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PNC's Stone: Likes Financials Now, Adding to Technology (Audio) · Bloomberg Intelligence

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  Speaker 1: Global business news twenty four hours a day at Bloomberg
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  Speaker 1: This is a Bloomberg Business Flash. Broom, Bloomberg World Handquarters.
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  Speaker 1: I'm Charlie plot Stocks are lower, little change now with
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  Speaker 1: the SMP five hundred index down two points to drop
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  Speaker 1: there of one tenth of one percent down, industrials down
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  Speaker 1: three also a drop of less than one tenth of
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  Speaker 1: one percent, and as stack up nine a gain of
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  Speaker 1: two tenths of one percent. The ten year of three
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  Speaker 1: thirty seconds with the yield of one point five seven percent,
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  Speaker 1: Gold up five sixty ounce, the thirteen thirteen of four
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  Speaker 1: tenths of one percent. Crude oiled or West Texas Intermediate
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  Speaker 1: back below forty four dollars a barrel closer to forty
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  Speaker 1: three now forty three, twenty five down three point two percent.
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  Speaker 1: I'm Charlie Holton. That's a Bloomberg Business Flash. This he's
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  Speaker 1: taking stock with Kathleen Hayes and Pimpox on Bloomberg Radio
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  Speaker 1: Live at the US Open, a Flushing Meadow, Queens for
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  Speaker 1: the U s t a s premier event of the year,
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  Speaker 1: the fourth Grand Slam in the World Tennis tournaments, and
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  Speaker 1: we are very happy to be here raiding outside this place,
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  Speaker 1: suspended on the courts around us, but the retractable roof
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  Speaker 1: used for the first time last night as rafanal Rafa
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  Speaker 1: Nadal beat his Spanish opponent in use again as Andy Murray,
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  Speaker 1: the second seed tries to beat his French opponent. Meanwhile,
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  Speaker 1: we are very happy to be joined again this year
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  Speaker 1: by another big tennis found There's so many people who
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  Speaker 1: work on Wall Street, who work in the financial services,
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  Speaker 1: actually work in all kinds of industries who come out here.
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  Speaker 1: It's a great opportunity to see just such terrific action
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  Speaker 1: and maybe even see some friends and colleagues like your
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  Speaker 1: friends at taking Stock. Bill Stone is here his chief
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  Speaker 1: investment strategist p n C Asset Management Group, to talk
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  Speaker 1: little tennis and certainly the markets. Welcome back. Thanks for
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  Speaker 1: having me again. Why do you come here open every year?
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  Speaker 1: You know, I love tennis. I I competed in tennis
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  Speaker 1: through high school and just you know, I really appreciate
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  Speaker 1: how hard it is to play at this level. And
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  Speaker 1: it is a great venue and it just keeps getting
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  Speaker 1: better every year, honestly, so it's an awesome place to
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  Speaker 1: be better in terms of the food, and better in
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  Speaker 1: terms of the people who are here, better in terms
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  Speaker 1: of you know, I think of it as certainly food
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  Speaker 1: is good that you know, the facilities get better. I
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  Speaker 1: mean I started coming in the early nineties and not
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  Speaker 1: every year, but when I when I work for Salomon
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  Speaker 1: Brothers right out of school, so I I came here, um,
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  Speaker 1: and it's you know, it's it's way nice there. In
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  Speaker 1: terms of friendlier to non total tennis people, it's a
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  Speaker 1: it's a full entertainment event now, so I think that
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  Speaker 1: makes it exciting. I mean I would just love to
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  Speaker 1: watch tennis, but not everybody is so tennis crazy. So well,
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  Speaker 1: they do seem to have a good business head out
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  Speaker 1: here at the U s t A to know what
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  Speaker 1: is going to work for the fans, of sponsors and more.
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  Speaker 1: I think, so yeah, I mean it's great. You know,
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  Speaker 1: I always do some shopping, so you know there'll be
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  Speaker 1: some us open clothes coming home with me as well. Well.
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  Speaker 1: The FID will be glad to hear that they want
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  Speaker 1: to sumer stuff boost the economy in the second half.
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  Speaker 1: They can you know, get a rate hike in or
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  Speaker 1: two this year. Uh. In terms of the retractable roof.
