the distributors you will have to negotiate against four other things.
That makes it complicated.
There are interesting partners that will be completing -- competing with one another.
To a certain extent, disney and news corp.
Were trying to get around the distributor.
Now if you giving it back to the distributors like directv and time warner, they have the internet and cable customers.
They have a lot of power.
Newly see an insight at some point -- do we see an and in sight at some point?
They will come in tonight, but it does not mean we will have a front runner.
That will take some time.
On dell, it was an interesting development.
It is basically michael dell and silverlake signaling to short- term shareholders that if you do not like working dollar $.65, you will not get more from us.
-- $13.65, you will not get more from us.
That is their final offer.
If shareholders turned down the deal, at that point, carl icahn will have to propose a vote to implement his deal and now michael dell has a vote in that deal, so we could see a proxy contest between michael dell and carl icahn emerge out of this deal.
It could be more complicated.
What legally happens if we get to the shareholder vote and a majority of shareholders vote for the dell deal?
What happens legally for carl icahn?
He has to pack it up and go home.
Or could he take a tender offer to shareholders?
It would be tough because he cannot do that without a shareholder meeting.
As always with carl icahn.
Second-quarter earnings season starts monday.
We will sort through the best.
What our company saying about guidance?
We will tell you after the break.
Earnings season is upon us once again.
It happens four times a year, so what types of information are traders expecting to the?
Dom chu has what to expect.
It starts monday after the close, alcoa.
Big names, without: kicking himself, but through the course -- with alcoa kicking things off, and then you have yum!
Brands, and then you have wells fargo and jpmorgan.
Over the next three weeks you will have 28 financial companies reporting results.
They are front-stacked . financials are the best performing sector by far in the s&p 500. and still cheap.
Citigroup is an example.
Bank of america is very close to it.
They are one part of the pipe.
If you look at pre- announcements, a lot of companies will say get ready for this kind of results going forward.
This chart shows you the ratio of negative three announcements to positive three announcements -- negative three -- pre- announcements to positive pre- announcements.
They are managing expectations.
Maybe you set yourself up for a surprise to the upside.
You know how the game is played.
Coming up, labor force participation is a big deal and it might be creating problems.
That is the chart attack with our closer.
? time for "chart attack" where we show you some charts that will make you smarter and we also hope it will make you money.
Jason schenker sees something interesting, labor force participation.
You think this is a big deal.
Part of the reason we have seen the unemployment rate falling over the last few years is a decline in the labor force participation rate.
That is right.
This is the second month in a row where we have seen the labor to the patient rate go up.
Area -- participation rate go up.
Here is why this is a big deal.
This is a nasty trend.
Fewer people are being counted.
Before we get to the recent data, why are fewer people being counted?
If we were to break this out by age groups, you would see workers that are 55 and older, it is at the highest lever -- level ever.
We have even seen a decline in in the groups between those.
In other words, if kids cannot get jobs -- kids cannot get jobs out of college.
That is right.
Ben bernanke has talked about this as a big problem because it evil cannot get into the workforce, how can they -- if people cannot get into the workforce, how can they move up.
Is the key, they might be turning.
-- this is the key area of it might he turning -- it might be turning.
It is what the fed said about unemployment targeting.
If it is better that more people to dissipate in the labor force, why has unemployment actually gone up?
It is because the denominator is bigger.
More people are participating, but the fed policy is targeting the unemployment rate.
Ben bernanke has said 6.5% is the target.
And his most recent press conference he said the real natural rate is between 5% and 6%. if more people come back into the labor force, it will keep the unemployment rate higher for longer.
Which means there will be more qe support for longer.
We have the top 10 stocks you need to focus on.
Plus, the jobs numbers might be good, but an app could make them better.
? if you missed everything that happened, don't worry.
Time for the top 10. just coming into the close, kicking off a yahoo.
Marissa mayer is continuing her shopping spree.
They are tools for finding and storing info will be included in yahoo mail and messaging.
Number nine, lennar.
Shares falling more than 4% us treasury yields rose to the highest level in two years.
