JACKIE: TIME FOR FOR THE WORD
ON WALL STREET, TOP INVESTORS
WATCHING YOUR MONEY JOINING ME
NOW THROUGH THE CYCLE PRESIDENT
JOHN LONSKI AND HORIZON
INVESTMENT’S CHIEF INVESTMENT
OFFICER, SCOTT LADNER.
LOOKING AT FUTURES AND BOUNCING
AROUND, INDICATED LOWER BUT NOT
BY MUCH.
SEEMS LIKE THE MARKET IS TEPID
BEFORE WE GET THE JOBS REPORT
OUT.
WE EXPECT 300,000 JOBS 5DED THE
LAST’ED INTHE LAST MONTH.
WHAT ARE YOU EXPECTING.
>> THE BEST OF TIMES, JACKIE,
FORECASTING THIS NUMBER IS SORT
OF LIKE A RANDOM NUMBER
GENERATOR AND WE’RE NOT IN THE
BEST OF TIMES SO WE’RE EXPECTING
A NUMBER RIGHT AROUND THERE BUT
WE WOULDN’T BE SURPRISED BY
ANYTHING LIKE 200,000 OVER P OR
UNDER THAT NUMBER AND THE MARKET
HAS BUILT THAT IN AS WELL.
THERE’S A REASON FUTURES AREN’T
TRADING, A REASON WHY THEY’RE
FLAT, A REASON WHY WE RALLIED
OFF THE BOTTOM.
NO ONE WANTS TO PUT ON A LARGE
POSITION AHEAD OF THE NUMBER,
THAT WILL DRIVE A LOT OF WHAT
THE FED WILL DO IN THE UPCOMING
SEPTEMBER MEETING.
JACKIE: WE’RE LOOKING AT
FUTURES.
IT’S LABOR DAY HOLIDAY, IT’S A
BIG DATA POINT WHEN IT COMES TO
THE JOBS REPORT THAT TRADERS
WATCH.
WE’RE GOING INTO A LONG HOLIDAY
WEEKEND, THAT WOULD MAKE SENSE
WHY PEOPLE WOULDN’T WANT TO PUT
ON BIG TRADES AT THE MOMENT.
>> THAT MAKES A LOT OF SENSE.
I THINK FUTURES ARE MEANINGLESS
UNTIL THE JOB REPORT COMES OUT
AND THEN WE’LL SEE WHAT HAPPENS.
RIGHT NOW OF COURSE WE’RE VERY
MUCH CONCERNED WITH WHAT’S
HAPPENING ON THE COMMODITY FRONT
EVER SINCE THE JACKSON HOLE
REMARKS FROM JEROME POWELL,
WE’VE HAD COMMODITIES DRIFTING
LOWER, WE HAVE COPPER DOWN FROM
WHERE IT WAS PREVIOUSLY,
ALUMINUM AND SO ON.
THIS DECLINE BY THE INDUSTRIAL
METALS REFLECTS NOT ONLY WORRY
ABOUT THE U.S. ECONOMY IN THE
MONTHS AHEAD, IT ALSO CAN BE
ASCRIBED TO A GLOBAL ECONOMIC
SLOWDOWN THAT INCLUDES CHINA AS
WELL AS EUROPE.
AND OF COURSE EUROPE THE FIRST
THING YOU THINK ABOUT, NATURAL
GAS.
AND THERE’S A GREAT DEAL OF
CONCERN OF A SHUTOFF OF SUPPLY
FROM RUSSIA TO EUROPE OF NATURAL
GAS AND THAT COULD SEND NATURAL
GAS PRICES SKYWARD, REGARDLESS
OF A POSSIBLE RECESSION IN
EUROPE AND WITH THAT HIGHER
INTEREST RATES.
JACKIE: SCOTT, I JUST WANT TO
BRING YOU IN HERE BECAUSE THAT’S
A GREAT POINT ON THE EXODE AT
THIS MARKET, JOHN -- COMMODITY
MARKET, JOHN.
