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

two tenths of one percent. The ten year of three thirty seconds with the yield of one point five seven percent, Gold up five sixty ounce, the thirteen thirteen of four tenths of one percent. Crude oiled or West Texas Intermediate back below forty four dollars a barrel closer to forty three now forty three, twenty five down three point two percent.

I'm Charlie Holton. That's a Bloomberg Business Flash. This he's taking stock with Kathleen Hayes and Pimpox on Bloomberg Radio Live at the US Open, a Flushing Meadow, Queens for the U s t a s premier event of the year, the fourth Grand Slam in the World Tennis tournaments, and we are very happy to be here raiding outside this place, suspended on the courts around us, but the retractable roof used for the first time last night as rafanal Rafa

Nadal beat his Spanish opponent in use again as Andy Murray, the second seed tries to beat his French opponent. Meanwhile, we are very happy to be joined again this year by another big tennis found There's so many people who work on Wall Street, who work in the financial services, actually work in all kinds of industries who come out here. It's a great opportunity to see just such terrific action and maybe even see some friends and colleagues like your

friends at taking Stock. Bill Stone is here his chief investment strategist p n C Asset Management Group, to talk little tennis and certainly the markets. Welcome back. Thanks for having me again. Why do you come here open every year? You know, I love tennis. I I competed in tennis through high school and just you know, I really appreciate

how hard it is to play at this level. And it is a great venue and it just keeps getting better every year, honestly, so it's an awesome place to be better in terms of the food, and better in terms of the people who are here, better in terms of you know, I think of it as certainly food is good that you know, the facilities get better. I mean I started coming in the early nineties and not every year, but when I when I work for Salomon Brothers right out of school, so I I came here, um,

and it's you know, it's it's way nice there. In terms of friendlier to non total tennis people, it's a it's a full entertainment event now, so I think that makes it exciting. I mean I would just love to watch tennis, but not everybody is so tennis crazy. So well, they do seem to have a good business head out here at the U s t A to know what is going to work for the fans, of sponsors and more. I think, so yeah, I mean it's great. You know, I always do some shopping, so you know there'll be

some us open clothes coming home with me as well. Well. The FID will be glad to hear that they want to sumer stuff boost the economy in the second half. They can you know, get a rate hike in or two this year. Uh. In terms of the retractable roof. I just have to ask you. You're a fan, you sat under the roof, how how does it feel? How does it sound? How does it seem? I think it's great, you know, because one it lets us still have tennis despite having the rain, and you and I were dying

at the heat last year. And for those that don't know, there's air conditioning in there when they close the roof, so it's actually really nice in there. Okay, again, another smart business decision. While we are, while you're watching tennis, I know you've got your your mobile device and you're watching the market. Kind of a mixed day because everybody's waiting for the jobs report tomorrow. We did, though, get kind of not such a strong read from the big

three automakers on their latest sales. Now, of course, sales have been very strong from a from an equities stand point, from an investment standpoint, How do the automakers look to you in the light of the latest numbers and Ford's head saying pent up demand is gone? Now? Yeah, you know, it's really hard because I think you know, as you point out, you're coming from a high level that I think even coming off that level is still a pretty

attractive number. Um and I you know, maybe the pin up demand is gone, but I would say at least when you think about it, and maybe another reason to be really watching the number tomorrow is if we keep having job creation, it's hard to imagine the consumer giving out right if you have good job creation, decent you know, uh gains and wages. Um. You know. Again, usually at least in this recovery, certainly at least those have driven spending.

They haven't necessarily borrowed more consumer spending or consumer credit wise, which is fine. That actually makes it, I think, a more durable recovery, albeit slower than some of the more fund recoveries we've had in the past, but some of those don't end a lot quicker. So okay, So the Bloomberg Consensus survey for the change in payrolls tomorrow, that's the key number for the Fed, right, hundred and eighty thousand. That's the forecast, down from two five thousand in July,

which is pretty strong. I believe the previous month was two eight seven. August was was very weak. So what what's in the in the stock market right now? Number one in terms of a number, Oh well, I mean I'm gonna go with the consensus. I mean, we the problem is, I think most people out there would say, well, the seasonals usually aren't good on this one, so you

usually bet under. But then we got a decent ADP yesterday. Um, you know, I think like what you're seeing today is even though you got say the I s M manufacturing probably giving making people a little more nervous around, uh, the economy in general. You know, you're certainly not seeing the market have a big sell off, and maybe it's

partly because some of it. If you get a bad number on Friday, it doesn't necessarily mean the economy is falling apart, but what it does mean is pretty much takes a timber hike off the table for the FED. And maybe that just makes people feel okay that you're only gonna get Let's assume things kind of continue moving on at a decent pace and you get that December

hike and that's it. Well, it seems that the markets have shrugged off stock market anyway, and the bond market didn't have a big reaction to the I s M manufacturing number. The Institute for Supply Management, if it's above fifty, it shows manufacturing is growing. It was below that is starting to contract, and after being at fifty two point six in July, the numbers at forty nine point four. So stock market just but but doesn't seem to be people put too much attention to that one today. No,

