>> if you're hoping for a week so the fed may cut, you are trying to thread a needle. >> the fed can cut but if they cut what is priced, you will not get any fully easing and financial conditions. >> they won the battle on inflation, they do not want to lose the war on a soft landing. >> there's no way they can signal a cut in july with this data. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: let's get the week started. good morning, good morning.

bloomberg surveillance starts right now. your equity market negative .2%. it is super bowl week on wall street. it is all about wednesday's doubleheader. cpi in the morning, 8:30 eastern. later in the afternoon the fed decides. in a news conference with chairman powell at 2:30 after we spent the weekend waving goodbye to july. angela hollen horst going from july to september -- andrew hollenhorst going from july -- lisa: at a time it seems like the labor market will not give the open door to the federal reserve. where they put the balance of risks. do they upgrade their expectation of inflation the same way the ecb did? basically decreasing chances that one rate cut will be the beginning of a massive series. jonathan: what are they really

think about the jobs report on the fomc? what we got from citigroup is surprisingly strong job growth. let sit on that for a while. how many articles did you read over whether the jobs data overstates the strength of the u.s. economy? lisa: i read articles about overstating the strength, question the accuracy, talking about the downgrades and revisions. then i got tons of articles talking about how the inflation rate is totally skewed by inappropriate measures in housing that have been amid -- that have been manipulated and distorted. all these people questioning the date the fed is using to set policy, which raises the question do they poke holes in it, do they take it at face value, where's the balance of risk where there are number of sign showing material weakness? jonathan: the questions around the news conference be fascinating. mark zandi coming up at 8:30. check out french markets. look at the french market.

down more than 2%. in the bond market spreads wider. the euro a little bit weaker, down .5%. we saw 1.09 last week, back down to 1.0 744. marine le pen crushing emmanuel macron in european election. more surprising was his response to it because this was in line with the polls. lisa: a lot of people are saying this was the biggest ramification. there are two thoughts. one is to show he still has support and solidify that in a questionable moment for marine le pen. the other idea is let's get that party in and see what they can do ahead of the general election and if they take the economy you've been warned. it is a question about why he's doing it now, whether it is smart or not. it is fascinating because it raises the question of how much the dollar can weaken at a time there's not an alternative that

is what was raised over the weekend. jonathan: then we get but -- can we pick up on your second point? the ability to govern. does he -- or does he legitimize the party into 2027? lisa: this is a key question at a time it was not just france. germany with olaf scholz party coming in with the lowest showing in its history. this is not just a france issue. this is the growing acceptance of far right governments worldwide, but particularly in europe and this raises the specter of how much elections can influence markets in ways that are unexpected, even if these were in line with expectations. jonathan: bloomberg's ali crook joining us out of berlin in about 10 minutes. -- bloomberg's oliver crook joining us out of berlin about 10 minutes. we pulled back just a little bit. down .25% on the s&p. yields with the double-digit move on friday off the back of a

stronger-than-expected headline payrolls report. on the 10 year, 4.4493. lisa: you called at the super bowl of economics, i will call it the world cup of economics. the doubleheader we get wednesday with cpi and the fed rate decision. this is highly unusual and comes in a week of relatively little other economic data. we get a series of auctions. today we get three year, tomorrow 10 year, and on thursday we get 22 billion dollars of 30 year bonds at a time when the bond market reaction to this economic data will be pivotal. we also get jobless claims on thursday. you raise the question, it was more important, jensen or jay? it was more important, jensen or tim cook or jay? in the corporate world that is more fascinating. we have the worldwide developer

conference for apple. how important is nvidia? how important is siri? nvidia stock split takes effect today and thursday we find out how much elon musk gets paid and whether people are ok with him earning $46 billion. jonathan: can i cheat and say this week is j? lisa: maybe. if you look at some of the top stocks, they account for more of the index than ever before. at a certain point if there is a material shipped in these massive tech companies they overshadow jay? jonathan: if you think about friday and we ask it in the morning, how relevant is the payrolls report to whatever nvidia does? if you think ai is in the business of destroying jobs the jobs report has nothing to do with the success of nvidia stock. lisa: i love that point. if you have rates at the same level for a longer time that

could cause nvidia evaluations to tank. nvidia evaluation has decrease based on how much their profits have increased. it is a good point. jonathan: nvidia doing something unusual, it is down the premarket. coming up, been late learner on why we are in the -- ben laider, terry haines, and rubeela farooqi. ben laider saying the u.s. economy remains on a goldilocks trajectory, supporting nearly 3% gdp growth and double-digit corporate earnings growth. wednesday's doublebill of the latest inflation data is unlikely to derail them. ben joins us now. can you walk me through what is goldilocks about the friday jobs report? ben: i think we are in this

phony war right now where there's just a lot of uncertainty on the data. i think enough is going on, whether it is the jolts, whether it is the eisai manufacturing, whether it is the productivity data that the economy is in good shape. it is slowing just enough to keep the door open to rate cuts. i don't think the market really cares whether we will get one or two were three this year as long as the next move is down and the cost of this resilience is we are getting good earnings growth. companies have visibility on this corporate earnings recovery. the market could easily live with this. jonathan: you think we are in the early innings of a new bull market? can you walk us through the pillars you think this bull market is sitting on? ben: one is the earnings recovery, which is fairly idiosyncratic in the u.s., it

has not been led by the top line, it has been led by ai, by profit margins. over time that will broaden out. the rest of the world were we are seeing interest rate cuts, we are seeing economies firm, it has been much topline layers. the earnings recovery will continue and will broaden out. that is pillar one. pillar two, the interest rate cycle has decisively turned in the u.s. is the outlier. let's not lose sight of the fact that we have had something like 70 interest rate cuts this year relative to 15 or 16 hikes and that will feed through over time interfirm or economy, stronger earnings growth, and the u.s. will follow at the back. i think it will ultimately follow. those are the pillars. there is technical support as well. there is a lot of cash sitting on the sidelines.

sentiment is lukewarm at best. when we get the inevitable pullback, that money will come into the market and that is what we have been seeing so far. lisa: let's talk about john's question, it was more important, j or jensen rising -- who was more important, jay or jensen rising to prominent. lori calvasina saying the risk increases dramatically if we do not get a fed rate cut. do you agree that if we get better-than-expected economic data that could lead to a real pullback that you want to buy but you do expect in the near term? ben: i disagree with that. the narrative for the last six to nine months has been stronger-than-expected economic data pushing back on the rate cuts. i think the market can live with this.

the market will take the higher earnings growth as low as the rate cut is still coming and that is still the case. there is enough going on with the economic slowdown, with the productivity boom and the inflation data that the next move is still down. i think wednesday will be a nonevent. we will not learn anything we do not already know that inflation is sticky, that the fed will probably bring the dot plot down towards to where the market is and we will live to fight another day and move on. i was -- lisa: i was going to get to the idea that you see the top stocks in the s&p rising to a record high as a portion of the s&p of 35%. you think wednesday does not matter. what if the fed signals they will go once this year and possibly it will be a december and they start talking about equally balance risk and the potential for a rate hike. that would not be an event?

ben: i think putting a rate hike back on the table would be a potentially seismic event. i do not think they will do that will stop i think they will walk down the three cuts, the two cuts, maybe even one cut. as long as cuts stay on the table the market is fine with this. i think that is a nonevent. putting a rate hike back on the table, that would be seismic and drive weakness. i suspect people would ultimately by the weakness. that would be a significant change. jonathan: it is good to catch up. thank you. it would be a brit to call the super bowl on wednesday a nonevent, pouring cold water on something like that. lisa: do you think he would've felt differently if we said it was the world cup? jonathan: like the cricket world cup finalist. we did not marketed properly.

lisa: good morning, it is the world cup or cricket match. jonathan: the prickett final on wednesday. i don't think it -- the cricket final on wednesday. i don't think it has the same ring with that. what we saw friday can change completely wednesday morning. you saw the double-digit move on the 10 year yield. we are unchanged on the week. massive moves in either direction and we can become just as sensitive wednesday morning to cpi delivering the downside surprise. lisa: i wonder in retrospect how much of this data will be so noisy to be completely confusing and misleading. that is what you are giving up in these reports? something is a disconnect when you see the soft data highlighting something different from the unabated strength in the jobs market and a solid disinflation in the inflation data. jonathan: wednesday is an important day. equity futures -.2%.

let's get you in update on stories elsewhere. here is your bloomberg brief with dani burger. dani: apple's worldwide developer conference gets underway in cupertino and advancements are said to be the dominant theme. apple is expected to unveil a new suite of features called apple intelligence that will provide users with voice memo transcripts and summaries of texts and emails. they're planning a more powerful version of siri. nvidia's 10 to one stock split has gone into effect. the irb -- the ai boom had powered the company to huge gains. the share price surpassed $1200 and boosted the company's valuation to $3 trillion as goldman's david costin points out a key reason for the split is to increase liquidity and retail activity. the cost of owning a home in the u.s. has increased 26% since 2020.

that is because of expenses including taxes, insurance, utilities. those categories have soared as americans continue to do with higher inflation. the bank survey found home maintenance is one of the bigger costs weighing on homeowners. the past four years of rising cost have dealt the biggest blow to utah residents where expenses surged 44%. jonathan: thank you and congratulations on the new set. love. manus cranny and dani burger, 5:00 a.m. on weekdays, beautiful new desk. lisa: it looks beautiful. jonathan: tuning weekdays at 5:00 a.m. eastern time. coming up, europe's far right referendum. >> there remains a majority in the center for a strong europe and that is crucial for stability. it is also true that the extremes on the left and on the right have gained support.

