's libbytalk with pimco cantrill. that is coming up next on bloomberg television and radio. ♪ >> despite a certain amount of pessimism, the economy is outperforming expectations. economic policies from the president are working, and america is going back to work. i think that is crucial. david: that was national economic council director larry kudlow speaking earlier to bloomberg. we welcome now libby cantrill, head of public policy at pimco. job numbers surprised across the board. how significant are they? libby: this was only one jobs report so you have to put it in context. there were temporary factors affecting it, including the gm strike, but it is a good job report. especially going into the last mile of the trade negotiations, this is likely to embolden the administration in terms of what their perceived negotiation as. it is a great talking point for the president in terms of 2020. from the white house perspective , this is unequivocably positive. david: what is driving them? we do not have the tax cuts anymor

still with us is tony crescenzi of pimco. hear some concern about it, even if it is not for their company in particular. tony: there's a healthy consumer sector, but some businesses might be overreaching. here is that he said there was nothing systemic. that's one way you could interpret it. there's nothing systemic you could suggest from the leveraged loan market. the could be problems related to the leveraged loan market that could exacerbate in economic downturn, but there probably wouldn't be the source of a downturn, or make it such that there would be big problems overall. it does have the idea that when you are investing, you have to be thinking about the loan market, the debt markets generally, that perhaps there is some risk in companies that would show up in a time of stress. you want your investments to be good on a standalone basis. remember, these days, investors, because they are reaching for are negative interest rates globally, investors are starving for yield, and they are willing to say to some companies in

tiffany wilding, pimco executive vice president and use economist.ll ahead, opec meetings wrapped in vienna with some surprise decisions. big interviews coming up next. this is bloomberg. ♪ ♪ vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." french labor unions are expanding their strikes into next week and calling for a countrywide march, seeking to force president macron to either sweeten his pension reform plan or abandon it. joining us from paris with the latest, bloomberg's correspondent. the pictures look fairly dramatic. does that translate into a lot of disruption? bigrter: there was a turnout yesterday for the demonstrations. about 800,000 people, but we've seen bigger marches in the past in france. but it is still pretty big. in paris particularly and other big cities, there's been a lot of transport disruption. a majority of the metro lines in paris were closed and remain closed today. that is important in paris because they are heavily used for commuters. trains around the countr

the billionaire portfolio manager and cofounder of pimco bowed out in april.r 48 years as one of the biggest names in fixed income investing. in an exclusive interview with bloomberg's erik schatzker, he took the occasion to reflect on his career. in addition to sharing insight on markets, he shared some information from his life that cast his success in a fascinating new light. >> my personality, not to get personal, i have asperger's. can compartmentalizes\. they can operate in different universes, without the other universes affecting them as much. i still had feelings about pimco. i think they did pretty well in compartmentalizing. not that i didn't wake up in the middle the night and start damning one side or the other. but when i came to work, it was all business. i don't think it affected me that much. it is hard to know. you are not your best witness when it comes to trying to figure out whether something is affecting you or not. so that's a possibility. >> i did not know you had asperger's. is that what you meant in february of 2016? you wrote about m

ene frieda joins us from pimco.ore of an idea that the trade war come if we have a deal between the u.s. and china, moose elsewhere. ?hat does it mean for bonds >> i think it gives you a clear sense of what you should still own bonds because it is telling you that there is a lot of risks.inty, and a lot of the question marks about trade and technology will be hanging over us probably for the rest of our lives. from that perspective, you will see the threats come up between countries, which gives you a vision of a worst-case scenario. in the case of the china-germany dispute, this is a case of the ruling party, the cdu wanting to put tighter restrictions on huawei. but the cdu party conference already rejected a motion on this. so the odds are you end up with a compromise in the government. this is a credible threat from the chinese to hurt german autos, so we expect that it means more regulation, but it does not mean complete decoupling. how difficult is it to model th these? how difficult is it to understand the me

