>> we are moments away from the closing bell. this is "bloomberg market day." i'm alix steel. ♪ you are looking at stocks falling for a second day, s&p and dow posing one-month lows. the dow suffering its third straight weekly loss, really just all about that jobs number we saw. the telecom, utilities, consumer staples, specifically

the safety plays moving the s&p lower. joining me now is joe weisenthal. what really struck me was that crazy move on the 10-year yield, 2.4%. last friday we were at 2.12%. this was where the volatility and the action was today. joe: the global bond selloff is of big market e-com story the week. we saw yields spike right after the jobs report. the jobs report was great. jobs created, far ahead of expectations. the unemployment rate ticked up a bit, but that was mainly a function of labor force participation rate rising. we saw wage growth accelerate to 3%r .3% month over month -- 0. month over month. alix: we talk a lot about betting. we nailed it.

joe: that it's a fun thing about the jobs report, everyone wants to guess. we had the winner on the street whose call was closest, 275k. he was the closest of the major banks and even he was a little pessimistic. i want to highlight the twitter nfp guesses. my old colleague gets 281k. he basically nailed it. alix: what was your guess? 240k and that the unemployment rate would decline. i completely blew it this week. alix: you are done. timeout for joe. joe: i'm never going to do it again. weekend is the belmonts, the final leg of the triple crown. we are going to talk about the finance or markets triple crown. there are three big stories everyone is talking about right

now. one is the job situation, the economy, the fed, all that stuff. the other one, today's opec meeting in what is going on with oil, and greece. with us we have chad morgan lander, portfolio manager, and green to be-- eric securities.- of tb guest: great to see you. alix: you did not nail it. but yesterdayot, we had christine lagarde saying the data says we should wait until text -- 2016. today's data point undermined that. what do you think? >> but i think of jobs and when the fed is going to raise rates, i don't look at rates or inflation. inflation is moving as we expected, moving higher.

jobs, 175,000 to 225,000 is to get the fed off zero. to me it is the consumer spending, durable goods orders to see is more of a lift off going to the third quarter. it is happening. confidence that jobs can be around that level is rising. alix: what might have been perceived as more negative was the temporary workers. fromy increase to 20,000 16,000. they are relatively high. i wonder if that is a choice, people want to work part-time, or if it is because companies are still pretty skeptical and don't want to commit. guest: i think him but he's our spectacle. i focus on the underemployment rate. let's take this into consideration. it was 8% before the great recession.

we still have a lot of labor slack there. inflation,es to wage you will have to see a couple more numbers -- a couple good more numbers on the wage side. inhink the fed will raise september, october. and shows two different measures of wage growth. one is the average hourly earnings number. the other one is the employment cost index. alix: there is a lot on there. the employment cost index is a quarterly number that measures benefits. the trend is up for both. given number is noisy, but it looks like we are heading higher. excellent have an point in terms of underemployment. what i like to focus on is the direction of the underemployment. one way of measuring that is the gap between the e3 and e6.

when you look at that chart we just saw, my money is on the eci. it's moreefers it, comprehensive. the hourly earnings, there is so much noise going on there. this is what i focus on, tilting the momentum. that moment him is beginning to shift to the right side now. we're seeing evidence of higher wages there. alix: higher wages coming from the likes of walmart, gap, target employees rather than higher-paying job. what is the payback when the minimum rage -- wage is raise to $15 -- raised to $15 and i lay -- in l.a.? guest: you need to see aggregate mortgage debt move higher. in normalized times, that grows at 6%. even in a recession, the growth and mortgage credit is around 3%.

janet yellen and company will move very slowly moving into 2016. this will be the slowest rate increase in history. alix: and ever. i'm excited about today, the non-opec meeting, nopec, my question, my big take away was did opec prove that it no longer matters? i point to opec spare capacity. spare capacity is basically the oil you can bring on in 30 days that lasts for three months. that has been declining very steeply as the high production we have seen is coming at the expense of their piggy bank. they don't even have the capacity to do what they did before. what you think? guest: i think opec has no teeth right now. there is dysfunction within the group. it has always been like that. i believe they will continue over the course of the next 12 months to continue to pump it in