jonathan: that conversation up next. live from new york city, good morning. ♪

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jonathan: live from new york city, good morning. equity futures will a bit softer, down .2%. the focus in europe on the euro, down .6%. euro-dollar 1.0 739. under surveillance, europe's far right referendum. >> there remains a majority in the center of our strong europe. that is crucial for stability. it is also true that the extremes on the left and on the right have gained support.

this why the result comes with great responsibility for the parties in the center. jonathan: far right party's getting in european parliamentary elections. in france emmanuel macron calling a snapped election to fend off marine le pen. italian chancellor with the wind and olaf scholz party has a -- joining us is oliver crook. if we want to get something fixed in europe who do we call now? oliver: getting things done in europe at a parliamentary level is a slow process. when you need to get things done in europe it is strong leadership. now you're in a position when germany and france have had a pseudo-referendum on themselves as governments and the people have said we are not interested, whether it is the spd with the

lowest support they have ever had on record. emmanuel macron coming in at 14% with marine le pen more than twice that, how you get things done if you do not have the support of the people? macron solution to the problem is calling a referendum, hoping they are willing to elect someone at the eu level they're not willing to elect at the french level. olaf scholz does not have that lever. if they call anything they would get crushed. who leads in europe? the winner of this is giorgia meloni, just days ahead of hosting world leaders for the g7 in italy. lisa: how much was it a good idea or a bad idea for emmanuel macron to hold the snap election and a time when it is clear he is losing support? oliver: this is the big question. the questions this brings up. on the one hand there is an idea in france they will vote for anyone but the national front.

when you have the first round the national front won, but then a lot of the french people would rally against whoever was in opposition. emmanuel macron is calling this at a time when the stakes are lower than presidential and at a time when there is more support than ever for the far right across europe. he is relying on this french impulse to vote against the national front. does it create an opening for them to be tested in a soft way, in a way that could open the door for them in 2027? jonathan: all the crook out of berlin. -- oliver crook joining us out of berlin. joining us now is terry haines. the president heads to the g7 hosted by the italian leader giorgia meloni. can you tell us how difficult this might be for president biden to be heard for the vision of multi-nationalism away from isolation? terry: is an opportunity provided to show leadership and

opportunity for the leaders of europe to show leadership. they have just come off a dj celebration where they wanted to go out of their way to show the united front and that they were united in a variety of struggles, particular the one in ukraine. they will have to double down on that. they will have to do more than that. they will have to explain what is at stake and why it is at stake, that is not just biden, that is the european leaders. they have all gotten too complacent that everybody understands this already. lisa: is president biden fighting a war that is from 20 years ago in the sense he is trying to appeal to a certain status quo and a certain establishment order of the world that a growing population of this world rejects? this wave of populism rejects a lot of what that establishment

is touting. how do you see that being part of the tension? terry: there is a lot of tension in this. as oliver and others were pointing out, there is a sense here that a lot of the right parties are not ready to govern and those rightist parties, to get over their own home will have to show that they are. this is a war that continues to be fought, whether it is 20 years ago or two or one. my critique of this comes down to, so far biden and european leaders have not been forceful enough, explanatory enough, persuasive enough. they will to step up their games so the threat is now clear that it was two days ago. jonathan: for a lot of these countries the issues are

immigration and the cost of living. certainly the number two and number one issue in united states. when the g7 leaders get together in italy this week, they will likely be talking about how to tap into russian assets. this is what lisa is getting at, the rejection of the establishment. you think they are focused on the wrong thing? terry: i think to some extent they are. there is a real sense, and this comes up in biden's rhetoric about democracy being on the ballot and the dismissal of rightist parties by a lot of the folks in brussels, there is a real sense they do not understand their own culpability. there has been a generation here where we have essentially had policy cul-de-sacs on a lot of issues. what voters are saying and believing is that they are frustrated about that they want some action.

combined with that in the european context is a sense nationalist parties are pushing back against brussels and do not want the kind of slow pseudo-progress they would characterize brussels as exemplifying. they want more action and they want it now. it would behoove european leaders to address that instead of trying to give it the back of their hand. jonathan: appreciate the input. terry haines of pangaea policy and washington, d.c. tapping into russian assets at the end of this week could be a big conversation for g7 leaders. you do not feel that with the electorate. lisa: i wonder from election standpoint who is president biden speaking to? who is emmanuel macron speaking to? is he speaking to voters to try to support them?

is he trying to appeal to voters who say you're not paying enough attention to what you talked about at home, which is immigration and cost-of-living and that continues to be the dominant issues. jonathan: the euro struggling. french bonds lower. one to watch throughout the morning. coming up, one to watch this week. elon musk's $56 billion pay package facing opposition from one of tesla's largest shareholders. equity futures this monday morning, -.2% on the s&p. from new york, you are watching bloomberg surveillance. ♪

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jonathan: equity futures a little bit softer. the nasdaq down by 0.1, the russell down 0.7. the russell struggled last week. the s&p, could spend some time on this. down one 10th of one percent at the close on friday. kailey: this market feels like it's kind of divorced from the dynamics. they put this chart out that i thought was really telling, the top 10 stocks makeup a record high 35%.

it basically is, does he even care? i almost went there. does he care in all about what fed policy will be? jonathan: trying to clean up. that was almost a little bit messy. it was close. on the two year, 487.33, we had a double digit basis point move following the payroll report. on the week, we were up by a single basis point. the risk in markets right now from either direction, either side on economic data. lisa: at what point do these benchmark yields for the global market create a problem, so far it hasn't. at a certain point i remember back in the day, 20 basis points

of a swing was actually significant. when does this sort of create the risk? people say as long as it is 30 basis points we are ok. suddenly you have to wonder, it is more widespread through markets. jonathan: you are always at risk of running away with whatever the last data point was. take away friday, most of the data last week was weaker than expected. they spent the week talking about a welcome calling and deterioration. it was hard to reconcile key elements. lisa: i will add this to that, when you look at the stock market's highest cap stocks, you see volatility, you have never

seen such valuation swings ever in the history of the stock market. pair that with the volatility you are seeing in bond yields, more generally people don't see a lot of volatility going forward. jonathan: the euro-dollar i think on thursday went to 1.09 and then backed away after strong payroll support. we are down by 6/10 of 1%. yields in france moving in the wrong direction. this is not about better economic data. this is about political uncertainty. lisa: this highlights all the people saying investors will avoid from the dollar because of political risk. jonathan: to what? lisa: exactly. i will point is this create something that was not there. there is no alternative unless

you are going into bitcoin or gold. everyone was counting on the dollar to weaken a few months ago. jonathan: we will keep returning to that story. investors looking ahead to wednesday. the fed rate decision at 2:00 p.m. fed chair powell's press conference will provide some clarity on how much they may cut this year. it is the statement, projections, and news conference. they come out at 2:00 p.m. and they tried to work it out. lisa: i think the statement of economic projections will be the most important aspect. where they see inflation end of year. how they sort of parse out about this in their commentary. housing costs remain elevated because of high rate because you

have less volume of sales. i don't understand how they will deal with this. it gives you the sense of what would make them more likely to cut. jonathan: i was surprised that some of them change their calls. i would've waited until wednesday morning. let's see what cpi brings on wednesday morning. lisa: you think so? in terms of singling, the market is superstrong. inflation is coming down. what is the harm in waiting? jonathan: even if the market is strong. lisa: it has gotten a little bit more shaky. how much are they being pressured to stay at hold? given the wage component of that employment report, there is enough concern that maybe this is a realistic kind of inflation. jonathan: i can't read chairman powell. i find it hard to predict the

jobs report from friday. does anyone have any confidence around that? we could point to one thing and not the other. lisa: at this point, what is the harm in staying on hold as they remain flexible with the incoming data. what it ultimately comes down to is the balance of risk in terms of what they weigh more heavily. preserving the labor market. that will be important. jonathan: the difference between the consensus and chairman powell, between him and the news conference. lisa: he can't resist the dove in him. you are expecting to come out, who knows? jonathan: ultimately i have no idea what chairman powell will

do. let's turn to this, secretary of state antony blinken turning to the middle east, he is pushing for a proposal publicly endorsed by president biden. it gets tripped after a large operation that killed at least 100 citizens. let's talk about this. the change to the government is a big stand out here. lisa: the moderate candidate, the moderate person, he would step down if there was not a comprehensive plan going forward to create peace and stability in gaza. how much did that affect what happens with benjamin netanyahu and how much more he has to defend -- depend on far right of his political party.

all of this boils down to will beget a change in policy? probably not in the near term. saudi arabia, trying to catch this other coalition together. very difficult. jonathan: not getting any easier. french president emmanuel rock -- emmanuel macron and the social democrat party suffering its worst ever result. what was surprising? not the result, the response to it. ultimately the poll suggests he will face another loss. does he risk legitimizing the movement ahead of 2027? lisa: it also raises the question how much investors have internalized the populist ways. this was an election result that

was expected. was it just because emmanuel macron held an election or is it broader? this is real. there is a clear movement away from the establishment that has been in place for a while. jonathan: it appears to be the difference between what is leadership focused on and what the electorate seems to be focused on. the president is abroad talking about the risk of isolationism. let by people like vladimir putin. i could see where he is coming from. the problem is for him, they are focused on the customer. that is two big priorities heading into november. there's a lot of daylight between what he's doing today and what is back home. lisa: the reason we were asking terry haynes, how much does this

affect his chances? it has no kind of weight on people in the united states. they are just focused on what they could buy at the grocery store. i want to understand my job prospect. i have no mobility to move because there's no housing at a price i could afford. ideas that don't have a direct obviously through people at home. jonathan: if you are focused on income streams from russian assets and sophisticated ways to make sure the money goes to ukraine and not the russians, here is you and this is where the rest of the country is. lisa: it's important for them to focus on these things. it is a question of messaging. you could tout that as a win and that might work to people in the business world. on the flipside, it is not

sending a message to the voters. jonathan: she will catch up with us tomorrow in italy, and murray. i'm sure for the rest of this week, and murray -- ann marie made it happen. one of tesla's biggest shareholders saying it will vote against the 56 billion package. craig, walk us through this package and ultimately what has changed over the last couple of years? craig: it is a heck of a story, there are so many vantage points to look at this from. if you look at it from the perspective of norway and the folks that have come out against it, yes, they must hit these targets. they have been given an opening by the judge in delaware.

