Jobs Report Shocks Wall Street — The Open Interest 6/5/2026

[00:00:00] Matt Miller: All right, it's Jobs Day, 30 minutes till the start of trading after a blowout number. I'm Matt Miller. Danny Berger is off today. Bloomberg Open Interest starts right now. Coming up, the U.S. added 172,000 jobs in May, crushing estimates and boosting Fed hike bets. Bond yields surge while stocks fall as investors pull back from the AI trade. And SpaceX mania is building, even after a setback to its S&P 500 ambitions. The stocks that we're watching this morning, well, these big, heavy tech companies are falling. NVIDIA down almost 2 percent. Micron down 5 percent. SanDisk down 3 in the pre-market. They've had a pretty good run, to be fair, but this threatens the 10th straight week of gains for the S&P 500. We could break the streak today. Investors are selling as traders gear up for the biggest IPO in history next week. Maybe they need to free up some cash for that. Back to our top story, though. The U.S. added 172,000 jobs in May, double the expectations. Let's get details from Bloomberg's international economics and policy correspondent, Michael McKee. He's at the desk over here. So, Mike, blowout number, where did the additions come from? [00:01:29] Michael McKee: Blowout number for the month of May, but also a blowout number for April, revised up significantly to 179,000. So, over the last three months, the moving average is 188,000. That is strong by any measure, especially at a time when people think the break-even rate is about 50,000. We also saw the unemployment rate tick down a little bit, not enough to round down to 4.2 percent, but it is a little bit lower as we saw a little more hiring than we saw in terms of unemployment. The labor force, though, after several months of being down, contracting with the president's plan to get rid of a lot of immigration, did rise, but only by 83,000. Now, here's an interesting number. Average hourly earnings up 3.4 percent. That's down from 3.6 percent the month before. The Fed has been talking about how average hourly earnings and basically people's take-home pay is not inflationary, and this would help stand that up. But you have to figure that this is going to be something the Fed is concerned about, this level of job creation. Biggest changes were in accommodations and food services, 58,000, in local government, 55,000, health care and social assistance, 47,000. That's the category that usually rises. Retail down by a little over 1,000, and that may be an indication that consumers are slowing down. But where you didn't want to work, finance, down 22,000 jobs. So let's take a look at the overall reaction that matters to everybody on Wall Street, and that's our WIRP function. Traders have now priced in, by the end of this year, one full rate hike. A month or two ago, I would have been saying a rate cut, and now we're looking at rate hikes. So good luck, Chairman Warsh. You know how to get a hold of me if you have something you want to say about this. [00:03:23] Matt Miller: So, all right, Neil Dutta just published a note. Back to boomflation is the subject header. What does this mean? You say there's no wage price spiral to worry about, but what does it mean for the economy? That number, I note, is not keeping up with the PCE, right? 3.4% is the wage increase, but PCE was 3.8. [00:03:48] Michael McKee: Yeah, it's not keeping up with CPI either, which we get next week, and that'll get a lot of attention in terms of whether or not people think we're going to have a rate hike and when it will be. Basically, what we're seeing is that the war and tariffs are pushing up costs, and that's really feeding into inflation, but it's not labor at this point. If people have to keep paying the gas prices that they're paying now, they may start asking for raises, and then that's something that the Fed would get even more concerned about. But it is going to be interesting to see because, of course, the guidance last time, and that led to those dissents, was that we still might be cutting rates, and that obviously has gone out the window this morning. [00:04:28] Matt Miller: Oh, I have a follow-on curveball here. I just got a note from a trader to watch the yen, which is smart, right? We're back above 160, and there was a story in the Bloomberg yesterday about how much intervention has cost the BOJ and that they need to sell treasuries in order to fund that. That can't be good for rates either. [00:04:48] Michael McKee: Well, that's probably not going to be good for rates. I think it's going to be a minor contributor for the time being. The Japanese can only do so much, and they know that. They tend to do a cycle of interventions and then back off. And at this point, given the fact that the U.S. is now going to be priced into raising rates, you're going to see the dollar get stronger. And just as a conundrum for the rest of the world right now, what do you do? And we'll have to see how the Japanese figure that out. [00:05:16] Matt Miller: Yeah, I'm looking at the dollar strength here and DXY. And, of course, Bloomberg DXY is a better index to track for that. BBDXY up one-tenth of one percent. Mike, thanks so much for joining us. Bloomberg's international economics and policy correspondent Michael McKee. You're going to be seeing a lot more of him on a day like this. Let's talk stocks, though. S&P Dow Jones says it will keep its existing rules for index inclusion, denying SpaceX and other mega IPOs a fast track into the S&P 500, the world's most important, I think it's fair to say. Index Bloomberg's Bailey Lipschulz covers IPOs for us and joins us. Bailey, this after, of course, you saw the NASDAQ change its rules. No more seasoning necessary, and they never really had any profit rules. But you've seen other rule changes at FTSE Russell, at the NYSE 100. Is the S&P able to push back because they're not looking to attract any business? [00:06:09] Speaker 3: I think that's part of it. To your point, NASDAQ operates an exchange. If your option is to have Elon Musk list SpaceX on your exchange or your rival, you probably want to do anything you can in your power to make sure that he chooses for your exchange. The other thing, I think, is we saw this and talked about it ad nauseum back when MicroStrategy was able to be added to the NASDAQ 100. Would the S&P 500 review its rules? The thing that stands out to me is not just the six-month seasoning period, Matt. The biggest piece of this update is strictly the fact that you need to be GAAP net income positive for a year before you can be added. That adds a bit of a curveball, not just for SpaceX, but I want to talk about Anthropic and OpenAI. Those are two companies that people don't expect to generate net income positivity for quite some time. [00:06:54] Matt Miller: Are these IPOs, and by the way, I guess you could look back and see what happened during Saudi Aramco or during Facebook. Do they cause fund managers to sell industry-adjacent holdings in order to free up cash to use for a SpaceX, for an Anthropic, for an OpenAI? [00:07:15] Speaker 3: It depends how you manage your book. If you're a tech investor, yes. If you are benchmarked to, say, SpaceX gets added to the Gix component and is now a communications company, well, that impacts charter. If it's added to defense, that impacts L3Harris. I think the big thing is, again, where is the money coming from? It depends who you are and what kind of money you manage. If you are strictly a generalist and you're able to use SpaceX, similar to what you did with Tesla a few years ago, as a way to generate alpha to outperform the S&P 500, you can really be taking that from cash on the sidelines, or you could, to your point, be selling down Manc 7. We have been seeing a lot of weakness in Bitcoin. That's something that people have been pointing to as well. [00:07:49] Matt Miller: By the way, my producer, Will Shaker, pointed out, I don't know, was it Morgan Stanley, Will? A trillion-dollar revenue forecast for SpaceX in 2040. I saw the story that we had. Evercore ISI expects something like $755 billion in revenue in five years from the AI component alone. [00:08:11] Speaker 3: Matt, the thing, my favorite part of the story that we broke last night that no one cared about, apparently, on Evercore, is not just the fact that they're penciling in a trillion dollars in revenue in 2031. They are penciling alongside Goldman Sachs, CapEx, $360 billion in 2030. Evercore ISI analysts over on their research team see $732 billion in CapEx in 2031. That is the GDP, greater than the GDP of Israel. In one year, you are potentially going to be spending $732 billion. Where does that come from? [00:08:43] Matt Miller: Yeah, I mean, we just showed, by the way, I think the Morgan Stanley forecast is actually for $3.4 trillion. By 2040. Of revenue in 2040, which is, like, not that far off. My daughter will be 16 in 2040. Bloomberg's Bailey Lipschultz covers IPOs for us, so you're going to see a lot of him over the next week as well. Remember, just one more week until this stock starts to trade. Turning to retail, though, Lululemon shares are sinking after the company cut its outlook due to deteriorating performance in North America. Here to break down the results is Bloomberg Intelligence Senior Retail Analyst Poonam Goyle. And, Poonam, this company just can't get a break. What's the problem? Is it the see-through tights? [00:09:23] Speaker 4: It is everything in North America. It's really product. Product is their bigger problem. They don't have the innovation. They don't have the speed that they need to get product to customer. And that's really what's been hurting them. The problem is that things aren't getting better. They're only getting worse. Even though sales had increased 4% overall in the quarter, North America, specifically U.S., was down 4%. And they revised the full-year guide to be now flat to down. And that's just, you know, it was unexpected. It was up before. And I think the issue is that they just don't have the expertise to bring in the product right now. And as we await for Heidi to come in in September, that's still a long way. And by the time she puts in her efforts, we're looking at 2027, 2028. So things could get worse from here. [00:10:16] Matt Miller: You know, they've just recently decided to bring Chip Wilson back, or at least to collaborate with him in some ways. He was, to be fair, you know, the visionary that made this business what it is. Can he change things? [00:10:32] Speaker 4: I think he could have his input. Remember, the biggest problem here isn't that customers don't love Lululemon. It isn't that the brand equity is gone. It is that the product lineup is not what it should be, especially on the woman's side. So I think his contribution could help, but it takes time to evolve product. It doesn't happen overnight. So we're still looking, you know, even when he starts to add his input and when Heidi comes in, it's still a year away at the minimum. [00:10:59] Matt Miller: All right, Poonam, great to get your take. We'll be watching your research on BI. Poonam Goyal, Bloomberg Intelligence, covers the retailers for us. Check on what's going on in markets today, because we are seeing a sell-off, and it's particularly pointed in tech. S&P futures down 7 tenths of 1%. After two consecutive days of losses, we see NASDAQ futures down as well, 1.4%. Actually, let me amend that. Yesterday, we were down at this time, but by the time Romain and Katie got on air, we were up. So the S&P 500 closed up 4 tenths of 1% at 75.84, but it is down today in the futures. The futures on the NASDAQ down 1.4%. You see Treasury yields rising here, six basis points to 453.43, and you can see Brent crude holding it around $94 a barrel. Let's get a look at some of the single stock stories that we're