All members of the homebuilder index retreating.
Number eight dropping five percent.
The real estate fund is dropping after a better than forecasted jobs report stoking speculation the fed will begin to reduce the size of all of those asset purchases.
Shares of nokia up 4% even though the debt rating was cut one step deeper by standard & poor's. their net cash may tumble after they agreed to by siemens and their equipment venture for $2.2 billion.
Amazing this is the same day we saw samsung missed their earnings forecast and lower guidance.
There may just be too many phones.
Of 3% after bank of america upgraded them to buy from neutral.
Evaluation is "compelling even the market fundamentals." animal science two cars.
Number five, tesla.
More than 100,000 people have signed a white house petition to allow them to sell directly to consumers in all 50 states.
It's up to the white house issue an official response.
Not just that, tesla also has a lot of orders in hong kong for their electric cars.
There's a lot of momentum for tesla building.
This could be your chance, dom.
I could try, but i think i will wait.
I like to see a few cars on the road and maybe be in the second wave of adopt theirs.
Very them of very big difference in the.
We will see how this pans out.
Click some want to see more charging stations first.
A good point.
Only a few thousand made per quarter.
How about blackberry?
They are facing sanctions in indonesia after an outage left users unable to access messaging services.
They may hinder their efforts to increase their market share in indonesia, which they rely on for about 10% of their subscriber base.
Not easy being blackberry in this way and age.
With samsung and nokia also, just a tough time to try to make phones.
Not good for being a maker of yoga clothes either.
Lulu lemon down 1.5%. his stake in the company is certainly facing a lawsuit that they failed to alert them into the sheer pants scandal.
Every time i say that, i have to laugh.
They're not that sheer.
I'm just telling you.
I don't know how to respond to that, carol.
And tell down more than 2%. -- dell down more than two percent.
They will not be moving their target.
The company said activist investor carl icahn's offer is not aced on concrete cost savings plans, adam.
Ringing the floor -- develop before the stock exchange.
Shares of the world's largest gold miner down 7%. prices plunging after the jobs report showing more workers being added down forecast in june which means you may have the fed stop buying bonds sooner than expected.
That would be bad for assets like gold.
It's been very tough to be a gold investor these days.
Having a block to stir market today, all over the place.
It was up, down.
It finished up on the highs of the session.
Dom chu, run us through the details.
At the end of this particular shortened holiday trading week, the s&p 500 up about 16 points.
1.02%. the dow jones also showing the roller coaster ride.
We dipped down for a brief moment after rallying up to close up 147 points.
Let's round it off with the nasdaq.
We were talking about the correlation on "lunch money" today.
It is up about 1% today also.
If you look at the sectors that really drove the trading action, on the upside the s&p 500 financials, the best are forming sector, up but almost 1.8%. as he finished the day, a lot of the stocks driving the upside for four naturals him a regional banks.
As things start to improve, the smaller banks, not necessarily the massive ones, but think of the little ones like suntrust bank.
Those regional banks tend to be more leveraged.
Utilities, the stocks that act of the most like bonds, you want to sell those off the s&p 500 utilities index the worst performer.
Unchanged as we start to settle things out, but that is the look on stocks, carol.
Back to you.
For more on what drove today's trade.
Let's get to our street fighters.
Jerry leavy and are closer, jaso n. let's kick it off with you.
A crazy day.
Did the trade makes sense for you?
I will take it with a grain of salt.
It's the day after july 4. i think what we saw is the guys left in the office, covering though shorts and moving them higher.
Next week is earnings.
Zacks has the concern -- the estimates looking for 4% growth and now we are looking at -.3% earnings growth.
My question is, and where i'm concerned going to next week with alcoa, jpmorgan, will we see the follow-through?
Qe is fading away and will we finally begin to look at lackluster growth?
Will there be a follow-through?
I don't think so.
I think we move lower.
Your thoughts on jared's roadmap?
Much of the run-up this year has not been due to strong earnings growth or the expectation.
It has been through repricing of macroeconomic risk.
We are not in a fragile business cycle.