the fact that there was fault taken and how this team together -- came together. we haven't necessarily seen a ton of evidence to the contrary, even in the way things have transpired just the last few weeks. really pulling out all the stops, advocating for him. this even continued over the weekend with commenting on norway, suggesting that shareholders or backers of his other companies have first dibs on things tesla does. i think he's trying to rally retail support in particular and really banking on the fact that retail shareholders make up a significant portion of the shareholder base and this idea

that he could get them and potentially have more luck than the institutional shareholders who are going to have a difficult time justifying if i could get the performance for free, i should. lisa: i'm curious what the consequence is, for this. does that mean elon musk will take his toys and go home? craig: that's one of the main points the judge in delaware made. this idea of you have this guy very much incentivize to stay put at tesla because he already has a substantial stake in the company. if you were to walk away that would be much less valuable. he is kind of stuck. there is this real risk here. whether or not that is credible seems like a tricky case for them to make. he is very aware of the fact that a lot of the value in this company is wrapped up in his

involvement. it would be damaging to him. jonathan: it shouldn't matter in the eyes of the law. let's take tesla out of it. if you hit them you get paid x. i didn't like that deal but ultimately, no. could we actually do that? craig: i think it is really tricky and it is in part difficult to answer the question. we never have seen a company lay a compensation package quite the way tesla did. it does feel like there is some reason to feel like your nose is out of joint if you are elon musk. my board laid out this package, they laid out clear targets, i hit them.

i did. the issue you run into here is the court in delaware has a bit of standing. years and years of court precedent. taking issue, it does cause real challenges with undoing that decision. the fact that they are no johnny-come-lately, they are sort of where companies are based. there is some concern that the fact that this ruling came out the way it did earlier this year may pose a risk to that. this week's annual meeting is the company wanting to reincorporate in texas. jonathan: we will touch base with you later this week. let's get you an update on stories elsewhere with your bloomberg brief.

dani: bill gross is optioning his stamp collection this week. it is likely to fetch as much as $20 million, a new record. saying his mom got him into the hobby. he thinks stamps are due for a correction. they use to have a fundamental base of kids and that does not exist anymore. bill gross will join the team at 3:30 p.m. eastern today. a check on southwestern airlines arising 7%. the journal reporting they have bought a $2 billion stake in the company. elliott reportedly plans to engage with management and push for change. carlos alcaraz won his first u.s. open -- french open title. it's the 21-year-old's grand

slam title. the victory follows his win at the u.s. open in 2022 and means he passes rafael the doll -- rafanadal. he will have his chance to defend the wimbledon crown. jonathan: for hours and 19 minutes. could you imagine that? lisa: if you are 30 years old, you are old in this field. jonathan: if you get tired at the gym after 20 minutes, it is not even that intense. up next on the program, counting down to wednesday's doubleheader. >> there's no way they could cut or signal, they would have to change their reaction function.

i don't see the fed doing this. jonathan: the conversation right around the corner, this is bloomberg.

jonathan: equities down 1/10 of 1% on the s&p. counting down to wednesday's doubleheader. >> there's no way they could cut or signal a cut in july with this data. they would have to change the reaction function and get public about it. i don't see the fed doing that. there are no pandemic savings, there is no physical impulse coming. jonathan: it is the latest this morning.

the fed rate decision following the payroll support. incoming data will ultimately drive rate moves and make the policy stance less restrictive this year in response to a slowing growth and inflation backdrop before we run away with this on wednesday, we need to start with last friday. do you believe the jobs data overstates the strength of the u.s. economy? >> the jobs data showed the economy is creating jobs, if you look at the underlying trend to the upside or downside. the u.s. economy is still creating a lot of jobs. the economic rate ticking up. still in line with where it

marks the rate. this economy is very strong. the labor market is very supportive, we continue to see that. lisa: we saw wages increase month over month. you see the data pointing to a little threat of inflation for labor costs, what gives you that conviction? >> if you look at the average hourly earnings on the report, we saw it in the latest numbers. if you look at data, it is volatile quarter to quarter. if you look at the earlier changes, we are seeing a consistent improvement in productivity and if you look at the revision to the latest numbers with labor costs, the consistent deceleration. if you look at other numbers, we

are seeing mixed signals. i don't want to overreact to one month's number. our base case is growing. the demand side of the economy is growing. if you look at the services pending numbers, that is slower. the problem is we have seen this support. we have seen slowdowns and rebounds. the early numbers are certainly suggesting that. we have already seen a step down in household spending. the fed is looking for the same. lisa: could you frame how important that cpi will be on wednesday whether supporting your thesis but also disinflation versus sort of rejecting it? rubeela: we expect them to show

what the pc data is showing. really not much of an improvement right now. what we are seeing is a deceleration in deflation in goods prices. that is where the problem lies. cpi versus pce, you have that housing component. we do think that is also going to come down, but gradually. we also think the housing component of services is also something we are watching carefully. all indications are if you see services spending, we could expect as that demand slows those price pressures will also. there is conflicting evidence. if you look at some of the numbers on travel, entertainment, those numbers are still signaling there is power

to the services side. overcoming some moderation. the whole idea, the fed has delivered over 525 basis points without causing a recession. we think the base case is the u.s. economy grows. jonathan: appreciate it. looking ahead to wednesday. the economy may be calling. we had so many different versions of that over the last few weeks. lisa: we were so negative and he just disagreed. jonathan: he is team december, right? lisa: we have no clue what is going on and the data is messy.

the press conference could focus on immigration rather than immediate policy. he probably has more to say on those things. jonathan: the establishment survey makes it look like an incredibly strong and healthy labor market. makes it look like a very weak labor market. it is the best of times and worst of times. going into friday, you did not change your mind. lisa: it underscored this disbelief of numbers it seemed and was rather ugly for both. jonathan: coming up next, troy, josh, and mike. the next hour of "bloomberg

surveillance," coming up next.

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>> what we are being reminded over and over again is how difficult this economy has become to understand. >> you are seeing some parts of the economy slow but it is not falling off of a cliff. >> they could hold off, be patient, and see how things play out. >> this is "bloomberg

surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: good morning. your equity market negative by 0.1%. this week is all about wednesday. 8:30 eastern time. already this morning, a controversial take about one hour ago. lisa: it's easier to say it is a nonevent. given that we are having such uncertainty. at a certain point it is fair to say that. if there are no rate cuts, it will raise the specter in the

stocks that are more sensitive. jonathan: looks like this on the s&p 500, a little bit softer. if i could predict what wednesday's cpi number would bring, could you guess what the market would do? we had a really decent headline figure. equities down by 0.1% on the s&p. lisa: all of the information right now, i will have no idea how the bond market or stockmarket market trades in any capacity. it is completely uncertain, we have the worldwide developers conference. how quickly could they move to ai, does it move the needle

considering how much those stocks are valued? maybe we don't believe in the rockstar that is ai. all of these questions are fundamental. jonathan: i know you have some bonds to sell, do you want to pitch them? lisa: you have some bonds to pitch? we have some bond options. at a time where you have a market with any move potentially with understanding the long-term trajectory of inflation, is there concern about a stickiness . how bad could that option be? jonathan: just a little bit of a softer euro for you. french equities underperforming,

bonds lower, put it altogether. what was the surprise of the weekend? that is basically what we got. snap election, just like that. lisa: he wanted to see if the subordinates won, could they rule? if they couldn't, that really strengthen support. a lot of people weighing in on both sides. there is this larger question of what is the alternative to the dollar? what if it continues to strengthen or even stay the same before the political winds really cute output -- heat up? jonathan: presidential election just a few years away. bloomberg's josh wingrove ahead of biden's trip to the g7.

mike shoemaker for what it is needed for a rate cut. a harder than expected jobs report muddying the path to rate cuts. leaving investors wondering is good news now bad news? troy joins us now for more. let's start there. the data on friday, was a good, was a bad, i guess it depends on where you look. troy: it depends on the asset class. it is incredibly good news. equities have higher yields, tied to this mornings's futures as well. 21.1 times four earnings. the upside is path as long as the numbers stay high. fixed income continues to be bad news. everyone that expected to cut

rather aggressively wants to be wrong yet again. we expect that to continue. we don't expect any meaningful move that these levels. jonathan: what do you think about wednesday and the news conference with chairman powell? it says reach for the tin hat, if you talk about the establishment survey it says let's talk about higher rates. troy: the data is murky as you highlighted this morning. surveys are painting different pictures of the economy. one thing that has been consistent with four cuts. as a lot of your prior guests have stated, the labor market has proved from white-hot to red hot.

continue to boost consumption. wage growth has slowed down. it will be data-dependent. they will not overreact to anyone survey. lisa: do you have a sense before we get into markets on where the balance of risk is right now in terms of potentially inflation overheating versus the recession? it seems like we have been whipping from week to week with some people saying the fed will have to hike again. other people saying they should be aggressive because of weakness, where do you fall? troy: two extremes that are unlikely. we have been walking down a path of urging the economy. you had so much fiscal stimulus, excess savings, it is taking time for that to go away. i'm not sure why people

extrapolate the economy through a hard landing. whether it is business fixed investment, the cloud scalars right now. whether it is residential housing, consumption has slowed but there is nothing that appears to us that will drive unemployment higher to go negative. it is not zero but it is somewhere between one and 10 and one and five the next few months. unless there is some type of dramatic supply shock, it is extremely unlikely. don't hike, keep rates where they are. have one or two cuts by the end of the year. lisa: you said why are people looking at these traumatic situations.

