sonali: welcome to bloomberg markets. i am sonali basak. wall street strategists warning for volatility and the week is a big week. u.s. cpi data and the fed rate decision later in the week. before that we have to get to markets to start off. the s&p 500 up about .1%. a little more than that on the day. the nasdaq 100 also in green. starting with optimism. if you look at the two year

yield, fascinating. you're getting a one basis point move lower on the day we look at the short end of the curve. we are higher than the lows of last week. the 10 year yield, which hit below the 4:30 mark -- the 4.30 mark. we will zero thrust of the week brings. midday movers on -- we will see what the rest of the week rings. airlines mover on a report that activist investor elliott has put a $2 billion stake in southwest. that would make elliott one of its largest shareholders. the airline has struggled to capitalize on travel demand out of the pandemic and you are seeing southwest up more than 8.4% after the news. looking at shares of crowd strike as well. we are seeing them all rising on news they will join the s&p 500 and the latest quarterly waging change. -- weighting change.

we will talk about it with carly gardner and abigail doolittle. stocks flirting with fresh highs. what is the trendline show you we are heading? carly: i am of the opinion we are starting to get into a situation where the upside potential is a lot less than the downside risk. if we listen to the peripheral things such as the copper market, copper has predicted big turns in the stock market. we saw a big reversal in copper in the last week. eventually big turns in copper translate into big changes at the stock market. we saw in 2018 and 2020. it puts me on alert. i'm not saying it happens tomorrow. i believe it is time for playing defense, not offense. abigail: talking about copper

reminds me of commodities from last year because the bloomberg commodity index down more than 10%. to your point it does come back together and i was looking at the bloomberg terminal. the commodity index up 4% to 5%. so is the dollar. was last year's decline a signal -- some commodities people at bloomberg say they saw that as a sign of a soffer session ahead that people were ignoring? carley: i agree. they say the yield curve predicts recessions but copper has been a good predictor. there is definitely something there. we are working off of a multiyear period. since the financial crisis there has been very aggressive fed policy, legislative policy to pump into the system. if you look at the chart of the money aside in the s&p, what we see is the money side is translating into the stock market gains.

how this ends we do not know but this feels like a lot like it did in 2006 through 2007. we are seeing a lot of the creative political strategies turn into creative strategies on wall street and main street. a lot of retail traders are taking on a lot more risks so they realize they are participating in strategy is such as aggressively selling puts in stock indices, leveraged etf's. i feel like at some point that leverage will have to unwind and we could see quite a bit of volatility. abigail: of your bringing up the m2 global money supply versus the s&p 500. as the money supply goes up so does the s&p 500, basically follow the money. relative to the russell 2000 on the year it is down slightly. the dow kissed 40000 and then down. you think there is any chance in the future we could be talking about that brief moment above 40,000 that was the tell of a

consolidation of a monster rally we have had out of 2020 that you correctly called? carley: i believe it is. if you look the s&p 500, most of the gains have come from one stock were a couple if you want to break it down. that is not sustainable and not healthy. these things take time. months, not days or weeks. we turn the s&p in a long-term chart using monthly bars, you'll see there is heavy support trendline -- resistance around 5400, 5500. i think it will be tougher prices to get over that. in a natural market, if you take out the excess of stimulus we saw after covid we should be trading between 4500 and 3500. there are some substantial risks. sonali: a lot of that gain has been seen in concentrated. the boom -- the ai boom, the big

tech names. if you see them start to falter do you breathe the breath in the market can make up for that loss or you think everything falls together? carley: last year i would suggest the breath would catch up and that would keep us higher. at this point we've gotten so out of bounds, speculation has gotten so rampant, i also noticed there is quite a bit of money going into the peer e*trade that has been doing so for quite a while. it seems to be capitulating. that is where people are borrowing yen and using it to purchase stocks in the u.s.. i've seen this in 2007 and 2008 and when the yen carry trade unwound it. i think we might see something like that. i hope not. sonali: we are seeing the central bank divergent start to play in. what is the risk that carry trade unwinds in a vicious manner? carley: if it does unwind it

will be vicious. we have had gains in the stock market anyway. if you start adding leverage it is risk on risk. when it unwinds it gets nasty. abigail: i've to go back to the 3500. that is a big drop. you are bullish correctly right out of the 2020 pandemic. that is a big drop. do you think that is the yen, the economy? sonali: -- carley: i think what catches us off guard the most is retail traders and hedge funds caught in strategies like selling the vic's, selling s&p puts. we saw this in 2018 when the vix was really cheap and it felt like printing money selling the vix. then one day it was not and i think we get something like that. it might be quick. it might have been a short time. i hope that is the case because it is easier for us to handle. sonali: i would love for you to