Even if it's not a great expansion, it is certainly a sturdy one.
It has been a repricing story certainly.
Explain when you mean by that, mike.
I'm curious up by what you are getting at, expectations about what's happening down the road.
When people feel the economy is on sounder footing, then it can decline a bit.
To discount the earnings you have a bit less and it leads to higher equity prices.
That is a repricing event.
It is not an ongoing appreciation story due to strong earnings growth.
Mike thomas jason shanker.
Do you think repricing is going to be a better year of growth?
How much more are you expecting?
Isn't it more likely this will be similar to the growth rates around the 2% we have seen for the last several years?
Is a going to go slowly or do you think there is a repricing for better growth this year above that level?
We think the year-over-year real gdp growth will be right about 2%. as you said, it's been that way for a few years.
We are not seeing strong economic growth.
The employment forecasts going forward are quite constructive for the next 24 months.
Over the next four, as the spending sequestration is at its maximum in the third quarter, we may see jobs gains some are more in the order of 170,00 0 jobs per month.
It's not a strong growth story with markets up, i just think people are less worry about the fragile business cycle state.
The economy is a bit sturdier and the economic expansion and less likely to have any scares going forward.
Jerod, how do you trade at this point?
With the rising dollar, how will this affect the multinational companies that make up a big chunk of the s&p 500? i'm flocking to the financial sector.
Being undervalued and outperforming, that's where i'm going.
As an options trader, i'm doing a lot of covered calls and looking up for these high valuation, high-growth expectations.
I know that's boring and the sort of general, but -- it is not boring to jason shanker next to me.
I just want to ask you.
You talk about the strong dollar.
I heard it in the last segment.
Do you really think the fed is likely to raise rates before the european central bank?
As i look forward and think about where we are growing with growth and what this means for different markets and the dollar and our ability to export, do you think of the fed hike rates sooner than they will?
Let's back up for a second here.
To answer that, let's remember it's not just about with the fed actually does.
It is the market anticipation about what the fed is going to do.
Therefore, i believe the market participants are beginning to think, yes, there will be a quicker move on the fed's part versus the ecb.
Yes, i do think fed tightening begins at the end of this year versus next.
In terms of rising interest rates, that comes early next year, but i am in that camp.
The fed needs to begin to think about an exit strategy and you are seeing a lot more hawkish fed members than you are doves.
I'm in the camp of faster rate hikes.
That sounds very positive, mike.
Raising rates or slowing buying for the right reasons.
We have growth.
Our view is the top of tapering has really disconnected -- the talk of tapering is disconnected.
We predict the first hike would take in the order of october 2015, not really a moved up timetable due to the top of early fed tapering.
The federal reserve wants to end the asset purchase program and they are setting the stage to do so, but i think the fed stands to sit on the balance sheet for roughly 20 months after they stop buying.
I saw ben bernanke speak in april and they said long before they will try to take assets off the balance sheet, they will raise the interests, raise the fed fund rate.
Before the most recent fed meeting, i had i had been expecting an increase in fed fund rate at the end of 2014, but after hearing him speak about that 5% or 6% unemployment rate they were targeting, i have to agree.
I move my number into 2015. a lot of them respecting the rate hike in 2014. they might and qe, but they will leave rates lower.
As opposed to jerod, the ecb will move higher and i think they will move higher before the fed.
That's the nature of the ecb.
Even though we are further along?
We are still going to be doing qe.
The moment they get positive growth -- in europe, the pmi is 48 point two.
Ours is at 51.8 -- theirs is at 48.2. the europeans are likely to see positive growth by the end of this year.
They are much more worried about inflation.
European investors have a much higher ratio of debt than we have.
The concept of inflation and hyperinflation the europeans look at, they are very much afraid of it.
It is the main cause of world war ii.
Even the pensioners in places like greece, the earlier you retire especially with defined benefits as opposed to a defined contribution package, you have to make sure inflation stays low.
The ecb is a perennial hawk.
It will continue to do that.
One thing they seem to agree on.
Thanks to jared, mike, and our closer, jason.