part of it is because people feel uncomfortable. there is a real tensions with stocks at all-time highs in a weakening economy. does that give you pause? troy: the biggest concern for listed equities has fewer or fewer companies, when you do not have a super narrow market, the magnificent seven minus tesla, what you are really concerned about is something going exceptionally wrong with the market leaders. one of the reasons i think investors feel this environment has been too good to be true is you actually had the idiosyncratic risk. it has been a have no fear movement -- moment.

nvidia has turned into the greatest wealth creation machine mankind has ever seen. you are growing faster than market cap. you have these wonderful treatment drugs treating the biggest secular challenge. it is understandable why there is nervousness and caution. clearly these valuations, you alluded to the 30 year bond option going forward, that continues to be one of the most obvious risk two weeks ago. that is the most obvious risk. jonathan: you say that is the most obvious risk, nvidia is doubled again.

are we having the right conversation? troy: the last 7-10 years there is this transformation where you had more diversified sources of growth. it has been a winner take all economy. more and more companies have stayed private. there is more opportunities to stay diversified. focusing on that idiosyncratic risk is very valid. the strength of the growth has overwhelmed that. despite the fed tightening at the pace that they have, equity markets we expanded for 21 .1

times four earnings. i think people are focused on the right things. the focus is sometimes underlying organic strength of earnings could overwhelm concerns. equities should outperform in a strong economic environment. fixed income should continue to struggle. obviously the magnitude has as well. jonathan: a lot to think about. the s&p 500 today up 12%. lisa: options, that is really important. to me, it is the duration risk to bond yield. frankly, profitability has powered through that, that idea is an interesting one.

laura has been talking about the idea of sticky inflation. how long could people power through that? is that the reality where they are by bonds? jonathan: maybe they reassert themselves as the year goes on. lisa: people are talking about a potentially catalytic moment. this is still a risk. what will jerome powell say in his news conference that could potentially move the needle? that ongoing continues to be a concern. that will be the thing for bonds going forward. jonathan: let's get you an update on stories elsewhere. here is your bloomberg brief. dani: in videos 10 to one stock

split will happen today huge gains of more than 140%. the share price has surpassed $1200. goldman's david costa says one of the key reasons is to increase liquidity and detail activity. antony blinken will head to the middle east today looking to push a cease-fire that has been pushed by israel and hamas. he is expected to meet with prime minister benjamin netanyahu. his eighth mitt -- visit to the middle east. donald trump had his first meeting today. sources tell bloomberg the president will do the interview virtually from his mar-a-lago estate. the presumptive republican nominee is scheduled to be sentenced by a judge in new york in july 11 just days before the

start of the republican national convention. jonathan: a challenging g7 coming up for president biden. >> it's an opportunity to show leadership and an opportunity for the leaders of europe to show leadership as well. jonathan: more from the team here at bloomberg. from new york city, good morning.

jonathan: this morning starts in france. good morning to you. yields are higher by 10 basis points, the french 10 year, highs for the year. listed equities, a struggle.

the reaction emmanuel macron had to it, the legislature raises a lot of questions about his party win and what would happen if they go? does it legitimize the far right party or does it show they cannot govern? jonathan: june 30, first round results, the british election, more on that later. a challenging g7 coming up for president biden. >> it's an opportunity for biden to show leadership and an opportunity for the existing leaders in europe to show leadership as well showing what is at stake, wyatt is at stake, that is not just biden, that is the european leaders. jonathan: u.s. officials look to

finalize a $50 billion loan to ukraine using frozen russian assets. just what is at stake for the president this week? >> wants to show democracies could still do things. giving away to the g20 where all eyes were focused, russia, china really blocking the fences on that, many of them were unlikely to be there at the next meeting or at least it is up in the air, you kind of have this kick of the can to do something in particular on russia and ukraine . it seems like there was progress on that over the weekend when joe biden was in france, hasn't given any more details. i think that will be the big

topline thing. the finance ministers focus on china with other countries following it with some of the steps it has taken to add tariffs on chinese exports on critical technologies and goods. finding some way to squeeze cash out of these assets. jonathan: traditionally these are big opportunities. i say traditionally because these days isolationism seems to be playing quite well. do you think this week is an asset for the president or liability? >> time will tell. i'm pretty sure joe biden thinks it's an asset for him. he will look at these results

and see more of the fact that the overall composition of parliament seems to not have changed all that much. they seem to have the inside track their. he will see that as more or less holding. we will hear a lot about that next month. joe biden and donald trump have very different views. he's even less of a fan of nato members that don't pay the 2% on gdp defense spending. the status quo will not continue. we are going to see joe biden put a banner upon it. you are mentioning the european debate in a few weeks. the first debate, all eyes will be on the polling there still. it looks like if he has a path

to a second term, it could be a razor thin election. lisa: you said basically president biden is putting on a show at the g7 who is this for given that he has the voters given the messaging he is putting out there at this g7 meeting? >> he wants to remind voters what he said trump would do. a lot of them show they aren't tuned in in recent weeks and months. we sometimes get ahead of ourselves assuming when people check into the process. he just wants to say maybe there are voters that think democracy is at stake, that is his argument. there is reason to be skeptical. there is polling that shows this

is an issue. maybe this is a moment some democrats will scratch their heads over. biden more or less wants to have this american exceptionalism, american standing in the world, trump has much more of an isolationist view. lisa: as we have been talking about voters on the show this morning, those are two of the biggest issues they have been putting out there. people also very much looking at both of those features for different reasons. how much do you expect what we saw from president biden in terms of curtailing the asylum-seekers at the border from coming in to limit inflation? we will see lower immigration regardless of who wins the election.

josh: he hopes for comprehensive immigration reform are very low regardless of what happens. there needs to be some restrictions at the border. trump would go farther and talked about massive deportations. that is a big difference between the two. we are still waiting to see how this gets shaped. there seems to be a little confusion. not sure how quickly they will be removed or how quickly they are taking place. he has decided he will tolerate the risk from the left and more prominent lawmakers including padilla from california has gambled that there are voters in the middle that he could get by taking action on the border and has said the u.s. risks losing

public support if it doesn't get a handle on things in a more orderly way. they are both cracking down but the measure to which is quite different. i think it is a big difference between the two. jonathan: why are you in washington and not the south of italy, what went wrong? josh: i'm leaving in a couple of days. jonathan: thank you. that is the trip everyone wanted to go on. lisa: he's going to go late so he could watch the game and put on his jersey. lisa: what did we do wrong? jonathan: 12 months ago talked about how we needed to get to the g7.

lisa: it's going to be important. jonathan: lisa could break down the sophisticated nature of this potential that could happen with the russian assets. lisa: i will do a detailed analysis. jonathan: i will let you know later why lisa must go and i will supervise. lisa: people should write in if they think we should go. jonathan: see if management comes along for the ride, i doubt it. apple edits developer conference, the stock is positive one third of 1%, just around the corner. ♪

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jonathan: more on what the new iphone will look like in september, seconds away. s&p futures negative by 0.1%. nasdaq soccer by 0.4. fantastic job sprint with an asterisk. equities down by only 1/10 of the present. double-digit basis point move on the front end of the curve. 16 basis move higher on the two-year on friday. 4.8930.

just pulling up the options on my terminal, because lisa gets excited about these things. 30-year. that is the lineup. of those maturities, which one is the big one? lisa: 10-year is always the biggest because people see that as the preeminent gauge of longer-term inflation expectations but that is tuesday. i find it more interesting on thursday because that comes after what we got from cpi, after the fomc rate decision. after ppi, if they are harder than expected reads, could that lead to what troy gayeski was talking about? if you get hot prints, you can imagine that will be the true gauge of how uncertain people are, don't understand the underlying inflation.

people come on the show and it is various shades of i don't know. lack of certainty is the phrase du jour. this is what you will see in terms of how volatilities options can be. jonathan: let's turn the page and go to the fx market. the euro weaker this morning, negative by 0.7. the french snap election, let's sit on this for a second. were you surprised to see a much weaker euro on the back of this news of the weekend? lisa: given the fact that it was exactly in line with projections, yeah. it raises the point that people have been making, you cannot vent on elections, politics, but then it happens in people respond. in this case, it was because of what emmanuel macron did, basically gave the far right party a chance to legitimize

their governing abilities. at the same time, it feels like people are not pricing in the possibility in the polls. jonathan: based on your projections, we will be staring at the sun a little bit. we should be covering the g7. speaking directly to one person. under surveillance this morning, counting down to wednesday's doubleheader. fed rate decision and chairman powell's news conference. it is the statement, the news conference, and then the projections. 41% of economists expect them to signal two cuts in the dot plot for the year. an equal number expect one or no cuts at all. that gives you a sense of the expectation going into wednesday. lisa: deutsche bank talked about how incredibly rare it is to get

cpi and a fed rate decision on the same day, how much the fed will have to readjust, after having a full day of meetings. given where inflation expectations are, that could shift the tone of the meeting in a substantial way. jonathan: neel kashkari feeling pretty good going into the meeting tomorrow? lisa: he thinks maybe we should not cut at all, next year, potentially one cut, even a hike. at this point it seems so uncertain because of the weakening economic data too. we have seen a complete lack of conviction from every guest. jonathan: apollo, socgen agrees with him. elsewhere in europe, the latest political news, far right party gaining ground in elections. emmanuel macron calling for a snap legislative vote in a bid to hold off marine le pen.

