Global business news twenty four hours a day at Bloomberg dot Com, the radio, plus mobile, lapt and on your radio. This is a Bloomberg Business Flash from Bloomberg World Handquarters. I'm Charlie Pellett. We have got thirteen minutes to go ahead of the close SMP five hundred index trading close to our record. Nes DAK is at a record down.
Jones Industrial Average also trading close to a record. Right now, we have got the SMP five hundred index advancing four points to seven, up two tenths of one percent down. Industrials hired by twenty three points up one tenth of one percent. Has stack up three tenths of one percent at fifty two sixty one Gold down a dollar and a half now thirteen thirty seven ounce down one tenth of one percent. Crude oil West Texas Intermediate at one point three percent of sixty cents of arrol oh one
right now on West Texas Intermediate Crude. I'm Charlie Pellett, And that's a Bloomberg Business Flash. You're listening to taking stock with Bim Box and Kathleen Hayes on Bloomberg Radio. What does the FED think of increasing stock prices. Well, here to tell us more is Matt Mayley. He is managing director and equity strategist at Miller, tay Back and Company. Matt Mayley, welcome to taking Stock. Great to be here.
Thank you for for having so tell us about your On the one hand, and on the other hand, the Federal Reserve is concerned that markets are too complacent, and yet they don't necessarily want people to go out and spend all their money on stocks. Is that correct? Well, the one thing that we I do think that that is correct to a degree. I mean everybody talks about how the fan and rightfully so that the Fed doesn't what the stock market to uh get hit hard. I mean
it is. It is important part of the of the economy nowadays. Off the stock markets at hard, it's going to have an impact on the economy. And you've seen it when it has been hit fairly hard, you know, and oh down over temper Center more there's a day another central manks have stepped in and provided the kind
of liquidity that would buoy the markets. However, I mean you can't not that, you know, they don't necessarily want the markets to to go to the moon on a straight shot, just like we saw what happened in late nineteen nineties. Because obviously that that creates a bubble that they can't control if it does roll over. So I kind of think now it's like they want more money
going into the economy rather than the stock market. Uh. And that's kind of why I think that you're gonna hear a little bit more hawkish tone out of a chair fed chair yelling this week. Well, one area of the stock market that has seemingly gone to the moon is the technology sector. I mean, if you take a look at x l K, which is the Spider Technology Select et F, I think it's up more than ten and a half percent since the beginning of the year. Yes, it's had a great move. And you know, it's funny.
On the one hand, that's you talked about one hand. On the other hand, on the one hand, that's very positive because it shows that we're in a little better leadership out of this UH market instead of some of
the defensive names like utilities and the consumer staples. But on the other hand, it has gone up quite a bit, and and a lot of that outperformance we've seen has been in the last really since the Brexit vote, and you said that the XLK it is now ten percent above it's uh tun a day moving average, and also a subset of the technology set of the Semiconductor index, the socks that's above it's moving average, and you go back the last ten years or so those in both
cases is of basically where the market or those groups have topped out. So we could be due for a little bit of a pullback. Having said that, um, the group has had a nice run on on the chart, it's broken out, so not necessarily thing. It's a group we should where you should take profits, and so much is that the buyers might want to step back a
little bit. And if we do get the usual September October scare, that's when you want to come back in and maybe buy on weakness because it is getting extended on a technical basis. Well, it is okay to sell every now and again. I mean, after all, as they
you don't go pro taking a profit. And looking at your description of the x l K, as you said just after that Brexit vote, that particular exchange traded fund the technology XLK it's up nearly fourteen percent from those Brexit loaves, do you believe that the Federal Reserve, and particularly the head of the New York Federal Reserve, Bill Dudley, do you think that his comments are meant to maybe make people a little bit more worried about what the
Federal Reserve will do or is there's something deeper, a deeper meaning to his on the one hand, and on the other hand comments well, you know again, when you use that when when when somebody is influential, as as a New York Federal Federals are president makes it says that the comments, I'm sorry that the markets are getting
you know, the investors are getting way too complacent. I think that's a substantial statement, And of course it was followed right up by the uh, you know, the next most important person in the sad the vice chair Fisher, kind of saying the same thing. Uh. So, I think that the they are trying to warn people that we
don't want things get to get out of control. We don't want the market because they keep talking about normalizing rates, whether they raise them now or in December or even later, they're acknowledging that rates are too low given the underlying strength. Now they don't want, you know, so, so they're they're they're too low for the where the market isn't where
the economy is. Uh. They don't want those things to get further ahead of them before things get out of control, because again that creates bubbles, and whatever bubbles unwind, we know what happens then and they can't control them. So I definitely think that they're sending a warning signal. Um. There is some people who think that you know, we can they'll still keep uh, you know, a net safety
that under the market with QUI programs. But they just don't think that the interest rate things has worked in the last a few years, and it's something they want to rectify. You use the word bubble, and I want you to see if you can tell me about bubbles
imprecious metals like silver. If you look at silver up thirty six percent since January, that is you know, and and and the thing is that it's it's it's rolled over just in the last couple of days, which has definitely know, it has been had a real nice ninety seven cents per ounce right now right and it got up to twenty and it's it was in that you know, it had that big rally. Then it was sideways for two months and it has now broken below that sideways trend.