following for you this hour. Shares of Oklo, the nuclear company, rising after the U.S. said a small nuclear reactor made by Antares achieved criticality, which means a chain reaction became self-sustaining enough to produce a steady release of energy. That's good news for these small reactor makers. DocuSign earnings beat estimates, but the revenue beat was smaller than its typical results. That stock down 5% in the pre-market. And Chipotle rising after J.P. Morgan upgraded it to an overweight, citing a rare valuation opportunity for the burrito maker. You can see Chipotle stocks up 2% in the pre-market, and it's a down market. Coming up, BlackRock's Rick Reeder joins me to talk the markets and the economy. And later this hour, we're going to hear from White House Economic Director Kevin Hassett after this blowout jobs number. This is Bloomberg Open Interest. All right, let's take a look at what's going on in the markets ahead of the opening bell. You can see these big red arrows, and we could be in store for the first down week in 10. We had nine consecutive weeks of gains on stocks, so it's not that bad, right, if we go lower. And part of the reason could be that we're selling off certain stocks to make room for massive IPOs coming our way. You can see NASDAQ futures down more than S&P futures by about double. So 1.4%. We see yields creeping higher, and Brent right now holding at $94.22. After a blowout jobs number, let's bring in BlackRock Chief Investment Officer of Global Fixed Income, Rick Reeder. Rick, great to have you on Friday, Jobs Day, and especially on one with such good news for the labor market and for the U.S. economy. What do you make of the nonfarm payrolls? [00:13:52] Speaker 5: So, you know, Matt, I mean, a solid number. And I think, you know, I think one thing I always find it interesting when you get the top line, but then it's like markets, like all the money is when you get underneath the surface. It's a fascinating report in a couple of different regards. When you actually look at it, so, you know, we know health care, you know, we talked on the show all the time. Health care, health care, good again, check. Local government was a big number this month, so it was about, what, 50,000 jobs, local government. So, what do you do with that, you know, interest thing that tends to move around, obviously. But then when you get underneath the surface, I find it fascinating, a couple of things. Construction was strong. Why is that? And then you dig into construction and you look at it. Data science. Non-residential construction is strong, meaning AI build out, which we know is coming, which we know is happening and will continue to come. And then you look at underneath, and you look at real estate, real estate softer, and then you look at resi, residential softer. And then a thing I also thought was fascinating, and I think you mentioned the finance jobs softer. Then you dig into finance, what's happening? Insurance was pretty soft, which is a trend you've been seeing. Why is that? It's AI sensitive. These are the areas and services where you're going to start to see the softness, and you're going to start to see AI start to press on the areas where you can create some real efficiencies, real productivity. So net net, solid number, things like food and drinking. I don't know what was happening that created that sort of hiring. That was solid. You've got to factor that in your equation. So anyway, point being, I think you've got to factor an economy that's doing quite well. You've got an AI. You've got a big cylinder of AI that you see show up in construction, and you see what companies are doing that are starting to implement. So, you know, and I think you've got to think about the Fed's reaction function. The data so far is solid, and you've got to build that into your positioning. [00:15:37] Matt Miller: I mean, I don't know about what people are doing with food and drink. I guess it's some celebration with indexes at all-time highs. I'm always tracking G-body 911s. Even the 997s are at prices that I just can't believe. There's a lot of cash out there, Rick. I look at credit, right? The ag at 30-year tights right now. Where is all this cash coming from? [00:16:03] Speaker 5: You know, Matt, you brought up there a couple of very relevant statistics today. I mean, the money market fund number is extremely high. And by the way, every, I mean, I stare at it. It's one of the numbers I stare at every week, and the inflows in the money market funds just keeps coming. By the way, you've got a strong economy that is supporting that. So you've got money market inflows, bank deposits, very solid. The other thing that you see that happens, we see, we track in the market, you know, why is all the supply well-subscribed in fixed income? You know, you see the pension demand, the life insurance demand. You're at yields. If you're matching a liability, you've got yields that are pretty attractive, you know, even though spreads aren't that interesting. So you've got two big pockets of demand, you know, particularly for fixed income and then for equities, you know, I've said it before. Even though you're getting IPO calendars, so a little bit of digestion, you have so much in the way of buyback that the net supply of equities is just not that large. So, you know, not to say you can't pull back on numbers like this or war-related issues, but the technicals underlying the equity market are pretty solid as well. [00:17:05] Matt Miller: You know, when you come on, Rick, my IB just lights up. Viewers writing in with about 1,000 questions here, so get ready. What's your view on all the investment-grade data center issuance? Is it overweight because that's the future, right, because that's the dream and it's going to come true, or are you being more cautious because you see so many more deals? [00:17:25] Speaker 5: Yeah, that's a great question. So, one, I think you've got to build that into your duration, your interest rate exposure you take into portfolios today, meaning you've got to supply, you know, we talk about it's a lot of treasury supply that comes. There's a lot of financing that's coming to support this data center bill that just showed up in the employment report today. So I think you've got to think about how much interest rate exposure I have today when you're pushing a lot of supply in the market. Maybe I run a little bit less rate exposure, which I think makes a ton of sense. And then, listen, I think it's mixed. I mean, some of the, you know, some of the, quite frankly, some of the supply and investment grade is okay. You know, there's, you know, because people don't have a lot, you get, you know, some demand for that. But, you know, some of the, you know, some that comes in convert form, very interesting. If you get equity upside along alongside of it and a coupon that I think is super interesting. And then, you know, quite frankly, some of the quasi private, you know, some of the more off the run data center finance that I find more interesting than just the regular way auctioned investment grade debt. [00:18:29] Matt Miller: Let me also ask about, I had a trader write in, Anthony Santos Stefano, about the Japanese yen when we got this jobs number across. Because it gives strength, right, to the dollar. That makes the yen weaker. Right now we're at 160.07. And they've already blown through, like, $75 billion in foreign exchange reserves. If they go in to defend this here, they're going to have to sell more treasuries, right? What does that do to yields? [00:18:59] Speaker 5: So, you know, I would say a couple of things to that end. A, you know, when we look at U.S. rates, I think the thing you've got to respect today, you've got the Bank of Japan that's raising rates, the ECB, the RBI, the bank account. So, you've got, you're in a cycle today and you've got a fiscal dynamic that I think you have to respect if you're the U.S. rates market. So, that's one part of it. Listen, the yen, I mean, you know, we spent a bunch of time looking at it and, you know, how much risk do you take in JGBs and how do you hedge it? Listen, I think one of the things, you know, we need, you know, Japan's been, Bank of Japan's been a bit deliberate on moving rate like they need to in terms of getting that rate up. And so, obviously, the derivative impact, you see that play out in the currency. So, listen, we follow it, obviously, closely with positions in it and we look, you know, we watch it pretty carefully. And I think, listen, there's one thing that is beneficial and one of the ways I think Japan is very interesting is on the equity side. Like, I think, you know, you see that sort of price action in yen and you think about the beneficiary thereof. Listen, I like Japanese equities. Rates is a, particularly front end rates, is a pretty tough trade. [00:20:02] Matt Miller: What are you doing in Bank right now, Rick? You've been outperforming the market in your ETF. What moves are you making that you can share with maybe your competitors who are watching? [00:20:13] Speaker 5: Thanks for that. You know, I'd say a couple things. Listen, I think, you know, we've moved our interest rate exposure sympathetic to get a strong economy. We've, you know, we've reduced a decent amount of interest rate exposure. You know, some of the negatively convex the rates, you know, agency mortgages, which, you know, is a good asset class. We like it. Today, maybe we want to be, and, you know, we have been a bit more cautious about that space. You know, I like Europe in a relative basis. You know, Europe's already priced in the hikes. You know, we could debate, do they have a lot more to do? I think European fixed income is quite interesting because you've already priced in the hikes. And so that, you know, we like that quite a bit. And then EM, you know, obviously you've got to manage the currency and think through it. But actually, you know, we've, I would say we've been pretty neutral on EM. But, you know, we have, you know, higher exposure in EM than we've had historically. You know, albeit that's not a huge position for us. But big moves, you know, watch your negative convexity and interest rates. Europe's got it more priced in than the U.S. And that's, you know, we think the balance and the carry that comes from Europe is, fits the portfolio nicely. [00:21:16] Matt Miller: Does the war make any difference to your investment strategy? I mean, if we just sit in a ceasefire where we shoot at each other for, you know, months and oil holds around 100, does that matter? [00:21:29] Speaker 5: Yeah, I mean, what really matters for the markets today, I mean, if is, you know, obviously what the forwards are going to be in oil until you think about what are your inflation break evens and how do you it. So, you know, we watch the forwards pretty carefully in terms of where that goes. So, yes, that's important. You know, if you stay in a range markets, to your point that you made earlier, there's so much cash in the market. As long as you believe that it's in this stasis, even if it is, you know, similar to the Ukrainian situation, then markets generally OK. It's the shocked that it's going to move one way or another in a significant fashion that obviously you've got to you've got to be sympathetic to on portfolio. You know, I will say we've built a lot of, you know, what's happened recently is volatilities come down in the equity market, pretty markedly, not so much single name, but in index. And so now you can just start to use volatility to protect your left tail, to protect the downside in the equity market. So, you know, we've done some of that, particularly when you have, you know, the news around it is, you know, just, you know, we're not really going anywhere. [00:22:28] Matt Miller: I'm looking at the forward curve