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  Speaker 1: I just have to ask you. You're a fan, you
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  Speaker 1: sat under the roof, how how does it feel? How
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  Speaker 1: does it sound? How does it seem? I think it's great,
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  Speaker 1: you know, because one it lets us still have tennis
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  Speaker 1: despite having the rain, and you and I were dying
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  Speaker 1: at the heat last year. And for those that don't know,
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  Speaker 1: there's air conditioning in there when they close the roof,
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  Speaker 1: so it's actually really nice in there. Okay, again, another
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  Speaker 1: smart business decision. While we are, while you're watching tennis,
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  Speaker 1: I know you've got your your mobile device and you're
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  Speaker 1: watching the market. Kind of a mixed day because everybody's
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  Speaker 1: waiting for the jobs report tomorrow. We did, though, get
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  Speaker 1: kind of not such a strong read from the big
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  Speaker 1: three automakers on their latest sales. Now, of course, sales
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  Speaker 1: have been very strong from a from an equities stand point,
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  Speaker 1: from an investment standpoint, How do the automakers look to
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  Speaker 1: you in the light of the latest numbers and Ford's
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  Speaker 1: head saying pent up demand is gone? Now? Yeah, you know,
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  Speaker 1: it's really hard because I think you know, as you
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  Speaker 1: point out, you're coming from a high level that I
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  Speaker 1: think even coming off that level is still a pretty
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  Speaker 1: attractive number. Um and I you know, maybe the pin
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  Speaker 1: up demand is gone, but I would say at least
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  Speaker 1: when you think about it, and maybe another reason to
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  Speaker 1: be really watching the number tomorrow is if we keep
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  Speaker 1: having job creation, it's hard to imagine the consumer giving
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  Speaker 1: out right if you have good job creation, decent you know,
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  Speaker 1: uh gains and wages. Um. You know. Again, usually at
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  Speaker 1: least in this recovery, certainly at least those have driven spending.
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  Speaker 1: They haven't necessarily borrowed more consumer spending or consumer credit wise,
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  Speaker 1: which is fine. That actually makes it, I think, a
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  Speaker 1: more durable recovery, albeit slower than some of the more
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  Speaker 1: fund recoveries we've had in the past, but some of
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  Speaker 1: those don't end a lot quicker. So okay, So the
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  Speaker 1: Bloomberg Consensus survey for the change in payrolls tomorrow, that's
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  Speaker 1: the key number for the Fed, right, hundred and eighty thousand.
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  Speaker 1: That's the forecast, down from two five thousand in July,
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  Speaker 1: which is pretty strong. I believe the previous month was
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  Speaker 1: two eight seven. August was was very weak. So what
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  Speaker 1: what's in the in the stock market right now? Number
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  Speaker 1: one in terms of a number, Oh well, I mean
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  Speaker 1: I'm gonna go with the consensus. I mean, we the
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  Speaker 1: problem is, I think most people out there would say, well,
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  Speaker 1: the seasonals usually aren't good on this one, so you
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  Speaker 1: usually bet under. But then we got a decent ADP yesterday. Um,
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  Speaker 1: you know, I think like what you're seeing today is
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  Speaker 1: even though you got say the I s M manufacturing
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  Speaker 1: probably giving making people a little more nervous around, uh,
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  Speaker 1: the economy in general. You know, you're certainly not seeing
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  Speaker 1: the market have a big sell off, and maybe it's
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  Speaker 1: partly because some of it. If you get a bad
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  Speaker 1: number on Friday, it doesn't necessarily mean the economy is
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  Speaker 1: falling apart, but what it does mean is pretty much
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  Speaker 1: takes a timber hike off the table for the FED.
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  Speaker 1: And maybe that just makes people feel okay that you're
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  Speaker 1: only gonna get Let's assume things kind of continue moving
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  Speaker 1: on at a decent pace and you get that December
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  Speaker 1: hike and that's it. Well, it seems that the markets
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  Speaker 1: have shrugged off stock market anyway, and the bond market
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  Speaker 1: didn't have a big reaction to the I s M
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  Speaker 1: manufacturing number. The Institute for Supply Management, if it's above fifty,
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  Speaker 1: it shows manufacturing is growing. It was below that is
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  Speaker 1: starting to contract, and after being at fifty two point
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  Speaker 1: six in July, the numbers at forty nine point four.
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  Speaker 1: So stock market just but but doesn't seem to be
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  Speaker 1: people put too much attention to that one today. No,
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  Speaker 1: And I think probably just the conflicting number. You do
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  Speaker 1: get a market p M I number that's still held
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  Speaker 1: in better I s M is probably one people watched
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  Speaker 1: closer um and then I think it's just the other
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  Speaker 1: data around that says, well, I don't get too crazy
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  Speaker 1: about one number out of I s M. Even though
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  Speaker 1: I like watching is M, I think it gives you
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  Speaker 1: a good take on things. I think the other side
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  Speaker 1: is like high and now we're kind of fading in.
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  Speaker 1: It's kind of like if you watched that I watched
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  Speaker 1: the Atlanta Fed GDP now all the time, and you
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  Speaker 1: know we faded down to three point two percent there.
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  Speaker 1: I mean, we think by the end you end up
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  Speaker 1: at about a three for this quarter. But still, you know,
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  Speaker 1: even though you came from a much higher expect you
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  Speaker 1: know what, I think it got up to three point
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  Speaker 1: eight at one point something like that three I'll take
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  Speaker 1: rights that the averaging about one percent you every year
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  Speaker 1: for about three quarters. That would be good. So as
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  Speaker 1: for the stock market, bill Stone, what's your view about
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  Speaker 1: where it heads from here? Treading water indefinitely or will
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  Speaker 1: is there something that will give the people who are
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  Speaker 1: bullish the excuse for the reason to say time to buy.