Here's what's coming up on "street smart." hit movie heat wave.
The director of "bridesmaids" is back with a new movie.
Why funny females are beating the blowups in the box office.
Throw away your resume.
The new app that could completely way the -- completely change the way companies hire.
Alas, a russian spy proposes to edward snowden.
The man who wore the same thing for 40 years.
Mick jagger's hair for sale.
It's all part of today's "weird wall street." stay tuned for your first trade on monday all coming up when "street smart" continues.
? we are back on "street smart" on bloomberg television, streaming on your ipad, and on bloomberg.com today's estimate sort of the estimates, but the numbers just don't add up.
We have 12 million unemployed americans and four million jobs waiting to be filled.
His app says they can fix it one job at a time.
They use location tracking and automatic resumes to connect job seekers to open positions nearby.
Great to have you here on "street smart." tell us exactly what you did.
We have had technology in this space for about four years, different technologies.
A high name asked us to roll this out for hourly working.
I want it see what in that situation.
It's very different than the corporate game.
I went undercover in new york city and went to the application process.
One store gave me a piece of receipt paper.
I took out my phone and i tried lying.
It was not optimized for a smart phone.
The second store, i was lining up about 50 other people waiting to get my five minutes with the manager and given a six-page form to fill out while waiting.
They just kind of dropped off as time passed and i never made it.
I'm thinking, this is ridiculous.
So many jobs are open.
Out of 195,000 jobs open, nearly half are in a service and support industry.
Leisure and support industries have about 112.000. with lots of turnovers.
You effectively created a program, a nap i can get on my phone and it helps me find where companies are hiring -- an app i cn getabnn get on my phone.
These types of demographics are already there.
They want to stand in the street and they want to see what stores, with places around them are hiring.
They don't want to be traveling more than five miles to look for an hourly position.
Goto settings, enable current location, hit go and it says, these seven companies, were seven retailers are all hiring right now.
And it tells you how far you are.
You can literally go from one to another.
There are two domain components to it.
I found that for every application going through, i was filling of the same application time and time again.
Career history, education.
We should try to create an easy way for a job seeker just to swipe for that.
They can take other phone and apply and swipe the information in one syndicate strip much more interactive piece.
We thought by giving interactive scenarios to the worker it is much more beneficial.
They can listen to an angry customer, for example and they can given audio situation.
Why can i not bring my dog in the story?
And then i have to explain how they will to calm the angry customer down.
It sounds like a good application, but you have to have demand.
Who is using it?
We launched it literally two months ago and we are speaking to several very large household names already.
Do not want to share?
If you pop into one of the new york city locations, you will see a kiosk in the store.
It's very important for this worker to not only be able to apply from anywhere but actually show a presence in the store.
A lot of retail hiring is given to the responsibility of a general manager of a store and there is often a risk there.
A corporate level, you have experienced recruiters and you know what you're looking for to maintain the brand.
When it drops down to the store level, sometimes it gets diluted.
By putting in a system like this, we have anchors.
We have psychologists on the team.
Once a candidate has gone through the application, and automatically scores and filters them according to specific metrics and anchors in the back end of the system.
Make sure you are hiring the best people for.
It works both ways.
It's a filter for the employer and it's a front end for access if you're looking for a job.
If you're talking about you mean with -- teaming up with large retailers we know, whether it is a burger king, walmart, starbucks, banana republic, companies that are hiring thousands of people around the country, and a perfect world, that would be her type of customer.
Technology solutions are all geared toward management, corporate environment.
A lot of the jobs open are not geared towards that type of jobs in a different type of solution is needed.
They advertise a specific time to come in and meet with a push you back to the website, like if you're applying for software developer at ibm . what is the barrier for entry?
Are you anticipating there will be a lot more competition?
This kind of market is going to change.
It makes a lot of sense.
It's not an easy thing to create this.
We've been building an hr and jobs technology for four year so we understand what's going on.
We have a mechanism to not to allow them to put their information in but on the backend do adjusting things about the recruiters don't have to spend as much time reviewing applications.
Adam, have a question for you.
