[closing bell ringing] we are looking at the dow falling for a fourth straight day. we are negative on the dow jones industrial average for the year, falling by about five points. you can call it flat, but it was a crazy ride we have seen. flat, the nasdaq, one of the bigger losers there. but the dow is closing around a two-month low. we are in the middle available -- of the longest losing streak since march. the nasdaq falling for a second day. digging in the smp, telecom, tech and the utilities leading the smp lower -- the snp lower.

here with me to break it all down his joe weisenthal, the bloomberg markets managing editor. joe: one thing we have been talking about a lot is transport and we have been getting not so good news. american airlines cutting forecasts, southwest was one of the worst performing stocks on the s&p 500 today. there's fear the transport could lead the over market -- the overall market lower. alix: raymond james said expect it lower into the summer months and muted -- you wouldn't expect that. he has a different take. i was looking at energy, the second are finishing relatively neutral, but you did see a big move in oil stocks and oil in upgrade for oil stocks at oppenheimer and in terms of oil price, you had eia coming out, downgrading its

forecast for july. be atexpect production to a 43% high but shale inching lower. joe: one headline that hit before the bell was another company boosting the amount of cash it gives to shareholders. target boosting its dividend by 7.7%. there was a goldman note out that said stop buying back your stock, but investors seem to like it. goldman itself doing a buyback -- we don't like that you do it, but you are going to keep doing it at the end of the day. two other stocks that hit on earnings -- lululemon and dave and buster's. these stood out -- this is what investors want. they want premium pe multiples of the sexy growth stories, high-growth consumer names. comps and dave

investors had almost 10%. these are numbers we don't see that much anymore in this environment. joe: outside the stock market, we got some awesome news for the american worker. a bunch of new data comes out and says good news for workers and wages. the first chart comes from today's survey of small businesses. they asked what they are seeing in the economy and this chart is one of my favorites ever. single biggest problem companies are seeing -- you can see the orange line is sales are their biggest problem is collapsing. companies are having bigger big a the just not as problem. on the flip side, the number of companies that say labor quality is their biggest problem, more and more are saying they cannot find workers, so that seems like it news if you are a worker. the next chart is also from that

survey and it takes compensation plans, the number of companies inclined to wait -- to raise wages compared to the cost-of-living index. it shows we could probably expect the employment cost index, a measure of how much it costs to employ workers to rise. alix: not enough workers. they have to pay more. the last chart came from a different survey which measures things like job openings and quits. the number of job openings in this country is at a 14 year high. this is april, it lags a little bit but put these things together and you have companies saying they are having trouble finding workers and companies saying they are increasing their plans to pay more and you have the number of openings surge. i can't see how wages are not on the rise.

unless you are a banker and then there are some issues. alix: we want to bring in our panel, the chief strategist at rhino trading partners and lisa abramowicz. what was your chain -- what was your take on what joe was saying? what kinds of jobs and wages are we seeing? michael: joe is actually on to something here. alix: exclusive. survey wasat important. it really did show us something in terms of compensation plans. the thing to point out is that number was very strong. what i noticed was the strength month over month was in services related sectors, health care and education and manufacturing was down. that's something we need to focus on.

not as good, isn perhaps hitting a wall, i'm going to stick to that. it may not matter. butstill a wage skeptic, between this and the numbers on friday, i'm starting to come around and say we need to pay attention, what does this mean for the economy? wage growth is in los angeles, is that really going to make the fed feel better? lisa: the bond market actually agrees with joe. you have spawned levels rising to the highest levels since september, the 10 year highest since october and you saw a real soft this in the credit market. people are getting nervous and people are saying this could be the real thing. this could be the time the fed looks at this data and yes, your point does get enough comfort

that they can start their hiking process which will be problematic, particularly for credit and emerging markets which have been hammered recently. these are some of the dynamics for the market. it was bad for the bond market. michael: it seems like even a few weeks ago they were saying it's going to be a while before the rate hike. how do youseptember, see the fed hiking rates -- when do you see the fed hiking rates? michael: my answer is not this year. i'm still a skeptic on wages. one issue with wages, and i think this is a global did wages, how much really come down during the recession? did they really come down a lot?

