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Conference Board's Goldstein on the April LEI Index (Audio) · Bloomberg Intelligence

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  Speaker 1: Global business news twenty four hours a day. If Bloomberg
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  Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
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  Speaker 1: I'm Charlie Pellett. The Dow, the SMPNAZ, DAC all lower
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  Speaker 1: stocks sliding in a broad sell off. This update brought
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  Speaker 1: to you by weather Tech, car mats and floor liners.
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  Speaker 1: Stocks are lower right now, with the SMP five hundred
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  Speaker 1: index falling nine points to two thousand thirty eight, a
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  Speaker 1: drop of five tenths of one percent, NAZ Stack down
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  Speaker 1: thirty two points, a decline of seven tenths of one percent,
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  Speaker 1: and the down Jones Industrial Average is down ninety three points,
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  Speaker 1: a drop of five tenths of one percent. The tenure
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  Speaker 1: of to thirty seconds that yield one point eight four percent.
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  Speaker 1: Gold down nine ten the ounce to twelve fifty five
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  Speaker 1: thirty a dropped there of one and a half percent.
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  Speaker 1: Crew down seven cents. The barrel forty twelve right now
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  Speaker 1: on West Texas Intermediate that is a drop of point
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  Speaker 1: two percent. So again recapping another sell off for stocks
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  Speaker 1: with the SMP down nine, drop of five tenths of
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  Speaker 1: one percent. I'm Charlie picton that's a Bloomberg business flash.
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  Speaker 1: You're listening to Taking Stock with Kathleen Hayes and Pim
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  Speaker 1: Fox on Bloomberg Radio. The consumer, What is the consumer
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  Speaker 1: think about the future of the economy. What is the
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  Speaker 1: Conference Boards Leading Economic Index for the United States? What
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  Speaker 1: is it telling us? What we have? Ken Goldstein to
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  Speaker 1: tell us he's the economist for the Conference Board, and
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  Speaker 1: he joins us, now, thank you very much for being here. Ken,
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  Speaker 1: give us the update the Conference Board Leading Economic Index
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  Speaker 1: l EI for the United States. It's it's up, and
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  Speaker 1: it's up again. And not only is the lead up,
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  Speaker 1: but in some sense more important to coincident, because that's
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  Speaker 1: what tells us where we are right now. After no
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  Speaker 1: change last month in April, that's back up. So, in
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  Speaker 1: other words, the measure belt where the economy is right
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  Speaker 1: now is telling us we continue to chuggle along, and
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  Speaker 1: the lead is telling us expect more of this at
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  Speaker 1: least through the summer, maybe even into the fall. The
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  Speaker 1: economy is not, you know, way picking up, but it
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  Speaker 1: certainly is not losing steam. That maybe one reason why
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  Speaker 1: bonds are rallying. Leading Economic Index contains how many hours
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  Speaker 1: are worked in manufacturing, the jobless claims, new orders of
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  Speaker 1: various kinds, building permits obviously another leading indicator for housing
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  Speaker 1: stock prices. Investors are betting where they think things are going. Uh.
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  Speaker 1: That we've got the interest rate spread uh to give
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  Speaker 1: us some sense of the credit markets are saying. So
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  Speaker 1: all of this is but you're missing you're missing the
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  Speaker 1: most I'm not the most important one, but but you know,
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  Speaker 1: to follow onto the earlier question, one of the measures
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  Speaker 1: here is about overall confidence, not just consumer confidence, overall confidence. Um.
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  Speaker 1: And it's been one of the you know, sort of
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  Speaker 1: you know, lagging behind the rest of the interview, very
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  Speaker 1: volatile lately. But that's different from being steadily down. So
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  Speaker 1: there's been a change over the last six twelve months
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  Speaker 1: there in terms of confidence. People are anxious. They're a
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  Speaker 1: little bit more solid about way the economy is it
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  Speaker 1: right now, but they're a little bit you know, worried
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  Speaker 1: about where things are good going to go, what's the
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  Speaker 1: next shoe that's going to hit the floor. That's part
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  Speaker 1: of the reason why until April you didn't see that
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  Speaker 1: big pickup in retail sales. We might you know, unless
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  Speaker 1: that was just a one month bounce. We might be
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  Speaker 1: starting to see some of that, a little bit more spending,
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  Speaker 1: a little bit less saving because people are a little
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  Speaker 1: bit less concerned about the bottom falling out. Ken Golds team, you,
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  Speaker 1: I'm sure read the report having to do with the
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  Speaker 1: Federal Open Market Committee meeting minutes for April. The context
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  Speaker 1: is they will raise rates at a future meeting if
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  Speaker 1: the economic data continues to come in as it has
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  Speaker 1: given today's report. I know it's incomplete. Be given today's report,
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  Speaker 1: if you had to decide whether the Federals are would
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  Speaker 1: raise interest rates, which way would you come down in July?