And I think probably just the conflicting number. You do get a market p M I number that's still held in better I s M is probably one people watched closer um and then I think it's just the other data around that says, well, I don't get too crazy about one number out of I s M. Even though I like watching is M, I think it gives you a good take on things. I think the other side is like high and now we're kind of fading in.

It's kind of like if you watched that I watched the Atlanta Fed GDP now all the time, and you know we faded down to three point two percent there. I mean, we think by the end you end up at about a three for this quarter. But still, you know, even though you came from a much higher expect you know what, I think it got up to three point eight at one point something like that three I'll take rights that the averaging about one percent you every year

for about three quarters. That would be good. So as for the stock market, bill Stone, what's your view about where it heads from here? Treading water indefinitely or will is there something that will give the people who are bullish the excuse for the reason to say time to buy. This thing's pushing higher. Um, I think I'm hopeful that you're gonna see that. But I think part of what's

taken as a bit higher now. Obviously we're treading water here a little bit and down a little bit lately anyway, Um, but I think you're going to see earnings start to pick up because you're you know, we're now anniversary the really ugly oil moves, so the headline won't look as bad. But then you're seeing a it up in areas like technology, and I think you saw at least last night, Look, technology was a good h it was a good sector

today in fact even Um. I think why you see such a cross current out in the market is some of the sectors that are more interest rate sensitive have been suffering lately, so like the utilities and the telecoms. That was our strength before. So we're really seeing a bit of a rotation. I'm hoping anyway to some of the more economically sensitive areas. And I think you're seeing some good news, you know, like you said, the eyes and manufacturing wasn't so good today here in the US,

But we got great news out of the UK. You know, it's snap back phenomenally. We got a better number out of China. Not that it's completely turned the corner, um, but at least you can say, uh, you know it it as always, well, the US was the really strong one and we were worried about everybody else. Um, maybe we're having a little lift here in some of these other places. Well, of course, the Brexit just doesn't seem to have taken a bite out of the UK economy as much as

people thought. On the other hand, their central Bank chief Markcarni did promise to be aggressive and made that restored some confidence. So in terms of investment strategy, you are, uh, tech doing reasonably well. You can see earnings picking up. So how do you play it? What? What industries? What sectors? Are you still looking at dividends? Are you looking at growth? Momentum? Value? Where?

What? What What do you what? What is your team saying money? Yes, I gave you the ones that we really do like technology. We actually just added more to technology yesterday, So we do like that space. Um, we like the financials. I think you're underneath it. It's going to be a slow move up in interest rates, but you've seen some help from that side, at least recently. Of course, the financials ones we've liked for a while. It's been a long time coming. And you know, I think the valuation is good.

There may be very good if in fact we get some decent numbers when you look at financials. Are you talking some of the big money center banks? Are you talking regionals? What where do you look to find the best value. Yeah, I'm gonna say probably mostly the more the more regional banks, only because uh, you know, when you get into the money centers, you're talking more trading type of thing. I'm I'm thinking just more lending, and

certainly some of the money centers you're gonna get lenny exposure. UM. I don't have a good view on whether necessarily you're gonna see trading while you pick up Okay, tennis, who are you? Who are you? Who? You had to capping on the men's side too, do you know what? You know? We talked about this a little bit last year. I'm I'm gonna I'm voting for Djokovic. If Federer was here, I would say him, But I'm gonna say Djokovic because he's coached by my one time twin Boors Becker so

and my hero. So I have to go with that. Anybody can topple Serena this year. Do you think on the women's side, Uh, certainly possible. But I obviously I think she has to be the favorite. Yeah, yeah, well she always is. Yes, that's true. As long as she's playing. I think he's always gonna be the favorite with good reason. He's about as far as I can remember. Bill Stone, thanks for joining us. Thank you. Yeah. Here at the US Open Flashy Meadow, Corona Park. We're having a terrific time.

Billi's chief Investment Strategies p n C Asset Management Group. He thinks, uh, Conn, He's doing better, Ernie's gonna do better. He's might say he's mildly positive on stocks. I'm Kathleen Hayes, and this is Bloomberg