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  Speaker 1: This thing's pushing higher. Um, I think I'm hopeful that
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  Speaker 1: you're gonna see that. But I think part of what's
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  Speaker 1: taken as a bit higher now. Obviously we're treading water
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  Speaker 1: here a little bit and down a little bit lately anyway, Um,
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  Speaker 1: but I think you're going to see earnings start to
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  Speaker 1: pick up because you're you know, we're now anniversary the
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  Speaker 1: really ugly oil moves, so the headline won't look as bad.
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  Speaker 1: But then you're seeing a it up in areas like technology,
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  Speaker 1: and I think you saw at least last night, Look,
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  Speaker 1: technology was a good h it was a good sector
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  Speaker 1: today in fact even Um. I think why you see
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  Speaker 1: such a cross current out in the market is some
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  Speaker 1: of the sectors that are more interest rate sensitive have
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  Speaker 1: been suffering lately, so like the utilities and the telecoms.
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  Speaker 1: That was our strength before. So we're really seeing a
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  Speaker 1: bit of a rotation. I'm hoping anyway to some of
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  Speaker 1: the more economically sensitive areas. And I think you're seeing
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  Speaker 1: some good news, you know, like you said, the eyes
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  Speaker 1: and manufacturing wasn't so good today here in the US,
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  Speaker 1: But we got great news out of the UK. You know,
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  Speaker 1: it's snap back phenomenally. We got a better number out
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  Speaker 1: of China. Not that it's completely turned the corner, um,
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  Speaker 1: but at least you can say, uh, you know it it
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  Speaker 1: as always, well, the US was the really strong one
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  Speaker 1: and we were worried about everybody else. Um, maybe we're
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  Speaker 1: having a little lift here in some of these other places. Well,
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  Speaker 1: of course, the Brexit just doesn't seem to have taken
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  Speaker 1: a bite out of the UK economy as much as
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  Speaker 1: people thought. On the other hand, their central Bank chief
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  Speaker 1: Markcarni did promise to be aggressive and made that restored
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  Speaker 1: some confidence. So in terms of investment strategy, you are, uh,
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  Speaker 1: tech doing reasonably well. You can see earnings picking up.
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  Speaker 1: So how do you play it? What? What industries? What sectors?
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  Speaker 1: Are you still looking at dividends? Are you looking at growth? Momentum? Value? Where?
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  Speaker 1: What? What What do you what? What is your team saying money? Yes,
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  Speaker 1: I gave you the ones that we really do like technology.
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  Speaker 1: We actually just added more to technology yesterday, So we
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  Speaker 1: do like that space. Um, we like the financials. I
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  Speaker 1: think you're underneath it. It's going to be a slow
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  Speaker 1: move up in interest rates, but you've seen some help
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  Speaker 1: from that side, at least recently. Of course, the financials
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  Speaker 1: ones we've liked for a while. It's been a long
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  Speaker 1: time coming. And you know, I think the valuation is good.
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  Speaker 1: There may be very good if in fact we get
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  Speaker 1: some decent numbers when you look at financials. Are you
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  Speaker 1: talking some of the big money center banks? Are you
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  Speaker 1: talking regionals? What where do you look to find the
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  Speaker 1: best value. Yeah, I'm gonna say probably mostly the more
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  Speaker 1: the more regional banks, only because uh, you know, when
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  Speaker 1: you get into the money centers, you're talking more trading
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  Speaker 1: type of thing. I'm I'm thinking just more lending, and
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  Speaker 1: certainly some of the money centers you're gonna get lenny exposure. UM.
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  Speaker 1: I don't have a good view on whether necessarily you're
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  Speaker 1: gonna see trading while you pick up Okay, tennis, who
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  Speaker 1: are you? Who are you? Who? You had to capping
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  Speaker 1: on the men's side too, do you know what? You know?
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  Speaker 1: We talked about this a little bit last year. I'm
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  Speaker 1: I'm gonna I'm voting for Djokovic. If Federer was here,
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  Speaker 1: I would say him, But I'm gonna say Djokovic because
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  Speaker 1: he's coached by my one time twin Boors Becker so
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  Speaker 1: and my hero. So I have to go with that.
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  Speaker 1: Anybody can topple Serena this year. Do you think on
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  Speaker 1: the women's side, Uh, certainly possible. But I obviously I
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  Speaker 1: think she has to be the favorite. Yeah, yeah, well
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  Speaker 1: she always is. Yes, that's true. As long as she's playing.
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  Speaker 1: I think he's always gonna be the favorite with good reason.
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  Speaker 1: He's about as far as I can remember. Bill Stone,
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  Speaker 1: thanks for joining us. Thank you. Yeah. Here at the
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  Speaker 1: US Open Flashy Meadow, Corona Park. We're having a terrific time.
• 10:57
  Speaker 1: Billi's chief Investment Strategies p n C Asset Management Group.
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  Speaker 1: He thinks, uh, Conn, He's doing better, Ernie's gonna do better.
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  Speaker 1: He's might say he's mildly positive on stocks. I'm Kathleen Hayes,
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  Speaker 1: and this is Bloomberg