they didn't go down, they didn't go up, they're just kind of stuck there. they never went away all that much. this is good. the other thing about the fed's i'm still in that camp at the fed says they are data dependent. if they were data dependent, they would have hiked rates three years ago. now watch inflation -- they are not going to do that. they are scared to death of theg anything to upset credit markets, too upset emerging markets, they don't like the strong dollar, say what you will, president obama said something about the strong dollar over the weekend. nobody makes stories like that. everyone is focused on this -- we don't want the dollar too strong. they are focused on volatility in the markets. a report came out that

said they are actually reducing their weight in stocks and bonds and are moving into cash, raising cash to 11% split between the dollar and sterling because of the data getting better and they think the fed will perhaps raise earlier than expected. michael: -- joe -- michael: if that happens, i think that will be a buying opportunity in fixed income because i think the fed will get cold feet. not just the fed. we're talking about inflation data with economic growth improving their. when you have a strengthening dollar, that means a weakening of currencies and other places. theiry have to sell reserves to potentially bolster their currency and what does that mean for u.s. assets

because a lot of their reserves have been held in u.s. assets. the weaknessd to in credit markets in general? this is a big concern because once you get a real shift, people are concerned money is going to start flying around and it could be violent really quick. one of the things that was brought up is this rising correlation between bonds and equities, so there's no place to hedge. what are people on the street doing about it? lisa: more cash allocations, people are looking for corners of markets that are not as correlated, but it is a tricky science. flowss why you see record into unconstrained funds. the question is whether they are really uncorrelated or not. alix: stick with me. we have lots to talk about. lisa, thank you so much and joe, thank you for being with us.

we have more right after the break. stay with us. ♪

welcome back. i'm alix steel. we want to get straight to the top headlines this afternoon. a portion of the white house was

evacuated after a bomb threat was phoned in. secret service interrupted a live news briefing by the press theetary and evacuated james brady briefing room shortly after 2:00. after security sweep the room, they were given the all clear. if accuray should at the white house are rare, but not unprecedented. president obama was at the white house at the time but he and the first family were not affected. theobama earlier defended health care overhaul in washington, thing the health care law is no longer just a law or theory, but a reality for millions of americans. president obama: while we were told over and over again and again, we were told obamacare would be a job killer, some critics pedal this notion, it turns out in reality america has has experienced 63 straight months of job growth that

started when we enacted the affordable care act. former house speaker dennis pastored is pleading not guilty to federal charges in a federal hush my case. he entered the plea through his attorney. breaking accuse of banking laws and lying to investigators. the report says he agreed to pay $3.5 million to cover past misconduct. air travelers might want to shop for smaller carry-on suitcases. a trade group is calling for smaller bags to free up space impact overhead ends. details are murky on how it would be implemented. it could vary from airline to airline but it could raise the possibility that many passengers would be forced to check their carry-ons. i'm back with michael block some of the chief strategist at rhino partners. is the bond rally over?

michael: there is a lot of pain being felt out there. we alluded to it in your earlier set her -- in your earlier segment. this froze allocators, macro guys and fixed income investors were a loop. this rose allocators for a loop. i don't think anything has really changed. but i think this pain is going to have a lasting effect. the bond market was the area that was holding up. isn't that foreshadowing a spillover into equities? michael: what is it foreshadowing? perhaps a move like last october where you had the fed making soothing noises and they central banks stepped up and providing the floor again. i could see a selloff in high yields. i'm worried about the prevalence .f the etf's in high yields

we've never seen how these things have act did on a selloff like this in this magnitude. it this overeen game done by maureen sick about it. and i'm worried sick about it. to think of stock and bond returns as being random walk or normal distribution, but the truth of the matter is when it is outlier moves, the outliers tend to cluster together. people are modeling risk even after 2008 in a way that they are not counting for that. aey say it is a one in billion move, but it happens over and over again and will only exacerbate some of the pain in volatility. how do you account for risk when we've never been an environment like this before? michael: you bring physics in and don't assume anything. to it,u get back down