on a regular basis. hence the reason why are forecast for oil. it is at $70 a barrel. i would not be shocked if global growth continues to decelerate if we start toe, see a rapid deterioration within the economy within china. guest: what we have is a situation globally where there is too much supply. you might demand to eventually catch up, but what is going on in shale production and the united states, the energy revolution, that is a game changer. opec is trying to squeeze that, especially saudi arabia. it's going to be difficult because the nature of that oil it can be turned on and off very quickly. as long as we are keeping output where it is right now, it's going to be a struggle to get up towards $70 or $80 anytime soon. >> another key schematic is the demand curve for oil is shifting lower because as the world bank

and imf have brought in their global growth estimates [indiscernible] the talk about greece. i found this to be a funny week for greece. at the beginning of the week it looked like -- the story was the big players are going to get involved, they are really going for a deal this time. merkel was getting involved. we hit two developments that undermined that. one is greece pushed off its imf payments. the new have this speech from citrus, an hour or so ago, saying that the offer from creditors -- alix: he said they are closer to a deal than ever before. offer of thee creditors is nonsense and they should withdraw. is it more groundhog day? greece isown view on

that i think the greeks want to be pushed out of the euro. greece cannot survive in the euro in its present form. it needs debt relief. they have exceeded to some to some-- acceeded demands. aat the troy guys looking for something -- they want to keep this going along long enough that so they can get their money back. they are demanding 4.5% surplus. can greece really outperform surplus? i don't think so. guest: i agree 100%. the long-run perspective here is that a dis-unified eurozone when it comes to the political side and the fiscal this unification has shown, and greece is the primary example of this. they really need to fix this. in the short run, we believe

they will kick the can down the road. an investor and you put money to work. you actually care what happens to greece? guest: in the short run you could see the market go down 5%, 10% on the equity side. alix: the u.s. market? guest: in a long run, economic growth will have an marginal effect. global growth right now we believe is growing around 3%. we would be underweight equities because we are believers that the equity markets are overbalanced. alix: good stuff, guys. got through lots of thanks. joe, good to see a. chad morganlander and eric green, you are sticking with me. we have a lot more to talk about. coming up, you have said bank of new york l dudley president saying it is likely to raise interest rates this year. we will discuss who is right after the break. ♪

alix: welcome back to the "bloomberg market day." ellen pao is said to be wanting to $.7 million to walk away from her gender bias lawsuit against kleiner perkins. bloomberg has learned that pao told the elite venture capital firm she will not appeal her courtroom defeat if it pays her. itswanted the frontage of demand for nearly $1 million in court costs and an appeal made keeps alive the three-year-old discrimination cost. the greek prime minister alexis tsipras spoke in athens and he said there is urgency to solve his country's financial crisis.

decisionthe imf's yesterday to accept the move of all payments to the end of the month, it is clear to everybody and above all the markets, understand nobody wants to breach, and time is diminishing, not only for us, but for everybody. alix: the greek prime minister is dealing with an issue in terms of trying to get his money. he spoke in athens earlier today. the standoff continues there. bank of america is bringing aboard a former cit chief jeff peek as executive vice chairman in the global investment bank. the 68-year-old was recently a vice chairman of barclays. he starts work in new york this summer. peek presided over his collapse and emergence from bankruptcy in late 2009. this year'sto book power lunch with warren buffett, on ebay the top bid is $1.6

million. it might prove to be a relative bargain. three years ago it went for $2.4 million. buffett will not tell you what he's going to invest in next. bidding ends at midnight tonight. bill dudley said the fed's like to raise interest rates this year. saidrday christine lagarde the should wait until next year before raising rates. eric green is with td securities and he joins us now, a former fed president -- eric: i wish i were, but no. alix: what would you do if you were in the fed right now? hold off untilot 2016. when you think of the imf, they have a different mandate. the fed has a domestic mandate. the fed has socialized the whole notion of higher rates for almost nine to 12 months.

they want to raise rates. the question is are they going to have enough reason room for that bias to be realized. i suspect it's not about inflation, it's not about jobs, it is about growth momentum. as long as they are seeing stronger growth and you can pick your number, it is the direction of growth, higher as opposed to flat or lower, that will be sufficient to get them off the theyin september alix: have said data dependence, but which data point? what ends up being more important? if you look at the data meeting,t april's fomc they had a three-month average that was negative. when they meet in june, assuming we get a 1.5% for next week, he will be .8%. the isn is moving higher. durable good orders have been a weak.