in italy, the pm, don't you think she is going into this g7 feeling pretty good? lisa: you have to wonder how much that shifts the tone of the g7. we talk about how president biden will talk about the threat to democracy, these very significant moments to signal status quo. at the same time, you wonder how much of a state she gets, how much more discussion there is about immigration, inflation, countering the dependence on certain nations for energy costs. a lot of issues that would be curious if they cover in a more comprehensive way. jonathan: we will be getting caught up with anne-marie on wednesday. lisa: it is difficult when it is really nice. jonathan: i am jealous. i'll be doing this for days.

apple preparing to develop a new suite of ai features and a more powerful version of siri. dana wollman joins us now for more. i'm absolutely clueless what to expect in this latest iphone later this year. walk us through in simple terms how this thing will change. dana: apple will be working artificial intelligence into just about every aspect of the user experience, summarizing notifications, webpages, emails, enhanced photo editing. if you are typing and there is not already an emoji that fits what you are describing, it will make it up on the fly. that seems pretty cool to me. jonathan: do you think apple is making it up on the fly? are they very behind in trying

to launch things when maybe they are not ready to be launched? dana: i think they are certainly playing catch up. today's offering is expected to be pretty robust. out of the two-hour presentation, our reporter estimates this will take up about half. plenty of features on offer. he also expects they will be listed as beta when the software launches in the fall, and that is unusual for apple. what you usually see is really polished final software, very few bugs, but this will be listed as beta. users will also be asked to opt-in, so you will not be looped into this whole ai framework if you are not comfortable with it. lisa: that raises the question, how high is the bar to start a new super cycle of purchases? is this enough to get people in the door -- not that there is in

a line going out the door. do you get a sense from your reporting of how high the bar actually is to restart interest in purchases? dana: take this with a grain of salt, i am not an industry analyst, just an editor. but chances are fairly good of a super cycle of phones, especially if the features are limited to the highest level of iphones. these features sound pretty neat and aggregate. it could indeed prompt people to upgrade especially if they were already holding out. maybe they already paid off the installments on their phones. they could be ready. this could be a notable enough upgrade. we have not talked about the way

that ios itself will be getting an uplift beyond these features, the look and feel will be different as well. lisa: just because i'm a contrarian by nature, part of me wonders how much we could see another microsoft moment, where they unveiled certain ai aspects before they were ready, pretty big snafus that brought a lot of bad press. but whether people are concerned it is moving too quickly without a sense on the ramifications? dana: i think apple will need to discuss security there in its presentation today, specifically how the data is handled when it is processed in the cloud. apple has talked about the benefit of on-device processing, but for these kinds of tasks, it will have no choice but to offload some of that to the cloud. it will have to talk about the security of the chips it uses in

these ai servers. jonathan: dani was describing somebody who has not paid off their phone, consider things, and then waiting until september. i have also never used siri ever . all i hear is it is absolutely useless, so what is the point? lisa: the question is how high is the bar for you, you are representing all those people who delayed their purchases. the question of whether what you heard is cool enough to get a new phone. jonathan: my issue is that the facetime is not working anymore, the headphones are cutting in and out having a conversation with someone. am i the only one experiencing this? lisa: i have. jonathan: is it a headphone issue or hardware issue? lisa: or just an issue of reception? jonathan: it is wi-fi, so it cannot be. lisa: it's a good point.

people are used to using their phones for certain things. will it move the needle for them to get new things? there is a subset of younger individuals who have their parent's credit cards -- jonathan: this sounds close to home. what is it about apple that just becomes a complaint from your personal life? i'm hearing from a producer, airpods do not work on facetime. dana wollman on the latest on apple. let's get your bloomberg green up the dani burger. dani: sunday night during a rally in las vegas, donald trump said he would get rid of-tipped earnings for hospitality workers. this was a bid to appeal to the service industry. former israeli army general

benny gantz has resigned from the country's emergency government over the weekend. he has been critical of prime minister benjamin netanyahu's handling of the war with hamas. it does leave the government without a moderate voice and makes netanyahu more reliant on his right-wing coalition partners. the cost of owning a home in the u.s. has increased 26% 62020. the past four years of inflation dealt the biggest blow to homeowners in utah where expenses searched 44%. jonathan: thank you. the program, aiming for a soft landing. >> i think it fed preemptive cuts are essential for the soft landing to continue. if inflation doesn't let them do that, we are looking at a bigger slow down. jonathan: that is up next. this is bloomberg. ♪

jonathan: live from new york city, equity future is just about unchanged on the s&p 500. yields a little bit higher by two or three basis points after a double digit basis point move on friday. 4.4631. under surveillance this morning, aiming for a soft landing. >> we are priced for a soft landing, so what is the risk to that? a recession i would argue are a bigger slow down. if the fed cuts but the market is calling for, you will not get to easing in financial conditions. i think fed preemptive cuts are essential for the soft landing to continue. if inflation doesn't let them do that, we are looking at a bigger slow down. jonathan: traders pushing down

the rate cut expectations following a stronger-than-expected job support. investors preparing. . michael schumacher says the fed needs to see two or three consecutive good inflation report before using. i think this resets the count to zero. mike schumacher joins us now for more. we want to get your perspective on quite a choppy week last week. week data, bonds rallying, finishing the week but strong data and bond selling off. a noisy journey to absolutely nowhere. anything that you see that tells you sometime soon we break out of this range? mike: it's really all about inflation. the fed needs to see inflation behave a bit better, stop drawing questionable numbers out there. last week was bad on the inflation front. we have a huge number coming up

on wednesday, more important than friday. the inflation story dominates. until that goes in a better direction for the fed, you'll see this messiness in the markets, disarray at the fomc. we will hear a lot of people waiting in. it will be difficult for policymakers to get excited about a rate cut on the cpi is actually decent. jonathan: wednesday morning, what do you define as decent, what do you expect to see you expect to see wednesday at 8:30? mike: 0.25 would be nice. 0.3 is a relatively poor number. 0.4 is a fed killer at this point. anything above 0.3 would change things. lisa: how much does that affect your macro call particularly on risk assets, equities, riskier credit that has rallied disproportionately this year? mike: i recall is still fairly

bullish. more broadly thinking about risk, with relation to high-yield bonds, the fed keeping rates high is pretty tough in the long term for credit. it has an erosion effect. people look at carrie. may be in the near term i want to buy credit. also increases the chance of default going up. in the longer term it is a negative for risk. probably will not hit a tipping point. if cpi comes out at .25, not a death knell risk but it is a negative. lisa: given there is a quite considerable part to be crossed on wednesday with cpi, fed messaging, it seems like a silly question, but we started the show with a guest who said it is sort of a nonevent. do you agree? mike: the market did not get that notice. clearly not a nonevent.

it is a huge event. cpi has been the biggest market mover for the better part of two years. it will not change on wednesday. something like .2, .4, markets will go bonkers. as far as the fed commentary, that is the second event. the fed will not move on wednesday, that is no secret. the bigger story is cpi. does it change the chance and a meaningful way that the fed could cut this year? the market is price for 30 basis points, it has come down, cpi may put the hammer in that. that is the story cpi on wednesday morning. lisa: one asset class do you think will move most, what does bonkers look like? mike: think about rate moves on friday. 15 basis points. if you get cpi coming in at 0.2, i would not be surprised if the 10 year treasury yield drops 15 basis points, two-year down 20

points. those are big numbers. if you put that and say instead of 0.2 let's say we get 0.4, do we get a somewhat symmetric response? fairly close i would guess. something in the order of 15 basis points if the miss is 0.1 either way on the 10-year. jonathan: you said when we start pricing in rate cuts properly, it will be a lot. do you still stand by that? mike: i do. here is a key point. you have to differentiate with the fed and any other central bank, what it does versus what the market prices. we think the market will run with it when that first ease happens. right after that, the market prices in a lot more easing. if you look at market pricing right now from september of this year to september of next year, forwards imply 90, 95 basis

points. history would tell you that is probably 225, 250 basis points. we think the market could price another 125 basis points going forward, perhaps 75. we stand by that story, we think the market will run ahead of the fed whenever that rate cut happens. jonathan: a two-year at the moment is just short of 4.90. the 10-year is 4.46. we have a two-year -10-year in the -40's. the consensus trade at the start of the year was this fed was going to cut interest rates. is it still too early to put that trade on? mike: probably too early to put on steepeners. when the fed comes in you want to put in longer duration trades. in our view clients are best off waiting.

trying to guess that first moved by the fed is a losing game. if you look at historical moves, and i recognize you can always make the argument that this time is different, but usually the long-duration trade does well for a couple quarters after that first rate cut. curve moves not so much. our advice have been pretty simple, don't try to guess when the fed will move. wait for the actual rate cut and then get long-duration. jonathan: and then year-end we are in the high threes for the 10-year? mike: i think low 4's is the right call. plus or -15 basis points. lisa: i am thinking about bonkers. it is a bonkers week. jon was talking about where this leaves you with bond bets, is an

important one. i want to go back to the moves we have seen and how volatile things have been intraday. the fact that we see these 20 basis point moves, it is how we got there. does it worry you that we have seen such massive swings in the benchmark rate that sets the valuation for a broad swath of financial instruments? mike: what i find interesting is we have seen such big moves. they effectively cancel themselves out last week. a ton of choppiness, intraday, intra-week, but not going anywhere rapidly. people don't really know how to read the tea leaves yet. that is why each subsequent inflation print is getting more and more important. probably should be the opposite. this stage of the cycle, you would think every data point becomes less relevant because the path is clear, but it has not worked out that way. if you look at it week to week

or month to month, not as much. jonathan: mike schumacher, appreciate the update. great framing at the end of the conversation. if you think about last week, if you were at work, the economy was slowing down. you would have a completely different picture of the world if you came in friday morning and looked at the jobs report. hard to reconcile friday's data with what we saw the rest of the week. lisa: raises the question, who is participating in the roller coaster? is there added fragility to the market because of how much things have been swinging? you talk about getting potentially 24% by the end of the year on the 10-year but the path there is so dramatic it looks quite different. in the process, does something break given how instrumental this rate is? jonathan: speaking of, this from bmo. ongoing resilience on the job front will not delay john scott

but removes employment as a potential trigger for a reduction in rates. the fomc will still see four additional prints between now and september, leaving a q3 rate cut as a very real possibility in the invent the inflation data begins to conform with the fed's target. they are probably agree with that sentiment this morning. lisa: the idea that conviction is coming down, will take more than just a wednesday. that is what a lot of people were saying when they said that was the sound of the door slamming on a july rate cut. there is enough data to give fed officials confidence. jonathan: for the record, sort of like a bang on the table. lisa: i saw your eyebrows go up. i couldn't help myself. you were just more restrained and polite than i was. jonathan: slamming the door.