on Brent. Anyone can do this on the Bloomberg terminal, by the way, just type CT for the contract table on a commodity. And I see we don't get below 80 until 27. What about SpaceX? What about, you know, an IPO that sucks that much liquidity out of the market, especially if you have three of them in a row? Does it matter to fixed income? [00:22:49] Speaker 5: It definitely matters to equity, you know, our equity portfolio, you know, whenever you're, you know, we think about, you know, a name like this and, you know, it's a name we've been involved with and others are involved with. And so, you know, you've got to think about it within the portfolio and think about, you know, how much, you know, what else do you own and how do you manage that or when you think about new issue that comes like this. So it obviously matters to supply and demand in the equity market. In the rates market, the fixed income market, I think there's one thing that does, I don't know, equities have taken you to such an elevated position. If you're a pension, a foundation, endowment, and then now you get to a place where you're fully funded in some places. And when rates back up your real rates, now we're at levels that are pretty darn attractive if you're defeating a long-dated liability stream. So, you know, I think what a lot of people are thinking about, like, boy, this has been a pretty positive, pretty powerful period for equities, including some names within the portfolio, names that are doing well. You know, fixed income, when you keep elevating these rates and you think about your real rate and, gosh, even if inflation is running a bit elevated, if you can build portfolios, I don't know what we do in bank. If you can create six and a half, six and three quarters of yield, boy, it's pretty attractive. [00:24:04] Matt Miller: It is, and that's why people buy it. Rick Reeder, you're going to stick with us through the opening bell. Check on markets as we head there. We're looking at futures that are selling off tune of seven tenths of a percent on S&P futures, down one and a half percent on the NASDAQ. After Rick, we're going to talk with Kevin Hassett. Stay with us for that. All right, we are moments away from the start of trading. This is Bloomberg Open Interest. I'm Matt Miller. It is an exciting day. I'm positively pumped, not because of the futures picture. We are down, and we could end this week in the negative, which would break our streak of consecutive wins, the first down week in 10 for equities. But I'm pumped because the jobs number was so strong. It came in double what we were anticipating, 172,000 jobs added in this economy, and last month's figure was revised up. We're going to talk more with Rick Reeder about that from BlackRock in just a second. We're going to talk with Kevin Hassett from the White House after that. So keep your questions coming. I'll throw them at these guys. Let's take a look at the AstraZeneca ringing the opening bell at the New York Stock Exchange. They're up 78 percent over the last five years. They're in a good mood. Lynn Martin right up there with them as usual, which is such a cool thing that you get if you go down to the NYSE. We talked to the CEO yesterday, and they basically monetize your apps, is what he said. So kind of marketing on social media. Take a look at the reasons that we're down. The big, heavy tech stocks that have gained so much so fast lately. For example, Micron over the last 12 months is up 1,000 percent, are selling off today. Micron and Sanchez to the tune of 5 percent. NVIDIA, a $5 trillion company, off 2.5 percent. So that's obviously going to drag down the index, especially the ones that are weighted heavily on, the S&P and the NASDAQ. So that threatens the 10th straight week of gains for the S&P 500. But investors look like they're selling to gear up for the biggest IPO in history next week. SpaceX is going to raise $75 billion at a $1.8 trillion valuation. Then you've got OpenAI. Then you've got Anthropic. And if you look at the projections for a company like SpaceX, they say a total addressable market of $28 trillion because of AI. They say, well, Evercore ISI says $800 billion in AI sales in 2030. Morgan Stanley says $3.4 trillion in total revenue in 2040. These are massive, mind-bending numbers. Let's bring it back in BlackRock Chief Investment Officer of Global Fixed Income, Rick Reeder. Rick, what do you think about these projections? I mean, it seems like AI isn't just bullish the economy but changes the trajectory at which we operate, if they're true. [00:27:06] Speaker 5: I mean, listen, I went through the data and I talked about a presentation I gave where I looked at if you take AI-related the last three years, it's about 28% of the growth of an economy that's a well over $30 trillion economy. You think about how big that's, I mean, how can that be? And by the way, about 70% of the return of the S&P. And then you think about every part of the economic ecosystem today. You think about how AI, the spend and the CapEx, and then, you know, per the number today, you look at the companies that are starting to adopt it and how it impacts everything. And we talked about insurance. We talked about the impact that's having on some of these services, software, et cetera. Boy, it's become, you know, the thing I would suggest, though, you have an economy that's operating on that cylinder and the rest of the economy is just okay. You know, I was talking about small business, not great, young people, lower income, not great. But, boy, that part of the ecosystem is humming. The numbers are mind-blowing. I mean, every day, including weekends, we get calls on financing that's got to come to the market. It has become pretty impressive. [00:28:12] Matt Miller: Well, and we see, I mean, you were talking about construction jobs, Rick. It doesn't seem as concentrated as the naysayers are worried about. Like, we look at companies that do HVAC that make boilers, and they're rallying hard. You know, Ford Motor Company has become an AI play because it makes big batteries that data centers can use. Caterpillar, Deer, all of these old economy. I mean, yesterday we saw the Dow up, the Dow Jones Industrial Average, up 900 points. What do you think of this rotation? [00:28:45] Speaker 5: So I think there's a lot that makes sense of what you saw. And so you think about, there was the first level. You think about semis. You think about the direct beneficiaries. And then you look at things like electrical equipment. You mentioned cooling, like the infrastructure build. Like, I think the thing that makes sense was people are starting to count. And you're seeing the numbers of these companies that are reporting. The companies that are tangential to AI, or maybe not anymore, maybe their business, actually, and some of them has become directly top-line revenue related to AI. Like, that's where, quite frankly, the multiples are not as egregious today. And power, obviously power, and that there is the demand function for those products. And by the way, related to space, you look at the components there as well. Like, those companies become pretty interesting today as people start to think about, okay, I need to diversify a little bit. I've got concentrated risk in some of the parts of my equity portfolio. Yeah, I think it's real. But again, it gets to the point of, like, you've got one big cylinder that's driving so much of the economy today. [00:29:43] Matt Miller: It is driving so much, though, and I think that's the point. I mean, are there areas that AI is going to miss, Rick? Are there industries that you're worried are left behind? Do you worry about AI eating jobs in some places? [00:29:59] Speaker 5: Matt, you know, I think people talk about the K-shaped economy, and I actually think that visual is not that great because it suggests that the lines are equivalent on both sides. I actually think that the economy today is more like a three-month-old birthday cake. The icing is great, but then you look underneath, which is the bulk of it, and it's actually not doing so well. I mean, the thing that is tricky today is I think you're going to displace a lot of workers. Yeah, and I think, you know, part of what the Fed's job and otherwise is be a bit anticipatory of where we're going and how it affects the broad population at large. And, listen, I think, I mean, you know, obviously we and every company uses AI aggressively. And you think about, including this morning, I was going through with a member of the team, gosh, I can do this now, I can do that now, I don't need to go to that. It is going to change the ecosystem, and you're seeing productivity that's here to four kicked in. By the way, robotics, automation, all powered by that same ecosystem that, listen, I think where we're going, and, you know, by the way, when you think about the economy today, you've also got a big fiscal tailwind. When you think about where we're going the next few months, you know, I think you'll have somewhat different disposition around that. So, anyway, point I would make, if you're the Fed, I think you've got to pull back. Maybe, you know, you're on hold. You know, like you say, I position for, you know, what could be a Fed that's more hawkish. But, gosh, you know, I think you've got to think about where are we today, what's being impacted in the economy, the people in the economy, and then, you know, and give it a bit of time to evaluate the condition. [00:31:25] Matt Miller: But are you saying, I mean, it looks like we're adding so many jobs and inflation is still way too high. You don't want to be cutting, right? You kind of, if anything, you have to raise into this, don't you? [00:31:40] Speaker 5: So, my personal view is when you look at the broad construct and you look at what the interest rate tool really impacts, is it affecting the AI spend? Is it affecting the infrastructure? Is it expecting? Is it really influencing? Does you move the discount rate? Does it really influence the hyperscaler demand? Really not. It influences housing where you're seeing that. It influences, obviously, small business where you're seeing it. You look at credit card charge-offs. Anyway, so what do you do with that? I think you've got to take the whole equation and say, my personal view is, obviously, inflation is above target. Obviously, growth, fiscal tailwind is solid. I think you've just got to give it a little bit of time. No, you wouldn't cut, obviously, into this. Do you need to hike into it? And, by the way, you look at Europe. Europe is going to hike into a supply shock. You look at the data in Europe around consumer confidence, ZEW, like you're seeing a tangible slowdown. I just think if you're a central bank, you've got to be a bit anticipatory of, you know, I heard somebody say the other day, you know, what happens with commodities. You know, price adjusts commodities and demand adjusts in terms of what happens. And I think you've just got to be a bit thoughtful and look at the whole picture when you make that decision. And, you know, quite frankly, I think going forward, I think, Chair Warsh, we're very thoughtful about, do you have to keep moving the funds rate around to tweak small moves, particularly when it's supply shock driven? My perception would be, my perspective would be, look at the whole construct. You don't have to constantly adjust and be thoughtful about where the puck is going. [00:33:08] Matt Miller: Hey, we've been talking a lot on this program over the last week, Rick, and over the last several months about pulling money out of private credit. And now it seems to have spread to private equity. And then gates, redemption gates coming down. We talked about cliff water, right, 17% withdrawal requests. You had partners group seeing that creep over into private equity. Yesterday