draw out some of the thinking. you mentioned the relationship between copper prices and the stock market. what is the relationship? carley: on a day-to-day basis there is not much of a correlation. if you look at the big turns -- when popper starts getting up against resistance, right now the trendline resistance comes in at 5.35, top out at 5.20. when we get copper extremes, the batting average is 444. for example, even on the upside in 2022 -- 2021 copper bottomed somewhere in the three dollars. four or five months later the stock market followed suit. it is a good reversal on the stock market. do not pay attention most days but if you see movement in extremes that is when you pay

attention. abigail: i'm looking at a chart of the 10 year yield in the last time we spoke i believed you are bullish on bonds and yields would go lower. that would match your call that we could see stocks go to 3500. that would clearly be a haven bit. do you think it would also be the fed cutting aggressively to get the economy going if there was an economy play? carley: we think it would start is the safe haven bid. we've not seen safe haven come to treasuries in a while but we think that will come back. we are trying to normalize after years of abnormal policies. if we start to normalize, which i think we will come of that will pull stocks down. there's a lot of risk built into the system, why not be in treasuries. if you get 4% or 5% and you happen to get capital gains, that is a cherry on top. sonali: thank you so much for joining us.

that is carley garner and bloomberg's abigail doolittle. coming up next, big asset. apples ai plans. we are live from the worldwide developers conference in california as the company starts its event in the next hour. that is up next. stick with us. this is bloomberg. ♪

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sonali: this is bloomberg markets. it is time for stock of the hour. apple has seen a 471 billion dollar rally in recent months as the company lays out its ai plans. now the worldwide developers

conference bloomberg's jackie davalos is at apple card in california and she is reading all of the tea leaves for the future. let's start with what the complications are. even after the rally you are seeing apple down roughly .5%. what can jolt the excitement back into the market russian mark jackie: -- what can jolt the excitement back into the market? ? jackie: apple has been quiet about its plans for artificial intelligence while its peers like microsoft and google have been racing ahead to jump into the space. ceo tim cook was saying last year they were going to tread carefully around this technology, but this was the first time he is going to lay out the vision in just under one hour when he delivers the keynote address to apple park. there are a lot of people waiting to see how the ai patient will pan out. there are a few things we know.

the ai system will be called apple intelligence. this is where we will be able to see generative ai features show up in the devices like the ipad, iphone, the new operating system that it will rollout. we also know it has a widely anticipated partnership with openai. we just saw sam altman as well as the open i i -- as well as the openai president and cofounder. there is a lot of anticipation to see were opening i will fit in terms of apple broader ai strategy. sonali: how user-friendly will it be? one interesting question is how you can make ai consumer friendly in a big way. interesting to see sam altman there himself. where can apple be the most competitive? jackie: if you think about it, apple has some of the most ubiquitous devices on the market. what we know about apple

intelligence and generative ai features is they will be popped into start. some of them will be in beta form. some examples include summarization. summarizing your text messages, web articles, as well as auto replies. gmail allows you to type in a few words and let you finish off your and -- your message. you will have that now in the mail app. what apple is trying to do is draw people in but it will not have to work very hard. billions of people have devices from apple in their hands. it will take a major leak forward, the generative ai technology embedded in this new ai system will partly be openai but also apple. it will keep developing there and iterate based on what it sees in traction. sonali: it is important to remember this is a developers conference. there will be new stuff on

display but the relationship to developers has always been very mixed. what will developers actually be looking for today? jackie: the developer community is key because they are the ones that build the apps that draw users in. if you remember last year with the vision pro, it was not just we were seeing this fancy new headset. it was the anticipation around what apps we would see embedded inside it. today we will get a sense of how that relationship will go forward in this new ai era. a key focus for apple is understanding how can they leverage voice control, users saying can you pull up my email, without actually having to go to the email app on their own. that relationship is certainly going to change. as you mentioned the developer relationship will remain crucial. sonali: many questions about the future of the app store. bloomberg's jackie davalos.

good luck today. now we are joined by the bloomberg" host alix steel who will be speaking with the apple cofounder -- by the bloomberg close cohost alix steel who will be speaking with apple cofounder steve was the act. it is a new show and a relaunched show. alix: we are relaunching the close and it is really important because 30% of all trades happened in that our. you have to be there to be up-to-date. will be tapping into all of our expertise. there'll be a lot of energy, sports, and entertainment and lots of analysis. we are making sure to break all those earnings. super important on that front. as you mentioned will be talking to steve wozniak, cofounder of apple. the question we will talk about is innovation. his apple innovating enough? they like to step back and let other people do the stuff. are they innovating enough?

