Prestige's Schenker, Bloomberg's Adams-Heard, on Oil (Audio)

It was the longest winning streak for stocks in smarch. Industrial, energy and financial shares have led the comeback since Monday. We took the markets every fifteen minutes. The Dow Industrial Average gained at nineteen points a tenth of a percent to close out the week at seventeen thousand, nine hundred forty nine. SMP five founded up four points two tents of a percent to twenty one oh two. The NAZDAC added twenty points four tenths of a percent and closed

at forty eight sixty two. West Texas intermediate crude oil of eighty seven cents of ARRO one eight percent to forty nine eighteen spot called up twenty three dollar sixty cents announced a thirteen ten year treasury have seven thirty seconds that with the yield of one point for four percent and repeating our top story. And Bangladesh local officials say that two police officers have been killed in an attack on a Bangladesh restaurant and that about thirty people

are being held hostage. A State Department spokesman says that all American citizens that are under the authority of the Diplomatic Chief of Mission and Dhaka were accounted for and we're not involved in the incident. The Department is still checking on private American citizens who may have been in the area. And that's the Bloomberg Business flash you're listening to taking stock with Pim Box and Kathleen Hayes on Bloomberg Radio. The health of the global economy, the strength

of manufacturers around the world post Brexit. This is what we're going to dive into now and what it may mean for some key commodities. To who's whose health is so important to the health of the US and global economy. Jason Shanker joins US now. He's President Prestige Economy X. He's located in Austin, Texas in studio Rachel Adams Hurt. She's part of Our America's Oil team here in New

York City. So Jason, let's start with you. I spoke earlier today with Brad Holcomb from the Institute of Supply Management, and we talked about US manufacturing. It's going pretty decently, fastest growth in more than a year. But why don't you and I and Rachel look at the Euro Area numbers because it's surprising that Euro Area manufacturing was going as fast as pace in six months. But can that

last post Brexit? Well, I think you know you've hit the nail on the head here that things looked pretty good going into Briggs and even the UK manufacturing numbers were up quite a lot, went up to fifty two point one from fifty point one, you know, uh, and and the Euros it was at fifty two point from fifty one point five. We're fifty as a break even for all of these. These all look good, but after breakfit,

I think they're significant. Concern about investment and if that investment is reduced, you could see new orders be reduced as well. And I could weigh on on manufacturing. Although it's a bit of a mixed bag for the UK, where exporters might still do quite well in this low pound environment. You know, some are saying that it breaks it behind the commodities market. You know, door is open for prices of things like oil to keep rising. This is one of your specialties, Jason. What do you see

for the price of oil moving ahead now? After breaks A lot of uncertainty is still around. Yeah, I know. I think for the balance of the year, we're going to spend most of the year between this second half between forty and sixty dollars a barrel. I think that

what's really important here is kind of a mix. When I look at forecasting commodity prices, it's a mix of three p M I S I look at the I s M, which is expansionary right now UM at that high level for June and fifty three point two, the eurosone manufacturing which is pretty strong and fifty two point UH and the Chinese manufacturing p M I. If you look at the Sichine which is the privately conducted one of the government survey that's contracted now for eighteen of

the past nineteen months. In other words, there's been a manufacturing recession in China for over a year and a half, so the mix of it is better than it's been in a number of months, which is positive, But China continues to risk being a drag and if there is reduced investment into Europe um then there could be issues with growth slowing there as well. So, Rachel, let's turn to you. You wrote a story this week about cheap gasoline and how that could mean a fuel record demand

for the fourth of July holiday. What's going on? Yeah, so Triple A expects that nearly forty three million Americans are going to be traveling this holiday weekend and that's due in part because of cheap gasoline prices, but also because it's the three day weekend and we've had a few past couple of years for July four UM, so this one is no different. And with more people saving money from cheap gas and because that gasoline is so cheap right now, it s incentivising Americans to hit throat.

So the reporting of done for this story and other work you've done on oil is it? Is it the when you talk to the analysts and the oil experts, are are they seeing sufficient demand to keep oil prices around this level? Or higher. Well, a recent Bloomberg Intelligence survey actually found that more than fifty percent of analysts and energy professionals expect that gas will in the year I mean oil, excuse me, oil in the year at fifty dollars a barrel or more. Um. And those respondents

were actually more bullish on Brent crude. Where about saw that that oil within the that price range? Okay, Jason Shanker back to you. Um if I'm oh boy there. The central banks are really in play right now, aren't they. The Bank of England maybe cutting the rate rates twice. It's a lot of economists think the Fed on hold. Stanley Fisher, FED Vice chair got to see what the impact of briggs It is before you look at rates. What's going to happen? Well, you know, I think I

think you know my thoughts on this. I know I spoke with you when my my book Recession Proof came out at the end of February. I've been expecting on end of two thousand sixteen or two seventeen US recession. I think that's already been baked in. And regardless of what happened with Breggsit, I think Breggs it just pushes US further in that direction. I think there's a risk of a UK recession, and that's been acknowledged as a result of reduced investment despite a likely increase in exports.

And you know, the Eurozone and the entire global economy are very much on the edge. I mean, the i m F lowered their growth forecast back in April significantly. In the press conference, one of the heads of research said, we're not presently in a crisis, we're on alert for a crisis. This was back in April, right, So I'll be very curious to see that next round of i m S growth forecast. But the world banks lowered THEIRS, and the IMF recently lowered the US growth forecast, not

only two point two for the year. I think we're in for some real slowing. I think autos are the lynchpin for the US economy right now. They were very strong last year. If you look year over your retail sales excluding autos was at a lower pace than in two thousand one, so autos, a million extra cars were and light trucks were sold. Last year. We went from sixteen point four million vehicles in two thousand fourteen to

seven teen point four million last year. And if the financial regulators push on banks to be more conservative with the credit, you're going to get a reduction in subprime auto loans at a time when the lease fleets that are coming back this year are three times the size of normal returning God, leave it there, Jason Shanker, thanks so much from Prestige Economics. Thanks to write Rachel Adams, heard from Bloomberg. Keep it right here. This is Bloomberg

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