you had Blackstone talking about redemptions and gates as well. Is that, it seems to be the only crack here that I see in financial markets. Is that a concern? [00:33:44] Speaker 5: No, not, I mean, not. So is it a concern to you syncretically? Yes. In some parts, we've talked a lot about software, et cetera. Is it a systemic shock? No, I mean, I've gone through, you know, where you have, first of all, it's term financed, you know, versus you go back to the financial crisis that was largely overnight funded. So, no, it's not, it's not systemic. And the sheer size of it is not that large. What, quite frankly, it has done for portfolios and how we think about investing, the needle has moved around opportunities. If you go back the last few years, there was so much money floating around that privates were trading at very rich levels in credit. And now the opportunity set is much more robust. I mean, now you've created normalcy, which I think is awesome. Like, now all of a sudden you have, you know, the dynamic of if you've got an illiquid asset, you should get compensated for that. And now you're starting to see that into the equation. So, no, I'm not worried about the systemic at all. You know, in some names where you have debt that needs to be rolled, you've got to be, obviously, you've got to watch it. But not, definitely not from a systemic crack in the system. I'm not worried about it. [00:34:44] Matt Miller: What, so I'm going to talk to Kevin Hassett on the other side of this break, Rick. What would you ask him right now? I mean, you mentioned the cake-shaped economy. What questions do you put to Kevin? [00:35:01] Speaker 5: Yeah, I mean, I think, you know, I think he's been pretty thoughtful, very thoughtful. I just saw a headline about, listen, I think you have to, you know, think about the broad picture and give the system some time and think about what the interest rate tool does versus liquidity versus balance sheet. Listen, I think that's really important, you know, is think about, you know, how do you think about, you know, there's a lot of treasury issuance that's got to come to the market. You've got to make sure that the back end of the yield curve is contained. How would, you know, how would you think about that? How would the Fed think about that? To me, I mean, you know, financial velocity today, it's not really created by the overnight funds rate. It's out the yield curve. It's where we finance commercial real estate, residential, corporate. Like, that's a really big deal. And, you know, hearing, you know, how does the administration think about it? How will the Fed think about that? You know, he's very thoughtful on these things. [00:35:46] Matt Miller: We, the new chair, Kevin Warsh, in 2024 said, central bankers around the world seem to be more comfortable with inflation closer to 3% than I wish were the case. That's very dangerous stuff. We can have an economic boom in that scenario, but there will be a high price to pay. Do you think this central bank is comfortable with inflation where it is? [00:36:07] Speaker 5: And so I think there's something that's important, the momentum, the momentum of inflation and what is driving it. So if you look at the interest of the rate-sensitive parts of the economy today and we break down inflation, you say, what's rate-sensitive? Obviously, you know, shelter is rate-sensitive. We need to build more houses in this country. Obviously, you take things like used cars. What's interest rate insensitive, things like health care, education, insurance, those are sticky high. But the interest rate tool doesn't really do a lot with it. You know, it gets to this point about the headline versus what actually is happening. And I think you just kind of factor in if you're a central bank, if you have a supply shock where they should abate over time, and if your tool isn't really effective for some of it, then I just think you have to think about what is your tool doing. Maybe the monetary base should be adjusted, maybe the balance sheet. But I think you have to have a broader discussion around it. Listen, today, I think the central bank's inflation is above target. You've got to wait. Maybe the ECB hikes a bit. But, you know, I just think the simplistic top-line answer for these, which are complex subjects, I think is a bit superficial at times. [00:37:15] Matt Miller: Rick, great having you on. Really appreciate it. BlackRock Chief Investment Officer for Global Fixed Income. And I am looking at things like used cars. If you have a 997.1 slick top with three pedals, please reach out. Coming up, White House Economic Director Kevin Hassett joins the show following the blowout jobs print. This is Bloomberg Open Interest. Welcome to our global TV and radio audiences. I'm Matt Miller. In May, the U.S. economy added 172,000 jobs, far exceeding all estimates. Let's bring in White House National Economic Council Director Kevin Hassett. And, I mean, frankly, congratulations are in order, Kevin. This is an unambiguously good jobs number, an upward revision in the last month. Does it foreshadow the risk of broadening inflation? [00:38:18] Speaker 6: No, absolutely not. And, in fact, it's something that's a great question, Matt. The bottom line is that what's going on is because the president has recruited from companies around the world $18 trillion of new investment. And we're seeing, if you looked at the advanced herbals numbers, you know, equipment investment through the roof, up 3%, you know, in March, one of the biggest months we've ever seen, that people are building factories, creating jobs, creating the golden age, the boom, that is a logical supply-side response to the big, beautiful bill, the no tax on tips, the no tax on overtime, and the rest. And so we're seeing the benefit of that. And you might recall that when, you know, we were talking about this a year ago, there were a lot of naysayers who said, well, we can't possibly even have positive jobs numbers because of our immigration policy. But the fact is that we're getting positive jobs numbers because we've got high-wage growth and native-born Americans are rushing into the labor market in droves. And so that negative story is gone. And finally, I've got to say, we really love going through the Bloomberg data. And we have this thing that I like to look at, which is the probability distribution of all the forecasts for the jobs number before it comes out. And when I looked at it after I got these numbers, I saw that the very, very top person was low by about 40,000 jobs, which shows that the Trump economy is surprising Wall Street analysts over and over again. And they need to maybe think about getting the supply side of their model fixed. [00:39:42] Matt Miller: It does surprise people to the upside for sure. I hear a lot of, I have heard since it passed, a lot of positivity about the big, beautiful bill and the economic growth that it would create. We see 172,000 jobs. We see unemployment at 4.3%. But we see inflation at 3.8% on the PCE. So it looks kind of like too late Powell was right on time. And now the market is pricing in a hike. Is that wrong? [00:40:12] Speaker 6: Yeah, I think that's terribly wrong. The bottom line is that what you need to do is look at the impact of oil price shocks on core inflation. And the history of it is that they're temporary, they don't lead to lasting inflation, that people see through it and don't adjust upward their inflation expectations. And so my advice to the Fed, and I certainly respect their independence, and I'm really thrilled to have a talented person like Kevin Wurst there, is watch the numbers. Because what you're going to see is that with a big supply side boom, that you could have high growth without having runaway inflation. It's not a Phillips curve event at all. And the last time this happened was the 90s when Alan Greenspan saw through that and gave us some of the best years we ever had. And I think that we have that opportunity right now if the Fed pays close attention to the data and thinks about why it keeps surprising on the upside, them especially, and surprising on the downside on inflation. I mean, absent the Gulf issue, the inflation basically would be completely under control right now. [00:41:11] Matt Miller: How soon do you expect that to be wrapped up? Because that's almost completely within our power, right? We went in there maybe at the behest of Israel, but it was our decision to do that. [00:41:21] Speaker 6: Well, the president will make the call on that. I mean, negotiations are ongoing, and I'm not a forecaster for when it's all going to end. But the bottom line is that global market should understand that risk premia are going to be much, much lower going forward once we successfully take away the option for Iran to build a nuclear weapon. And, you know, if you look at the sort of crazy actions that they're taking in the Straits, you know, even attacking Chinese boats, for goodness sakes, then you can see how terrible it would be for the world if they had ballistic missiles and nuclear weapons. And President Trump thinks that's unacceptable, and, you know, of course there's a short-term disruption in oil prices, but we expect it to be over soon. [00:42:00] Matt Miller: Let's get back to the jobs picture because you mentioned the investment in equipment, which makes sense following on the legislation that you passed. Are we going to see manufacturing jobs come back to the U.S. economy? Because we don't really see job creation in the goods-producing sector yet. [00:42:16] Speaker 6: You know, it's inching up, but what is going way up is construction. And remember in the big, beautiful bill that President Trump did something that was really quite clever, where he said for four years we're going to allow people to expense factories. And so what's happening right now is that people are racing to build the factories, and then once those buildings are up, then they'll put the machines in and create the jobs and so on. And so construction employment is way, way up, and we think that that's like the leading indicator for what's going to happen to manufacturing work over the next year or so. [00:42:48] Matt Miller: We have seen an uptick in government jobs, which I thought was surprising. I figured we were going to go the other way, but we added 54,000 there, and an uptick in hiring in a lot of health care services, food and accommodations. Those are lower paid areas. Are you worried about the lower half of the K? [00:43:12] Speaker 6: Well, what we're seeing is that wages across the board, real wages, are going up on average about $3,000 since President Trump took office. And so, you know, right now the jobs, the government jobs that you talked about were really state and local jobs. And there tend to be kind of seasonal patterns in those things that aren't completely captured by seasonal adjustment. And so we have a lot of teachers that took off for the summer and maybe took a job at the boardwalk and so on. That kind of thing is, and then it gets offset in September is probably what's going on because it's all state and local. We, in the federal government, have cut federal government employment by more than 300,000 workers. And that's like tax savings that is going to accrue to the benefit of the American people for a long, long time. [00:43:54] Matt Miller: We did, I was just looking at the wage growth, 3.4 percent and PCE was 3.8 percent. So how do you factor higher real wages? [00:44:06] Speaker 6: You're looking at the latest number and I can send you an email, but we've aggregated it through since when Trump took office and the number was 3,000 as of a speech that we wrote for him a day or two ago. [00:44:17] Matt Miller: All right. Well, that certainly is good news for the workers in this country. Kevin, great