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  Speaker 1: Why is that? Because I don't think that they're going
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  Speaker 1: to do it right before the Brexit vote in June.
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  Speaker 1: So July, which is early enough to get away from
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  Speaker 1: our own election, but but you know, soon enough in
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  Speaker 1: order to move not to tighten, but to go back
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  Speaker 1: to this normalizing program that they've been trying to get
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  Speaker 1: on for so long. So if I had a bet
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  Speaker 1: right now, I would bet on exaggerator on Saturday and
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  Speaker 1: on the Fed raising in July. Okay, well that would
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  Speaker 1: be exciting Saturday. The Preakness. Now, well, let me ask
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  Speaker 1: you this um in terms of the economy has your
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  Speaker 1: view changed ially when you look at on what growth
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  Speaker 1: rate we're going to have shaking his head there, you've
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  Speaker 1: been saying something around what two to two and a half?
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  Speaker 1: Two to two and a half, and I think, you know,
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  Speaker 1: might even be closer to two perhaps, but you know
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  Speaker 1: that has been the view now for maybe the last
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  Speaker 1: two years. So that the statistics, at least the gd
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  Speaker 1: PEACE statistics bounce a little bit, you get much less
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  Speaker 1: bounce out of the labor market. And so one of
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  Speaker 1: the questions is which do you really rely on GDP
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  Speaker 1: your jobs? I think jobs is a better measure um
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  Speaker 1: And again, I mean it's not telling us things are
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  Speaker 1: going to pick up dramatically, but certainly that the bottom
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  Speaker 1: is not falling out. And I think that even the
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  Speaker 1: consumer is beginning to relax a little bit that the
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  Speaker 1: bottom is not gonna fall out, that if they signed
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  Speaker 1: a contract to make thirty six car loan payments, at
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  Speaker 1: the bottom is going to fall out in the middle
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  Speaker 1: of that. Tell me about stock prices, because we're trading
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  Speaker 1: in this range and I'm wondering what. I wonder what
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  Speaker 1: people take away. Well, with some some exceptions that may
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  Speaker 1: have frightened people to death, Tell us. What this tells you, well,
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  Speaker 1: what it tells me is that, you know, earnings haven't
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  Speaker 1: been very good this earning season. We saw this coming
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  Speaker 1: and I don't think that this is a one earning
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  Speaker 1: season phenomena. I think that you know, we're in for
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  Speaker 1: several of these, and I think that the stock prices
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  Speaker 1: are beginning to reflect that. But again, it's not that
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  Speaker 1: the bottom is falling, but just that things are may
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  Speaker 1: not get much better. They're not going to get that
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  Speaker 1: much worse, not for the economy, not for the job market,
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  Speaker 1: not for the stock market. Of course, the bob market
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  Speaker 1: got hit pretty hard. As I saidgested, people obviously were
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  Speaker 1: not positioned for a FED that was this what they
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  Speaker 1: considered hawkers. Right today, bonds doing doing a little bit
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  Speaker 1: better as as stocks sell off a bit. I want
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  Speaker 1: to ask you the global question, because you know very
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  Speaker 1: well kN it seems people who are opposed to the
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  Speaker 1: FED raising rates now and think it's a mistake, is
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  Speaker 1: that the global economy is still soft, you know, still
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  Speaker 1: have negative rates around the world. What is your view
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  Speaker 1: of the potential linkage and and if if there's some
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  Speaker 1: worry there, well, there is some worry there that you
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  Speaker 1: know that growth is not quickening across the globe. It
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  Speaker 1: is in certain places, you know, uh, and in some
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  Speaker 1: other places China, for example, maybe it's beginning to soften.
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  Speaker 1: But India is very strong, UM Africa, Latin America commodity producers,
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  Speaker 1: both in terms of prices and in terms of what
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  Speaker 1: that means for their economy. So again, you know, even
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  Speaker 1: if we look at the globe, it is not as
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  Speaker 1: if everything is beginning to implode on itself. And and
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  Speaker 1: because that's the case, and there even are some bright spots,
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  Speaker 1: this might be the time to just do not you know,
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  Speaker 1: a fifty point or seventy five point move, but maybe
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  Speaker 1: a twenty point move, and then do another one after
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  Speaker 1: the election, both for the domestic economy and for the
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  Speaker 1: global economy. Can Goldstein betting on exaggerated? All right? I
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  Speaker 1: can hardly wait. Thank you so much for joining us
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  Speaker 1: today from the New York based a conference board to
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  Speaker 1: look at the growth in leading economic indicators and what
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  Speaker 1: it needs for the economy. This is Bloomberg Radio coming
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  Speaker 1: up on taking Stock. After a week of dismal earnings
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  Speaker 1: reports and forecasts from retailers, Walmart stores and other chains,
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  Speaker 1: delivered some upbeat news in the past twenty four hours.
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  Speaker 1: We're gonna give you the details