That's a big concern for me, especially because if you look at the c OT, this commitment of traders data had showed that the long positions in oil had gotten to huge records. In fact, they were much higher than they were back in two thousand eleven when oil was at almost fifty dollars. So your less than half the level, and yet everybody's on one side of the boat. So this thing starts to roll over. Uh, you have a lot of people on wine some of those positions. So
it's still a little early. We've only broken it for a couple of days. But unless it anounces that quickly, that's going to be a big problem. And when silver, you silver is usually at turning points anyway, is usually a line indicator for gold. You know, we've heard a lot of bullish comments about gold lately, especially for some very smart and successful people billionaires and things. But they're long term thinkers. But that doesn't mean we can't have
a significant sell off over in the near term. Uh if if silver continues to break down, So that's something to watch very very closely. Too many people on one side of the boat in the precious medals, especially silver right now, Well, gold, as you said, now up about two tents of a percent higher by nearly three dollars, announced thirteen hundred forty dollars for an ounce of a gold. Gold started the year at around uh well, one thousand
sixty two announced. Now we're at thirteen hundred forty announce. You mentioned energy. Tell us about your thoughts investing in the energy complex. Crude oil today up one and a quarter percent, forty seven dollars for a barrel of crude oil, and also natural gas higher by nearly three percent today at two dollars seventy five cents per million BTU. Well, it's it's funny because the oil thing, I've had a couple of decent calls recently. When it got up to fifty,
I was getting overloved and over owned. Uh that was worked off. When to pull back to the you know, forty dollar range, actually dip alow that for a second, and I kind of said it was oversold or now we're kind of a no man's land. We bounced back a little bit. I'm not a big believer in what's going on right now. I mean, we have a lot of people who are not at their desks at the end of the summer, a lot of people still on vacation.
So uh, some of these rumors that are going around that have you know, it was one of the reasons today, of course, is more rumors about Iraq uh and and supplying the man from them and others been increasing their output and no real agreement on capping the output from OPEC nations. Right, So we got the thing is we get we keep getting these rumors or chatter or whatever out of out of OPEC, mostly coming from OPEC, and they all seem to be empty. They don't seem to
come to fruition. So I'm a little nervous up here. Then when you're pushing them towards fifty dollars, I know, you know, Goldman Sachs was talking it was today or yesterday, late yesterday about looking for the fifty dollar range uh as being where it was going to settle in for the time I'm being I tend to agree with that. However, the one thing, of course, on the technical basis is
what's going to happen. Uh, that kind of forty fifty dollar band is going to be key because you know, let's face a commodities traders are the ones who invented technical analysis, and those are key support and re listen stuff. I know, what's a wide range, but if you break below forty, that's going to cause some people to bail. A break above fifty that's going to attract a lot of momentum money. So right now we're kind of in
the middle of it. But at some point we break above above ba below that range, but it's going to be something that's gonna really affect what the trading I've started with the commodity traders do. When you speak of momentum, I keep thinking of stocks such as Facebook. The shares are up nearly twenty so far this year, you're trading in a hundred and twenty four dollars. Is that the kind of company that you want people to own or is that a play that is over? Now you're gonna
look for value? Well, I you know, I am a little bit more cautious on the market these levels of number one, because I do think that the Fed let's looking to raise rates, which well will I think full the market down because I think that will happen in September or in December. I think the chances are higher, are higher. I think it's going to happen in December. But I do think the chances of a December rate
hip are more than people expecting. I'm in the more of the chance that have been happening, or a lot more people are in sit fund futures. Of course, so much below that, but I just think that we'll know more on Friday, that's for sure. When when when FED chairs Yelling speaks. You know, if everybody talks about who's the most important voice, well, I think we all we can all agree about who's second or third or fifth
and most important. We all know whos number one, and that's uh so we'll get that feeling on on on money, and those set fund futures may see a big change on Friday. Thanks very much, Matt Mayleie. He's a managing director and equity strategist for Miller, tay Back and Company. He's talking about FED chair Janet Yelling. She will be speaking at the Kansas City Federal Reserves Annual Symposium in Jackson Hall, Wyoming, this Friday, ten am, Wall Street Time
right here on Bloomberg. Also, we've got reports from my co host Kathleen Hayes live from Jackson Hole, Wyoming, and the all important speech by Janet Yellin, Chair of the Federal Reserve. We take you through to the close on Wall Street next