IT’S SOMETHING WE’VE BEEN
WATCHING.
IT’S LIKE THE MARKET ESSENTIALLY
THINKS THAT THIS RECESSION IS
COMING AND THAT THIS GROW BALL G
SLOWDOWN IS HAPPENING AND THE
ADMINISTRATION CAN CALL IT A
TRANSITION OR WHATEVER IT WANTS
BUT THE REALITY IS THE REALITY.
THAT’S WHY COMMODITIES HAVE COME
DOWN.
NOT BECAUSE THE POLICIES HAVE
BEEN WORKING TO TAME INFLATION
OR ANYTHING LIKE THAT AT THIS
POINT.
>> YOU’RE ABSOLUTELY RIGHT.
LOOK, THE MARKET HAD PRETTY
CLEARLY MOVED ON FROM INFLATION
BEING PROBLEM NUMBER ONE YOU TO
RECESSION BEING PROBLEM NUMBER
ONE BEFORE JACKSON HOLE AND THE
MARKET THOUGHT THAT THE FED
STARTED TO MOVE ON FROM THAT AS
WELL.
THE POWER OF POWELL’S SPEECH IS
TO SAY THE FED HAS NOT MOVED ON
FROM INFLATION BEING PROBLEM
NUMBER ONE, IRRESPECTIVE OF
WHETHER OR NOT WE GET A
RECESSION THEY’LL GET INFLATION
DOWN.
THAT MEANS THEY’LL THROTTLE
GROWTH EVEN MORE.
THE PRICE ACTION IN COMMODITIES
IS COMPLETELY CONSISTENT WITH A
GLOBAL GROWTH HE SLOWDOWN AND
TEETERING ON RECESSION, WE’LL
SEE IF WE GET THERE OR NOT.
THE ODDS ARE PROBABLY FAVORED
THAT WE GET A RECESSION AT SOME
POINT.
COMMODITY ACTION IS CONSISTENT
WITH THAT.
JACKIE: WE’RE WATCHING OIL
PRICE AS WELL, SEEING THE WORST
MONTH SINCE NOVEMBER, DOWN MORE
THAN 9%.
YOU THINK ABOUT INFLATION, GAS
PRICES, OIL PRICES, THE ECONOMY,
WHAT JEROME POWELL IS TRYING TO
DO WITH INTEREST RATES, TELL ME
HOW OIL PLAYS AND WHERE WE ARE
RIGHT NOW IN THIS, IN THE
PRICING, HOW THAT PLAYS INTO
THIS BIG PICTURE.
>> OIL IS INCREDIBLY IMPORTANT
TO THE NEAR TERM INFLATION
OUTLOOK.
THE MONTH OF AUGUST WE HAD THE
PRICE OF GASOLINE, EXCUSE ME,
THE MONTH OF JULY, WE HAD THE
PRICE OF GASOLINE FALL BY NEARLY
9%.
THE CPI WAS UNCHANGED.
FOR THE MONTH OF AUGUST THE
PRICE OF GASOLINE, THAT DECLINE
DEEPENED TO 12%.
AND IN TURN, I WOULDN’T BE
SURPRISED IF WE HAVE ANOTHER
UNCHANGED READING FOR THE CPI IN
THE MONTH OF AUGUST.
THAT WILL BE GOOD NEWS ON THE
INFLATION FRONT.
THAT WILL BRING THE ANNUAL RATE
OF INFLATION DOWN TO ABOUT -- TO
8.2%.
THE QUESTION THEN BECOMES WILL
IT LAST AND WHAT HAPPENS TO
THESE OTHER ENERGY COMPONENTS
SUCH AS NATURAL GAS THAT COULD
GO SHARPLY HIGHER THIS WINTER IF
WE DO HAVE A REDUCED SUPPLY OF
NATURAL GAS TO EUROPE FROM RUSH.
JACKIE: IT’S GOING TO BE A
HUGE ISSUE.
WE’RE GOING TO BE ALL OVER THESE
STORIES AS WE HEAD INTO THE
FALL.