Broadcasting live to New York, Gloomberg eleven, Rio to Washington, d C, Bloomberg to Boston, Bloomberg twelve, D to San Francisco, Bloomberg nine to the Country, Zooeus jam General one ninet and around the globe the Bloomberg Radio plus, DAPD, Boomberg dot Com. This is taking stock the long bond. The US Treasury third year bond continues to rally today even as stocks in the United States come back, rising for the third day in a row. Does this make sensible?
According to our next guest, it does. One of the big pieces of fallout from the bregsit vote is we're going to have a slower for longer global economy, keeping a lid on inflation. This is certainly going to support this bond market rally. Kevin Guinness is going to be on with us to shortly from Raymond James here in New York today. He's also going to talk about the bank stress test and why the Fed keeps raising the bar for banks that are probably in better shape and
they've been in a long time. Now, let's get to Katherine Cordie. She is in the Bloomberg newsroom with the Bloomberg Business Flash, Thank you Kathleen and Bloomberg Taking Stock brought to you by Sector Spider E t S. Why buy a single stock when you can invest in the entire sector? Visit sector spdrs dot com or call one eight six Sector e t F. This stock market is extending yesterday's games as global markets continue to recover following Britain's vote to make a break with the European Union.
There's speculation that policymakers will continue to counter the effects of the withdrawal. Jim Paulson, chief investment strategist at Wells Capital Management, says the market can continue to advance. I really think there's good odds that we're going to set record highs before the year's out. Here in the sp
there was some good things going into Brexit. Here we we we've had a very broad based rally off the January February Lowe's, which was unlike the rally we had last August, or or the even the one we had from the almost correction in two fourteen. Those were narrow, narrow based rallies. This is broadbay. Can we check the
markets every fifteen minutes throughout the trading day? Down Industrial average is up two hundred sixty five points one and a half percent, trading at seventeen thousand, six hundred seventy three. SMP five fundered up at thirty four points one point six percent, trading at two thousand sixty nine. The nastack is hired by ninety points one point nine percent, trading at eighty one. West Texas Intermediate crude oil up a dollar seventy nine a barrel three point seven percent at
forty nine sixty five. Spout gold up ten dollars twenty cents an ounce at thirty eight ten, and the tenure treasury unchanged with the yield of one point four six percent. And now let's get an update and some of the other stories were following today on Bloomberg Radio. Thank you, Catherine from the Bloomberg Newsroom. I'm Julie Hyman. Survivors from Tuesday's terror attack and Turkey are telling their stories. Stephen Nobille was at the airport in Istanbul with his wife
when the attacks began. He describes his desperation when he suddenly realized his wife had disappeared. I saw the sea of people flooding towards me, and I was just pushing through the trying and get to to her. I was praying God that she didn't leave the area. As long as I could find her, at least I could take her safety. And then that's when I saw him in the corner and I saw the bullets flying. Now Beale's
wife survived the attack. Meanwhile, Sam Spinado's flight had already taken off from the airport in Istanbul when she learned of the attack. She landed safely in Atlanta, thanking God I was in the air and that he was watching over me and that I was. No one is claiming responsibility for that deadly attack at the airport in Istanbul, but Turkish authorities are blaming Islamic State. Forty one people were killed, another two d and thirty nine were wounded.
President Obama offered his condolences to the people of Turkey. Authorities say a terminal at JFK Airport was briefly evacuated this morning after a police dog flagged an unattended bag. A spokesman for airport police says roads in and out of JFK's Terminal five were closed for about an hour. The terminal was reopened after bomb squad officials gave the all clear former Nassau County Executive Thomas Swazi one of five way Democratic primary race in the Long Island district
of retiring Democratic Congressman Steve Israel. Swazi will face Republican Jack Martin's in the general election. Swazzi ran unsuccessfully for the two thousand six Democratic gubernatorial nomination, losing to Elliot Spitzer. Global News twenty four hours a day, powered by more than twenty six hundred journalists and analysts in more than one hundred and twenty countries from the Bloomberg Newsroom. I'm
Julie Hyman. This is Bloomberg Catherine. Thank you. Now, let's get an updated a bench marks down Industrial Average up two hundred sixty two points, trading at seventeen thousand, six hundred seventy two. Smp F I founded up thirty three points at two thousand sixty nine. NAZAC higher by eighty nine points, trading at forty eight one. And that's a Bloomberg business flash. Is taking stock the Fed in focus on Bloomberg Radio taking a look at the bond market now.