these moves are going to be painful and there will be a lot of tall malton the markets. what i am telling client is be patient and wait. alix: what are you waiting for? michael: opportunities. a sell off right now, if it doesn't get a lot worse is an opportunity. alix: here in the u.s.? europe, in the u.s., places like turkey and brazil we are watching carefully. by when the blood is in the street and sell when everyone is euphoric and making online trading commercials. i watch things like that. in this environment where everything is stunted and stilted because of central-bank manipulation, frankly and you say do i like u.s. growth, i don't hate it. it's muddling along and european growth's getting better. i should be glad that european inflation is back, but i'm not

that excited and i'm not screaming deflation. we are in this environment -- muddling along, but there are ways to do it and with long-term, i still like u.s. growth. i like tech stocks and everyone hates them on days like today. i don't think banks are going to make as much money. i'm going to wait and say this is a good time to cut exposure or get short. alix: thank you for being here. , we are talking real estate and whether a recent trend is a sign of weakness in the economy. ♪

alix: welcome back to the bloomberg market day. i'm alix steel. capitaly, cerberus management bought 4200 houses in a large purchase. it indicates a broader trend for the rental industry. an americancquired homes portfolio of 2400 homes. with us today is david miller, ceo and president of silver bay to talk about where the smart money is going. your deal in april and cerberus coming out, what does that tell you about the smart money is doing? guest: it's a trend of consolidation. you have maybe half a dozen or more players getting bigger, buying the smaller companies because we have institutional platforms, lower cost of capital access to the credit markets, so

you are seeing smaller players sell for a variety of reasons and it makes sense for bigger players to continue to grow. this, it'se heart of also about demand and we have seen demand for rentals go off the charts. mortgage andget a people just don't make enough money. bloomberg news looked at the affordability gap and what it meant for millenials to buy a home in places like new york and san francisco. it's way more if you count inks like brooklyn's and queens. $80,000 in san jose. what does that chart look like in the next five years in terms there'sg? guest: absolutely a gap. it highlights different trends. the markets in the southwest and southeast, florida, atlanta, dallas -- the affordability is actually there and it's quite

affordable to buy a home. such strongou see rental demand is because not everyone can get a mortgage. even though the affordability is there, it's a great decision and a lot of people can't do it. from a rental perspective, you are able to get great value without the hassle of owning it. that is what silver paid -- that is what silver bay does. maybe they will buy in a few years, but the rental option is viable one. -- is a viable one. our average age is in their 30's. historically, they were first-time homebuyers but they are taking a few years to rent a home. some by choice and others because they need to build their credit backup. it's great for our industry. millions of people that are going to rent home for 1, 2, 5 years. this tell yous about the u.s. economy and where

we are in the recovery cycle? guest: it tells us a couple of things. there are some demographic thats and lifestyle shifts favor renting. buying a home is not a surefire way of creating wealth and they value flexibility. on the other hand, mortgage availability is a big driver and we have seen that getting tight over the last four or five years. that's going to drive housing recoveries in the future. the recovery is tepid but until you see income growth and unemployment get better, you are not going to see the housing market come back strongly. alix: we used to look at how the housing market is looking, but if we see a structural shift into rented -- into renting versus owning, that changes the way of how the stock market looks at what housing means. certainly the

construction opponent and gdp growth component does drive gdp. and at new home building it's nowhere near historical averages, but it is getting better. until we see existing home prices get closer to what we spend, and what builders you are not going to see construction go forward. alix: do you own or rent? guest: i own. alix: he owns. good to have you here. that's it for our bloomberg market day. ask for watching. have a wonderful afternoon. we will see you act here tomorrow. -- see you back here tomorrow -- ♪

>> jack ma takes manhattan. i'm brad stone in for emily chang and this is "loomer west. coming up, leaders of streaming business sound off on apple's new music platform. i will ask pandora and rhapsody how they went on competing with tim cook. and at