john, i want to read marquise from pimco's who thinks the strength and high credit is here to stay.e says there is not enough high-quality and assets to meet the demand. marquise that is the reason credit did so well this year, not just the fact that the fed and other central banks cut rates. it is just that there is that much demand. does demand continue in 2020? i think the fed is a big component of this. theyfact that the fed and other central are accommodating in policy. reducing one of the major risks and credit, reducing the recession risk. another thing the fed has done by bringing down rates is reducing the hedging costs for foreign investors who want to buy credits. i think both of those are positive. the fed is definitely a part of the pro-credit story. i want to come back to the idea that there is differentiation within the credit market, and managers can take advantage of that. we have noted that energy credit has really lagged. lagged event has though management teams are being very prudent with their balance sheets. you see asset sales lagged in oo manage their maturit

the three fixed income managers are oak tree, afl, cio and pimco. comments and updates for all five managers are contained within the attachments to the memo and wore pleased to answer any questions. >> board questions? >> public comment. item 10. >> clerk: item 10, chief investment officer report. >> i'ming here, investment returns for the month. 1.46%. led by a strong rally in u.s. stocks which were up over three. on a cal fiscal year basis we're up 3.6% for the five months end and for calender year we're up almost 13.8%. that's led by a 24 and a half percent rally in public equity. there's a discussion on return and i did want to maybe highlight two things. one as you recall, the equity mark receipts down big-time. they were down double digits. primarily because of concerns about tried. those trade issues are not yet resolved but the markets have rallied none the less. assuming that those trade issues will be resolved and meanwhile economic growth is continuing to be strong and solid. we had a very good jobs report announced after publication of

taylor: john, i want to read something from pimco who thinks the strength in high-grade credit is hereo stay. he says there is not enough high-quality income producing assets to meet the demand. that is the reason credit did so well this year, not just the fact that the fed and other central banks cut rates. it's just that there is that much demand. does demand continue in 2020? john: i think the fed is a big component of this. they are accommodating in policy. the moves will lengthen the cycle which is reducing one of the major risks in credit, reducing the recession risk. another thing the fed has done by bringing down rates is reducing the hedging costs for foreign investors who want to buy credits. i think both of those are positive. the fed is definitely a part of the pro-credit story. i want to come back to the idea that there is differentiation within the credit market, and managers can take advantage of that. we have noted that energy credit has really lagged. energy credit has lagged even though management teams are being very prudent with their balance sheets. you see asset s

pimco, blackrock, and state street saying these could be cheap hedges on the breakevens.ghts? peter: i tend to agree. it is a bit of a widow maker trade because, unfortunately, breakevens have been low, extremely low for quite a while. we have been bouncing back from previous lows whenever central-bank stimulus came in just to collapse again. i daresay i think the development of actual inflation is one of those things that keeps people awake at night because it's very much an unresolved mystery as to why inflation is not stronger even in places where -- over the more medium-term, the breakevens under price the risk of inflation to come. debate between the good inflation and ugly inflation. capitalhaffrik, rbc markets, stays with our spirit a little bit more to do. bank of america is out with a new phone call for 2020. we will give you your morning call. this is bloomberg. ♪ manus: this is "bloomberg daybreak: europe." i am manus cranny in dubai. nejra: i am nejra cehic in london. bank of america is out with a new bold call for 2020. annmarie hordern is here with more. mar

tom: we are with jerome schneider of pimco. and look to the future. the balance sheet came up in the balance sheet rolled over. here is the action of the fed. where do you envision them ending this? is it back to the stability level here? do they grow it out with the economy, or do they revert to another time and place? jerome: they probably grow it out with the economy gingerly over time. there is a natural need for a surge as the economy grows, so for them to create a flatline basis for the excess reserve does not work in the construct of monetary policy. they have provided additional excess reserves, probably more than we need. they have the liberty to let it grow over the next year or so and not need to adjust, so the combination of open market adjustments and t-bill purchases, those give the fed a lot of leeway to let policy rome and repo rates remain consistent. jerome schneider with some clarity on the repo market. we will revisit this. smart conversation at 10:00 a.m. this morning, robert kaplan of the dallas fed, an im

