On Friday, July 5, Caracal Global Founder Marc A. Ross joined Bloomberg Radio's Sound On program.
Below are his prep notes for the episode.
Prep Notes | Bloomberg Radio
July 7, 2019
Jobs Day
Stocks fell on Friday after the release of stronger jobs data dampened hope for easier Federal Reserve monetary policy = Markets like stimulus | Overread? Low amount of traders working
Dollar rises to a two-week high on job numbers = impacts commodity goods - including oil - traded in USD
Fed a little less dovish = next meeting July 31
The US economy added 224,000 jobs in June. Economists had forecast the US added 165,000 jobs in June, after a stunningly low 75,000 jobs were created in May, according to Dow Jones.
two month average = 149,500
The unemployment rate edged higher to 3.7% but was still near 50-year lows
Though companies still face the uncertainty of trade tensions and inflation remains below the Fed’s goal, the broad hiring gains in June provide a solid backdrop for consumer spending
A St. Louis Fed economist recently wrote a report suggesting that housing trends are consistent with a looming recession, and the bond market for months has been sending signs of a slowdown ahead.
Even after 10 years of job growth, employers are hiring at a faster pace than the pool of worker is growing. Yet, for most workers, wages are rising only modestly.
"Trump says the Fed doesn't know what it's doing"
Larry Kudlow
Kudlow says talks between the US and China are continuing.
The Fed should "take back the interest rate hike,” Kudlow says. "With a weak global economy, taking out an insurance policy is not a bad thing."
Global Banking
EU officials are considering Mark Carney for top IMF Job = He's Canadian, but he holds Irish and U.K. passports.
ECB = On Tuesday, European officials nominated Christine Lagarde, the International Monetary Fund’s current leader, to succeed Mario Draghi as European Central Bank president.
Bloomberg - Editorial: Lagarde is the right choice for the ECB: She’s more than acquainted with the problems Europe’s facing. She’s lived them.
"Yet to truly prepare the euro area for whatever tests may come, the ECB president will need to be a lot more than a monetary-policy expert. She must also have the political will and conviction to push for the deeper structural changes crucial to making the currency union viable. On that front, the lessons Lagarde appears to have learned over the past decade should prove invaluable."
If she’s confirmed, both the ECB and the US Federal Reserve—the world’s two most influential central banks—will be headed by lawyers, not economists.
Forty years ago, economists convinced the world that good monetary policy needed to be free of political influence in order to focus on long-term considerations in a more global and connected financial system. As a result, governments installed technocrats with deep academic and market expertise to head central banks. But following the financial crisis of 2008 and a rising wave of economic populism, technical expertise and knowledge of monetary policy does not cut it anymore
We now live in a world where politicians, journalists, and the public are wary of expertise and economic populism threatens central bank independence.
Both Powell and Lagarde have enough economic knowledge and humility, to consult with economists, and know when to put economic interests above politics. Future central bankers may not have this wisdom. To be fair, economists don’t always either.
Global Business
Jaguar Land Rover plans to build a new range of electrified cars in the U.K., safeguarding thousands of jobs and providing a boost for a British automotive industry that’s been rocked by job cuts and plant closures.
Ford readies for push in electric cars = “While Ford and VW have yet to announce any definitive agreement around joint-BEV development,” Morgan Stanley wrote, referring to battery electric vehicles, “we believe investors should prepare for significant levels of potential collaboration to share development and manufacturing costs.”
US-China
The meeting between President Donald Trump and China’s Xi Jinping at the G-20 might have been enough to pause the trade war, but it seems that finding a lasting peace is no easier than it was before the summit. China’s pre-condition is a removal of all tariffs placed on its goods, with state media saying talks will “go backward again” without the U.S. agreeing to that step. Trade spats are starting to spread beyond the U.S.-China faceoff, with the long-standing grudge match between Japan and South Korea among those that are beginning to re-emerge.
CNBC: White House trade advisor Peter Navarro: ‘Complicated’ US-China talks ‘will take time’
“We’re headed in a very good direction,” Navarro said in an interview with CNBC. “It’s complicated, as the president said, correctly, this will take time and we want to get it right. So let’s get it right.”
“All we’ve done basically is to allow the sale of chips to Huawei, and these are lower-tech items which do not impact national security whatever,” Navarro said. “Selling chips to Huawei, a small amount of chips - less than $1 billion a year - in the short run is small in the scheme of things.
“We’re not going to sacrifice anything in order to get a cheap political trick,” he said. “The whole China game plan ... is to dominate not just 5G but artificial intelligence, blockchain technology, and we can’t let that happen.”
Election 2020
Politico: DOJ says it will continue to explore path for citizenship question as Trump considers executive order
Next DEM debate = July 30 + July 31 = Detroit
Currently, 21 candidates have passed a modest qualification threshold for the July debates, either hitting 1 percent in three qualifying polls or getting 65,000 donors. That’s one more candidate than the Democratic National Committee has said it will allow on stage across the two nights, meaning someone has to get cut.
Fourteen candidates have crossed both of the thresholds = Joe Biden, Cory Booker, Pete Buttigieg, Castro, Tulsi Gabbard, Kirsten Gillibrand, Kamala Harris, Jay Inslee, Amy Klobuchar, Beto O’Rourke, Bernie Sanders, Elizabeth Warren, Marianne Williamson, and Andrew Yang.
On the outside = John Delaney, John Hickenlooper, Tim Ryan, Michael Bennet, Bullock, Bill de Blasio, and Eric Swalwell.
No chance = Seth Moulton, Wayne Messam, Mike Gravel, and Joe Sestak
Hickenlooper campaign in shambles = Senior staffers asked the former Colorado governor to drop out of the presidential race and run for Senate.
Politico: Reeling O'Rourke seeks a way forward: The Texan’s boosters think organization and a moment could turn the campaign around. 'Things can change on a dime,' says one strategist.
Campaign Cash
Here's how much 2020 candidates raised in the second quarter, according to reports so far:
Trump: $105 million
Buttigieg: $24.8 million
Biden: $21.5 million
Sanders: $18 million
Harris: $12 million
Bullock: $2 million
Campaign Polls
ABC News/Wash Post
Biden 30
Sanders 19
Harris 13
Warren 12
Castro 3
Buttigieg 4
O'Rourke 2
Klobuchar 2
Booker 1
Gabbard 1
Bennet 1
Inslee 1
Yang 0
Bullock 0
Economist/YouGov
Biden 23
Warren 19
Harris 15
Buttigieg 8
O'Rourke 2
Booker 2
Castro 1
Yang 1
Gabbard 1
Bennet 1
Bullock 1
Inslee 1
Klobuchar 0
USA Today/Suffolk
Biden 24
Harris 16
Warren 13
Sanders 9
Buttigieg 6
Klobuchar 2
Booker 2
O'Rourke 1
Delaney 1
Gabbard 1
Bennet 1
Castro 1
Yang 1
Inslee 0