Interest rates across the globe are near record lows, many of them now and agative territory, no wonder that investors are finding yields attractive in the longest dated corner of the thirty and have trillion dollar treasury market. The yield on the thirty year, the longest bond of all, touching lowest since February twenty fift Have we hit bottom on yields? Have we hit the highs on price? The more this
goes on, the more you think we had. And yet every time someone seems to be sure that's the case and this is going to turn around, the rally just picks up again. Kevin, get us this here had a fixed income at Raymond James joining us in a New York studios today, Kevin, welcome. You know the image I get is, you know lex say, if you're on a boat and it gets takes on water and one and keeps thinking, so everybody keeps trying to get up towards the bow of the boats. That's what the third year
bond is now. Now it really is, And I think if you look at it, um in the U s in general and dollar denominated bonds of safety have become the item of interest for the globe um SO and there's very little to fear uh, from an inflationary damn point or the U S economy heating up, which would which would drive yields back up. So there's uh, they're still room to fall an interest rate based on global conditions. But more importantly, we're getting such a mixed bag out
of the US economy. It just adds to the appeal of buying longer data securities. And of course the we got stronger consumer spending for two months strongest is two thousand nine. That's nice. On the other hand, the inflation gage of the fet is watching is now down to zero point nine, even farther away from two point oh. How much of that argument that, you know what, there's more growth, you know, you might even get two and a half percent this year on GDP, but the inflation
pressures are not there. How much is it that, Kevin? If I'm like you, I'm I'm dealing with investors all of the world, big institutions. How much is it also just because there's been so much of this move towards negative rates. Look at the g g b s, the Japanese government bonds minus zero point two for the German bull that's a tenure minus one point roughly, which is that which is the big driver? Is it both? Well?
It is both. But I think, um, if you're a big institution UM and you're looking to uh, let's say you're a big bank and you're not making loans that where your marginal lies. UM, you have with a lot of cash still coming in, very little moves in which to make in your portfolio that don't include domestic bonds and specifically U S treasuries if you want to remain safe enough to curve for when this thing does turn, if it ever turns, or we just become Japan's economy.
But but mostly it is the return of choice. And if you go outside of the US, returns and risk and liquidity um aren't there. So you see the flood of the money in it, but you also see that money staying here, uh, taking small risk bites along the way, searching for yield that they're not getting from typical ending. So how do you play this? Then you just look at this as the benchmark and say, okay, I know what I'm you know what, I'm gonna build a bond portfolio.
One where do you buy bonds if you want to you want to hold them maybe and actually learn the yield seems like an old fashioned thing now because you
can't earn my yield on anything now. Well, probably the you know, the oldest good story in the bond book right now continues to be tax free bonds UM and because it not only provides absolute yield UM, it provides and I'm talking about high quality municipal bonds in particular, UM, the yield, the safety liquidity, and then the taxable equivalent returns when you compare it against a corporate bond or a mortgage bond or something that in the taxable space, UH,
it's a hundred basis points or better in yield pick up. And so a lot of that money has been flooding into the muni space. The taxable muni space is even better than the corporate space UH defaults or lower yields or higher better advantage. So it's a it's a small game to play, but there's a big enough market to UH to accommodate investors. So last week we got the first let's look at the bank's health in the first round of stress tests. We get the second version of
it today. I think can make a really good point in a note recently that the actually the banks are in better shape than ever. But it's if I'm understanding you correctly, it's almost like the FED keeps raising the bar. That doesn't sound good for banks. And why is the FED doing that? Well, there's two things going on. Obviously in these stress tests. The banks want to pass them, so they put you know, a lot of liquidity um uh in capital on their books uh, so that they
can repay shareholders. To the FED wants to make sure that the banks can absorb losses, have liquidity, continue to lend if there's uh an O eight style crisis. So what they've done is say, okay, oh eight becomes now the benchmark for what we look at when stressing banks, and let's see if we can't take it a little further. Uh And and how how do they react in these scenarios? So, UM, I think that the FED will continue to do that. They will continue to look for something bigger and more
substantial than ten percent unemployment. Half of the equity portfolio is falling apart, fifteen seconds left. Any any when it comes to big banks and corporate bonds, is there anything that you like? Um? The yes, you can just go straight up the curve um and look at at the JP Morgans in the world and the Wells Fargoes and some of the stronger banks, and and get spread off of their corporate debt um. The rest of it, though,
becomes more of a safe haven play, all right. Kevin gid us so happy he's joining us in studio today. He's had a fixed income at Raymond James. We're continue to follow the markets today, from stocks to bonds and energy. We're gonna also be looking at Turkey after the terrorist attacks on the airport there. We're going to find out
what it means for the president and the economy. On Blood Brig Radio Ben in Focus brought to you by Willoughby since eighteen ninety eight, New York City's boutique camera store for precision crafted, hostile, Blood and Like A cameras, plus a full selection of GoPro action adventure cameras. Willoughby's at the corner of Fifth Avenue and thirty first Street,