there goes july. lisa: very visceral response. it was a surprise. i think a lot of people are questioning why the data is being written. jonathan: we could have said friday morning, whatever the number is at 8:30, it will not settle a single debate. that is what it felt like over the weekend. in fact, i would say it poured more fuel on both debates. lisa: not only did it not get clarity, it actually widened some of the debates. stay tuned, we have more of them. jonathan: andrew is not an aggressive guy, cannot see him slamming doors. quietly frustrated. coming up, sarah hunt of alpine woods, vijay rakesh, mark zandi of moody's analytics.

this is bloomberg. ♪

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>> if you are hoping for a week payroll so the fed will cut, you are trying to thread a needle. >> i think the economy is

slowing but pockets of strength. >> if they can cut and what the market is calling for, you will not get fully easing in financial conditions. >> they won the battle on inflation, they don't want to lose the war on inflation. >> no way they can signal a cut with this data. jonathan: slamming the door on july. surprisingly strong job growth. jp morgan, the recent momentum in jobs growth. it was all about a blowout payrolls report. good morning. the third hour of "bloomberg surveillance" starts now. the s&p software by 0.1%. all about inching closer to wednesday morning. lisa: what is the threshold in order to tip the fed toward even cutting rates as soon as september? it seems like the bar has gotten higher.

employment is not giving them the reason, so it has to come from inflation at a time when many are rationing the models. we will not resolve that. but the reality is rents is not coming down as quickly as people like, consumer sales are still going well. jonathan: questioning the data still from friday. we shared this from peter cheer earlier this morning. the establishment survey makes it look like an incredibly strong and healthy labor market. the household survey makes it look like a very weak labor market. peter goes on to say, if we pick and choose the data to look at, it is the best of times. if you look at the other data, it is the worst of times. that is the issue for a lot of people. whether that data is good or bad? lisa: some people would say this is the case shaped economy, -- k-shaped economy. there is a group not doing well

and there is a cohort that is living wealthy. that explains the dissonance. there is a saying there has not been as many responses to surveys post-pandemic, not getting as queen of a read. that is why revisions are so significant in the subsequent months. jonathan: andrew hallman horse and the team looking for a weakening in the market. they just published, the establishment survey shows 2.8 million jobs added over the last year. household survey shows less than 400,000 new jobs over the same period, steady rise in unemployment in recent months. how much weight do you put on one over the other if you are on the fomc and you have to talked about the labor market on wednesday? lisa: they could say there are signs of a sustained loosening in the labor market, which is welcome, at the same time, enough strength to keep the economy going. not worried about the economy

falling off a cliff but sensitive to that. essentially where we have been, why we have seen such great intraday volatility with the macro signals, but at the end of the day, people are frozen in place. jonathan: probably with the opening statement will sound like. equities on the s&p unchanged, negative by 0.1%. the euro is -5.4%. french equities struggling. there is a political element, that i mention injected into european assets this morning. lisa: european parliamentary elections came in line with what a lot of the polls aside, a shift away from the centrist, classic democratic parties, toward more of the far right constituents. the question is what is the significance? any male micron said that he would hold a snap election. on a market level, how much this

show that election risk is not being priced into assets? nobody can price and how things will transpire but it is still a risk. that is something i was interested in over the weekend. jonathan: it is hard to gauge the outcome from the outcome. if we knew that this is how it would play out, when you have guessed a snap election? if i could tell you who would win in november, do we know what they would do? that is difficult to do. that is why we have sent we are flying blind into 2025. lisa: we don't know what the reaction will be in the subsequent days after the election. who will respond in what way? things that transpire from the outcome which we cannot predict, which is my people are saying you need to hedge in certain ways, but no one is making a call one way or the other. jonathan: coming up this hour, sarah hunt on what may's payroll

means for the fed. amanda lynam on their rate cutting cycle. and we catch up with mark zandi from moody's analytics looking to cpi. bracing for the fed's meeting. sarah hunt saying just when you thought you could make the case for a summer cut, incomes the job number and takes it off the table. the inflation numbers will add or detract from the evidence being used by the computing yes they should and though they shouldn't camps. sarah is with us this morning. never mind good news, bad news, what was friday? sarah: mixed news. you start to talk about the differences between that survey and the survey, can we count on this? it is indicative of the fact that this is a confusing market. on the labor side certainly. that is part of what is coming into play as we go forward.

we started off this monster rally when the fed said at the end of last year, october, we are done raising rates, people are going to put in a ton of easing, and now they are looking at putting that away. jonathan: i know lisa has thoughts on that, but if the payroll reports land the door shut on wednesday, could cpi reopen it? sarah: it is not just the labor market the fed is looking at. if inflation looks like it is coming down, but to your point, housing market is not getting any better, rent is not coming down, i think it could. you have that discussion of are we cutting rates or are we normalizing? the market will take any cut at the start of an easing cycle. if they can do something like the ecb, we are hock actually normalizing, don't look at this as a cycle, it could open it but

i don't think to july. lisa: on the flipside, if we get a hotter than expected cpi print, you were talking about the idea if that if there are no rate cuts this year, it could cause an 8% decline in the s&p 500. what if jen-hsun huang says he has a new development that will build robots that will do our dishes and take care of our children? will that change any kind of a selloff? sarah: there has already been a bifurcation and what a selloff means. there is a secular story there that is difficult to say, whatever is going on with a bed will be important for that piece of technology. there is also a big future element. that is what people are starting to recognize, you have to go further into the future to monetize this, unless you are in nvidia selling than the chips now. there is a thing going on where there is a secular story in one part of technology but a market story in the rest of technology.

lisa: are we currently at rates that could cause the market story to gain legs? if we stay here in the market, not just fed funds rate, that could really crimp how people understand forward-looking profits, for a lot of the companies in the other 93? sarah: interestingly, it is less about profits as what it does to things like the housing market which is still stagnant, what it does to people who have been waiting for a chance to refinance. the idea is we are going to hike, come down quickly. that is not happening. there is a lot of extend going on in some of the fixed income markets. whether or not the stresses be a part there, if you don't get a cycle coming down, there's a lot of areas where there is tension in refinancing. jonathan: places you want to be, places you want to avoid? sarah: i think you need to be in

the part of the technology sector that is throwing off buckets of cash, doing well in any environment. hard to say that is a place you want to stay away from. oil just got more difficult for energy. that is still something that is throwing off a lot of dividends. retail is very difficult right now. a bunch of retailers have said year-over-year sales are not doing well and we are worried about the next couple quarters. there are areas where there has been a clear slowing, areas where there may be an acceleration, but the overall picture will weigh on energy and some material stocks. it is very pick and choose right now. lisa: you hinted at something, the longer rates stay at these levels, this could percolate into rates. how severe could that look, is that a credit crunch? is it a sudden plunge? is it a slow bleed on economic

growth that becomes more evident over time? sarah: there has been some equity volatility but not the kind that you would expect given what has gone with interest rates over the last couple years. we have had all these government programs that came through in the financial crisis that people look to, if there is a problem with interest rates, there is a program that will help them. there are a lot of programs to deal with that. i don't know if it is as much of a crisis as it would have been in past eras when you didn't have a backstop. i don't know where that goes, but you have seen commercial real estate have problems, certain parts of the real estate market that are showing stress. those are long assets, financed at a time, where if you have

to refinance, you are looking at a larger number. there is a question of what those assets are worth. there is also a feeling that there will be something if things get really bad. lisa: just to sum this all up, jon was asking what you like, didn't like. you like companies spending buckets of cash. you don't have visibility at a time when you are also charged with generating alpha. sarah: if you take the top 10 stocks, 35% of the s&p, but you have a multiple issue in the other areas, you have to be careful about what you pay and when everyone else's balance sheet looks like. am i generating cash? if you have any refinancing you have to do, it could be quite difficult, so you have to be careful about that. you really need to pay attention to valuations in a way that we

have not had to in a while. now you have more vulnerability on what happens with the rest of the financial picture, interest rates. jonathan: we start of the hour talking about politics. 25, how we got a clue what the next year holds in store for us? sarah: we do not. jonathan: how difficult is that as an investor? sarah: if you take the politics out of it and you say how much has the regime changed, what that means for the equity markets, as long as you are not radically changing tax or tariff policy -- there was supposed to be a big switch when body took office about what would happen with china. there may be a change in immigration. we will see what happens in the labor markets. we don't know enough yet to see what that playbook looks like. i think that will be very difficult to parse. jonathan: in the time horizon, make tactical calls, or assume

no big change? sarah: we are not short-term traders, we are looking at a long-term picture. this goes back to am i generating cash, what does the economy look like? the political picture will change and we don't know how that will change. jonathan: sarah hunt. there is a lot that we don't know about next year. lisa: how do you have conviction to make a bet? you have a slew of things that you don't know. bye. jonathan: nvidia seems to be the conclusion. lisa: again going to concentration risk down the line. for the moment, it is a sure bet. jonathan: equities on the s&p just erasing this morning's losses. unchanged going into the opening bell. with your bloomberg brief, here is dani burger. dani: the euro is weakening this morning by .4% against the dollar. french rates have hit their highest level this year with

elections causing emmanuel macron to call for a snap election. the results reinforce her expectations for euro parity. >> in case trump win the election you have euro-dollar parity. that gets more attractive when you have the situation in europe, which is more complicated, making the downside trade more attractive. if we were to get the scenario where things go downhill from here, trump in the white house. dani: she went on to say that that makes parity more likely. apple's worldwide developer conference gets underway in california today. the company's advancement in ai is said to be that the. they will be unveiling a new suite of features that it will call apple intelligence. apple is also planning a more

powerful version of siri. donald trump is back on the campaign trail. he held a rally in las vegas last night. the presumptive republican nominee said he would scrap taxes on tips earnings for hospitality workers should he win a second term in the white house. this was his bid to focus on the service industry ahead of the national convention in july. jonathan: thank you. this facetime, airpod thing is a real thing. lisa: maybe they can fix that instead of doing more with siri. jonathan: did you know they bought a headphones company, beats? how did that work out? lisa: i like the ones that you can just plug into the phone. i prefer are those, they don't run out, they don't get fuzzy, they don't need to be charged.