You mention scoring, but is there still a concern that the employers could still be resume bond -- bombed, so you have people with the same score but you spend all day sifting through this resume pile.
What about things like our ground checks, references.
Will these be able to be integrated into your platform?
-- what about things like background checks?
You cannot do resume bombing.
Not like when you do with a job board.
With this, you have to go through second component of the interview, set by the company.
The standard piece in the beginning, the past boards section, and then it's interactive and they go in and set their own template and questions.
You actually have to spend a few minutes answering those questions, things like when would you be available to work.
If you cannot do the sunday shift that is needed, you are not a good candidate even if you have the right skill set.
For the background check, we have an integration with a very large background checking company through the backend of the system, we have a traffic color light, red, yellow, green, if they cannot pass certain types of tests, like drug tests.
Adam lewis, founder and ceo of applow.
Thanks to jason shanker.
Good to have you here.
The summer travel season could be your next big trade coming up on "street smart." later, going to have some fun.
We are talking to the creator and director of "freaks and geeks" as well as "bridesmaids." he has a new movie out, "the heat." we will get the inside scoop.
We'll be right back.
? flex time for your next big trade where we bring you the boldest calls on wall street and the people behind them.
By air, by land, by sea, millions of americans are getting away this summer in our next guest could have your passport to profit.
Ed w u has orbits with a buy.
But with travelocity, kayak, there is a lot of competition.
What is it about orbits right now that makes it stand out for you?
What they've done over the last six months to a year, really investing in technology and building up their supplier base as well as diversified away from air tractable -- from air travel to more higher profit hotel booking, they are turning around and benefiting from the growth we expect an online travel.
Maybe you can address earnings.
If you look at consensus estimates, one dollar 18 -- $1.18 but it drops.
There is a big accounting business -- difference in the first quarter.
They took a big tax benefit because now they have better visibility into earnings, they took a reversal of their tax reserves.
That is a special accounting issue.
If you back that out, the earnings is probably about $.20 on a pro forma basis.
They are actually growing earnings.
One of the knocks on orbitz and why it is trading significantly below its peers, priceline and expedia, they have been suffering more from, one, their reliance on air travel which has been less reliable and as well because of the smaller size.
Now, they are turning things around with their brand.
You mentioned some of the competition, priceline, travelocity, expedia.
I'm not loyal to any.
I will go anywhere to get the best deal.
Why'd you think orbitz has the edge at?
I think you are different.
I think people do have loyalty.
Yes, it's kind of like airlines in terms of you do have your loyalty but the price differences are that much different, you are not going stay with the same airline.
Same with online travel agents.
You would think the same product is available at all three sites, it's not necessarily the case.
Priceline and expedia have exploited it a little bit differently.
Orbitz as well, recently launching a loyalty program.
These stocks are up 250%, but you think there is room to run here?
main reasons why i like it and why i think we will keep running.
We mentioned earlier the travel industry is still very healthy.
Two, online travel penetration, particularly on the world, still very low.
In other parts of the world, people do not book.
We have to run.
We'll be right back.
? just about an hour ago, we saw protests reach a peak for mohamed morsi supporters.
They are calling it a military coup.
At least eight people have died and i believe this is a live shot.
It's 10:30 p.m. there and you can see the turmoil continuing in the streets.
We will continue to monitor that situation for you.
Meanwhile, let sure you are the markets close today.
A block us today thanks to the jobs support, better than expected.
Finishing up 140 seven points, curious reaction after the numbers came out.
We dipped down and then ultimately the optimists on wall street one out.
Up let's call it 100 50 points.
The s&p 500, a similar story, similar pattern.
And issuing up one percent and finally, looking at the nasdaq, you guessed it.
A similar pattern in the nasdaq also finishing up about 1%. we created 195, 000 jobs and they revised up the last month also to 195,000 suggesting ben bernanke may be tapering those bond purchases sooner than expected.
A very positive day.
We are at the halfway mark for the summer movie season but what has typically been a heyday for action flicks is turning into a bit of a bloodbath.
Take a look at these opening weekend numbers.
After earth, $27 million.
White house down, $25 million.
The heat is a bit of a surprise because it's a comedy but also a female-lead cast starring sandra bullock and melissa mccarthy as a pair of mismatched cops trying to take down a drug lord.
We are joined now by "the heat" director, paul feig and the screenwriter who is also writing for "parks and recreation." great to have you here on "street smart." are you two surprised that the female comedies have been able to take over the action flick competition?
And not surprised.
What we found with "bridesmaids" is that there is an enormous female audience out there that is underserved.
For some reason they don't get any films.
We are the only studio release this summer featuring women in lead roles.
Something is wrong.
Katie, you wrote the screenplay.
What is it like to work with a famous guy who has had a very famous run as a director?
Does he portray women?
This is my dream director.
I do not think you would want to do another female newbie after "bridesmaids." it's one of my favorite movies.
I love the directing women.
I've known funny women and i feel they are so underserved by their roles in comedy.
They are usually relegated to being the mean girl or the wife who is a drag.
When i see really funny women not being allowed to be funny, it makes me upset.
When k.d.'s script showed up, i said it was a no-brainer.
-- when katie's script showed up.
Sandra bullock and melissa mccarthy can both be hilarious.
What was it like working with them?
I was told sandra was interested because that was a boon for me.
I had never worked for her.
Melissa and i were trying to figure out something to do after bridesmaids and this was tailor- made for her.
They immediately hit it off so they had this chemistry that is so hard to manufacture.
Then it just went from there.
Katie was with me on the set and we were writing a new jokes as they went, playing off of each other.
It made for a very fun experience.
For people who have not seen it, i want to show a clip.
It gets to the, i don't know, the two of them getting to know each other.
A little seen about discovering spankx.
Stop pulling my pants off.
What are those?
What is it?
Quick stop at.
They are my spanx.
They hold everything together.
Y? what's going to come popping out?
It was sandra's idea.
In the meetings, we would sit there and talk to the actress is a lot before we started shooting and it was great.
They are both so funny.
That was her idea, write?
So we rewrote about that.
, to the process is collaborative?
-- how much of the process is collaborative?
It's very collaborative.
You never go in without a very strong script, the emotional arc and the dramatic underpinning.
But once we have that, and katie had such a funny script, and that's why i like to have her onset and we hire people who are great at improv and and we let them play.
It becomes what i like to call controlled chaos.
We get a lot of extra material so when we put the movie together we a lot of test screenings to keep finding out with the strongest jokes are.
If there's one that's not working, we put it together until we have a movie that works for ait.
Why do you guys think that these comedies are doing so much better than the action movies this summer?
At the end of the day, people just want a great story.
Action movies get so dependent upon the effects that you are not getting that human story that you need a lot of times.
I have not seen the new ones, but again i think this goes back to women being very underserved in the movies, especially with comedy, but in everything.
To not have more lead characters than they are playing.
It is so heartening that this is doing well, because i think he will send a message to hollywood.
Put more women in movies.
Guys are not afraid of seeing women in movies.
It sounds to me like there's an opportunity here to make more movies.
What might be in the works?
Personally, i have a female spy movie, like a james bond movie i wrote that we will hopefully be doing next.
Katie is writing away.
I'm working on a mother- daughter comedy adventure that this guy is going to direct.
You find someone when you are in tune with comedically, and it's great.
Look for the group and you understand the same things that make you laugh and hopefully they let us do it as long as we can.
Sounds like great stuff.
Paul feig and katie dippold, thanks for joining us.
It's about to get a whole lot hotter.
It's not good for the nation's power grid.
That story is coming up on "street smart." ? u.s. payrolls added 195,000 jobs keeping the unemployment rate at 7 point six percent.
This is a big deal.
They gained the most since 2011. the good news for the economy and the summer can mean good news for your career.
The founder and ceo of "the muse ," an online form for job advice for seekers as well as employers and she is here with the trends.
Good having you back.
It's been a few months.
Happy to have you.
Let's talk about some of the companies hiring right now.
What are you seeing on your site?