to get some time with you. Really appreciate you joining us. Kevin Hassett is the White House National Economic Council director talking to us on a day when the jobs numbers just came in far higher, as he pointed out, than the highest estimate. In fact, the estimate was 88,000. The whisper number was 100,000, and the number came in at 172. So, as I said before, unambiguously strong. No fast pass for SpaceX from Standard & Poor's. The S&P Dow Jones says it will keep its existing rules for index inclusion, denying SpaceX and other mega IPOs a fast track into the world's most important index, the S&P 500. Joining us now to talk about this is James Saifert, ETF analyst for Bloomberg Intelligence. And, James, I suppose on the one hand, this is kind of a surprise, right? If you've been listening to people at the NASDAQ, if you've been reading Matt Levine, you may have expected them to dump the seasoning rules and maybe even profitability requirements. But they don't run an exchange business, and they don't need that kind of contract. Is that why they're able to do this? [00:45:34] Speaker 7: I think that's part of it, right? NASDAQ was incentivized to do this because they wanted the listing of SpaceX. I'm not sure if SpaceX wouldn't have gone with them if NASDAQ wasn't doing this, but that's certainly part of it. The other part of it is, even if S&P did follow NASDAQ and Russell in doing the fast ads, they were only going to move from a 12-month seasoning period to six months. It's not like they were going to move it to 30 days or something along those lines. They were going to keep it, you know, relatively still long-lasting. So instead of six months, it's back to 12 months. I am mostly surprised. I kind of thought S&P was going to, you know, go with Russell and NASDAQ. And a lot of other indices already have some sort of fast ad rules, too. But they're the legacy. They're the leader in the space. And they decided they're going to keep things the way they are. And I think a lot of people are happy about it. [00:46:23] Matt Miller: I just want to point out, James, that if you work here at Bloomberg, our style, our official rule is indexes. You have to say indexes and not indices. In terms of what happens to this stock, I was looking at, you know, a list of, like, the top 30 IPOs of all time. And although some of them performed well, most of them didn't a year later. And the max drawdown after a year was, like, 55 percent on average. None of them were light. Is this maybe a smart move from the S&P? Well, who knows? [00:47:00] Speaker 7: Because, again, they are likely – it's going to – well, we don't know. It should be – it will be eligible for the S&P. You've got to remember the S&P is a committee. It's run by a group of people. And they make rather active decisions. So, in this case, the committee is not changing the rules so they can make even more active decisions, like add something six months before. But it's hard to know. Usually, if you can preempt by a few months what is going to go into the index, you can outperform. They tend to do well. And same thing if you can preempt before things get kicked out. But we've had people on Bloomer TV that have done analysis on this. If you can look at the things that after they've been kicked out, they tend to actually outperform as well. It's just that the numbers you had on the screen there, there's $26 trillion tied to this index across passive funds, actively managed benchmarks, and derivatives. So, it's a lot of money out there that can move things around. And it's just not natural buying or selling. [00:47:50] Matt Miller: James, great to get some time with you. James Seyfert there of Bloomberg Intelligence, part of our ETF super group, along with Tony Serafegas and, of course, Eric Bouchunas. Tune in to Eric's show, ETF IQ, that's every Monday at 12 p.m. New York time. He's joined by Katie Greifeld and Scarlet Fu. Coming up in the next hour, Marianne Bartels joins us on the recent tech sell-off and rotation. We'll talk to her about getting out of the NASDAQ and into the Dow Jones. All right, we are 30 minutes into the trading day. Welcome to Bloomberg Open Interest. I'm Matt Miller. Danny Berger is off today, but jobs are not. We had a blowout report fueling bets on a Fed rate hike, sending yields higher and stocks lower. SpaceX mania is building even after a setback to its S&P 500 listing ambitions. And in Washington, President Trump's immigration enforcement funding bill passes the Senate, clearing a key hurdle, but no ballroom funding in there. We begin with the payrolls report coming in hot. Let's break it down with Michael McKee. He's Bloomberg's international economics and policy correspondent. And, Mike, you know, the survey was 88, the whisper was 100, and we got 172, plus an upward revision. [00:49:13] Michael McKee: Yeah, a big upward revision to April to 179 from 115,000. It's so funny how everything has changed. A short time ago, we were talking about rate cuts. Now we're talking about rate hikes. You see the stock market going down on this report. It's been a while since good news economically was bad news for the market. So maybe we're getting back to a little bit of normality here. Unemployment stays about the same, just a minor tweak down in the three digits, still at 4.3% is where it rounds up to. The average hourly earnings is the only real disappointment in here, 3.4% on a year-over-year basis. Not good for workers, although it does keep inflation on the labor side not much of a danger. The three-month moving average now for jobs created is 188,000, which is significantly higher than anybody had anticipated at this point. And it's one reason that we're seeing all this talk now of rate increases. And yet you do have the K-shaped economy problem still out there. And you were talking with Kevin Hassett about this, 70,000 jobs for leisure and hospitality, 47,200 for health care and social assistance, and 55,000 for local government. Those were the big movers, and those are all relatively low paid. We're not seeing the manufacturing jobs. Only 7,000 higher paid manufacturing jobs were created. So even if we are seeing more jobs, we're still seeing more income inequality, and that's going to be a problem down the road, perhaps, for the administration, which is taking its victory lap on job creation, if people still are unhappy because they're not keeping up with inflation. [00:50:54] Matt Miller: I was talking to NEC director Kevin Hassett moments ago. He pointed out, because I asked him about the manufacturing jobs, that we are seeing a big boom in construction jobs. That makes sense, right, with the AI data center build out. He also said that real wages are positive, even though we had average hourly earnings of 3.4%, and, of course, inflation is much closer to 4%. Well, sure. [00:51:20] Michael McKee: It all depends on when you start measuring from, and they're starting to measure from earlier on. We're talking about the average hourly earnings taking a dip over the last couple of months. They were up above inflation, but so now you're getting a decline. [00:51:35] Matt Miller: Because they've come down and inflation has gone up. [00:51:37] Michael McKee: But they were up earlier, so if you average it out, then Kevin's right, you get a number. The biggest thing that he was talking about that is something that you've got to keep an eye on is, yes, construction jobs, most of that for AI data centers. And when those data centers are completed, those construction jobs go away, and the number of jobs in the data centers is much, much smaller. So we may see a reversal there that isn't going to work in the administration's job counting favor. [00:52:06] Matt Miller: All right, Mike, thanks so much for being with us today. I'm sure you've got a much longer day ahead of you on this Friday, Jobs Day. You're used to it. Mike is our international policy and economics correspondent. Now, the S&P 500 set to snap a record-breaking nine-week winning streak as the payrolls report fuels Fed rate hike bets. Rick Reader of BlackRock weighed in with his market outlook. [00:52:30] Speaker 5: For equities, you know, I've said it before, even though you're getting IPO calendars, so a little bit of digestion, you have so much in the way of buyback that the net supply of equities is just not that large. So, you know, not to say you can't pull back on numbers like this or war-related issues, but the technicals underlying the equity market are pretty, pretty solid. [00:52:50] Matt Miller: Joining us now is Marianne Bartels, Chief Investment Strategist at Sanctuary Wealth. Marianne, what's your take on the malaise or maybe the rotation that we've seen? Does this have more to do with, you know, getting ready for a SpaceX IPO or do investors take from things like Broadcom and CrowdStrike that we're just overbought here? [00:53:13] Speaker 8: Well, if you really look at the distribution of how the market has been performing, technology has been one of the best performing. And from a technical standpoint, it's extremely overbought. Now, can you have some repositioning happening? Certainly some people might be repositioning, getting ready for the SpaceX IPO, but tech was way overdue for a pullback, particularly the semiconductors, which I've been a very big fan of. And I still am, but I think they just got a little over their skis. We're getting a little bit of consolidation that I think eventually will allow us to continue the rally. So, you know, some temporary setback to reset the market. And maybe we'll be reset by the time we get the launch of SpaceX. [00:54:03] Matt Miller: How do you see the launch of SpaceX, that IPO, and the behemoths that are to follow, OpenAI and Anthropic, affecting this equity market? I mean, do they suck up liquidity? Do, you know, industry-adjacent stocks get sold off by PMs? [00:54:21] Speaker 8: I think this market, because we really haven't had a lot of IPOs, is really, really looking for some good companies and good IPOs. Now, obviously, SpaceX is going to be one of the largest and most famous IPOs. But I think the market can handle a lot more. There's still a lot of cash on the sidelines. So I'm really looking forward to having the ability to talk about other companies other than the Mach 7, to be quite honest with you. [00:54:52] Matt Miller: Yeah, that will be fantastic. And, of course, we have trips to Mars to look forward to. It doesn't seem like this market is overvalued. I look at the median forward P.E. on the NASDAQ 100, and it's not low, according to Ask B. It's at 27.2 right now. But if I look back at the median P.E. on the NASDAQ 100 in 1999, it was closer to 50. So do we still have a long ways to run here in terms of valuations? [00:55:26] Speaker 8: I personally think so. Now, my long-term target for the end of the decade on the S&P is 10,000 to 13,000. I still see significant upside. I think this whole AI build-out robotics is going to continue to really drive this market higher. And we do not have bubblicious valuations. We have something the complete opposite. We have an abundance of earnings, but they're concentrated, a lot of them, in the tech names. So I'm not concerned about valuation in this market at all. [00:56:00] Matt Miller: What about a broadening out, Marianne? Because the complaint or the concern has been a concentration. But it looks to me like a lot of sectors are seeing margin expansion that have nothing directly to do with artificial intelligence or tech. [00:56:15] Speaker 8: Well, the one thing I like in terms of broadening out is small cap is finally participating. So you are getting some broadening out in the market. Yes, we still have some concentration, but we have much broader participation within the market in terms of market cap. So, you know, I think the life of this market