just stick them in. jonathan: gen z thing. are they doing that? lisa: i am old school, what can i say? jonathan: i am on board. i used to like that, you could pretend that you were doing stuff. you have the cable. busy. don't talk to me. they know my secret. up next on the program, morning calls. and the stock split goes into effect. equities just about unchanged on the s&p. this is bloomberg. ♪

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jonathan: live from new york city, welcome to the program. equity futures on the s&p 500 just a little bit softer.

if you looked at the close on friday, lisa, you say no drum at the close. you would have no clue that 8:30 happened. lisa: we are looking at a market that is whipsawed on all the potential data point because they have no clue and ending up in the same place, which is why long-term investors are saying we are not doing anything. jonathan: i cannot even say there is a trend in the bond market. 4.4493. yields hired by a single basis point. two-year is a great story. weak data, buy bonds, and then friday happens, and a two-year is higher by a single basis point. lisa: this is the reason why i care about the auctions. what happens when you get a big disruption that causes more volatility in the short term, in the long term? jonathan: let's get you some

morning calls. susquehanna raising its price target on nvidia to 145. confidence in a sustained and smooth transition at the chip giant changes to its ai platforms this year. didi, and also lifting its price target on nvidia to 140. adjusting it eps estimate and target the back of the 10-1 stock split. vijay rakesh raising his price target to 127 noting its continued dominance. nvidia continues to see strong opportunities with the platforms announced for 2026. 10-1 shares but should create a more attractive point for retail investors, could provide additional shared tailwinds. i want to start with that final point, and thanks for joining us. why is that important? equity market snobs would say it doesn't change anything.

what do you think it changes? vijay: thanks for having me on. nvidia's 10-1 accounts for that . what it does is it makes it much more accessible for the retail side of the investing platform. the price target that we have, that is an attractive position that management sees. that is also a vote of confidence because this is the second or third one they have done in the last five years. lisa: do you get the sense that other tech companies are watching this, doing their own stock split going forward? vijay: it is very possible. when you increase liquidity on

the stock, it makes it much more accessible. improve the trading environment. it does not change the intrinsic value of the company. an evaluation you do stays the same. it improves liquidity, accessibility for the retail side. lisa: on number of papers written about whether nvidia can be a bubble, at what point it could fuel a bubble in other big tech shares. people making the counter argument that it is generating cash. how do you understand, what is your parameters of gauging when enthusiasm has gone beyond around the possible, for a company that seems to be shooting for the moon but it cannot continue forever? vijay: two key things to watch. if you look at ai in the

server-side, it is still about 10% of the market. there is a long way to go in terms of ai adoption, not just in the cloud hyper skill level, but enterprise. number two, when you look at the whole ai market, it is almost a $1 trillion market player. you will see $250 billion a year basically upgrading existing infrastructure. those investments will come through. don't forget, when you look at nvidia itself, number three, they are going to full stack servers in 2025. the selling price of these servers are around 1.5 to 3 million.

very significant increase in their selling price. that is a big priority for the top line. jonathan: i want to talk about concentration risk and not in the s&p 500, the customer base. we know there was one customer that accounted for 1/5 of nvidia's revenue. something that is microsoft. is that an acid or a future risk? vijay: you will see at any point other oems step up. you are seeing increased spending from amazon, google still on the come. the new kid on the podium seems to be tesla. they are pushing on ai data centers. a lot of new orders coming in from tesla. also look at the whole enterprise platform. there is a lot out there that

has not been penetrated. still less than 10% of shipments. you are seeing strong demand. all the supply side, always some limitations, so you cannot supply everyone yet. jonathan: always great to catch up with you. 10-1 stock split day on nvidia. microsoft, meta, amazon, alphabet, 40% of the revenue base for that company. lisa: those have been the companies that have been able to spend money. jonathan: they have the cash. how long is the runway? up next, amanda lynam, mark zandi on this u.s. economy. this is bloomberg. ♪

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jonathan: equities on the s&p 500 -- bramo, not happy. not criticizing where you are going on vacation, it's a beautiful place. so sensitive about these things. one hour away from the opening bell. the two-euro looks like this. pulling back a single basis point this morning at 4.8762. this just in from goldman sachs, we expect the dots to show two cuts in 2024.

a one-cut baseline is a possible risk especially if core cpi surprises to the upside wednesday morning. lisa: do they want to surprise the market in some capacity, cast cold water on this idea that there will be accommodated even without weakening in the labor market? two rate cuts is in line with what the market is expecting. you cannot expect a significant response so that seem to be maintaining the status quo option. jonathan: dollar stronger against everything in g10 on friday. this morning, the euro weaker again this time by 0.4%. some political uncertainty for the europeans weighing on euro-dollar. 1.0755. that is good for where you are going later this summer. lisa: revealing too much. i am wondering if we can get it down a little bit further, it would be a better vacation. this is a reason that everyone

is on a plane from the u.s. over to europe. they are all going to southern europe in particular. jonathan: 20 nations in the euro zone. lisa: the truth is they are all going to two. that is where all the american tourists are going. jonathan: always surprises me that france is number one, global tourism. i don't get it. when you get there, the french act like they don't want you there. lisa: japan actually doesn't want people. jonathan: you try to speak to tell italy, carry on. lisa: this just got really personal. you can actually speak some italian. jonathan: the french are like, no, stop. lisa: it depends on where you go. jonathan: good summary. in case anyone wants to take advantage of the 1.0755. we get the latest inflation with

cpi coming at 8:30 eastern time, the head of a 2:00 that decision and then jay powell press conference. mike, where are you focused on? mike: where lisa is going on vacation. lisa: southern italy is totally packed, that's what i hear. mike: everyone is looking at wednesday for the fed, cpi. it will set the trading tone for the summer. we will not get enough other data to really change people's minds over the rest of the summer time. we have other events coming in affecting people. we are going to get a weird cpi, in the sense that the headline month over month is forecast to go down. year-over-year headline is expected not to change.

whereas in the core, month over month does not change, but the year-over-year goes down. if we get an as-forecast number, what does it mean? the fed held off last time because not sufficient progress had been made. significant additional progress had not been made. with count as progress to see the core go down? lisa: you used the word weird. i am curious about why it is so weird? do you subscribe to any of these ideas that this is messier data than usual because there are fewer responses to surveys, potentially something going on with respect to how difficult it is to quantify? whatever other conspiracy theories people are coming up

with to lead to some of the significant downward revisions later on? mike: all of the above. it's a combination of things. the data got messed up by the pandemic in different ways. it changed consumers buying habits, for one, the historical data didn't fit a model going forward because people were behaving differently. we have seen response rates dropped significantly which makes it harder for government statistical agencies to correct for that. seasonals are all thrown off by the pandemic. there are a lot of reasons why this is happening. what is interesting, when you get down to the bottom line of it all, americans are still spending money. that is where the fed is at. they are still getting jobs, still spending money. we are not seeing huge changes in that. after the jobs report, the atlanta fed went.

we are seeing stronger-than-expected growth. the fed has to make policy and that, and that tells them that they don't have to move if they are not certain. jonathan: just in the last two weeks. amazing. let's continue the conversation with mike mckee. joining us now is amanda lynam, mark zandi of moody's analytics. two very different stories. what was friday about? amanda: taking a step back, you noted the overall establishment survey showed strong momentum, perhaps driven by the immigration coming into the country. household surveys showed a meaningful decline, but that is in folks under 25. we talk about the bifurcation in the economy. that is when you are seeing there.

in the aggregate, the economy is still chugging along, even if we expect some deceleration. let's say we end the year at 2%. still trend or above trend growth. for us, the shallow rate cutting cycle we are expecting is really a product of that. it is not obvious to us there is urgency for the fed to ease. we accept them -- and expect them to normalize but not ease policy. jonathan: would you put one weight over the other if you are sitting on the fomc? mark: these establishment surveys are the better measure. it shows the job market is strong, resilient. job growth was very broad-based. you cannot dismiss the household survey, increase in the on employment rate. it does indicate the labor market is really cooling off. if you look under the hood of the job market, hiring is weakening, if you were quits, unfilled positions are declining, temp jobs are

declining. the job market is ok, moving forward, but cooled off. exactly where the fed wants to see the labor market. resilient, creating jobs, but not at a point where it is fading inflationary pressures. lisa: this weird aspect of the jobs report, in terms of cpi, wednesday, are we measuring inflation correctly? mark: we are measuring it but they're all kinds of problems with it. looking at inflation measures, i would be focused on something called the harmonized inflation measure, which is everything other than owner equivalent rent. the implicit cost of owning your home. that is very problematic. i have learned a lot about this, digging deep into it.