Companies do higher during the summer.
There is a big mess that everyone takes the summer off.
A lot of companies still have goals to hit, targets to make.
We are actually seeing a massive uptick in jobs in certain sectors.
In particular, we are not exclusively for technology, but we are seeing a lot of growth in that area, so if companies like aol, uber hiring in at least 20 cities in the u.s. these days for a number of different roles from product focus to also marketing roles, management.
It's interesting for us to see as the economy recovers that employers and not just adding essential positions but this support role that are nice to have as they're getting back on their feet.
You think everyone is mellow and the summer, but if you are seeing a pickup, maybe that says something about the companies out what.
I think it's a great time for job seekers.
There is less of a frenzy that you get other times of year.
Click the calm her environment.
Standout from the crowd.
Summer is very social, so to good time to expand your network, but hiring at this point can really set you off.
Just because it's july, i am still dedicated to my career.
When people come to the site and they can see the short videos that take you inside the company, part of what makes it different, what is your advice to people if they want to apply for a job?
To find the three you like?
All 10 that catcher ayako how do you narrow it down you go -- all 10 that catch your eye?
Job searching is kind of like dating.
No one wants to date the person who will go out with anybody.
The reason we offer these videos is that people can pull up a profile of a company like aol, uber, and really get to know the company.
And make a case for why you fit in and you've done your research.
Because of the opportunities out there come a people want to apply for everything, but i say focus on 3-5 a day that are the most exciting.
It depends on how much were searching.
You may be searching only 30 minutes a day.
If you are full time job searching a few hours in the morning and end up with something more like 10 to 15 to increase her chances.
What are companies looking for the most?
It's a tough question.
Obviously, each company has certain priorities they are looking to fill and certain themes they are really exciting about.
One is people who are up-to-date in their industries.
If you have been working in an industry for a while, make sure you are speaking the language, whether it is computers, marketing, data analytics that are really common, it's a great time to take a class, read articles on the daily muse.
Whatever it takes to really feel like you're on the cutting edge of your industry because employers want be innovative brands.
And it was number one on linkedin, saying to go join.
I just became an influencer.
Seeing my piece get that much traction was really fun.
Akathryn minshew, foudner and ceo of "the muse." find out which cities are under the most pressure for their power grids coming up next on "street smart." ? we are here in the studio in new york city, but i went out earlier and i went for a run and it was hot -- unbelievably hot.
That means people are running their air conditioners which means we have electricity demand, crude amanda, you name it.
Let's talk about how the distressing -- crude demand.
Let's talk about how this is stressing out the power grid.
Edison was warning to be conservative in your power usage, so there are concerns already.
With bloomberg rankings, we were looking up the power supply that various grids have versus demand.
What we found is that the three top worst positions in terms of stressed-out power grids include the west coast, new york, and also texas.
Take a look at this.
Taxes, at their peak power during the summer, that means they are almost short.
They have to try to ramp up.
They don't even have it.
Like they have to import electricity from other states with a surplus.
Or have a blackout.
New york and california have a little bit of a surplus at peak power, but it's a pretty slim margin out there.
It just shows you how stressed- out the system is, but especially in those particular regions of the country.
What about is a look at other parts of the u.s.? not as bad.
The midi standard atlantic have almost 12% of their rat eat power for a surplus they can tap into.
A kind of shows you what is going on.
Texas is in the worst situation.
A perennial shortage.
They are not in good shape.
We have all talked about the infrastructure, the power grid.
It is dated, old.
To ramp it up, it means spending money.
It means power lines, or what have you, and they don't want that in their neighborhood.
It's not an easy situation.
How impactful are the different price choices right now?
Another words, you can switch.
Some utilities can switch from nat gas to coal and in some cases even wind and other alternatives.
How actively do they switch and relate to price?
It gives them some flexibility and we think they're going to go wherever the cheaper prices and that will help out the consumer.
In terms of pricing for the three summer months, june, july, august, the average price, the electric bill is almost $400. i don't think i've ever seen mine that hide.
It is down about 2.5%. we are looking for some