is very, very sustainable. I like that we're finally getting a pullback. I think that's going to extend the life and the rally within the market. [00:56:48] Matt Miller: Got to ask about Bitcoin, as I know you're an owner, or at least you have been. We're looking at $60,000 right now. It's had an incredible decline. Is this investors looking to free up some capital for the SpaceX IPO? [00:57:06] Speaker 8: It certainly could be. If there are speculators in there and they haven't been making money in Bitcoin, I'm sure they've been chasing some of the hot stocks within the tech space. So I do think that there's some repositioning that's happening within the market. $60,000 is a very important support level for Bitcoin. If we really can't hold that level, I think you're going to continue to see the crypto market under pressure. And I think Bitcoin is a really good barometer for market liquidity. And as we're seeing the volatility within the market, I think Bitcoin is telling you that to expect continued volatility. Now, from a long-term perspective, I still think you can have crypto within your portfolio. But we always advise it's a very volatile asset class. Basically, it's still in a bear market. And I don't see signs of a bottom yet. [00:58:02] Matt Miller: Can I ask, Marianne, because you are so steeped in not only the market technicals but also market structure, what do you make of the index rules that have been changed to include SpaceX? No more seasoning necessary. And in some cases, you're going to see a bigger market weight given to that stock. And NASDAQ never had a profitability requirement, but others that have may be waiving it. How does that make you feel about including that instantly in an index? [00:58:33] Speaker 8: Well, I really am not an expert on indexes and how to incorporate companies, but it personally doesn't bother me. You know, they have the right to make the rules and they have the right to change the rules. And including it will really give us a good sense, since it's going to be a very large cap stock, of how it's impacting the market. [00:58:54] Matt Miller: All right, Marianne, thanks so much for joining us. Marianne Bartels there of Sanctuary Wealth. Let's get a check on what the markets are doing right now. Just about 40 minutes into the session, we're seeing drops on the S&P 500, almost one full percent now, and almost two percent on the NASDAQ 100 as investors sell off heavy tech stocks. We see Nvidia down, we see Micron down, we see SanDisk lower, and it's not a rotation into the Dow that we're necessarily seeing because the Dow Jones Industrial Average itself is off 55 points, though, to more than 51,500. Coming up, we're going to get a fresh view on the labor market with Ben Swig. He's the co-founder and CEO of Revelio Labs, a workforce intelligence company. This is Bloomberg Open Interest. Let's get to high interest now, look at what's making headlines around the world. S&P Dow Jones will keep its strict S&P 500 entry rules, blocking fast track inclusion even for mega IPOs like SpaceX. New public companies still have to wait at least a year and meet profitability and public float requirements before joining that index. It puts S&P at odds with rivals like NASDAQ and FTSE Russell, which recently shortened waiting periods to let massive IPOs enter their indexes within days or weeks of listings. But, of course, the S&P, it doesn't manage an exchange. It's an index operator in the sense that NASDAQ and NYSE do operate those exchange businesses. Steve Cohen's .72 is also exploring a new way to gain a trading edge. The hedge fund is considering paying other hedge funds for their best trade ideas through a buy-side alpha capture program. The move is part of a broader Wall Street push to gather outside investment intelligence. Citadel, you recall, also reportedly pursuing a similar strategy. And what if AI takes your job but still pays you a decent salary? A new proposal gaining traction among tech leaders would use taxes on AI-driven profits to send every adult the equivalent of more than $60,000 a year. Critics say it could unravel the economy. But let's turn back to our top story today. Payrolls coming in stronger than expected. We spoke with the White House National Economic Council director Kevin Hassett following the blowout report. [01:01:35] Speaker 6: We really love going through the Bloomberg data. And we have this thing that I like to look at, which is the probability distribution of all the forecasts for the jobs number before it comes out. And when I looked at it after I got these numbers, I saw that the very, very top person was low by about 40,000 jobs, which shows that the Trump economy is surprising Wall Street analysts over and over again. And they need to maybe think about getting the supply side of their model fixed. [01:02:01] Matt Miller: All right, let's get more on the state of the labor market with Ben Swig. He is the co-founder and CEO of Revelio Labs. It's a workforce intelligence company that analyzes data from LinkedIn, Glassdoor, H-1B visa filings, and other public sources to track trends. You're a PhD economist. You were the managing data scientist at IBM chief analytics office. And you also are a professor at NYU. So it's great to have someone with your experience on here. What do you make of this report? Because it was not only higher than the estimate at 88,000, but higher than the whisper number at 100,000 by 72. And the revision from last month was also strong. [01:02:42] Speaker 9: Yeah, it was a great month. I mean, at Revelio, we had predicted it would be 123. So really good. That was actually our best month since 2022. So this is a great month. ADP was also plus 122. Overall, really good month. Really strong. Headline numbers strong. But also we're seeing stabilization in the declining job postings, which is also good. We're seeing layoffs kind of flat. So I think it's fair to say demand is there. It's a good month. [01:03:07] Matt Miller: What about the slowdown that had concerned us from Joltz? We saw a lot of job openings, right? But apparently, you know, when you get a job, it takes much longer to actually lock that down. [01:03:19] Speaker 9: And nobody's quitting jobs, right? It's a huge issue. I mean, you know, in a very positive economy, I would say we would like to see an increase in the inflow rate, the hires, and an increase in the attrition rate, the exits. And of course, the growth is just the inflows minus the outflows. But we're actually seeing declines in both. So we're seeing declines in hires, but even more declines in outflows, in attrition. So that's problematic in my mind. I think the economy, the labor market is still frozen, which is very troubling. What needs to happen for that to change? I mean, why is it frozen? I think the big story is AI. So it's not specifically about what AI means for demand. It means it's what AI is doing to the way that people find jobs. Right now, there's a lot of new job boards popping up that are basically treating the job market like a high-frequency market, where they're taking candidates and saying, you can create a very custom application, apply to a thousand jobs a minute or something, be one of the first applicants. And what happens is the employers are getting totally signal jammed. So they're getting a lot of these, you know, a lot of these slop applicants, and they don't really know what to do with it. So the utility of posting jobs is declining tremendously. And I think a large part of the decline in postings is due to that. And, you know, the search and match process is completely broken. So people are staying in jobs. They're just not looking for jobs, which is troubling for a few reasons. Another reason why that's troubling is about the unemployment rate. You know, the unemployment rate is kind of stabilizing. But remember, there's good kinds of unemployment and bad kinds of unemployment. So frictional unemployment is the positive unemployment. That's the job search and match. People just kind of being between jobs, looking for stuff, getting better matches. And that's declining. So I think the natural rate of unemployment is declining as well. [01:05:04] Matt Miller: What do you make of the, you know, for a long time, I would talk to lawyers and investment bankers, and they were all saying, we have no reason to bring any first years in anymore because we can do so much with AI. But now it seems like they're saying, we need kids right out of college in here so they can do stuff with AI. [01:05:22] Speaker 9: Yeah, it's interesting. I mean, we've seen a little bit of flip-flopping there. I think the story is still negative for entry-level workers. Really, I think for two reasons. One is that they are a more high-variance bet. So if there's more uncertainty, then all you can do is kind of optimize for the short term. I know you have young kids. So really, you know, off the beaten path reference in Frozen 2. You know, when the path ahead of you is unclear, all you can do is the next best thing. And so what employers are doing is they are hiring the low-variance bets, the safe bets, the experienced hires. And entry-level hires are always, you know, kind of risky. So I think in a high-discount rate environment, entry-level workers suffer. The other thing is the direct AI impact. So the issue is that, you know, you can think of a job as having two parts. One, it's a collection of tasks that need to be executed. Another, those collections of tasks need to be orchestrated. They need to be coordinated. So as we're seeing, you know, improvements in the ability to execute tasks and get work done, the return to coordination and orchestration is higher than ever. And that really is strongest among people that have experience managing others, managing complexity. [01:06:35] Matt Miller: I don't want to spoil it, but Elsa creates a horse from ice, and then she, like, tames it and rides it forward. What a talent. What a skill. I was right at the end. You know, what skills do the kids today graduating need to have to get into this job market. Like if I look at the breakdown of the jobs we added this month, it's like food services and accommodations, healthcare jobs, but not like orthopedic surgeons, right? It's the jobs that are, um, hardest to get. Right, right. [01:07:04] Speaker 9: I think that's right. [01:07:04] Matt Miller: Hardest to fill, I should say. [01:07:05] Speaker 9: Hardest to fill. It's a lot of small clinic type jobs. Um, so, so I think you're right about that. For, for the skills that are most valuable, I think it is in that management coordination bucket. So, so my advice to young people generally is, you know, try to take on projects that involve a lot of complexity. So, so, you know, managing complexity is a muscle. That's a set of skills that I think can be developed. The other advice is just to get better at networking because traditional ways of job search are more broken now than they happen. [01:07:35] Matt Miller: Ben, great having you in here. Hope we can get you back again. Ben Zweig, uh, is the founder and leader at Reveglio Labs. Still ahead, we're going to speak with Rubrik CEO Bipol Sinha as the cyber security firm posts its strongest quarter on record. This is Bloomberg Open Interest. This is Bloomberg Open Interest. I'm Matt Miller. Let's get a quick check on stocks. We are an hour into the session after a blowout jobs number and ahead of an IPO. Just one week away from a SpaceX IPO. It'll be the largest IPO in history. They're going to raise $75 billion, so investors may need to take cash from other places. You can see the S&P 500 down almost one full percent and the NASDAQ 100 down two percent. I should mention also that yields are rising. So if you take a look at the two-year yield right now, we're up 10, 11 basis points to 415. This