sonali: to the extent this is the pregame to the apple conference, you are the post game, who you have showing up? alix: i am the post game. we have sam post on a who was chairman and president of ibm. currently he is doing lots of things, but he is board chair of america's frontier fund and the point of frontier fund is a nonprofit to help have a holistic nation approach to critical technology. the u.s. needs to be competitive, innovative, manufacturing, and a lot of r&d. he is a pioneer in that space. he'll be talking about that in addition to cycles. what is a cycle of ai? what does that mean and it is different. it is the adoption so much faster and how that affects innovation going forward and how does it beat everybody else to it?

sonali: who else have you gotten to talk through the macro #alix: -- who else do you want to talk to about the macro? alix: bill gross. we will talk to them about the fed meeting. also in europe. you see yields fly. the spread between french and german debt is the highest so far this year. we talk about that and what it means for the u.s. election. is clearly worried about budget deficits and fiscal deficits. does that change to betting on who is in the white house in november? sonali: we were talking earlier about how much trade has moved towards the beginning and ending parts of the day. what are you looking to accomplish as you restart the show? alix: to drumbeat into that. you had your lunch, you did your thing, you are coming back at 3:00 and what do you need to do to trade for the next 50 minutes

and that is what we are hoping to capitalize on. a big part of that is index funds. if you look at it that way you buy and sell shares at the close which means the active players are doing the same thing, they are following the passive guys and it becomes a self fulfilling prophecy that is why you are seeing one third of all the stock trades take place in the final 10 minutes. we are hoping to help our audience take advantage of that. sonali: thank you so much and good luck today. we are looking forward to this. that is bloomberg close cohost with alix steel. also on the program is romaine bostick and starlink -- and scarlet fu with a great lineup of ceos and investors. more markets up next. this is bloomberg. ♪

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taking a look at uber who shares have been volatile with the headlines crossing just a few moments ago that the company lost an appeal to overturn california's gig workers status law. will be watching the story for more details. uber now down more than 2% on the day. this is big news for uber moving forward. we will keep an eye on all establishments as we move ahead. now we'll get to the wall street beat. looking at the talent exodus at the new york federal reserve since john williams took over as president in 2018. it is one of the most read stories of the day. here with morris bloomberg's alex harris. one of the things that is pivotal is how much more clout is being gained in other areas of the federal reserve, the emergence of the hammock to the scene. lori logan gaining clout. what does this mean for john williams? alex: this is why people are concerned because the new york

fed is assigned the role of implementing the federal reserve's monetary policy. if you have this influence shifting, that is fine. we want to hear from people who have a diverse set of experiences and can relate to these things. at the same time they cannot pick up the phone and call new york and say we need you to do x. that authority, people are wanting to hear from the federal reserve bank of new york and they want to hear more from john williams on these things they want to feel like this is someone who is engaged and who cares about these things that is not with the perception is on wall street. people feel like this is someone who is a bit out of touch and someone who is not into the markets or processes them the same way as his predecessors have done. that is why people are concerned and saying something is not right. sonali: what about the departure of key talent. you mentioned since 2020 been key exits.

does that mean the new york fed is further away from the markets? alex: that is a really good point and that is what we are getting to. one of these things is the orb -- is these are people who been there through decades. there is a lot of institutional knowledge and the deep venture is beneficial as they have ever shifting markets. not every crisis will look the same. this experience matters. we have a sense of people who have been here a long time. they know what they're doing when things go south. with an entirely new executive team, people are unsure and feel like there is unsteadiness because they are not quite sure who is left and who will take the reins. alex: we thank you so much -- sonali: we thank you so much for your time. do not miss alex's story.

that doesn't for bloomberg markets on the day. keep an eye on these markets. a choppy trading day. interesting moves in the bond market and of a massive day on wednesday with the fed. this is bloomberg. ♪ what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now. her uncle's unhappy. you' i'm sensing anions underlying issue.

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>> from the world of politics to the world of business. this is "balance of power."

live from washington, d.c. joe: closing argument begin in hunter biden's trial as donald trump sits for an interview with his probation officer. welcome to the fastest show in politics. i am joe mathieu alongside kailey leinz in washington. welcome back. this is the campaign of 2024. kailey: what a world we live in worry have a former president of the united states meeting today with people who can influence the sentencing he receives for the 34 felony counts on which he was convicted. that sentencing is in a few weeks on july 11. in the meantime, donald trump is on the campaign trail putting a big rally this weekend in las vegas. joe: and we are tracking separately closing arguments in hunter biden's trial. we could hear a verdict as soon as tomorrow and that will be one