>> u.s. stocks closing higher and nasdaq and itching and record highs. what'd youestion is miss? -- let: joe: a blowout jobs report for july. an economist to claims low skilled labor force will lead a recovery. we dig into their economy and what to expect from their central bank. scarlet: we begin with our market minute. a blockbuster july jobs report means the nasdaq and dow closed at record highs. financial and technology leading the way. -- one thing ied

should mention, volume in the dow is 21% above the 10 day average. this was again on better than average volume. down ones, the super safe ones, bonds got hit on this but a solid jobs report . matt: especially for tech stocks. the nasdaq came back up making an intraday high. in eight ofas risen the last nine days. risen --aq has since november of last year. the big tech stocks are widely held. apple added almost six points the nasdaq. microsoft added almost half as much. this just shows you how well

represented apple is, 4%. we dig to a sellout in the government bond market as people perceive the economy to be doing better and interest rate hike to be pulling ahead. mp, sensitived ju to expectations of fed policy, and an equivalent jump in the 10 year. the shape of the curve did not change much. scarlet: it lifted the dollar higher versus the euro and pound. you mentioned the other jobs report out of canada, a second straight month of job losses. the number of people employed dropped the most since november. you can see the move there. up.dollar is moving

this could pressure the bank of canada to cut rates. if oil prices continue to slide that could add to the pressure. joe: we will talk about more about canada later in the show. we continue to get the upward trend, production and drilling coming online in the u.s.. that is up for several weeks in late may. we have a selloff in oil, it ended flat on the day. you can see down a nickel on the day, essentially flat. lile everything else rallied, -- oil did nothing. scarlet: let's take a deep dive into the bloomberg. i'm looking at our favorite function, world interest rate probability. odds for aer, the

rate increase are at 24.2%. the jobs report it was at 17%. a big move up. if you take it out to next year, more than 50% odds for march of 2017. mohammed was on earlier saying bond traders are underestimating .he likelihood of a rate hike he would put it at 40 to 45 percent. matt: they are underestimating the odds of a september rate hike. with the jobs number this good and things quiet internationally he could make a strong case. scarlet: janet yellen speaks in late august. >> bond traders are actually in control of whether the fed raise rates. do you want to go?

i want to look at economic indicators. i'm intrigued by it. the chemical activity barometer index of the u.s. chemical industry. prices, employment commission's in the u.s. chemical -- employment, shipments in the u.s. chemical industry. if we zoom in and the last year you can see how it has taken off . i saw in a hedge fund letter someone pointing to this is evidence the u.s. is gathering steam. the jobs report is evidence of that. --y should be taking out checking out this indicator more. economy ise a commo doing better. exactly. check it out. highest levels. scarlet: the sources the

american chemistry council. listen, i have a chart that is also a tease for a segment we are going to do later. we are going to do a segment where you send us your favorite charts. we picked those that we think are best and add them to the library. someone was sending me charts earlier. this is one of them. debtgn holdings of u.s. you see here in white have come down. the trend has gone on for the last couple of years. yield of't pushed the u.s. treasuries up. sellers, think more these are big central banks around the world getting rid of u.s. treasuries would push the price down. but it hasn't been happening

until recently. i thought it was a cool chart. scarlet: private buyers are picking up the slack? that is what is going on? matt: i actually don't know why. scarlet: this lends itself to a lot of questions. is: here with more analysis catherine, the head of resources and chief global strategist -- he joins us now from miami. -- he joins us now from miami. what is next? emerging markets generally do well. we have seen emerging markets outperform developed markets and inequities. a lot has to do with what the fed does, and how oil develops, and the u.s. dollar. those have been the pillars of long emerging markets going

into this year which has played out to our favor. scarlet: if that is the case in the jobs report bolsters the argument for the federal reserve to raise interest rates in september or december, once we get higher rates, it grinds to a halt? guest: depends on the pace of the tightening cycle which i contend will be glacial. i think it's going to depend on how we see the economic activity involved -- you've all. olve.tivity eva apart from that, if we get a i don't thinker, that changes the trajectory. the fed is likely going to sound more dovish than hawkish. the fed is going to lay the groundwork war a slow pace of -- for a slow pace.