is a problem for incoming Fed chair or new Fed chair, Kevin Warsh, because the market is now pricing in one full rate cut. Brent crude, fortunately down 1% at 9404, but that's not helping any of these big tech stocks. Nvidia is down three and a quarter percent. It's a more than $5 trillion company. So it's a massive weighting on the S&P and the NASDAQ, and it drags those two indexes down as you'd expect. We have all of these big chip makers off as well. Micron down 6%, SanDisk down 6%. Even though Nvidia CEO Jensen Wang said they are clear now to put their high bandwidth memory in his AI accelerators. But this is part of that rotation that we saw yesterday out of tech and into the Dow. Yesterday, the Dow was up 900 points. We don't see a gain there today. Oklo is down 7% now. This, even though another small nuclear reactor had reached criticality, which is an important measurement of its ability to make power. That's good news for them. But investors still selling the stock as they are anything related to AI today. And related to see-through yoga pants, Lululemon is down 8% on bad earnings and outlook. DocuSign as well down 4.7% right now. Coming up, cyber security firm Rubrik's beat and raise. That isn't enough to excite investors on a day like today. We'll talk to the CEO. Cyber security firm Rubrik reported its strongest quarter on record and raised its outlook as AI boosts demand for its products. However, shares are lower this morning amid a very broad sell-off across tech stocks. Rubrik has 30 buy ratings on the terminal and zero sells. So it's safe to say the street loves this stock. Also this week, the company announced it joined Anthropik's glass wing project with access to Mythos. Here to discuss is Rubrik co-founder and CEO Bipul Sinha. Bipul, it's great to have you on the program. It's a tough week to announce earnings. I saw, for example, Broadcom forecast more than 200% growth in its AI chips, and yet the market sold the stock. What's happening right now? [01:10:59] Speaker 10: Thank you for the opportunity. Look, at the end of the day, we created an amazing quarter. If you look at our top line, we grew 32% year over year at 1.57 billion in subscription ARR. And not only that, we generated 74 million of free cash flow, 19% margin. Look, market is market. I mean, AI trade has been very strong and it continues to have this feeling about up and down and it will all settle down at the end of the day. If you have a great business, market will come to recognize it. [01:11:36] Matt Miller: All right. So it is, as I said, a tough, tough day, tough week for tech earnings, especially related to AI. We talked about your connection with Mythos and Frontier AI models that, as you have said, is driving more customer conversations, I can imagine. Are they actually converting into bigger contracts today or are you still in the education phase with these old and new logos? [01:12:02] Speaker 10: If you look at what is happening with Mythos and AI Frontier models, it has really brought this reckoning in business leadership that you can't prevent cyber attack. You need to be ready for the attacks that comes to you and you need to recover and restart your business upon an incident. And this is where we are seeing a significant customer demand. I mean, if you look at our unique technology, what we call preemptive recovery engine, that allows our customers to recover at AI speed when the AI attack happens, is causing a lot of conversations and the pipe building. And it is one of the reasons that we have raised the outlook for the year. [01:12:43] Matt Miller: I wonder what you think as an aside on Anthropic's call for a pause in AI development because there's a concern that these systems may start to develop themselves. Are they that powerful? Is it a concern for you at Rubrik as well? [01:13:02] Speaker 10: Look, I mean, Anthropic team is very smart. They are sitting at the leading edge of AI and they have a full comprehension of what's coming, not just what's in Mythos, but in future models. But at the end of the day, technology pace will continue. And if we are not doing this in America, people outside of America will develop newer models. What we need to do is we need to understand the risk and every business leader has to prepare for that risk. And that risk preparation is to understand that AI is now going to attack us more and more. And as we are rolling out AI agents in businesses, we need to make sure that there's a real-time runtime guardrail and controls on those agents. Because if those agents get compromised, you have a massive insider attack. [01:13:49] Matt Miller: You have $74 million in free cash flow. I see you raised your free cash flow guidance to as much as $303 million for the year. Are you worried, though, about there's a classic sort of software trade-off. You have a great growth narrative, but you get margin pressure from compute, R&D, and go-to-market spend. Does that affect you? Do you see that happening? [01:14:15] Speaker 10: I mean, look, we are a high-growth business and we are balancing how much AI we infuse in the business to continue to develop products faster, continue to run our business more efficiently. At the same time, we are also hiring people. And we are combining the two to create a long-term, highly profitable growth model. At the end of the day, look, we'll invest in the business, in AI, where we have to. We'll hire people where we have to. And we want to build the next 30, 40, 50-year company. [01:14:45] Matt Miller: In terms of AI agents, agentic AI, do you have ID security for agents? Because I was talking earlier this week with other security companies who said they'd rather have the customer create those identity securities. But I think other analysts expect to have it at the cybersecurity level. Do you think about it? [01:15:12] Speaker 10: Rubrik does identity resilience for a long time. And if you look at our recent announcement, we showed that our new product in identity resilience is grew to over 50 million ARR in just four to five quarters. But identity for agentic security is one aspect of agentic security. You need to have the full platform from understanding of what agents you are running to understanding of these identity for the agents and the posture, to creating a runtime security for agents, as well as what we call agent rewind, where if the agent make a mistake, how do you undo the action of agents? And Rubrik has this full platform from monitoring to posture to runtime security to agent rewind. And that's where we are actually helping our customers do AI transformation with confidence. [01:16:03] Matt Miller: Yeah, I asked because I've read you say agents create 100 times more productivity, but also 100 times more risk. And I just wonder if you're seeing companies, if your clients are budgeting for that, because I imagine also more cost. [01:16:19] Speaker 10: 100% they are budgeting for it, right? Because look at any new technology. When you adopt new technology, you need to have a harness to ensure that you actually are managing the risk. And if you look at the totality of upside and downside, our customers are very excited to do the AI transformation. [01:16:35] Matt Miller: All right, Bipol, thanks so much for joining us. Co-founder and CEO of Rubrik, Bipol Sinha. Let's get a look right now at what's going on in the markets. We're over an hour into the trading session this morning. And we're seeing the drops a little bit lighter. S&P 500 still down, well, nine-tenths of one percent off 66 points to 75.18. At that level, by the way, we will be down for the week. I think we closed last Friday at 75.80. That was our ninth consecutive week of gains on the S&P 500. So this will be the first down week in 10 if we stay at these levels. The NASDAQ looking at more serious drops off 1.75% or 540 points to 29,865. This, as we see yields across the board rising. You saw the two-year yield up 11 basis points. The 10-year yield here up six and a half at 453, 454. Although Brent crude is falling, oil falling across the complex. Brent down $1.10 to about $94 a barrel. Let's get a look at some of the single stock stories at this hour. Big tech stocks are slumping to end the week. Threatening, as I said, a tenth straight week of gains. That doesn't look like it'll happen right now. Although we did see a turnaround in yesterday's trade. Remember, we were down at this time yesterday and then we closed higher. Shares of Chipotle are rising after JP Morgan upgraded the stock to overweight from neutral, citing a rare valuation opportunity for the burrito builder. And Merlin announced the successful completion of a design review for its autonomy program with the U.S. Special Operations Command. Remember, Merlin makes autonomous flight systems for military equipment. Coming up, drones, speaking of that, are becoming a bigger part of military operations. We'll speak with the CEO of Pelican Products, J.C. Curley, about the company's growing role in the defense industry. This is Bloomberg Open Interest. A Pelican is known for its hard shell cases. They're used around here a lot to protect cameras and filming equipment. Now the company is finding new growth in the defense sector as drones become a bigger part of military operations. For more, Pelican Products CEO J.C. Curley joins us here. He is, of course, the former CEO at Levi's and Gibson Guitars. So, man, you make stuff that guys just love. Yeah. But also that's increasingly becoming important in the field for military operations. How did you get into that part of the business? [01:19:12] Speaker 11: Well, I mean, Pelican started as a passion project for protection 50 years ago. And then if you think about in the last 50 years what's happened, protection's always been needed. But today's world, like if you think about explorers and protectors and defenders and collectors and creators, they're all investing in something that needs to be protected. So as a CEO, we get to think outside the box, but we also have to think inside the box. So as we pivot now to the dynamics we're seeing today in defense, there's three big things happening. One of them is just the sheer attention on defense and the investment. Two is the replenishment dynamic. And then I think of more importance for us going forward is the form factor shifts, the unmanned dynamics, the drone dynamics. And they require mobility, transport, protection, versatility, organization, situational protection. So we offer all that. And it's putting a lot of positive pressure on us to actually innovate with agility going forward. [01:20:06] Matt Miller: So, I mean, with camera equipment, you know, the professionals around here, they seek out Pelican cases. They go to B&H and buy them. With other, my cousin, I told you, make sunglasses that are like $600. He sells them in Pelican cases because it's an expensive item that you don't want to break. With this military goods, you have to, I imagine, go to them and say, like, hey, we have a fantastic product for you, and then organize a government contract. That's a whole different kind of transaction. It is. [01:20:35] Speaker 11: And, you know, we call it our go-to-market cycles. And so, but what we're seeing now with the sheer scale required, and if you think about companies like Andril, companies that you didn't hear about five years ago, now coming onto the scene, what we're seeing and what we've witnessed is in the last few years, it's a very tactical relationship of we make something, we need to put it in something, we need to -- now we're working on multi-year partnerships with a lot of folks who are investing and innovating for the future. So, we now have our engineers working with us way upstream. The worst thing that could happen -- I don't know -- the worst thing that could happen is they