an nicola mai of pimco. pimco has one of the most cautious housecalls i can see out there. a cautious international look into the sustainability of negative interest rates? are they here to stay? we think that negative interest rates are probably damaging over the long run, so if you look at it so far, you could give a thumbs up to negative rate policy and bank rates have fallen and credit growth has generally accelerated. if you look below the surface, there are significant issues. bank balance sheets have been weakened by that, insurance companies are struggling. i think the longer these policies maintain, the more damage will be inflicted. our perspective, we are kind of the amount interest rates can fall into further negative territory. the longer these policies sustain, the more damaging it will be for the financial system. tom: how does it damage the actuarial assumption, the gross actuarial assumption of the institutional debt in business? they have liabilities and obligations of seven years, 12 years, 32 years. they are doing that in an environment that is a fiction

morning the ecb representative for italy was out there talking about how horrible negative rates are pimcoas always been on it like i have, like many have negative rates they put it quite succinctly squeeze profitability. they depress market returns and they create hardships for the likes of those who need to accumulate and match long-term assets to liabilities like pension funds and insurers we're in a place where they'll be buying securities i don't know where europe will find them all. germany, you realize that in 2018 germany had debt to gdp their economy is slowing anybody who doesn't think they're going to be running bigger deficits and adding stimulus that's where a lot of bonds will be coming from. carl, back to you. >> rick santelli a market flash here on semis dom chu has that >> semiconductors one of the worst within the s&p 500 so far today. it's the last couple weeks we see a move to the down side. the etf that tracks the big stocks is a record high lef. back in november, so to keep that in mind that's the context here some of the names moving the markets to the down side, tak

a battle between the shareholders, the company, and the bondholders, led by elliott management and pimcont different capital structure, management, board. it goes to bankruptcy court today. it will be interesting to see whether the judge tipped his hand one way or another which way he's going to lean. vonnie: which one is more lightly to be approved? it would have seemed that having governor approval would be something for the victims, but yet, the governor seems to be siding with the bondholders. abigail: very interesting. the stock at one point went up 50%. that was as stockholders thought their restructuring plan was going to get approved. but take a look at this chart in the bloomberg terminal. that is some of the pg&e bonds theier this year at $.76 on dollar, now closer to par. that tells you bondholders think they have a very strong case. they basically want the company to issue more shares. that would dilute shareholders, which they don't like, but it would mean they don't have to raise more debt. there's a possibility that the judge, when he does rule, there could be a split. he

bowed outder of pimco in april after 48 years as one of the biggest names in fixed income investing. to reflect on his career. showed insights on markets and some information success.past ♪ , i am ansonality asperger'. they can compartmentalize, operate in different universes without it affecting them as much. i had a nasty divorce. i still have feelings about i did well in compartmentalizement. work, it was all business. i don't think it affected me that much, but it is hard to know. witnessnot your best when it comes to trying to figure out whether something is affecting you are not. that is a possibility. >> i didn't know you have asperger's. is that what you meant in february 2016? in one of your outlooks, you wrote about michael lewis and the big short, you said you shared an affliction with one of the heroes of that book, dr. michael berry. a if you have a minute and half, it is a fascinating story. i read that book. lewis is a great writer. within that chapter about michael berry, he listed 10 things that asperger's have that michael had as well, and i read them and i read som

pimco and elliott management are the lead bondholders.ver the $13.5 billion settlement pg&e reached last week with wildfire victims. we sound down -- we sat down with her and capital -- with arend capital's ceo. >> a lot of these companies didn't have any choice but to go public to raise this capital. it has changed as we've brought more capital into the space. viviana: he says it has become more complicated and extensive to go public since the postrecession reform. big tech companies used to be seen as some of the most desirable workplaces. now they appear to be losing some of that luster. facebook and google dropping out of the top 10 plays is to work in the u.s., according to a glass door annual ranking. -- googles top four coming in 11th, facebook, 23rd. i'm viviana hurtado. that is your bloomberg business flash. alix: we turn now to wall street beat. first up, credit suisse cutting its target after they had some mrs. and losses at the firm -- some misses and losses at the firm. and women in asset management. we look at the challenges