the dollar index could be part of the answer to the see gdp, why don't we growth? if the consumer is 70% of the u.s. economy and we continually see more jobs added, we see more hours worked in a week, employees are getting a 2.6% raise, plus the savings rate is they are spending it, why isn't gdp bigger? guest: bill gross said it better. apart from consumption the u.s. is in recession. investment, companies are hiring but they are not building out their investment. that is a testimony to the questions that surround this

economic expansion. growth is going to be subpar in the united states which is going to keep the fed dovish. that has been our contention, that a low developed market rates which are going to stay yearor a long time, 10 will in -- and below 1.5 this year. it's going to hike may be wants. -- it is going to hike maybe once. it will keep appetite for emerging markets which we have seen outperform. this year will be the year we see economic growth and market sentiment. joe: what would it take to get the treasury bull market to turn the other way? guest: we would have to see impressive economic growth

numbers, real wages not be at 2.6 but 3.5. goodwages at 2.5%, it is off of 1.8% but it is not what we have seen in the past. we would have to see real wages up and businesses investing capital. strongerneed to see a economic recovery and better real wage growth. scarlet: we talked about the emerging markets and the rally they have been saying. with brazil kicking off the olympic opening ceremony tonight, i want to talk about their debt and their stocks. does that mean they will start faltering before the rest of the emerging markets? -- there is are still a lot of value in emerging markets, even more so in brazil. there are certain bonds i like if you want to search for that and take that

currency risk. july, itird week of was a record week. $4.5 billion flowed into the sector. searching for yield. brazil is going to continue to be a chief beneficiary because we are seeing a change in terms of policy. the market is loving the new administration and the advancement of some reforms. what has grown from a fall from grace in the market has now become more interesting for investors. joe: thank you for joining us. -- sheglobal strategist is a global strategist. scarlet: the charge that break down, next. this is bloomberg.

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>> let's get to first world news. donald trump's running mate is brushing off republican concerns of turmoil in their campaign. he appeared on the today show. >> all that matters is election day. , we arerump and florida seeing tremendous crowds, tremendous enthusiasm. i believe it is because donald trump's message, a stronger america at home is resonating with millions of people. >> he has angered republicans by

criticizing parents of a soldier killed in iraq and refusing to endorse paul ryan, and others for reelection. criticism ofdowed hillary clinton. hillary clinton says president obama is not getting the credit he deserves for leading the country out of a recession. she says she wants to invest more in infrastructure, generate more jobs for young people and help black entrepreneurs start businesses. the war of words between turkey austria is increasing. it started after the austrian chancellor said turkey was headed to a dictatorship and question whether the eu should continue membership negotiations . health.s his poor -- help lighting the

from lighting the elephant torch. he says i have got to bless all -- i hope god will bless all who participate in this event. i'm mark crumpton, this is bloomberg. scarlet: economists appear to be on the same page. to the sharpest economic minds about the job report and everyone seemed to agree on one thing. >> today's numbers are strong all around. >> that his good job growth. >> that is what i would hope for when i was working at the white house. >> it shows some good gains in jobs. >> we thought it would be on and around expectations. >> the labor market recovery continues, and the weakness we

are concerned about in may looks like it was a blip. >> the equity market is treating good news as good news. the markets are behaving as you would expect. >> is enough for janet yellen, i don't think so. she is focused on global conditions. she is still worried about a strong dollar relative to emerging markets and other developing markets. >> there is a high probability they may hike rates. going odds of the fed lower are very low. >> i think it is still too low. i would put it at 40 or 45%. >> may in december if this continues but not for now. scarlet: four a look of the jobs charts you can't miss, everyone is fixated on the headline number. let's dig beyond that. wage numbers, what did you find? guest: for production and

nonsupervisory workers, hourly growth, that group wage hit the fastest pace. that is exciting. that is one of those numbers on the wage inflation front that has been slow to catch up. we are saying this unified message wage growth is accelerating for real. showing had other data the same thing. guest: it is. the one caviar is these numbers are well below where they were in previous cycles. we are headed in the right direction and picking up momentum. that should support consumer spending which is one of the only things holding up economic growth in the united states right now. numberse the absolute below what they were? guest: the growth figures. we are at record highs for wages

in nominal terms but not growing as fast as we were. matt: we continue to grow. month after month we are growing. we haven't fallen. guest: absolutely. it has been a steady gain. joe: more people are finding jobs. what specifically are you identifying? guest: for the last 7-8 years one of the big stories has been all of the unemployed people who have dropped out of the labor force. that is the big death. more people dropping out of the labor force every month than finding work. in july for the first time we beenore people find work drop out of the labor force over the previous 12 months. we have a lot of improvement to continue making their but that story of unemployment rate is low because they are dropping