finally get that drone ready, and they can't protect it, ship it, transport it, et cetera. So, we now work way upstream with them strategically to make sure that we can scale up, we have the solutions, they have the selection, and by the time their drone, say, is ready for market, which is at an increasing pace, we're right there lockstep parallel with the solution. [01:21:28] Matt Miller: One of the benefits you have, at least in the other products that I've bought from you, is that they're made in the U.S. Yes. How difficult is it to find the labor to manufacture in the U.S.? Obviously, you have a history of doing this with guitars, but it's a different kind of product. [01:21:43] Speaker 11: It is different, but I think when you think about -- first of all, growth helps attract, you know, a certain individual who says, I want to be part of something cool at Pelican, so we have that brand, but also elements of automation we're working on, coupled with, yes, there's AI, but I don't call AI art. What's artificial about it anymore? It's augmented intelligence helping us on quality. So the labor dynamics are important, but they're not the only thing that we're focused on, because now with scale, our factories today in Torrance, California, South Deerfield, Massachusetts, we're actually running seven days a week, three shifts. So the labor dynamics are there, and what we're able to do is a skills matrix for people to say, we'd rather have a skilled operator looking at automation dynamics than just a traditional worker on the line, and we're seeing a very, very strong, healthy balance there. [01:22:33] Matt Miller: But I imagine you have to charge a much higher price than competitors. I think about your time at Levi's, right? They used to use these fantastic looms from cone mills, you know, and those have all gone to Tokyo. Now you're paying three, four, five hundred dollars for a pair of jeans made like that, and no one makes jeans in the U.S. anymore. How can you continue to manufacture here and keep price competitive? [01:22:57] Speaker 11: Well, I think it is that combination of automation. I think there's an element of scale and growth. And also, if we offer the best protective solutions in the world, we can command a premium price. And so when the mission is on the line, and we like to say for all the explorers, adventurers, protectors, we're not the heroes, but we enable and empower the mission to be accomplished. And so it's a mindset for people that say, if the mission is well prepared and protected, the chances of the mission being accomplished go up. What is the price of that? And so we're able to command premium pricing, and we're also able to bring innovation back into the solution. And as I mentioned, the amount of investment being put into what goes into a Pelican deserves premium protection, which comes at a premium price. [01:23:40] Matt Miller: You also have a premium brand, right? When I think of a product like a Pelican, I think also of a product like a Yeti. Yeah. You know, and they have like this cool Austin hit brand thing, Torrance, California, also a very cool place. Yeah. How do you build on that? [01:23:54] Speaker 11: I think, I mean, first of all, you start with what got you here, which was our founder, Dave Parker, was a passionate diver, and he wanted light underwater. So he developed an underwater flashlight. He wanted a first aid kit that was crush-proof, dust-proof, waterproof. That's what started it. 100 million cases later, billions of missions later, you can trace it right back to an authentic starting point. On the West Coast in Massachusetts, Harding Industries was synonymous with the science of protection. James Harding was literally a protection genius. And so you bring the soul of California, Torrance, you bring the science of protection from South Deerfield, Massachusetts, and that is a very, very powerful combination for protective solutions. What kind of growth are you looking at, JC? If the last year is an indicator, we're seeing an increased step change every quarter. Obviously, we're a private company. Our financial partners at Platinum Equity have been not only supportive in terms of where we've been, but seeing forward, how do we leverage our synergy together for scale, investing ahead of the curve. So our growth, we've seen, I can share that we had a record first quarter, and we're on track to have probably the strongest year in the history of the company. [01:25:04] Matt Miller: And that despite, I mean, you make stuff in the U.S., so you don't have to worry about tariffs on the finished product. Correct. But you do have to worry about, I imagine it's petroleum-based, you know, chemicals and compounds. How do you see pricing right now with the Strait of Hormuz closed? [01:25:22] Speaker 11: Yeah, we were very, you know, some might call it luck, but I think it was strategic, proactive decisions we made about a year ago. Tariffs were one thing, but what we're also seeing, and no one foresaw a year ago was coming. So we developed a series of countermeasures, but now we're leaning into it. So we worked with a new resin supplier about six to 12 months ago. We wanted innovation, and we wanted also to look at cost. So we're now in a very healthy balance of we worked with a new resin supplier. It brings improved innovation to our resin, which makes our cases stronger, lighter, UV resistance, etc. But at the same time, we were able to -- our scale and growth means we can leverage that back into our supply base. So we can push our costs down even if the inherent base of the cost goes up, if that makes sense. Yeah, of course. [01:26:09] Matt Miller: Great to have you on the program. Hope we can talk to you again, JC. JC Curley there is the CEO of Pelican Products. Now, coming up, it's a major win for immigration enforcement as the Senate passes a nearly $70 billion funding package. We'll have the details next from America's dad in Washington, DC. This is Bloomberg Open Interest. Let's take a look at what's ahead for the markets next week. Apple is kicking off its Worldwide Developers Conference on Monday. On Wednesday, we get more inflation in the form of CPI data. We also get more earnings from Oracle. Thursday, we get the PPI data and another round of jobless claims like every Thursday for your entire life, plus an ECB rate decision. Finally, on Friday, University of Michigan consumer sentiment comes out. And the big one, SpaceX, is expected to start trading on Friday as well. Now, after months of debate, the Senate has approved nearly $70 billion in funding for ICE and Customs and Border Protection. Beyond the money itself, the bill could fundamentally change how those agencies are funded. Here to explain is Nathan Dean, senior government analyst at Bloomberg Intelligence and the author of the Washington Update Newsletter. And, Nathan, I was listening to you yesterday through the Voterama. What an exciting day it was on the floor. We didn't get any kind of amendment to permanently block the weaponization fund. But we got close to that. How was it? [01:27:53] Speaker 12: Yeah, so we got very close to it. I mean, it only failed by a couple of votes here. And this was really to try and codify language in the Senate bill that would allow President Trump or not allow President Trump to move forward with weaponization, this $1.8 billion fund that people have been talking about. So, you know, it's always questions of whether that comes back. But what this bill ultimately did, as you noted, is it gave $70 billion to the Department of Homeland Security. And this actually takes out the policy arguments that the Democrats can use until after the end of the Trump administration. So you're not going to really see any leverage for ICE tactics or types of funding squabbles, if you will, until after President Trump is out of office. From the market perspective, not that big of a deal. But there are two things to keep in mind. Private prison stocks like GeoGroup and CoreCivic are moving off of this. The idea is now that the funding has been secured for the next three years, potentially the Department of Homeland Security will go on purchase assets from those two companies. So GeoGroup was up 8% yesterday as a result of it. [01:28:51] Matt Miller: Yeah, I did think they were going to need that amendment to push this through. I also thought they would need to take out the ballroom funding. That happened, didn't it? [01:29:02] Speaker 12: Yes, it did. The ballroom funding isn't there. And this is really a big, interesting question for those of us in Washington, because, look, the ballroom is going to get built no matter what. I mean, and this funding in particular was actually designed for the Secret Service and for the security apparatus of what's going underneath the ballroom. But you're not going to see the ballroom actually construction stop as a result of this. So probably what will happen here is that the Trump administration will try and reallocate funds from other parts of the U.S. government. Maybe it's the Department of Defense, et cetera. And then that money will actually go into the ballroom. But ultimately here, it's very difficult vote for Republicans, especially in advance of the election, to try and say, look, we are going to support a billion dollars for this ballroom. When President Trump's been saying all along, private companies are going to be the ones paying for it. [01:29:45] Matt Miller: This is, I think, interesting. And to your point, not that it matters too much for markets, but President Trump has said essentially that he will pay for it or that private donors will pay for it. Isn't it the case that certain things cannot legally be paid for with funds outside of the government, like these secret service facilities? [01:30:08] Speaker 12: Yeah. I mean, and this is where the Trump administration has somewhat gotten into trouble, but also not gotten into trouble here because, look, you know, you're not supposed to be able to reallocate money outside of the appropriations process. I mean, if Congress says, here's what the money is for, then you need to actually, you know, and you change it, then you could potentially run into trouble here. But then that's what is the resolve or how does Congress actually come back here? The answer is a lawsuit. And then it goes to the courts and it takes multiple years to actually go to the Supreme Court. In many cases, you know, the courts just say, look, this isn't all that big of a deal. Or for political reasons, the Democrats say, look, we're just not going to really push the president on this. So President Trump is testing the boundaries of the executive branch. And this is something you're going to see continued through the rest of the midterms and beyond, because ultimately here, when it's the executive branch versus the legislative branch, it's the judicial branch that comes in and tries to figure that out. And that process is not quick. It takes a long time. And President Trump loves to take advantage of that. [01:31:03] Matt Miller: All right, Nathan, great talking to you. Really appreciate you joining us. Nathan Dean there of Bloomberg Intelligence. I look forward to listening to you still with Joe and Kayleigh. They're much better at doing these interviews. On Balance of Power, that kicks off on Bloomberg Television at 1:00 and then the late edition at 5:00. Let's get a check on the markets right now. We do see a sell-off underway with the S&P now trading at 75.08. So it's 70 points off the closing level of last Friday. That means this will be the first week in 10 that we don't see gains for the benchmark index. The Nasdaq off more than 2% at 29,784. I guess it's really a perfect day for Tom and Scarlett to kick off Bloomberg Money. The inaugural program begins at 12 noon today. This is Bloomberg.