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you take those moving averages do you look at the moving averages or do you give caution by a non-farm statistic of 103 and a two months payroll revision of negative 50 is it a 53,000 month lousy or is it a better report than that well it's lousy I do look at moving averages too many to tell you the truth 200-day and several years and in many cases but yeah I think this is a week ish type of report it's true that and I would have said going in that wages were the key consideration point three was what was expected over a point one last month so that averages at point two and two point seven on an annual basis which isn't much change and so you know I would think this makes for more cautious fit especially in light of the global trade situation that we see on an overnight basis where we're just going to have to see but I think the Fed will be cautious going forward my forecast has always been for one or two hike 19 at 2018 type of year Bill Gross if we got wage growth as John Farrell mentioned spot-on you've got to take inflation out of that to get to real or inflation adjusted wage growth do we have inflation adjusted wage growth well I don't think we have much and I've got an interesting chart in front of me you can't show it but it it starts it looks good on Roseville it looks so good on radio that chart on radio is gorgeous bill continued well let's talk about it then since 1980 real wages have flatlined it's almost like this patient is dead and real output has basically doubled and so where has that productivity gone to certainly hasn't gone to wages it's gone to corporations and it's good for stocks I suppose in terms of earnings but if the feds goal basically is to get wages up and to get that inflation rate at two percent or more I don't think they're really doing much of a job bill I want to talk about how you're positioned you've talked about this short that you've got in high-yield over the last couple of months with us on Bloomberg radio and on Bloomberg TV it's a sure that seems to be struggling to pay off we've had risk appetite take a real hit over the last couple of months but all the volatility or the downside seems to be in equities and high-yield seems to be where the relative out performances in risk assets can you explain why you think that is bill yeah how y'all doing okay you know high-yield tends to in terms of volatility say the VIX is 20 high-yield tends to have a VIX related volatility of about five you know about a quarter of what the stock market does and you know it's a slow moving type of type of average and the investors wait on high-yield to see you know the expected number of defaults going forward and so far they've been relative benign Jonathan so I think that's the main point well what I do say in addition to that and the things that are making the short work out over the past month or so is that you know the global trade situation and the potential you know economic problems that higher interest rates you know place on low low quality corporate credits you know eventually forces those spreads a little wider and that's basically what the bets about I guess what I'm trying to ask bill is that is there a more optimal way of expressing this sort of head against risk appetite away from credit and say equities where the volatility seems to be contained and isolated right now well volatility may be contained I guess it's hard for me to make that description but I think what I'm doing in high-yield it's a little sophisticated but basically I'm selling calls and selling puts on the hyc DX which is the you know the benchmark for the high-yield market and to the extent that it doesn't move by more than 50 basis points one way or the other over a month's period of time then you're capturing a premium so I'm expecting high-yield to gradually move higher but if it doesn't significantly move lower than the bet pays off Bill Gross with us of Janice Henderson and Bloomberg Television and Bloomberg radio this morning bill I do want to turn to the politics and fold it into your decades of work in financial theory and economic theory I'm going to cut to the chase that you're my guess a critic of what the president's saying and maybe even doing what does the president most get wrong well he gets the trade deficit wrong I mean the trade deficit does most economists would affirm you know as a result of overconsumption and under saving on the part of the United States our our savings ratio is down to 2% which is historically low the trade deficit at 3 percent plus of GDP is you know basically relatively high and to the extent that we like to buy things and not save then we're gonna have a trade deficit because we buy things here in the United States and then when we can't buy enough we buy it overseas and so Trump basically has it wrong it doesn't mean that we're not being gamed by some countries in terms of you know tariffs or in terms of technology or cheaper goods and services but it does mean that there's a little way to change this situation by imposing tariffs on foreign goods and services so then what do you need from Larry Kudlow mr.
Carlos gonna join John Farrow hearing about I'm guessing 45 minutes maybe it's 35 minutes I'm serious bill what does Laurence Kudlow and other free traders even secretary Ross what do they need to do to stop the discourse that has a political tinge I understand that we all understand the president's angle on that but its effect on China what does Kudlow need to do to jumpstart that process this weekend well he needs to calm the the the verbal tweeting down so to speak he needs to basically acknowledge that Trump is a negotiator and that part of the process of negotiation is to go to extremes like he did last night with a hundred billion dollars more you have the question that the markets have to ascertain is whether or not you know there's a semblance of truth to that and whether or not there might be a hundred billion behind that and so you know I I think in the equity markets that are there our risk premiums as you know and that you know this continued type of verbalization and tweeting on the part of of trade and not only tweeting but real tariffs being imposed you know basically raises the equity premium by a half a percent or so relative to what it is say it's a four to five percent premium it raises it by a half a percent what does that do to prices it lowers it by about three or four percent in terms of the stock market
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