out is starting to go away. you.thank we have breaking news out of berkshire hathaway. scarlet: second-quarter operating earnings per share of $2803. 2911miss the estimate of dollars. profit overall as insurance units improved. coming up, audience participation. we have charts from our bloomberg viewers. stick around to see if yours was picked. this is bloomberg. ♪

scarlet: joined the bloomberg g chart library. we picked three charts from users to parse through. i will kick things off from mine . hold on one second. let me hold this up again. it is economic surprises, and that is in white. it shows what economists say data is topping estimates. the blue line is a 10 year yield. what is interesting here if the data gets better the yield should be going up as well. the divergence begin this year. if you look at a five-year chart it looks like it move in the same direction although at different rates. the split came this year. what would cause it to go back to what we have seen?

the world needs to change, right? you would need better global growth. we are not there yet. , he sentt sent a chart this, going back through the beginning of 2008, showing in white the s&p 500 and inbred -- in red, domestic equity cash flows. they have been entirely negative. ak, just ignoree these. it is distracting. it is worse than noise. it would lead you in the wrong direction. noise would at least the random. if you think money moving out of funds would be bearish with the

market, that would be a dead wrong interpretation to take. let's see what would happen. the data doesn't go back that far. it is basically always negative. -fer. mine is a two , thanks,also from bob appreciate your help. he shows us new factory orders. chartsly gets into the like us. datave been saying this , if you look at new factory orders it doesn't look as good. new factory orders are important to people doing business. you can see u.s. factory orders

coming down, in january new factory orders as well taking a hit. bob points out don't get too excited by this data. and you are looking at new factors it looks more bleak -- when you are looking at new factors it looks more bleak. taken with a grain of salt. is 2549. i've been getting other people who are sending me charts. we love to see what you can do with the bloomberg. if you have any cool charts you made up yourself, send them to us and we will use them. scarlet: there is some editing going on here. joe: we are not going to use every chart. matt: it has to be good. we are exclusive. thank you. scarlet: coming up, why less

educated workers will lead the u.s. jobs recovery. this is bloomberg. ♪

>> let's get to first word use. donald trump's classified briefingnce will begin in the next few weeks. earlier this week the white house informed mr. trump and hillary clinton their briefings can begin. debbie wasserman schultz has lost her job as chair of the democratic national convention, now she is trying to save her house seat. she is facing a law professor backed by bernie sanders. almostised $2.8 million, timerd-of for a first

candidate . another victim of the attack in nice, france has died bringing the total to 85. he died in the hospital. his wife and son were also killed when a truck barreled down the street on bastille day. the islamic state claimed responsibility. they have received reports islamic state may have captured up to 3000 iraqis fleeing violence, 12 of them may have been killed. officials said today they were trying to verify the information. global news 24 hours a day powered by 2600 journalists in 100 countries. this is bloomberg. acta here. a recap.let's get

the nasdaq closing at a record high for the first time this year. s&p 500, also a record high. for the secondg time in nine days. all of this was sparked by the better than expected july jobs report. in the dow with 15% above the average. we saw yields rise as well. increases in yields in the short and long hand. matt: i had a look at the nasdaq. we should note eight days in a row, eight out of nine trading days it is up. the longest rally since november. i put up a 13th month chart. it is a typical of course but the reason i did that is before this, july 17, you had to go back more.

there you see it. the nasdaq coming back to a record, really lacking. scarlet: berkshire hathaway reporting earnings after the market closed. missing the consensus $911 -- $2911.0 we do not intend to dispose of ibm shares. matt: no change in the after-hours trade there. this morning the u.s. jobs report saw a pickup in the participation rate. says this is part of the broader trend.

, thehave not done so well professor of economics joins us now from boston. thank you for joining us. tell us why we will continue to see a solid labor market recovery for a group of workers that haven't done so well in recent years. guest: a lot of these workers out there and a lot of hours. the labor market is becoming tighter and tighter. they are creating job opportunities for these last all of five workers. hard time. a lot lost their jobs and many have been on the sidelines for quite a while. they have been coming back. they are beginning to look like a trend. scarlet: one thing that you

note, that was a time in which there were less educated workers drawn into the workforce. what were the specific economic conditions during that? guest: a lot of opportunities for younger people, people dropped out of college, they dropped out of whatever they were doing to go into the labor markets. a lot went to information technology startups and things that were fairly insecure. when the boom of the late 1990's ended around the year 2000 these people took a hit. people who had a lot of experience and education, with college degrees or higher stayed in their jobs by and large because employers anticipated there would be an opportunity for them in the future. that is what happened from 2000

2007. and ae stable employment little bit of growth. the people who were highly qualified stayed in their jobs and these people who were pushed opportunities by going back to college and finishing their degrees. it bifurcated due to a technological change and if you know how to use technology, if your job involves the internet or you are good doing very well but if you don't have those skills, there are fewer opportunities for you. what is wrong for that story? what is it people get wrong when they dismiss the possibility for low-end or low skilled workers to come back to the economy? guest: people are overlooking

the fact that the largest part of employment in this economy is in the service sectors. a lot of those sectors use lots of people who have relatively lower skills and lower levels of education. jobs are created for these people when the opportunity arises and that is going to rise as the economy continues to recover. we look at this morning's report 255,000,th of jobs of well above the trend that has prevailed for the last decade or so. that is something that is going to draw a lot of people back into the labor force as jobs are created. the story you tell is basically sound. there is a bifurcated labor market. we are not seeing a lot of growth on the part of the people who have these qualifications and information technology that enabled them to work in jobs

that involve a lot of technology. what we're seeing in the labor market, wages are beginning to increase. the other part of the story is less qualified workers who are very numerous have been many on the sidelines, and so far until now we have not a of movement. participation rates are beginning to rise very slowly. the has been the case for the last couple of months. it has been the case for the last year or so. this is a trend that is setting in. that is going to continue and this is going to go back to work. wages are not going to move up and that is something we have to worry about. i have that here in front of me. i'm sure you know job openings

are covering around a record hiresthey have surpassed for the last few months. it reminds me of spain where they have 22% unemployment but you hear business manager saying they can't find anybody to fill vacancies. do we have a similar problem here? people are trained for the wrong jobs that are open? guest: we have this bifurcated labor market you were referring to a minute ago. the jobs that are open, they are jobs that require skills that are still relatively scarce. the response has to be employers bid up wages. they have to find people have other opportunities and pay them to accept their job openings.

that is what is happening at the upper end of the labor market. what you are not seeing is job openings. they are not posted, not part of large businesses. they're part of service establishments. some of them are small businesses. those jobs don't appear on the chart you are looking at but they are out there and they are growing, taking more and more of these people who have been on the sidelines into the labor force. stop -- step.ing thank you for joining us. scarlet: coming up, an interview with jill stein. we hear from her next. ♪

scarlet: time for the bloomberg business flash. warren buffett's berkshire hathaway second order profit rose 25%. net income climbed to $5 billion. operating earnings which excludes some investment results missed estimates. newly added companies such as duracell have helped basel results -- bolster results. the judge overseeing to u.s. cases among health insurance is giving up one of them. improves the rulings on tieups and reduce the odds they n.uld fall apart before the bates kept the case because it

is on a tighter deadline. -- a pharmaceuticals is potential sale could value the conservation treatment at 400 to $500 million. they could choose not to sell the drug. they declined to comment. that is your bloomberg business flash. matt: the green party is holding its convention this week. gilles simon will be named the willdential -- jill stein be named the presidential nominee. she spoke with bloomberg about what she hopes to happen. >> i think the american people are hoping for a deep change. i think it's not just me looking for a transformative change in the selection, for a voter revolt which is well in the making. talk to a young person about

what their future looks like, being trapped in debt, without decent jobs available, in a climate that is nolting down -- melting down. they hope to achieve a transformational result where we win a plurality of the vote. will we get that? i don't know. however close we get weird that much stronger going forward. >> you were in philadelphia. i wonder how you were reaching out to voters who may be disillusioned by what happened with bernie sanders. a lot of the progressive left aligned with his campaign. how will you make an appeal that you are the candidate they should back? >> the bernie or bust movement are well networked. i was astonished in philadelphia outside of the convention where

there were enormous rallies going on in which i became a central spokesperson, unbeknownst to me. the revolt was focusing on my campaign as a way forward for that movement, it true even inside the dnc where i talked with the press. it was the last place i expected people to be thronging around me. i felt like a social worker. there were so many broken hearted young people in tears coming up to me to say they were so excited, so grateful that our campaign provides a way that they can continue this amazing transformative movement that they have lifted up. >> are you afraid about splitting the vote, getting therapy tatian for being the next ralph nader? for being theion next ralph nader? >> we have the ability to flip

the vote. the younger generation is a underdog and a flipped economy. isther, let me say that it clear that the american people are not happy with their current establishment candidate. they are told to be good little boys and girls, don't rock the boat. but we know these are the most disliked and un-trusted candidates for president in our history. even a majority of their supporters. mostly support them. supporters don't mostly support them. >> what will it say in terms of the economy? economye calling for an that works for every day people. survive.struggling to the average wage for workers is barely above the poverty level. most jobs that have come back

are part-time low-wage and temporary. we are calling for a green new deal. we know how to do this. in this case it is a green new deal. it solves not only the economic crisis and puts people to work, 20 million good wage jobs. they are focused on a transition that can solve the crisis of climate change, jobs and clean, renewable energy that will move us to 100% wind, water and sun by 2030 in time to solve the crisis and a healthy food system , and restoring our ecosystem. that is the foundation of our economic plan. >> to you intend to campaign across all of the states through november? >> absolutely. >> how can you do that?

where will you raise the money to do that? sandersay that bernie endorsed hillary clinton our fundraising went up approximately 1000% and more. it continues to do that. we have now acquired much of the of the revolutionary revolt happening in the sanders campaign. sense three weeks or so bernie's announcement we have raised as much money as we raised in the entire year and a half of the campaign. >> it's a whole new ballgame going forward. >> that was dr. jill stein. scarlet: coming up with the canadian dollar plunged after the market contracted last month. we will dig into the report next. ♪

scarlet: the u.s. was not the only country that reported jobs today. canada came out with its jobs numbers and the canadian dollar plunge the most since it unexpectedly contracted last month. about what youk are seeing here within the details of the report. guest: one thing i would say all could talk, you cannot look at any one labor report to create a narrative. the figures here are disappointing. you then have the hours work

inching up by 0.1%. you can't take any of these at face value. what we have is the story similar to the u.s.. the good side is doing terribly. we are dealing with the oil fallout. that didn't play out in this report. it has been destroyed for the past year. >> i have a chart on my terminal . they move in sync but it is clearly linked they are not in sync. guest: the oil crash crystallized this. they mean more to canada's economy than they do to the states. is reason for this breakup starting around the u.s. housing boom. we are already losing manufacturing shares to mexico but we are getting the oil boost. unemployment is going down.

ie have a mending -- min housing boom. we are not cashing in with much growth. flat and theto u.s. continuing to go down. we have a chart here of the the canadian dollar. 129.s gone to that is a long way up from parity we saw earlier. nothing to show for it as far as gdp growth production. >> what is surprising about this, the chart we have here is not energy real exports. you would expect to see with a bit of a lag, not energy exports pick up steam.

boostk the is almost done. time oilflat since the started crashing. we didn't get any incremental boost from that. that is a very disappointing thing if you are a canadian. >> it is dependent on u.s. demand, is a net? guest: there's a tendency speaking is a canadian to say what are we doing wrong here? why can't we ship more to the united states? exports, the length between the canadian exports and u.s. demand is clear. one thing you see at the end of that chart, picking up after a 15, 16 month flat stretch, that bodes well. we were concerned about why imports were so flat.

a lot of that has to do with the inventory drawdown we have seen. that to goooking for to the rest of the world. guest: thank you very much for breaking down the canadian labor market. scarlet: coming up, what you need to gear up for for next week. this is bloomberg. ♪

>> the opening ceremony for the rio olympics begins tonight at 7:00 p.m. eastern >> i was going to say give it a miss but i might tune in. don't miss china cpi on monday. > >> on friday i will look into eurozone gdp. >> out of the three, that is the

one i'm going to tuene into. >> you will all have to stay up late. thanksff

mark: with all due respect to the nation's fact checkers make sure you get this one exactly right.. mr. trump: i don't throw babies out, believe me, i love babies. our event schedule the backstroke and the e-mail server medale -- first, the gold event, donald trump and mike pence are taking the torch to green bay wisconsin for an evening rally. but you won't see any badger state gold mest