it is very problematic even when things are going well, housing market is well-functioning, but as you know the market is a mess. we have a severe shortage of affordable housing, surplus of high-end housing. you want to get a sense of underlying inflation. that is what is used in the rest of the world. if you do, it shows, mission accomplished, inflation is back to the fed's target, and has been for some time. lisa: i am glad mark brought up the housing market. this is completely skewing a lot of the measures we are looking at because the housing market is broken. this is a key aspect of the u.s. economy, and put into inflation. how much are using that as a gauge of credit strength more broadly? amanda: part of why we like to look at the super core, services ex housing. from a pragmatic view, we are

not expecting major changes to the fed's inflation targets or the reaction function. i think they need to get to their target before they think about reevaluating whether these metrics make sense. from a credit perspective, we are not seeing a massive degree of restriction across the credit landscape. we are seeing it in pockets but not widespread. there are certain areas where, sure, but rumors would like to have some rate relief, but is 25 basis points going to move the needle for them? probably not. it is the depth of the cutting cycle that really matters. the good news is most of these corporate's are managing this backdrop in a resiliently. if we have a significant slowdown in growth, persistently elevated cost of capital, that is where we could become much more cautious. jonathan: have the sources of finance shifted? does that make it more difficult

for the fed to get to where they need to go? amanda: they have shifted in the sense that you see private credit playing a bigger role. we are seeing bigger demand for leveraged loans both from investors and borrowers to issue because demand is so strong. clo creation is very high. the sources of financing have helped out, but in general, the tone is still very strong. part of that is a function of corporates entering this period from a position of strength. the growth has allowed corporate credit to absorb the cost of higher capital. we saw buying in ig credit, investors coming into the market when we had a 15 basis point backup in yield. it is hard to get incredibly negative on corporate spreads, because even when it sells off, the buying comes in. jonathan: really difficult to

reconcile the conversation we have on wall street from what we hear from fomc officials around financial conditions. what is the difference between a federal reserve officials saying financial conditions are tight, below wall street saying they are easy? mark: they are right where they need to be. if you put in the equity market, credit spreads, it feels like conditions are easy, but if you look at bank lending standards, banking system in general, not so much. credit is much tougher to come by. the value of the dollar is strong. that is consistent with tight financial conditions. if you mix it up in a pot, it feels like financial conditions are right where they need to be. you can find things that showed it is easy, some things that show it is tight, but all in, it feels like the fed has financial conditions exactly where they want them. lisa: how much is this morning

the frog? we are sorta doing damage under the hood that will come to the fore. that was the belief earlier this year, last year, and then people said that things are fine, we can live with rates right here. do you have a sense of where the balance of risks is, holding at this level for a longer period of time? mark: those likely scenarios, that the economy was off the land, they will start cutting rates soon, things will settle in, but i do worry that they are holding onto long. too high for too long. the labor market has signs of weakness. i went through a litany of those. the financial system is fragile, it feels to me. the yield curve is inverted. short-term is still above long-term rates. that is not consistent with a well-functioning financial system. i have this image in my mind of

the system as an engine, it is shaking tremendously under the stress of these higher rates. so far it has held together with some duct tape, help from the federal reserve, banking regulators, but for how long, and why would you do this? mission accomplished. 4% unemployment, inflation back at target. why take the risk? i do worry about that scenario. i don't think it is off the table, and we cannot take it off the table until the fed starts lowering interest rates. lisa: you wrote about it. jonathan: goes against what we heard from bill dudley, who said the fed thinks it is fighting inflation, think again. what would be the guide to saying, you are wrong, this is how i see the world? mark: nothing will convince people but data.

we get consensus that the core cpi comes in at .25. you need some 0.2, 0.25s, and then you'll make some believers on the folks on the fed. 0.25, annualized, that is just over three. you make adjustments because the consumer expenditure is constructed differently. you are within spitting distance of target. by the way, again, we are holding through this 2% target on the pc deflator. i understand the necessity to do that because of the credit ability and everything else, but at the end of the day, is to present the right number? most people would say it is higher than that. why sacrifice the economy to the altar of the 2% target if we don't need to? jonathan: great to catch up,

mark zandi, moody's analytics, alongside a black rock's amanda lynam. let's get your bloomberg green with dani burger. dani: southwest airlines up nearly 8% in the premarket. elliott investment management has built in almost $2 billion stake in the company. the size of the holding makes it one of the largest investors in the u.s. carrier, and they plan to engage with management. tesla ceo elon musk's pay package is being put to the test at the annual meeting on thursday. one of the company's largest shareholders, the norway sovereign wealth fund, says it will vote against the deal. they say they are concerned about the total size of the award, dilution, and lack of mitigation of keepers and risk. nvidia's 10-1 stock split will take place today. the ai boom has power the

company to huge gains, more than one 140% year to date. the share price past $120 and valuation past $3 trillion. one of the key reasons is to increase liquidity along retail activity. jonathan: i appreciate that. up next on the program, apple's ai vision. >> and ai-driven super cycle. i personally believe it is a bad bet. jonathan: dan ives, one of the best. makes you smile every time. lisa: he is consistently bullish. jonathan: the message, the style? lisa: the style is great. jonathan: new york post says he is the best addressed on wall street. not sure what i think about that. [laughter] from new york city, good morning.

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jonathan: we are probably going to spend the whole week talking about wednesday. we will do that monday, wednesday, -- about 40 minutes away from the cash open. equity futures on the s&p 500 look like this. negative by 0.1%. yields are higher by three basis points. 10-year 4.4650. today we will get a 50 a billion-dollar auction of three-your notes, plenty more debt supplied through the week. apple's world development conference starting at 10:00 eastern. tomorrow, the fed kicking off its two-day meeting. i know that lisa is focused on that debt issuance. lisa: it comes right after the new york fed's inflation

expectations. here is to see when people start pushing back. i think the auctions really highlight that. jonathan: better data is pushing yields higher, question about how much is coming into the market? lisa: indigestion around what price? the bonds can clear. at what yields, what price? that is what we are looking for in terms of indigestion, how much the banks can take down, what it takes to cost in the clear market. jonathan: we were talking to amanda lynam, mark zandi about the fed decision on wednesday, but the big tech is what she said about credit on friday. yields breaking out on the back of better-than-expected data and people are buying corporate credit. the demand was good. we are seeing high yield on treasuries not crowding out what was happening elsewhere.

we see the amount of demand over the last few months. lisa: the amount of cash created in the global economy is overwhelming, why there's a lot of dollars looking for space. the u.s. is looking like the higher-yielding space as other places cut. at what point does this infuse the debt market in the u.s. with a sense of confidence because a lot of buyers are coming in from external places with lower yield? jonathan: it's not all about that or the federal reserve or cpi. there is a big event, apple's world developer conference starting at 10:00 eastern time. joining us now is jackie davalos. walk us through what we can expect later on today. jackie: it's a big day in cupertino, california where the worldwide developers conference is being held, starts in just a few hours. this is a developers conference,

usually gives the developer community a sense of what software and hardware is coming down the pipeline. this year it's all about artificial intelligence. that will be the central theme for apple, which you know has been a little bit slower to publicly state just exactly how ai will fit across its products. we have a sense of the things that are to come thanks to mark gurman's reporting, and one of those is that the new ai system will be called apple intelligence. this will use the more generative ai that we have not seen yet. apple is not a newcomer when it comes to ai. we have siri, the health assistants that infuse ai, but generative ai is what we are looking for. those features will be announced be read the other thing that is slated -- openai partnership which will unveil a chat across ai systems. they have not announced their

own chatbot to date. it has been seen as a laggard in comparison to microsoft and google. this is a big day, one of the most high stakes events for the company this year. lisa: apple has the reputation of being late and perfect. how much are they trying to race, and catch up, being messy, willing to break some things? jackie: definitely a risk. apple has its own large language models but is looking to partner with openai, also have discussions with google's gemini, to incorporate some of the already made products out in the market. this comes with its own risks but as we know, apple's strength comes through in his devices. even if this is not a big success, a lot of users will be using it. it allows them to really iterate on what they learn from how people are interacting with this.

the future when it comes to artificial intelligence depends on just how we interact through voice control, for example, allowing users to control those without having to look at a screen full of apps. this is really apple's advantage because they do devices so well. jonathan: looking forward to your coverage today on bloomberg tv and radio. apple, stock is positive on the year now, year to date, 2%. the karen over that stock will be september and the new iphone, and how many of these new features will be installed. lisa: september, will jonathan ferro actually go to the store and purchase a new one? he had been holding off in order to get the latest iteration. jonathan: now that i know that the airpod, facetime issue is a broader issue, they could fix that, and they wouldn't need to upgrade. i am not the audience.

i am the last guy to move. i will never be that guy. i am not the forward-looking technological expert. lisa: the technological people that want to explore the next thing, understand. do you want to look at a blank screen and say, siri, give me the number for this? jonathan: two types of people. headset people. the people that bought them and those who didn't. i didn't buy them. you did in either. lisa: it was kind of a limited product. jonathan: they were the first want to walk around with this stuff. you want to have an argument about this? lisa: this is what i've been waiting for all weekend. jonathan: the opening bell is around the corner. is this about your vacation?

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her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

>> from new york city for our viewers worldwide, it is fed week. we have futures down across the board, s&p futures off .2%. the countdown to the open starts right now. coming up, investors awaiting wednesday's fed decision and cpi print, plus the euro falls to its lowest in a month amid european election fallout and apple to unveil its ai strategy. we begin with the big