for them it's really the pattern. a week, firstnt half is temporary, and when they come through the june meeting, i think these famous thoughts everybody talks about are going to be critical because what it is going to show you is that despite a very weak first half where there is no growth and inflation, their bias is still to raise rates twice. that is something the markets cannot ignore anymore. alix: what volatility will that do in the markets? the fed is much more optimistic. what happens? know.i don't the reality is nobody knows. the web look at this whole hiking cycle is in two parts. olds not like any other cycle. when they start raising rates, nobody has a clue how far they are going to go. the fed has always been too optimistic because central bankers have a tendency to think they do a great job, and a lot of them do. inflation, employment, and growth -- you always think tha

t is where you expect to go. market is mispricing where the fed is going to be in 2015. over the next four weeks, that will be the main story in the bond market. alix: markets are a little too pessimistic in the short term. eric: too optimistic that the fed will not deliver rate hikes. alix: we had news out today that apple and oracle are buying a lot of corporate bonds. there's a lot of illiquidity in the bond market. is that what we will see trade unraveling here? eric: that's a great question. want a sharp repricing of rates that leads to a blowout in credit. when you have seen is that regulations and capital requirements have made it difficult for traditional market makers to make the markets deep in liquid. when you have a cup a like apple

that is gobbling up more debt, that reduces liquidity more. of have seen what like liquidity can do in traditional, sovereign markets. c, thank you for joining me. we will be right back. ♪

alix: welcome back to the "bloomberg market day." jobsubt this morning's number was strong, 280,000 jobs added in may. 5.5% unemployment rate. me is marty music, the ceo of paycheck, the number two payroll processor in the united states, specializing in small and medium-size businesses. he basically helps you get paid. great to have you here on this day. when you take a look at the number, does it reflect what you are seeing in your business? guest: what we have seen in our

small business index, the paycheck and small business index dropped a little bit. this is under 50 employees. our index showed that growth in employment in under 50 employee companies p last year and that has dropped off a little bit. it is moderate, but inconsistent growth. small business sometimes leads the way in employment and maybe that is now moderated a bit. alix: in the cycle of recovery we are in right now, how important is our small businesses? very important. small businesses make up 95% of all the businesses in the u.s. were still getting growth, and in our index, it is based on a 2004 base year. we're still seeing stronger growth. it has been a little bit inconsistent and more moderate than it was last year. alix: this is mean you expect some job slowdown, not

necessarily layoff, but slowdown in hiring? marty: it is more of a slowdown in hiring. there is still hiring, but it has been slower than we saw the peak last year. news, just notd quite as strong as it was last year and a little bit earlier this year. alix: it is different from what we heard in the jobs report. where do you wind up seeing the weakness? we saw ais month little bit of a drop in the growth of hiring in small businesses across the country. central part of the country has been the strongest. a lot of energy, has driven a lot of growth right from texas, right to the to code as -- dakotas. dropped, some of texas dropped off. some of that hiring in houston, in particular. the coast, northeast has not been strong, southeast starting to get stronger, and the west coast starting to get stronger. with construction, for example,

around housing. alix: the standout is the wages month on month in may. what do you think? marty: small business wages, we have seen a 2% increase in wages on an annual basis. the larger businesses has been more 2.5% to 3%. it could be that small businesses are a little more cautious. there have been a lot of changes for small businesses, regulation with the affordable care act. they have been more careful on a hiring and wage increases. alix: what do you think will change that? strongerthink always a economy, better consumer confidence, even though consumer confidence is up, you are not seeing the spend. alix: you've got the low oil prices. you would have thought. marty: you would have thought. more spending on discretionary services, everything from dry-cleaning to pet grooming and small restaurants, you are

seeing more spend there, but overall, spending is not quite as strong as the small businesses would like to see. alix: in your business you have three ways to get your growth. one is people hire more people, there are new business creations, or you take market share. as you see your company grow, which one is more prevalent? marty: right now a new business startups are almost back to pre-recession levels. fromof our sales come brand-new small businesses. that's a very good thing. the growth in employment of existing businesses is growing, but not quite as strong as it was. and then taking market share -- we are having good success with getting moreand products for our clients. affordable care act, we introduce the products, we are helping clients comply with the affordable care act to be sure they are ready to file at the end of this year. alix: thank you so much for joining us, marty mucci.

good to see you. thanks for watching me "bloomberg market day." i'm alix steel. have a wonderful weekend. we will see you back here on monday. ♪

♪ from our studios in new york city, this is "charlie rose." charlie: we begin with david petraeus talking about the rise of isis in iraq and syria and the lessons he learned there as commander in iraq and afghanistan. how bad is the situation on the ground in iraq and syria today? is impression is that isis gaining ground and cities. david: