>> we've been anticipating an inflection point in the economy and there flexibility in the data. >> things are not falling off the cliff, but we are coming >> off a boil. >>if you factor in the policy and how the fed has to react to the inflationary environment, it could really push growth down. >> as far as the fed, the driver for them has to be real-time data. >> once bitten, twice shy, i think they will be a bit late and behind the curve. >> this is "bloomberg surveillance." jonathan: "bloomberg surveillance" arts right now.

live from new york city this morning, good morning, good morning. the equity market, down by .4%. polishing off the playbooks for the election in 2024. take a look, politically provoked, barclays with inflation protection with a risk that yields move higher from here, in just two days there has been a 17 basis point move. lisa: the focus really is on the 10 year in not on short-term rates. yesterday we had the biggest curve steepening. going back to the beginning of the year, raising a question about what we do well. people are looking at what is the playbook beyond this. is it something that could potential he become attractive? jonathan: talking about bonds,

rbc has a new price target for 2000 24. 50 700, previous 153. this is what she says about 2025. we think there is too much fog in the 2025 outlook to release a target now. we have been talking about this for a while. flying blind. lisa: she said it was like staring into the sun when fiscal policy could make a big difference. yesterday we talked about the bond reaction in the market. it wasn't just trumpet running -- winning the presidency. the idea that if one party on either side of the government, it will be a big problem, there is no deficit reduction insight in the more you have actual unity to get through, the more the deficit will increase and it won't really be incited in terms of rationing back. jonathan: chairman powell is going to speak later at 9:30 and then we will get some jobs data

for you. the first sniff is the job opening report at 10 a.m.. here are the reviews on the jobs market. the unemployment rate is on the edge of uncomfortable. how uncomfortable are things becoming for the federal reserve? lisa: we heard from austen goolsby this morning, basically saying that we are on a path to 2% if inflation falls back. the fed should cut by keeping rates where they are, they are tightening. why is he saying that? not because of inflation. some people might argue that, but it is because there are signs that the labor market is normalizing and it never normalizes in a straight line. if you take a look at jewel, it's expected to come back down to the levels we saw pre-pandemic. this is a point where suddenly the job openings are not outstripping the unemployed to such a degree that people can just say that this is a very tight labor market. it has changed. jonathan: central portugal is

the perfect place for this conversation to take place. having a discussion about rate for rentals. maybe we should be talking about political differentials. this is what socgen has to say on this. relative expectations shifting marginally ahead of the euro, but the backdrop on both sides of the atlantic favors the dollar. the u.s. versus europe, it seems to matter more to socgen in terms of what the federal reserve might do. lisa: that's what we have seen and it suddenly crashed below 107, clawing its way back to stability in the u.s. the y is interesting and coming out of the discussions we have had, that that any type of tariff benefit the u.s. dollar in the short run and that any kind of nationalistic tone in the u.s. will help u.s. assets

more than if there was say a nationalistic tone out of europe. why? because of the reserve currency and dominant position of the united states. jonathan: euro-dollar, 100 711, and for the border price action your equity market is shaping up as such, pulling back by 0.4% with stability in the bond market after a selloff in the previous two days. coming up, we catch up with maryland bank private bank on election risk in u.s. markets. strategic lowering following the ruling on trump and new century advisors at of the comments from jay powell. top story, investors mapping out growing odds of a second trump term. private bank writing that the key variable to watch is the u.s. dollar. will foreigners vote with their wallet on the u.s. election?

only 28% of marketable treasuries, 32% on the corporate bond market, 20% of u.s. equities. joe joins us for more. your reaction to what happened thursday night and what you think it means for the market? joe: post thursday night i was watching the dollar in asia and europe, no real selloff relative to uncertainty in the u.s. talking about the dollar, i'm surprised it's not stronger. what's behind the dollar is the great u.s. economy. when i talked to sovereign wealth funds around the world, they want to own u.s. assets in there is a proper premium on u.s. rudi's and i don't think that will change between now in the election. uncertainty, but no big change. jonathan: going through a couple of steps here, for the sake of analysis let's say that trump

it's a win. let's say we get a red wave. 2016, people are thinking about that trump they book. this bond market was demanding issuance. economic backdrop demanded fiscal stimulus. that's not where we are at in 2024 and the choice of words back then, the yields climbed and the dollar rallied, but small caps rallied by 11%. i'm wondering, is that the trade this time around? that's not what i see in small caps. joe: small caps are still in purgatory. you could be right in the sense that if you have an administration bent on doing things here in the united states like tariffs, anti-immigration, we will have to raise the bar and increase production across the board. not just large-cap and small-cap. to me, it could spread for all the wrong reasons. nationalism, protectionism. trade could come back but to me

that doesn't give me any comfort because i think that small caps can come back on their own, but if it is a policy of protectionism, that's a different animal altogether. i understand exactly where you are going and i think small caps will have their day under a republican sweep. lisa: i wonder how far out you can make a prediction? this idea that there's no visibility run 2025, do you feel the same way? joe: i don't. the policy backdrop comes uncertain, but when you step back, look at the ai revolution and the productivity that's coming. look at the u.s. economy in general relative to the rest of the world. look at the geopolitics. places to put money to work with different premiums on resources and an infrastructure that was built continuing. that is policy fog, but i think there is opportunity to put money to work in certain sectors that -- irregardless -- it

doesn't matter what's happening with politics, it's going to continue into the second half of this decade. lisa: a lot of people were worried about valuations around ai, nvidia, a 140% gain this year and you have seen it bound over the past few trading sessions. do you agree that valuations, where they are is concerning and that there should be retracement before you get to double down on those themes? joe: to a degree. there is a lot a bullish sentiment in the market, so we are careful about that, putting the money to work, but they are backing up valuations with earnings. is that going to continue into 2025? probably not, but we are still comfortable owning this market and broadening out. we like the cyclicals. we still like energy. anything related to transportation and distribution,

we like that space as well. we are bullish on defense spending, given where we are. yes, there are parts of the market that could be allegedly overvalued, but this is backed up by a strong economy with good earnings, good consumption in foreign demand. jonathan: joe, build on that. energy, defense, is there some connection between the two? joe: absolutely. what's the premium? the u.s. is relatively energy independent. there's only one country that can really feed the beast, right, the ai beast in a relative way and that's the united states because we are energy independent. if you want to drive data with ai, you need energy. who needs the su has the energy? the united states. we will pull ahead because of our independence with energy.

we will pull ahead of the rest of the world and that's the bet that people are making. jonathan: what about buying utilities or energy providers? oil producers? energy producers? where my going for that trade? joe: transmission, distributees, people don't talk about it and we've got to get better. we have to be able to take all of this renewable capacity and plug it in. it's that simple and we are missing it. that's coming down the pipeline. more infrastructure on basic transmission distribution, beating it out, that's a whole new ballgame for u.s. competitiveness. lisa: i want to be at the independence day at your house, joe, seems exciting. when you talk about energy on a day like today where the rices are climbing to their highest levels going back to april on

the heels of hurricane beryl, the first one on record going back to the 1800s that really has reached that category five level, how concerned are you about a potential spike in prices over the summer if there is some sort of hurricane season that is as violent as some are worried about? joe: short-term, the spike up, there's plenty of oil out there, globally, not just in the united states. yes, if that is a concern, it could come back longer-term on everything we just talked about. it's that demand for electricity, ev pots, we are watching the hurricane season. when it comes particularly to insurance companies, housing and these other businesses we have been talking about, that's an issue. the climate change mitigation is broadening out for insurance companies and it's going to affect more consumers and that's going to be a big issue in the second half of the decade.

jonathan: brett, back in the high 80's. joe, good to hear from you. key theme for joe, preference for hard power, defense, hardhats, infrastructure. what did you make of that? lisa: it's a nationalistic type of agenda. increasing the defense spending, military, building your own industry. he's betting on what we have been hearing from every politician and frankly, he's not alone. jonathan: it's a big thing at the moment. checking on your stories this morning, we do that with our bloomberg reef and dani burger. dani: headline inflation slowed in june adding to evidence that price pressures are gradually moving towards the ecb to percent target. however, service inflation was stubbornly stuck. at the annual retreat in central portugal, the chief economists philip lane said he had lingering questions around it and data had yet to settle.

christine lagarde for her parts at the central bank still needs more time with the region still facing inflation uncertainties. the yen is hitting a 38 year low after a selloff in treasuries. vanguard is now predicting the end, it could get weaker to 170 if the decision at the end of the month fails to boost bond yields and that's putting pressure on the central bank intervened. the head of international rates said that a repeat of the yen buying spree in april would do little to halt the tumble. the paramount saga continues. barry diller is considering a bid for paramount. he lost a bidding war for the company decades ago is said to be making an offer for control of the parent company. the owner of cbs and mtv has been weighing options for months

and can close to a deal with the david ellison sky dance media before negotiations collapsed. that is your brief, john. jonathan: this is becoming tedious, isn't it? lisa: i felt the same way. i was sinking -- just buy it, just get over it. [laughter] jonathan: dani we'll be back in 30 minutes with an update, if we have one for you. up next, attempting to shift the narrative. >> no one is above the law, not even the president of the united states. today's supreme court decision on presidential immunity, that fundamentally changed. jonathan: that conversation, just around the corner. live from new york city, good morning. (♪♪) (♪♪) (♪♪)

(♪♪) beaches rhythm and blues caribbean sale is now on. visit beaches.com or call 1-800-beaches. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

jonathan: here's the price action on the s&p 500, negative

in the bond market, just about unchanged. the foreign exchange euro is weaker, 107 point 13. much more from christine lagarde in about 15 minutes. under surveillance this morning, attempting to shift the narrative. >> no one, no one is above the law. not even the president of the united dates. today's supreme court decision on presidential immunity, it fundamentally changed. for all practical purposes, today's decision almost certainly means that there are virtually no limits to what a president can do. jonathan: five and slamming a supreme court ruling that could allow donald trump to escape prosecution for his role in the january 6 riot. looking to move them it -- narrative away from the debate last week. a growing number of americans are questioning the ability of the president to serve. joining us now, jeanette, i've got to say, you were on the money when it comes to what you

were focused on, the tight senate races we should all be watching. if those start to shift, these that's this president might be in even more trouble. what do you say about that now? jeanette: great point. it's a big thing that we are seeing coming out of thursday, everyone is worried about biden being at the top of the ticket and potentially having -- having that debate performance that didn't change the trajectory the way he wanted. the bigger impact is what will happen in the down ballot races. one thing that's really important is you are seeing democratic senators in general where it's more difficult to unseat an incumbent senator in states like pennsylvania, wisconsin, and arizona who are currently outrunning biden in the polls. i think that if you start to see the numbers really change direction over the course of the next few weeks, right now the democratic party is rallying around biden, saying that he

will remain at the top of the ticket, but if you start to see deterioration in the polls, with fundraising in these down ballot states, it will pose a lot more trouble for the democratic already in november. you mentioned polling, fundraising, down ballot. some of the numbers i've been seeing say that there is no problem whatsoever. what are the numbers you are looking at? right -- right -- jeanette: right, good numbers over the weekend, there are concerns that the republicans are having good fundraising that is eating into the fundraising advantage that biden had earlier this year. but right now there is this rallying around him, right? the president came out to speak about the supreme court decision, this is him trying to reframe and get those images of thursday night out of the public view and put some new images out there. him taking that stand last night to make a statement was

important for the campaign to try to reset and change the narrative a little bit away from that debate performance to be more presidential. i think that we will be watching those numbers and right now everything seems to be ok, but the next couple of weeks are going to be really critical. lisa: there is some discussion of the dnc, the democratic national convention committee thinking of pulling forward the nomination of joe biden to try to throw a sense of support behind him. is this the right idea, given the fact that the anger is still out there very much so and there is a question of why the internal circle around biden isn't necessarily being more transparent about this process? jeanette: right and this was something that was kind of planned a little bit earlier. they were thinking about doing it before august 7 because there have been issues with the ohio ballot and the party wanted to have him basically nominated early just so that there could

be any turmoil at the convention in august. if you have a contentious convention, it doesn't generally bode well for the party ahead of the election and that was something they were trying to avoid. but one of the things they are trying to do now is think about -- well, we can actually move this forward and then solidify biden as the nominee. you can't have people trying to throw another name into the hat at the convention. ultimately, this is going to be for better and for worse down to biden making a decision about staying at the top of the ticket or stepping down. he can do that at the convention, that could be messy with multiple delegates having votes to figure out who should be the next nominee. or we could say but sc biden staying in the entire time. but the move to have it done in july is a way to try to squash dissent. if he can keep his numbers up over the next couple of weeks,

we don't see great deterioration in polling if he can keep making statements like last night rather than last thursday, that could allow him to stay at the ticket. this is something to definitely be watching. lisa: yesterday we had a series of guests talking about thursday night as a game changer in they were looking at the much higher likelihood of a republican sweep, going to your first point, watching the down ballot to see how many people basically stay home or are not excited about the top of the ticket and do not feel like they are being heard by the democratic party. how much of that is something you are seeing is a greater likelihood today than thursday morning? jeanette: i agree that there is a greater chance for republican sweep in the election but it's important to not assume that would be the case. the down ballot races are important. we have seen that it seems there is a much bigger problem with

biden and harris at the top of the ticket rather than an overall problem with the democratic brand. there are house races that have done well and races where the democratic candidates are outperforming biden in key swing states. the other thing that i think is important to watch is we don't want to just watch what the holes say, we want to see actual results, so we have been watching the special elections that have occurred since january and democrats have outperformed by 11%, indicating that there could be some ticket splitting this year, voters might vote for trump at the top and then democrats in the house or senate races. the important thing to remember is that currently congress has tight majorities in the house and the senate and it will not take a lot of seats one way or the other to really move that. there is still a possibility that maybe we don't see a republican sweep, we see a divided congress. jonathan: there's a distinct

sense that a lot of people in this country feel like they are being lied to. a division between the campaign and the rest of the country and i don't know what this campaign does about that. if i think about the stories from over the weekend, cnn was even blame for the makeup that they used on joe biden, as if that was the problem. what do you think they are going to do over the next four months to try to write course but we saw not just on thursday night before the last 12 months? jeanette: thursday's debate definitely increase the concern in the president needs to try to change the race, as it is currently a referendum on his first term, with an approval rating hovering around 40% and that's not good if he's looking to get elected. there are key factors to look for in the coming days. the court decision yesterday, we

saw the biden decision to try to change this and he tried to frame it as more of a choice and not trump. there's the sentencing coming up next week, things like the vice presidential pick on the republican ticket. so, there are options for the democrats to try to reframe the race to make it more of a choice between trump and biden, but there already is this kind of baked in feeling that voters have been concerned about the age of biden and that wasn't alleviated over the course of the net -- the last week. jonathan: up next, global central bankers meeting as political uncertainty weighs on the markets.

say aloha to olukai golf. waterproof leather. breathable fabrics. spikeless traction. the most comfortable golf shoe in the game. grab your pair today at olukai.com.

jonathan: socks just a little bit softer, down by 0.4% on the s&p 500. the nasdaq and the s&p were both negative, half of 1%. the russell was down .4%. the attention has really been on the bond market over the last 24 hours. the two year has been really, really quiet. the noise is at the long end of the curve. the 10-year yield repricing higher. lisa, just pricing the arts, the higher odds of a front end, higher tariffs with a threat of higher inflation. lisa: not just a trump win, but

a sweep, that's what we heard from multiple guest yesterday. watch down ballot. there will potentially be independents to stay home and don't want to go to the ballot. at this point can you start to price the yield premium? is this a many bond market tantrum giving you a sense of what's to come, or is this a blip as people look or an edge in a edge less world. jonathan: this argument that the dollar is going to break down, switching to the fx market that means problem in japan. the dollar-yen is up. the high of the session is 161.74. more on japan in a moment, but in europe, negative by 2/10 of 1%. that includes the japanese yen. even talking about rates, christine lagarde is opening up central portugal in the forum

and talking about rate cuts for this month, for the month of july. it's not doing much in europe, is it? lisa: especially at a time when eurozone inflation is coming down to what's in line with june. getting closer to the target you have some discussion from official saying -- i'm not ready to call out any kind of additional rate cuts. she's trying to have a more hawkish message but the market is saying frankly, it doesn't matter. looking at the politics in your region, the strength of the u.s. and the weakness in the euro, we are not buying it. jonathan: we talk about political risk in france, higher debt issuance, yields are up, spreads are wider, it's a euro problem. talking about the same thing in the united states? that's a euro problem. it's like the dollar wins. lisa: it's that question you been asking.

when do they get to stop borrowing recklessly? the answer is not yet and what will replace it at this time when there is the engine of innovation in ai? jonathan: not the euro, that's for sure. president biden slamming a supreme court ruling that found donald trump has substantial immunity from criminal prosecution for actions taken while in office. his televised remarks coming as his campaign looks to shifted attention away from last week's debate. something he struggling to do. if anything if you are in the market right now you might think that yesterday's decision breathes even more life into the campaign of donald trump. lisa: because it is unlikely that he will actually be put on trial for some of the other existing trials before the election. at this point that won't be as much of a distraction as joe biden would like. look, there is a bigger question and it is something i have felt consistently, the trials and legal issues of donald trump

haven't really moved the needle. it's not what people are paying attention to it hasn't been for a while. people not caring for him will not vote for him and the people that don't care, won't care. . . how do we look at this election at a time where joe biden is facing increasing calls from his own party in trump's remaining quiet because he can let the other party implode? that is what you are seeing happen even as there are real questions about the legality of trump and the things he did. you can talk about the supreme court and you could hear a lot of noise around that because of the anger around the split decision but you wonder if that does anything. jonathan: i agree and disagree. it has moved the needle, but it has helped him and not hurt him over the last 12 months. i remember the polls for the republican primary that had the governor of florida, desantis, head of donald trump by quite a margin. remember those polls? or member why they changed? because trump is suddenly back in the new cycle because of

these criminal investigations. he takes on this martyrdom in the republican party and it has helped him. look, here we are, sitting here -- if anything the sitting president would love to make this a referendum on the former president. the struggle after thursday night is it becoming a referendum on him and he can't get away from that. lisa: you nailed it when you said that ultimately this comes down to a feeling of honesty and if people feel like there is a transparency. this is from "the financial times," a democratic operative who has been there for a long time, there seems to be a level of anger in the democratic party that the inner circle has been keeping things from all of us. this is the issue, you can't turn the page on a fundamental feeling of distrust and if it isn't addressed directly, you will have existential questions heading into november. jonathan: forgive me for playing political pundit, elitist and

doesn't work in politics. this is where they went wrong with hillary clinton. joe biden sees himself as a scrappy working-class blue-collar politician. we have to ignore the fact that he's been doing this for four decades? the fact that the paper of the last few days screams elitism, saying don't believe your lying eyes, what happened thursday isn't what happened and to have people come up and they that you can have bad debates and bounce back from them, you can't compare that to a bad debate between obama and romney. that's not what happened. they got their lights run. lisa: well said. this is what we saw at g7 and globally. there's this issue of trust and outreach -- outrage where people are saying -- hear what we are saying -- and it needs to be reflected. jonathan: without a doubt. let's turn to the japanese yen, traders are paying close attention to the low against the dollar following a jump in treasury yield. the vice finance minister said

that recent moves have been driven largely by guess what? speculative trading. not helping. lisa: especially when bank of america called for the potential for the yen to get to 170 against the dollar. that that is the kind of level you can see. or vanguard sees it sliding to that level. this ongoing lack of response from the bank of japan requiring a rate hike to get traction underneath the yen and in the meantime, u.s. travelers that want to get to japan can get credible sushi for $12. jonathan: is that the feedback you are getting from your tourists on the ground? lisa: color on the ground. jonathan: amazing. 161 point 68 on dollar-yen. central portugal this week, we hear from jay powell and the ecb president, christine lagarde, 9:30 eastern time. this coming between france and the u.k. with the upcoming u.s.

election playing on global markets. great to catch up with you, what is the overarching message coming from central bankers in or trickle? >> there is so much uncertainty. on the one hand, they want to talk about nation and where it could go from here. in truth, they would cut interest rates if they could right now. take the u.k. and france, two massive economies this week with major elections do. france has so much uncertainty about the home parliament there. that will dictate fiscal policy. that will dictate the rest of the yield of course. that is critical for the broader story. it's the same in the u.k., broadly a expected return of centrist labor government questions overgrowth and spending stories. in a lot of ways no matter what the central bankers say, they know in their heart of hearts

that they are busy back home and whatever way the votes turn out will dictate acro economic policy. lisa: which is the reason we are dealing with sufficient data again. facing several under -- uncertainties, it will take time to gather that sufficient data. we saw the eurozone inflation come down in june. pretty much getting closer to target as expected in the region . i'm just wondering if you are getting a better sense from the central discussions around what sufficient data means. what are people honing in on? is it just the labor market as people assess the inflation with the long variable lives? >> there is a lot of focus on the jobs market. especially in the labor world. jobs coming out on friday will decide other or not that is the

case. it's similar in europe with folks on the jobs market. there is also a lot of concern around policy error, the risk of moving too soon. looking at canada, there has been some focus on canada in the recent weeks. the first g7 to cut rates, but then there was the upside surprise of inflation and a lot of people saying that that is why the fed is as cautious as they are. the ecb is trying to contain the narrative when it comes to interest rates. but i think that the entire back story is that most central bankers would say that growth is slowing and they would like munication, but there are so many sticky pockets on the services side of things that are keeping inflation perhaps a bit too high above their inflation targets and that is holding off the near-term rate, that is why at the start of the year they've expected a green light for rate cuts. to your point it is improving harder than expected. lisa: there's a big question

about why the u.s. has remained such a bastion of safety, and why the euro is punished. is it physical? proprietary, questions around the political sphere? or is it simply that the ecb will not be cutting rates as quickly? china, there is a question around weakness in the chinese economy. a little bit of that we saw overnight with the latest data and how much it is one of the pressure points for the ecb trying to figure out how to support growth while countering whatever is coming from a country that they really don't have a lot of visibility on. >> china has a very important policy meeting this month that will dictate where policy goes in china over the coming months. a lot of observers will be watching it closely. will the government be coming out with a progrowth strategy like in the past? expectations are being managed in terms of what they will do

around policy makers disappointing on the downside. but what comes out of china this month will of recep consequences for big trading blocs like the euro zone in the u.s., who do a lot of business with europe. right here right now the bigger driver with the ecb and the fed is there domestic economic story. if we get a reboot out of china, that will certainly become a global factor. jonathan: great to catch up with you. down there in washington, breaking down the latest for the global central bank. remember, jobs or out a little bit later. also, make sure that this is in the calendar, jobless claims come out tomorrow, not thursday, because of the national holiday. jobless claims declining recently. that is in our survey. the survey on friday, incidentally, payroll friday, 200 k is the payroll estimate. down from 272 in the previous month.

still pretty punchy, isn't it? lisa: well, it depends. it depends on where the jobless rate comes in and it depends on what the neutral level of jobs created has to be to create enough jobs for this economy. i would say that the unemployment rate expected to stay at 4% is going to be key. i also think that those numbers will be incredibly important as a forward look at the potential opening for a lot of different companies. jonathan: on the edge of uncomfortable, the jobs data drops friday morning. updating your stories this morning, here's dani burger. dani: the democratic national committee is considering formally nominating president biden as early as mid july. sources say the potential date for the nomination is july 21, when the democratic convention credentials committee meets virtually. the dnc says the plan is not a response to the fallout from the poor debate performance from biden.

homebuyers in manhattan are taking the plunge instead of waiting for rates to come down. according to firms, closings for co-ops and condos rose 12 point 2% this year. with a median price of $1.18 million, that is slightly down but still hovering near records. deals close with a met -- mortgage were up 15% and deals close with cash were up 10.6%. portugal has secured a spot any quarterfinals of the euro after a dramatic win over slovenia. missing a clear one-on-one. both of those chances would have likely proved decisive. the portugal goalkeeper saved three consecutive shots to secure that victory. they will meet france in the next round after they beat elgin . that is your bloomberg brief, jon. jonathan: what a fantastic

european championship this has been. underdog after underdog. lisa: the games have been incredible. even the winners that have been predicted winning by a hair, not exactly getting the victory they expected. jonathan: did you catch the crying yesterday? brutal. lisa: i know. jonathan: i found it heartbreaking. lisa: i get that, it's embarrassing. jonathan: you made up for it, but it's embarrassing. lisa: you need to be there for your team and keep it together, have composure. you don't want to completely lose it. i get it. jonathan: i get it, too. up next, warning signs [laughter] emerging. >> usually they describe it is going up like a rocket and coming down like a feather. that is on the mind of everyone. the job market is still quite strong. it's just been warning signs. jonathan: we will talk about

those warning signs, next. this is bloomberg. ♪

jonathan: welcome to the program. equities in the s&p with scores looking like this, negative on the s&p and pulling back from yesterday's gains in the bond market. yields are higher after going up friday and monday, four point 74, economic data is coming up a little bit later in the fx market. dollar strength against the japanese yen and the euro, and under surveillance this morning, warning signs are emerging. >> the fed dual mandate, great on the employment side, less great on the inflation side. now inflation is coming down, so we have got to think about both

sides unemployment usually goes of like a rocket and comes down like a feather. that is on everyone's mind, that there are some warning signs in the job market. but the job market is still quite strong. it has just been warning signs. jonathan: jay powell speaking at 9:30 ahead of a busy week of labor market data. jobless claims tomorrow, but the main event, the payroll report, friday. columbia south writing that a good labor market is not a reason to wait. the reason to cut is that inflation is down considerably. a good labor market is what is at risk if the fed doesn't. claudia, that's a fantastic framing, can we talk about how good the labor market is at a time when there are some questions around it? claudia: it's good. we are likely to have another job stay where we are celebrating in general.

we had stronger payroll gains for years, the longest stretch of low unemployment since the 1960's and we have continued to have months of wages outpacing inflation. i see exactly what the labor market needs to be doing and to change a lot of those harmful effects around the high inflation we have had already. this is a good thing. yet, two things can be true. a good labor market that is weakening slightly and gradually. we need to pay attention to both sides of that. you know what is -- jonathan: you know what is amazing when we catch up? i hear other people talking about your role more. they are all talking about the next number being a problem. what do you caution people with when you hear people talking about your rule? claudia: there is no simple solution or rule to assess what's going on in this complicated world.

the rules have purpose. i stand by it, it has logic. that's why we need to talk about this gradually labor market, but it isn't to hang our hat on. i absolutely am uncomfortable with people thinking about it as that will tell us we are getting too close to the edge. no, this rule tells me we are in recession. if they waited until it was triggered, they waited too long in terms of getting ahead of a recession. it's about how we use. it's really complicated to read the labor market. we saw that the last jobs day. immigration is playing a big role. so, to say that this is a recession, or that we are close to one, that could be, but we don't want to be complacent about the other stories in the mix. lisa: at the same time, are you

really interested in seeing the unemployment rate more than the headline number on friday? because it is more of a gauge of where the market is in a way that headline numbers don't give given the influx? claudia: the unemployment rate, if you have to's -- have to pick a summary statistic, that's the one to go to. but it's great that we don't have to pick one. and we absolutely shouldn't in terms of looking at the difference, the different pieces of information. the labor market, inflation, consumer spending, it all comes in and it gets harder. we cannot boil it down to a rule. yet i take it seriously that the labor market has gotten weaker. if you look, it is a gradual weakening that is not just the last few months. we've seen it for over a year. policymakers have a forecast and think that the unemployment rate

will be staying at 4% for the rest of the year, but how do your high interest rates do that? how do they stop the cycle? it's an absolute risk i am concerned about and it is a risk that policymakers can still react to if they so choose. but they need to react. the window is closing to get ahead of the risk. lisa: how big is the window? can you put a timeframe on it? claudia: we talked a lot about the fed working with monetary policy lags. in the real economy, and other financial markets. the real economy, that's in terms of orders, multiple orders of interest rate changes taking effect. again, you cannot -- financial markets may turn on a dime if the fed steps up and if we had to deal with some kind of market turbulence. i can change things, right, that day? it's not the same thing as say

giving so that they can balance things out. i am concerned that if and as any momentum could build in a deteriorating or weakening labor market, you just -- what the fed can bring to the table would be very slow moving in terms of interest rate relief. i wouldn't expect the fiscal to bring anything to the table to be helping if we were to go into a recession. jonathan: given the lax, i would love for you to talk about this, on wall street have a habit of making a big deal out of small margins. the difference between july and september. how big is the difference if the fed chooses to move in september over, say, july? claudia: there's the difference in the real world in terms of the economic outlook but then when it comes to inflation,

getting it back down while keeping unemployment low, then there's what it does and markets. if nothing else it would be good to have the fed start really working. the market messaging, this is not disruptive, moving away from the idea that once we are cutting like four times, somehow they have to navigate that around the market all at once. just go once and then we wait. something has become too amped up about this in the market space. the fed has got to get that under control. we will never have certainty about this being the right time to do it. but they need to have tried some better control over it not just written by the jonathan: markets. jonathan:claudia, -- by the markets. jonathan: claudia, great to

catch up with you. we will come back to you. what should the fed do? on her last point, getting away from this idea that once we start, we have to keep going, is the ecb delivering a template on that? lisa: it's trying to. we will see. christine lagarde basically sang don't expect it. but we are not committed. that was supposed to be the template. key question for the reserve is whether or not they can, given their guidance, given the data dependency, move in that way just because. it goes to the point of mohamed el-erian, how constrained are they by being overly data dependent? jonathan: this morning you will hear from chairman powell and christine lagarde. coming up next on this program, david welch, plus jp morgan asset management. the second hour of "bloomberg surveillance," up next. ♪

(♪♪) (♪♪)

sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals. want to save on some of the biggest names in streaming on visit sandals.com the network made for streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month. all your favorites. all in one place. only from xfinity. for more watching and less spending... x marks the spot. do it all on the network made for streaming, and bring on the good stuff.

>> we have to trade the earnings and data coming at us. quite there is room for downside surprised but it may not be yet that we start the down cycle. >> we probably have to pull in the expectations and then be more optimistic about the lagging areas. >> listening to the earnings call. listen to it. >> you can look at it, that's fine.

and then something shocks the system. >> this is "bloomberg surveillance." jonathan: live from new york city, the second hour of "bloomberg surveillance," starting right now. good morning, good morning. the equity market is down and in many ways the jobs data begins today. jobless claims tomorrow, then friday there is a payrolls report. we will hear from chairman powell at 9:30 eastern time. lisa: there is going to be a real question from chair powell about the echoes from austan goolsbee, reemphasizing the idea that if inflation slows materially, where the fed is is materially more restricted. are you going to hear the same

thing from jay powell? indicating that maybe they are open to a sooner move? jonathan: these guys are shadowing politicians, including france over the last couple of years, we have all been thinking about what a trump presidency could mean for the market. how different are things in 2024 versus 2017? the playbook with the economy recovering from the manufacturing commodity downturn of 2015, inflation was not a headwind for consumers. 16 versus 2014 is very important. lisa: karen dawson had the same tone yesterday when she came on the show. saying that basically when you take a look at the unemployment rate, when you began, the wage growth had growing support and

was completely different from where we are to now. inflation being more of a consideration with tax cuts if extended, it won't abide the same sugar as everyone else in 2016. these are the reasons people are saying there won't be the same economic to offset potential headwinds created by tariffs, as well as the other protectionist measures. jonathan: if it had been bond unfriendly, equity friendly, the conversation now is -- ok, will it be equity unfriendly again? 2016, we rallied by 11% on the russell. do you think that is the conversation this time around? lisa: we are coming in at a different level, yields are at a different level. at what point do bond yields, we had this conversation before and then we took off saying stop already. we have to reconsider that,

especially if you keep saying the other names lagging behind to such a degree. that's a reason why we want to understand the bond stock correlation a little better. jonathan: getting to the scores, this is what things look like right now. a 17 basis point move on the yield, it's down to the 10-year this morning. in the fx market, the euro is negative. it was socgen over the last hour. it is not rate differentials or what the ecb or fed might or might not do. it's political differentials on either side of the atlantic. lisa: this is what you pointed out, any political disruption can only be had on the european side because u.s. disruption evidently doesn't matter, it just consolidates things on the dollar. raising the question -- will

there be a longer-term penalty? is it just a positive dollar bet or does it send over to the treasuries? these are the questions that people don't have answers to. jonathan: coming up, we catch up with john over at oppenheimer. we seek -- speak to brian gardner on the stock winners and losers of a trump residency. and the chairman powell remarks, later this morning. top story, stocks are looking for a fresh catalyst as traders look at the election risks on key data, writing that it isn't uncommon in the early bond markets for one or two sectors to lead performance before a broadening takes hold. good morning to you. it's amazing, we are talking people -- to people about the labor market and a prospect of economic downturn and you are talking about in constructive on consumer discretionary. reconcile those things for us. john: my viewpoint in looking at

the economic data shows a recognition of the fact have had 11 rate hikes i the federal reserve and now eight pauses since march of 2022. it is natural that the economy will be slowing. we have been pumped up for quite a while on fiscal policy and the stock market. the economy in general. but i don't think we are heading into a recession. i think the fed will managed to avoid recession this round. as a result, i think market lee cares mostly about revenue and earnings growth. that is something we have consistently seen to be remarkably resilient and the consumer is resilient stateside. it has slowed but it has discounted things. now i get private label at the store. jonathan: how do you want to play that consumer?

john: related to the consumer, i like discount brands, always with him for sales. jonathan: like t.j. maxx. john: very much so. i have to say, we do own some in the portfolios i manage. that's neither an endorsement -- jonathan: of course, understood. john: my point is that in the u.s., we describe ourselves, we justify ourselves with the availability of shopping and being able to shop. whether it is online and we like competition -- we love sales -- i think that that persists. having done this for 41 years, it's always a bad thing to bet against the consumer. now the sector isn't performing well on a year-to-year basis, but that doesn't mean that it couldn't shine from here to the

end of the year as people recognize the fact that we are going to model along through the end of the year and likely see a pickup next year, regardless of who wins the election. lisa: spending is slowing down. citigroup put out card spending across the board and there was a feeling that as we just heard from claudia, the labor market is slowing down and there seems to be this tipping point where in her view the fed needs to start cutting rates get ahead of the protracted weakening. is that important for you on the stock call? john: not as much as it is to some. i think the fed is certainly cognizant of the fact that they are nearing the end of the rate hike cycle in what the chair has said every 10 weeks out of the fomc meeting. it's obvious they are planning to cut, but they are reluctant to cut because they know how

insidious inflation can be in terms of the flameout of inflation. i'm looking for the increased competition in the sectors. competition is the enemy of inflation. you get to see that in times where you come out of an inflationary cycle. initially the input as affected by the higher input, they work reluctant to pass it on to customers. once the press and the fed recognize inflation, people just bite the bullet and spend more of their money to buy the same things. then the resistance starts. then you will find within sectors that competition reemerges, where someone thinks about giving up on unit pricing and gain in volume. it just happened today with ai,

with advanced logistics. it's already begun. lisa: what do the names rhyme with? john: within consumer discretionary, it's the outfits that send you the big boxes you get every day. they buy in bulk. they are competitively priced. people shop. lisa: the walmart, the amazon around the world, heading up the prices and driving the competition. so, this gives you confidence around inflation and the question of whether or not now is a good time to take risk because growth is threatened, how do you sort of play that uneasy balance that, certainly, the fed is grappling with as well as the ecb? john: one thing that is important to remember is that

the intermediate to longer-term investors, i'm not trading on a daily basis, though i can frequently tweak a portfolio depending on the idiosyncratic situation of the names within the portfolio. the trend that is occurring right now seems clear. it's about technology. it is about the industrial infrastructure rebuild from chips to plants and equipment. training people, not only here, but around the world. it is about health care, it is about energy. it is about the financial sector getting more normalized in terms of yield curves. when i see the 10 year treasury at 4.45, that looks pretty good to me. i can remember when the federal reserve had an nation target of 4% and we just said -- if we could just get back to four, 4% inflation, we would sign up for life. it's like give me an 8%

mortgage, sign up for life. it's a different time. we are coming out of the free money and that is -- the people are spoiled. i don't mean that in a let them eat cake moment. jonathan: appreciate that correction. talking about the 10 year over the last couple of days, how idiosyncratic was thursday night? john: not as much as people think. i say this politically agnostic, i think that the biden performance was very well telegraphed by his performance since he took office. he's been deteriorating in his ability to perform, as in an act. politicians have to -- it's like getting on stage and he fumbled badly. but people who act like it was surprising, they were in denial, you know? that's just the way it is. jonathan: do you think of on the

fog market responded to it? john: i think that the bond market is really looking to get attention from the federal reserve and say -- jonathan: hold on, the treasury market is attention seeking? is that what you think? john: if you know bond traders -- [laughter] lisa: always looking for attention? [laughter] john: let me tell you, when i go onto the trading floor, there is always a different, it's a different vibe from the fixed income area to the equity area. a lot of it has to do -- it's not always the skills of trading and finding the opportunities. especially when people are trading for bits. the spreads can be very narrow instead of wide. it is an environment where there is a combination of skill, ego, and people talking their book.

i'm a bull, of course i'm going to talk my book, but i base my book on fundamentals. things just look -- when i walk around the city, things are getting better. it has very little to do with politicians. the business and the consumer are doing what they should be doing. jonathan: good luck when you get back to work today, walking past that front ask. [laughter] perfect description of dynamics on a trading floor in new york city. here's your brief with dani burger. dani: china's best-selling car brand sold a record number of ev's, 426,000 units, in striking unit -- distance of overtaking tesla as the biggest global seller of ev's. tesla's next estimate is 430

9000 alongside a slump in market like china and europe. i gamestop shareholder dropped a lawsuit against popular stock investor keith gill, a.k.a. roaring kitty, for seeking to manipulate the stock in his own gain. late afternoon on monday, he said he was voluntarily dismissing the lawsuit and his lawyers immediately responded to the rest for comments with a dismissal that is without prejudice, meaning he is free to file the suit again. the boston celtics are going on the market. the family who leads the ownership group decided to sell the franchise for a stake in family planning considerations. one of the other co-owners wrote that he still hopes to be a part of the celtics moving forward. they were the winners of their 18th title last month. celtics are valued at 5.1 billion dollars, fourth highest

in the league. $360 million in 2002, purchased four. jonathan: what a bout. -- what a valuation increase. the mavericks. lisa: i was thinking this, how much is exiting at the top and how much is going into more european football games. jonathan: let's talk with steve sometime soon. steve, i'm sure you are watching. we will catch up soon. next, the biden uphill battle. >> it's not ever going to be a case about whether or not biden makes the grade of time, he will have to make the grade every time. jonathan: that conversation is next, from "new york city" this morning -- next. from new york city, good morning. ♪

jonathan: the s&p 500 is a little bit softer, but negative, down on the s&p by .5%. putting back yesterday's gains, we kick off the third order and second half of 2004 in the bond market with treasuries rallying against the grain on the 10 year . 4.4494. and the president biden uphill battle. >> there will be a biden rescue effort going on to try to mitigate it. they also think -- you know, they got four months to turn this around. i've said it before and i will say it again, it won't ever be a case of whether biden makes the grade one time, he will have to make the grade every time between now and the election in order to put himself in the best position to win but now he is starting off a bit behind. jonathan: democrats are moving up the formal nomination process to a soon as this month,

according to rumor, inning to confirm his place on the ballot and refute speculation that he could be replaced. by him gallagher saying that markets should prefer a -- a second term for trump. either way, brad joins us with more. getting into the trades for a moment, thursday night, did that move things for you or was it baked in in terms of your concern of the last few months? >> i went into the concern think donald trump had a slight advantage over joe biden and it went up after it was clear there was definitely a move within the market among the investment community who thought similar. that trump is in a better spot today and that ayden is clearly weaker -- biden is clearly weaker than pre-debate. jonathan: let's run with that to

compare and contrast where we are now with this party compared to where we were in 2016. the low taxes, those paul ryan leaders are gone. looking at the party right now, i'm not sure how pro-business we actually are in the republican party, because there are differences as there always are across parties. do you have a clear read on that? >> this has been an evolution in the publican party for several years. it has become more working class and populist. the paul ryan's of the world are gone. going into the tax debate of 2025, 2026, more than half of the house republicans will have turned over since the house bill was passed and there will only be a handful of republicans on the ways and means committee that were there for the last tax debate. the replacements are far more populist. look at marco rubio in florida, when he ran as a traditional

reagan republican, he has since clearly moved in the populist direction. j.d. vance, and another one on the shortlist could be the trump running mate who represents the ascendant populist wing of the republican party. that's not to say the entire party is controlled by the populist, but they are clearly ascendant. lisa: to that point, why do you think that tech loses either way? brian: big tech is not loved in either party. the criticism in the party is different. for republicans, it's interfering and free speech. for democrats it's not enough content moderation. then you get into the entire antitrust argument and there is a lot more, not -- commonality on antitrust. that big tech is too controlling and there is too much consolidation of power among too

few players. going back to j.d. vance, he said the head of the ftc and the biden administration is one of his best nominees and should be reappointed if there were to be a second term. it just gives you the sense that tech is a focus of the current administration and it gives you a sense that members of both parties do not like tech a whole lot. lisa: it also raises the issue of how different a trump administration would be from a biden administration and if there is a sweep from one side to the other. what do you tell clients about a better chance of a republican sweep and what's the implication when it comes to spending and deficits? brian: i do think that there is a better chance for a sweep. one of the fallouts from thursday night could be to dampen democratic turnout.

so, while there could be a level of ticket splitting between the presidential and down ballot races, if democrats are dispirited and fewer of them, especially the younger voters in key states, don't show up in the numbers democrats need them to, it raises the prospect of a republican sweep. what does it mean going forward? well, on spending, it's tougher. they have been talking about spending over the last couple of years and this administration. traditionally, republicans will highlight spending deficits when they are out of power. look the other way when they are in power. the truth of the matter is that the math is getting such that you cannot move away from it when you are in power in that will become a bigger fight within the republican party if there is united government. on taxes, it goes back to the populist argument. corporations are not beloved

among a lot of populist house republicans. in the tax debate coming up, one of the things, two of the things you can see, one is the top or a resetting. keeping the lower brackets at the current lower tax rate levels. and then bringing in that corporate rate and kicking it up a couple of points to help keep the costs of extending those tax cut as low as possible. jonathan: i have to squeeze this in, tuesday to that of -- november the fifth is about four months away. does the biden candidacy make it? brian: i think he will be the nominee, but i think that time is running out very quickly for him to change voter perceptions. one of the things we have seen in the polls is that they are remarkably stable going back to the fall of 2023. why? you have two candidates so well known by voters across the country. we can say that it's early but the fact of the matter is that

this is the third straight presidential campaign for trump, biden's fourth time on the national ticket in six elections. begging the question -- what do voters not know about them and how likely is it that they will change their minds in the coming months? this is a different election because of that. we could know the answer of the outcome sooner than typical. jonathan: interesting. well said. brian, good to hear from you on this race. four months left? lisa: if it's like the public officials, are they just listen -- looking for attention? jonathan: love that take, the attention seeking bond traders? lisa: they just want attention. give me love. [laughter] jonathan: interesting narrative. this is bloomberg. ♪

the moment i met him i knew he was my soulmate.

"soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title.

>> two hours away from the opening bell. decent day yesterday for the nasdaq. lots of questions about the small caps. if you believe trump labor 2016 works in a 2024, we should be doing quite nicely on small caps. lisa: maybe if you get the tax cuts. but as a lot of people pointed out you were starting in a very different place. in terms of the unemployment rate, in terms of inflation which is higher, in terms of just how much the tax cuts have already been implemented.

how much more sugar is left? jonathan: it's a very different economic backdrop. this is where we are now. yields coming back just a little bit on a 10 year of 445. the previous two days we've pushed something higher like 15, 16 basis points. the biggest curve widening going back to early january. let's go with john stoltzfus' discussion. they are wondering when politicians will wake up and see them. if they really want to get attention, try harder because this isn't going to do it. as much as people cry and moan, you still have the steve eismans of the world saying stop screaming it never has changed. what is going to make a perpetual wake-up call will

ultimately have to do with foreign investors pulling back and frankly, a real ultimate question about if there is a better place to put your money or real questions around the response function of fiscal. jonathan: consensus trade for 2024, and people thought it will be driven by a rate cut cycle that would drive a rally into the front end. the best thing that wasn't on the radar for anybody. lisa: especially in a time when people are saying inflation risk isn't that significant. people are saying that is not the big risk. that all goes to the bull steepening. but the issue is people are truly thinking if you have an increase in assets and increase in tariffs and fewer immigrants, then you are looking at a very different scenario that potentially could pose more of a challenge. jonathan: reignite inflation risk. really starting the question about two months ago around this table, look at what is in this

package, what could be delivered. we might be talking about rate hikes again. >> when anyone talks about this, this isn't political. people trying to distinguish the idea of talking about this objectively at a time where there is so much subjectivity injected into this and any you mention either of the presidential candidate you are accused of one side or the other or obsessing over this. the bottom line is what is going to get through? if you take former president trump at his word, there could be a pretty inflationary policy. jonathan: i always go back to a phrase used on twitter eight or nine years ago. when he said the biggest challenge for an investor was to divorce your political bias from your market call because so many people thought the trump candidacy would be bad for markets. markets were decent, it was the policy backdrop and i'm with you. you have to divorce your politics. whatever you feel about either

candidate, either individual, it's about the policies. not just in isolation, against the backdrop we are in right now. it little bit earlier this morning, in 2016 bond market was crying, begging, demanding for there to be some sort of pick up in fiscal impulse. fed chair after fed chair was going in front of congress practically asking them to do it. that's not where we are in 2024. lisa: that's the reason why one of the most important things is going to be who donald trump as his vice president. is it going to be glenn youngkin? that could give you a sense of what the actual policies will be and whether it is going to be business friendly or much more in the populist vain. jonathan: not as clear this time around. not that it was clear last time around. let's turn to foreign exchange to talk about the euro and the japanese yen.

ecb forum, a little bit like jackson hole. she has talked down rate cuts in july of 2024. hardly parking them for the rest of the year but offering a template for what we could see from the federal reserve. lisa:lisa: something that we've been hearing from a lot of people. i feel like this is actually a cultural difference. jackson hole, you go hiking, you stay in this rustic lodge. this gorgeous, luxurious place in portugal in a vacation spot overlooking seas and having beautiful food. a very different scenario. jonathan: you take the rest of summer off and for some reason federal reserve august lisa: it makes a lot more sense when it comes to business but it is more living to work rather than working to live. it is sort of the classic differential. jonathan: under surveillance this morning.

resident biden looking to shift the narrative away from his agent toward donald trump's behavior, calling on voters to render a judgment of his opponent in response to the supreme court ruling that trump has some immunity from terminal charges try as he may, you can't get away from what happened thursday night. lisa: that's ultimately what we are seeing currently. you can make all sorts of discussions about the supreme court rulings that have come out, that happen fundamental. the chevron taste is more interesting from a business perspective. that said, people have already known all of this. the supreme court is in changing the narrative. it will take something a little bit more substantial. jonathan: i heard one suggestion. his campaign wants to make out that thursday night was just an anomaly, do a press conference. a couple of hours, take questions from reporters repeatedly. show that that was a one off on thursday night. lisa: do a full court, don't protect. stop trying to shield. that would be the one thing that

could potentially shift the narrative. jonathan: not what we seen at all. manhattan home sales unexpectedly rising for the first time in two years. buyers may be doing this. -- viewing this period as a good time to make a move. lisa: i was looking at this article and thinking to myself i wonder why and how much is because people are expecting rates to go down? basically they are having a put on where valuations are which has had something of a ceiling as a result of where mortgage rates are. and if you think about it, the fed is going to cut by 50 or 100 basis points, they can refinance and get a lower premium. jonathan: implicit in that is this underlying assumption that prices go up. do you think prices go up or down? lisa: i've heard arguments on both sides and frankly i don't have more clarity on it. if you have more supply coming into the market and that would

happen after mortgage rates went down, that you could see prices go down and other people say this pent up is so great, the lack of housing is such that there would be resilience. i have a sneaking suspicion it depends which areas were talking about. the sneaking suspicion that the sunbelt you are already starting to see some house price decline. particularly in the northeast. jonathan: could be very, very regional. analysts expecting tesla to report another quarter of weaker sales. he predicted 5.8% drop from a year ago would mark a second consecutive quarterly decline at the company struggles to continue its market dominance. damon welch strength us now from detroit for more. what does the trend look like over the last year? >> looking for a nearly 6% decline from tesla and that is probably pretty reasonable because they are trying -- there china deliveries were down 24%.

two quarterly decline see her and the rest of the year doesn't look a heck of a lot better because the product is kind of stale. there's a lot more competition. tesla i had in -- tesla had a near monopoly on ev's in the u.s. market and a lot easier competition in china and even europe they had this fantastic growth that everybody is still looking to somehow revive itself and it is not. there is too much competition now. general motors, europeans gaining traction. even honda has a couple. even if they only sell them in small numbers, they are taking market share. on top of that, you have consumers scratching their heads over whether or not it is time to go electric. that is not helping them. this is subjective but tesla has a styling problem at this point. that is the cars all look alike. they all have that same look as the model s in 2012. it hasn't really freshened up

with the exception of the cyber truck. you throw all that together, there's just not a lot that is going to energize sales for them unless they really do as elon musk has hinted at, come up with some really fresh product in 2025 and 2026. jonathan: you know that for the bulls on tesla stock they will just say august 8 is on the calendar, that is a big one. the robotaxi is going to change the game. how do you think about that? >> that's going to be the heart. you look at the problems general motors has had an ok, if you want to say that is a one-off, one company that didn't work, but for tesla it will, waymo, they've been at this for more than a decade and they're still only launching these vehicles in select markets in small numbers. the business itself is not generating huge revenue and great margin for them yet and they've got some very good people working on this for a long time. so how is tesla going to come storming out the gate with a robotaxi business is suddenly

going to change revenue and earnings for them? a lot of people have lost money betting against elon but until we know exactly what they are announcing, it is tough to see this thing quickly turning around the perception of the stock and the actual revenue and margins for this company. now, could it generate enough height because it looks really good in terms of the business plan for it? that it gets investors excited again? i think that is what they are relying on. elon is very good at keeping the narrative going and keeping people interested. i just don't see the robotaxi business itself generating huge numbers in the first year, maybe even couple of years. it's a very difficult technology to perfect and a very difficult business model to execute. lisa: we spend a disproportionate the antitype talking about tesla in part because we can't decide whether it is a tech company or a car company. i am more curious about the car company side of it and the other

auto manufacturers that are going to be reporting some of their sales figures coming out today and throughout the month. ultimately there is a huge macro problem facing them and you are starting to see sales slow more generally simply because the average auto loan has a rate of 10%. people cannot afford buying a new car in the same kind of way on credit and they did three years ago. how much are you expecting this to turbocharge the declines that we may see today and the rest of the week? >> i'm not sure we will see a big decline in vehicle sales. i think it could be down because a big chunk of u.s. dealers have basically been doing vehicle sales by paper because of the cyberattack and because of your bigger point, pricing at vehicles and interest rates and overall affordability calculation was pretty rough on most consumers right now. i don't think it is going to be a terrible quarter, but not a

great one. still looking for sales numbers it'd bit below they've traditionally been. vehicles are still pretty expensive. car companies are still playing this game where they are avoiding discounting, keeping prices high because it is better for profitability. but consumers are squawking and saying no more, i will just keep driving my vehicle for another year or two and the repairs aren't as expensive as the monthly payment at today's interest rates. it is sort of like college tuition. at some point consumers say i'm not going to pay it anymore because it is too much and that means carmakers are going to have to start discounting if they want to keep the volume up. you are seeing a bit of that. hyundai and kia are doing it. ford and general motors have health pricing that we will see how the numbers come in. if they want to keep volume going they are going to have to get prices down. not to crazy discount levels,

but something closer to pre-pandemic levels. you are still seeing people by vehicles well above pre-pandemic prices right now. jonathan: it is a tough market, super competitive. looking ahead to this tesla delivery numbers. about 30 minutes from now we will catch up with ben callow of baird. talking about a growth company with lofty multiple. stories elsewhere this morning, with your bloomberg breeze, we can cross over to dani burger. >> president joe biden's campaign says it raised $127 million in june, the best fundraising month for the campaign of this election cycle. it also includes $38 million raised in the four days starting thursday which was the day of the presidential debate. his aides have pointed to that ability to rake in cash despite his performance as evidence of the president retaining his party support and has not irrevocably damaged his campaign. former microsoft ceo steve

ballmer has passed bill gates on monday to become the sixth richest person in the world for the first time. more than 90% of his fortune is in microsoft shares. gates has diversified as well and slowly has been reducing his fortune through philanthropy, building the $75 billion gates foundation. hurricane beryl is the earliest ever category five storm in the atlantic. it is headed toward jamaica. typically the first hurricane arrives in the atlantic by august 11 according to the hurricane center. with three storms already in the books, the season is running ahead of pace. early forecast called for this to be an active year. and that is your brief. jonathan: brutal. up next, election risks move the market. >> i do think that what happened on thursday meaningfully increases the likelihood of a

republican sweep in november. tariffs are an elixir for stagflation. karis, slow growth and push up inflation at the same time. jonathan: that conversation next. you are watching bloomberg surveillance.

♪ jonathan: let's show you some of the scores. we are negative by half of one person on the s&p. the bond market is where all the noise has been, particularly the long end of the curve. yields lower by a single basis point. under surveillance this morning, election risk moving the market. >> as an investor, perhaps it is a bit early, but you can't really ignore what happened on thursday. tax cuts and iteris, all of

those things end up being somewhat inflationary. >> i think that the risk is that yields to move higher. the other thing we heard is that neither party is considering austerity. >> one of the more controversial policies that the trump administration is talking about is inflation. tariffs are an elixir for stagflation. jonathan: here's the latest. bond traders weighing the potential economic implications of the trump victory in november, a grueling course of wall street urging clients to position for sticky inflation and higher long-term bond yields. ian, this is been a question we've been leaning on over the last 24 hours all the way back to friday. what does thursday night change for this bond market? >> i think thursday night brings into perspective for the market that the election is coming up. i think the market only likes to focus on a couple of things at once and maybe in part the election for the time being, europe and possibly some slowing from the u.s. economy

standpoint, but now obviously thursday brought the election front of mind again and what could happen is we just heard from the surround tariffs and taxes and ultimately with a keep inflation sticky or would even elevate inflation further and what does that mean for the long end of the bond market? that is of the market has been digesting. jonathan: let's talk about the shape of this bond market. coming into this year we had the curve deeply inverted. it is still inverted. a lot of people are looking for the steepener but they thought it would be driven by rate cutting cycle that would fuel a rally at the front end of the curve. that's not been happening. what is happening is despair steepener those driven by a selloff in the longer end of the curve. how sustainable do you think this evolution is? >> you've got two components of the. the front-end remains reasonably right because we for categorically from the fed they do not want to hike rates further from your and you do believe the next move will be a cut, so that does keep them

pinned to some extent. and it is the long end which really can move around, waxing and waning with market expectations for demand and ultimately supply. it is that supply that is going to come to the market if we are expecting further deficit increases across the u.s. it's really that that has been concerning the market to some extent. and a lot of people have been position for this steepening to occur in the trouble they had is the negative carry. there is a cost. having that hasn't worked. and a lot of people then moved out of that risk and we had this knee-jerk reaction over the last couple of days. lisa: very simply, is this a buying opportunity on the long end for you? >> i argue it is more of a buying opportunity in intermediate bonds. i do believe the long end is going to move around based on what we're hearing around the election risk where it is that front-end, the five-year part of the curve held down by what the

fed is up to. and that, you're going to get more confidence that those areas are where you are buying. if you think about a two-year bond today, we are pressing a couple of cuts in. imagine they just do one or maybe yields move a little bit higher from where we are today. but if things do go wrong, if you get a sentence slow down, a bad payroll print on friday, you could see those yields move remarkably lower. i think your risk-reward for owning the front-end makes a lot of sense. lisa: there is this ultimate question of why is that u.s. immune to political risk and liability for the nation's currency, for the nation's bonds ? the way it is in france, the way we seen it stay sticky. if they're going to be a point where there is going to be convergence but french bonds getting a rally, yields come again more aggressively or on the flipside, this type of move to be sustained simply because people are sick of it with the

u.s., feeling like you can always have the privilege of acting recklessly? >> i do think the u.s. gets a bit of a pass given it is the reserve currency of the world but i don't think they are completely immune to it. that is will be seen over the last couple of days. when the considerations are that you're going to get a lot of supply to the market, someone else really needs to buy that and if you want to buy it, maybe they need to be compensated a little bit more so we are getting high yields on the back of that. jonathan: 75 basis point spread between germany and france. i think it is worth repeating. do you think this wider spread between france and germany is the new normal in europe? >> i do think it is the new normal. what we seen just since the results over the weekend, it feels that some of that tail risk of a left majority has been removed. we are going to find that over the next couple of days and over the weekend what actually happens in rents, but fundamentally it does mean that

france is more of a deteriorating story. yes, you could see a little bit more of a relief rally and maybe after next weekend you will see a little bit further, that to me with the somewhere in the 60-70 range for that spread. i don't see us going back to 40 or 50. i think that is just a perceived risk now in france that wasn't there earlier this year. jonathan: when you see it going to 100, 150? >> we started to lean in a little bit. i do think there is the ability for the spreads to go wider, but you would have to have more concerns that they would be some loosening of the fiscal site. and i think the right wing, they are looking at the 2027 presidential elections, they want to be seen as credible for that and they are also looking backwards at what happened in the uk2 years ago and not wanting a repeat of that. i don't expect us to go to 150

basis points, i think we consolidate around here. ultimately you do want to be owning at these levels but you are probably not going to get a huge amount of satisfaction if you are only going back to the mid 60's. i think there's more opportunity in slightly better credits like spain or italy where there is more valuation. lisa: earlier this morning we had john stoltzfus on who said a love the mood to be seen in treasuries has been bond traders looking for attention, thinking they know everything and trying to maybe get some recognition from the government or from the fed. do you think that is true characterization? >> ultimately you go back to the fundamentals. you go back to the technicals and you believe that if we are going to have a higher deficit, more supply to the market, bond investors want to be compensated so they need higher yields for that to happen jonathan: good to hear from you. what is happening in europe and on the global bond market,

ultimately, the strongest pillar of the bond case in europe is that nobody wants to be less -- liz truss. lisa: this is the argument that the market is going to discipline a lot of populist governments and that essentially that was already tested and done and dusted. unclear. i guess that is really the question. one story i was watching overnight is this idea that the union on the left and in the center in rents is kind entering and you are seeing that any more significant way. we start having a different conversation about how much discipline this market can inject on any kind of populist all the seas? jonathan: let's see where we are monday morning and that french bond market. we will speak on tesla, looking forward to that. calling and political provocation in the bond market. which is quite the phrase. going to break down what he is looking for in the labor market with jobs coming up just around the corner. payroll on friday and jobless

claims tomorrow. all of that, still to come.

food isn't just fuel to live.

it's fuel to grow. my family relied on public assistance to help provide meals for us. these meals fueled my involvement in theater and the arts as a child, which fostered my love for acting. the feeding america network of food banks helps millions of people put food on the table. when people are fed, futures are nourished. join the movement to end hunger and together we can open endless possibilities for people to thrive. visit feedingamerica.org/actnow

>> we've been anticipating inflection point in the economy.

>> we are not at the things were falling off the cliff we are definitely coming off the boil. >> if you factor in the fed policy and how the fed will have to react to inflationary environment, that could really push growth down. >> we should take them at face value. a driver for them has to be real-time data. >> once bitten, twice shy. most likely i think they're going to be added behind the curve here. announcer: this is bloomberg surveillance of jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the third hour of bloomberg surveillance begins right now from new york. looking ahead to jobs data at 10:00 a.m. eastern time, job openings in america. 30 minutes before that you will hear from chairman powell in portugal. here is a preview. not mine. dovish signs from sintra. we expect chairman powell strike a fetish tone as economic activity and prices are both slowed according to recent data.

jonathan: he says this at a time where they are expecting the job prints to be 155,000, down from the expected consensus of 200,000. but frankly it comes after austin goolsby really did signal a dovish tone since the tends to have a more dovish tilt talking about have given how much inflation is coming down they will be overly restrictive if they keep rates where they are. the whole idea of a midcycle adjustment bully coming to the floor. jonathan: we've heard signs of this now for the best part of 12 months. they don't want to be responsible for passive tightening. it's going quiet in the core of the committee over the last couple of months because this would really speak to a midcycle adjustment. a couple of moves, settle things down, wait for the data. why isn't that the dominant conversation taking place heading into july? lisa: because there are signs of sticky inflation to continue and whether it has been housing which has continued to be a complete mystery, whether it has to do with commodities showing

conflicting signs, for whether they chose stickiness and service spending, there is an uncertainty of where the inflation beast has truly been killed. there is an issue about whether to focus on the manufacturer that cannot yesterday. it came in disappointing but it also showed a disinflation under the hood when it comes to some of these goods, or do we focus purely on services? we do get the ism services tomorrow to see whether we have that same disinflation trend. that might be the key for the center of the committee. jonathan: three straight months of contracting factory data. job openings tomorrow, the big one because the market is closed on thursday. you will get adp, initial jobless claims, s&p global pmi, factory orders. that is quite a 24 hours coming up on the data front. lisa: a data dump ahead of the key one on friday where everyone is going to be at the beach but they are going to have to dial back in.

he, of all those readings, potentially any kind of aberration could move the dial. job openings might be the most important. if they come down to that pre-pandemic level which is as expected, 7.9 million openings, people are saying that will move the dial because all of a sudden we will be talking about a normalized labor market electing downward. jonathan: will we be talking about normal, or something more sinister? let's go back to the framing over the last three or four months. the difference between a welcome cooling and unwelcome deterioration. do you think this market is willing to see that through rose tinted glasses anymore? lisa: which market? i'd argue probably the front end of the you have already started to sniff out a little bit of welcome cooling which is sorta speaking to the fact that you have a couple rate cuts being projected out. the equity market, some people would say the other 493 stocks have already sniffed that out. jonathan: stocks negative again

this morning, some weakness for you this morning. scores look like this in the bond market after the today selloff. yields are lower by two boys -- two basis points. talked a lot about chairman powell and central portugal. christine lagarde speaking just yesterday to open up that forum, some freezing cold water over a july rate cut. negative about 1/10 of 1%. coming up this hour, we will catch up with john hancock as investors weigh second-half risks. we speak to ben callow as tesla reported second-quarter deliveries and little bit later today and bomo maps out how a trump victory would impact the bond market. we begin with our top story. 90 minutes to go until jay powell speaks at the forum. the fed is likely to be one of the few central banks that can't cut yet. all the cool kids have cut.

the last inflation report was good, but one report does not make a trend. powell likely reiterates that they need further evidence to be confident that inflation is going to their 2% target. matt is with us now for more. i'm not going to say they are ignoring some of the weaker labor market data but it is not as important. >> initial jobless claims still around 200,000 is fine. if you look at initial jobless claims as your primary input, the signal that is going to show you the labor market is deteriorating, at 230,000 it is still not bad. about 300,000 is when the fed is going to have to pick up more and start to cut. but the inflation data just in the last month was great and we all celebrated. in q1, it wasn't great. we need more data points for the fed to be confident. you are getting pete ray eels in the united states.

just be patient. higher yield right now is a gift. i know we've been talking a lot this morning about it maybe being politically driven, but inflation does come down over the course of the year and chile the fed does cut, this higher yield will be an opportunity. that is what we would look at in this bond market today. jonathan: you went to the politics so i will add to it using your words. there's a lack of geopolitical risk being priced into markets on the s&p 500 and high-yield spreads only 3%. regardless of the election winner, either one will be taking an economy that has been benefiting from massive fiscal stimulus that is unsustainable at this pace. we've been asking this repeatedly. thursday evening, how does it change this bond market not just for next week, but for the next 12 months? >> i just don't see it. you actually said it best earlier when you said it is all about the context.

under the biden administration, the best performing has been the energy sector. and i'm not talking alternative energy. i'm talking drill, baby, drill texas energy companies. how did that happen? because they were down a lot prior to the 2020 election. they were really cheap and they did recover. it was a private sector. the private sector is going to be dominant here, coming off of all this fiscal policy that is likely to decelerate regardless of who is in office. we think the bond market is getting a bit spooked but we actually believe that over time it is going to be inflation that drives it. if you don't have a major pandemic or shutting down the economy for therefore fiscal policy that is historic in nature, that trend probably continues. so he for the think it is all about the context and whoever is going to be in office in the next four years is likely going to be seeing a deceleration in inflation back to the old demographics driving the

narrative and the backdrop of growth environment, and things are expensive right now in terms of equities. in our view, we would look at bond yields as an opportunity. we would look at defensive part of the market as an opportunity, because there are some risks out there. but politically, we would divorce that from your investment decisions. lisa: so a buying opportunity when it comes to 10 year yield in particular, is that what you're saying? ian steely is saying that is a risk. >> we do like the 10 year. right now you think about the intermedia partners curve. we are getting in at 5% on the u.s. aggregate bond index. it is still near those highs of the last 20 years. if you could do 5%-6% with even a little bit of a credit by us, we think that is going to be a very attractive return. we are thinking about trading this around all this economic

data. the election. think about high quality bonds. if you get that over the next five to seven years, that is really what bond investors should be focused on. not all the noise. right now you really need headphones that are going to be really good at noise canceling. that is what investors should be focused on, just the income component. on a global basis, u.s. yields are really attractive. they are the highest vs. chinese yields and history, a lot higher than european and japanese yields. so you got the best yields in the world. you've got to be patient for that duration tailwind but when it comes, you make it five years of bond returns in 12 months. and if you are out of it and you are not fair, you are not able to get it. lisa: which raises questions that how bearish you are on the u.s. economy because you think that inflation is going to cool and any new president is going to be dealt a pretty bad hand when it comes to fiscal stimulus

coming off, inability to really stimulate more. a lot of the rightsizing already happening, a lot of companies. what does defensive mean in the equity market rest of the big tech names have been called defensive, value and everything else? >> the quality and the momentum factor frankly dominate the u.s. equity market. and we still like the quality factor. we think that good balance sheets. you don't need capital. companies that don't make money right now need capital and it is the expensive. we think that's going to continue for the end of the year. and then we think defensive equities like dividend, utility type companies. we think those actually get more love into the end of the year and next year. they have been unloved, and even in bonds, higher quality bonds have really liked credit and lagged equities. those could actually make a comeback into next year. so there's a lot of defensive options. in terms of the economy, we do

think it is ok but it is hard to get a real gauge because it has just in some medicated with all this fiscal stimulus. you take that off, but that is going to have to step up and be the next one to stimulate and we think that is a 2025 story. we want to position before that and there's a lot of defensive options on sale. jonathan: i got to ask you, do nvidia make noise canceling headphones? >> that will be the next thing. apple with a robot or something like that with noise canceling headphones. investors are going to need nerves of steel and you guys are going to be at the forefront of it. it's going to be interesting either way but for us it is that entertaining and making sure investors are focused on the things that drive markets like earnings, the economy, and focusing on risk management. jonathan: appreciate the education, thank you sir. equities, too. serious dimension to that question.

thinking about noise handling headphones made by the treasury, made by nvidia. what are people seeking out to cancel the noise? lisa: they've been made by nvidia for the past six months because people are saying ignore the political noise, ignore the macro economic noise, take a look at the cash machine that is nvidia and say that sounds good. the question now, i go back to that statistic saying that basically the top 10 stocks account for more than 30% of the s&p 500 when you look at the market cap, but only 24% of the expected profits. that is the issue. at what point have people gotten over what they expect? from the cash counts currently, how long can they continue to have those incredible rates? jonathan: nvidia down this morning, about 4/10 of 1% on the s&p 500. let's get you an update on stories elsewhere this morning with your bloomberg brief. >> after the supreme court ruling, donald trump is making a fresh push to have his new york

hush money conviction overturned. the u.s. supreme court ruled yesterday that trump has substantial immunity from criminal prosecution for actions taken while president. bloomberg reports as lawyers are taking steps to request that the verdict of his new york trial be tossed out. lawyers are also proposing delaying his july 11 sentencing. and more homebuyers in manhattan are taking the plunge instead of waiting for rates to come down. according to miller samuel and douglas element real estate, closing spike 12.2% for this year compared to last year. the median price of $1.18 million is slightly down and still near record highs. deals close with a mortgage were also up 15% while deals closed with cash for of just 10.6%. and a gamestop shareholder has drop a lawsuit against roaring kitty. he was accused of seeking to manipulate the stock for his own gain any proposed class-action lawsuit filed on friday.

but late afternoon monday, he said that he was voluntarily dismissing the lawsuit. his lawyers did not immediately respond to request for comment that the dismissal is without prejudice meaning he is free to file the suit again. and that is your bloomberg brief. jonathan: up next, some morning calls plus there is been callow as investors away tesla deliveries and little bit later on that conversation coming up next. from new york city this morning, good morning.

jonathan: let's go to the bond market first. i want to talk about treasuries briefly. repricing higher over today's friday and monday. yields a little bit lower today. what will change the story? we need endeavors dovish pal, good jobs and a good payroll to

stop the steven wright of funds toward high-yield and a steeper curve. the election cycle has now made its way into the bond market and don't forget to keep the yen and oil on your front screen. this is important, the election and what it means for this bond market going forward. lisa: i'm glad that he brought the sub, given that there is this increase under the hood in crude. this is really the thing today. when do people get conviction to go into long-term treasuries at a time when there is a lot of political uncertainty and it is not clear that the fed to get ahead of that? the fed is sort of deemphasized right now given that the political noise, those noise canceling headphones just aren't working. jonathan: equities and session lows, down about 4/10 of 1%. first up, guggenheim predicates target on mcdonald's. the analyst removing the best idea designation but noting long-term structural advantages. next up, price target on cosco

raised to 900. the big box chain accelerating grocery share gains over the past five years and finally, baird maintaining its price target. saying that while delivery numbers still matter, he sees attention shifting ahead to the august 8 robotaxi unveiling. that stock is down by 1.6%. that's get to it. we will separate those stories and start with deliveries. then begin talk about august 8. what you expecting today on the delivery side of things? >> good morning, thanks for having me on as always. we are expecting 35,000 deliveries. i think deliveries are expected to be weak, so if they get close to our numbers i think the stock reacts very positively because everyone is looking ahead. first to the robotaxi event in august, august 8 and really into next year with the next generation vehicle platform

coming online. jonathan: you can tell that because if we were looking at a company that had two negative quarters of earth we would be wondering why it is a growth stock, but it still is. particularly starting august 8. how much of a game changer is august 8 and when can we expect to actually see this rollout and livery top and bottom line growth? >> first, robotaxi. tesla owned their own fleet, we think they do. probably as early as next year, sometime next year. then start rolling out the option to its car owners to use a robotaxi type application where they get their cars and rent them out to other people. i also think that we probably could get a reveal on the next generation platform which should

include multiple different vehicles. i don't know if they show them all at once, but this is something that the market is looking forward to. like you said, stagnation in the next generation platform really get you back into that growth mode area they said that they start ramping up production late this year into next year. lisa: shares currently around $208 each. you're saying 35% upside. i'm just curious about how big the bar is for you on august 8 to really justify that valuation, whether if they don't meet your expectations you would actually become bearish in the name. >> well, just overall, me included and investors all over have fatigue around mosque saying full self-driving will be here in one year. he's been saying that for five years. this is a very difficult problem to tackle.

many companies are trying to tackle it. but i do think that mosque has learned over the years about timelines and i think putting this event august 8, they say realistic chance that we see cars on the road performing robotaxi application within the next six to 12 months. lisa: one aspect that people don't talk about is just what is the kind of lag time to get some of the trials up and running for the regulators sign off on? back in texas when they were having some of the robo cars being tested out, i know that gm has had some snafu with the robotaxi type of service in san francisco. how high is the bar just to get it up and running and profitable, and is that important to you? >> it is important. they will choose a location specifically where they can get cars out to the road soonest.

areas in phoenix, different states have different rules around putting self driving cars on the road. i do think that is probably the lag time six months from august before they get cars on the road is more from a regulatory perspective that a technology perspective. one key thing that we are looking toward is when tesla starts taking liability of the full self-driving. right now they caviar everything. you have to all the steering wheel. when they start removing that type of thing, that shows they are taking some of that liability on, and i think that shows the technology has evolved to where it is really functional. jonathan: appreciate the update. i say we are looking forward to the numbers and ultimately what we're hearing at the numbers really don't matter. what matters is what happens august 8 and what they are looking for in 2025.

lisa: as of now, the numbers don't look very good. today it is being reported that china sales fell 24%, which isn't small. remember we used to say that china matters. it doesn't, evidently, because of robotaxis. at what point do you have to see something that can deliver profitability in order to continue to feel bullish? jonathan: change the subject. this is from bernie sanders, the president. op-ed piece published in usa today. they want lower prices on ozempic. this is the quote. if other pharmaceutical companies refused to substantially lower prescription drug prices in the company e andnd their greed, we will do everything and have power to end it for them. talk about trying to change the subject thursday night. lisa: i do love the story. first of all, shares didn't initially have a 3% drop. they currently fallen to less

than 1%. not exactly a massive move. it is an interesting moment. president biden and senator sanders in the usa today newspaper in the united states. a question of basically saying if you are on ozempic and paying $1000 a month, we are going to be there for you, we are going to cut your student loans. it is sort of like all right, i understand you're basically flooding the zone. at the same time, how much does this ring true at a time and ultimately it is up to medicare and medicaid when they have been pushing back to the far as coverage goes? how much can you potentially do this, the legality of it. talk about changing the subject. jonathan: or attempting to. attempting to is probably the right way of framing this because they are not going to be able to change the subject. they can keep trying that they are not going to be able to. lisa: what are you talking about? i'm just thinking about ozempic. i'm being somewhat facetious. you just wonder how many pieces

are they going to pull out to try to shift the topic and at what point do they have to actually address the elephant standing in the room on the table just saying hello, here i am. jonathan: it's not going away. you have to keep remembering why we did that debate at the end of june. to get this campaign wanted. they wanted to get voters engaged ahead of november. they thought it was going to help them. it hasn't, it has hurt them. lisa: i wonder if donors are going to push back. how much do donors say can we shift this in the bid? >> how do i know who to trust now? passing his war chest of money onto someone other than kamala harris. jonathan: we will focus on that. (♪♪) sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals. [introspective music]

recipes. recipes that are more than their ingredients. ♪ [smoke alarm] recipes written by hand and lost to time... can now be analyzed and restored using the power of dell ai. preserving memories and helping to write new ones. ♪ the moment i met him i knew he was my soulmate.

and helpi"soulmates."new ones. soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title.

jonathan: let's get you set up for the next 60 minutes or so. german pal speaking about an hour from now. the ecb form. looking ahead to all of that, equity market negative by 0.4%. taking noise some of yesterday's gains. in the bond market taking maximum yesterday sellers.

lisa: over a john hancock, it is a buying opportunity. the question is, especially as it gets noisier and noisier, a lot of us don't have noise canceling headphones. november looms large. expect more of this. jonathan: you can't cancel it out. the front end has been quiet. i want to talk about that briefly, why the front-end has been so quiet given these conversations we are having. lisa: partly because the fed basically said they are not going to raise rates, full stop. you've been raising this over at the ecb where there's been a similar trend. are they going to be the leaders in terms of cutting rates once and then not cutting again? what we heard from philip lane over at the ecb during the conference is essentially there is a fundamental question on services and that is a global question. at what point do you see true

disinflation in the area akin to at the central bankers need to seek? jonathan: let's check out the euro, it is weaker today by about 1%. the dollar stronger against everything that the exception of the british pound and the canadian dollar. we get close to 162 earlier. done a hundred times we have to say this. the verbal intervention is not working. a new record post-1986 if the bank of japan does not raise rates at the july meeting, at this month's meeting. this is the key question, how will they be a response that a time where some people are saying the authorities aren't that alarmed. they do get a low tourism. i don't know if people like that were not in japan, but i first secondhand that it is actually quite a good time. jonathan: the tourists like it,

that is for sure. under surveillance this morning, sources telling bloomberg the democratic national committee is considering formally nominating president biden as early as july 21. the party had already planned to nominate him before the august convention. this conversation now accelerating this is a big benefit because we can put event this idea that we are going to change the top of the ticket. lisa: what interesting to me is that joe biden and questions around his with it-ness have been percolating and baking into the polls for quite some time and if that is the case there are going to be people in the biden campaign who say he still has a chance to win, especially people who are close to them who will remain in power. many pave the way for somebody else. jonathan: the way they've been

seeing development in the bond market, they see things very differently. thursday night with this major game changer and be set on this program yesterday friday like the first trading day of this campaign in 2024. like the first day where you felt like people point just thinking about trades, they were starting to express them. lisa: partly because it raises question of a suite. who is going to cannot during the election? how do you get turnout when there isn't enthusiasm for either candidate? how do you raise that enthusiasm down ballot? jonathan: yields have been climbing over the last couple of days. this morning pulling back by a couple of basis points. down two or three basis. another story for you, considering an offer for paramount. new york times reporting that diller has signed nda's with his parent company. paramount has attracted other suitors including david ellison.

this has been going on for a while. stock is up by 3% or 4%. you were tired of talking about tesla. how tired are you of talking about this? lisa: i'm waiting for the special to come on netflix at paramount's purchase. jonathan: this has been going on forever. lisa: at a certain point, how many different media moguls can get trying to buy into this area? at what point does it become a thing that could potentially be highly profitable and consolidate some of the media that we oliver sorg? -- all absorb? jonathan: investors keeping their eyes on this week's long list of potential catalyst starting with remarks from jay powell at 9:30 eastern just ahead of jobs data followed by jobless claims tomorrow. there is so much data tomorrow. adp, isn, take your pick. mike mckee is with us around the table. let's get to 9:30, 10:00.

>> looking for jay powell probably not afraid a whole lot of ground today because there is still dated to come. he's speaking a lot this month so he will have other opportunities including the week after next when he goes up to capitol hill. he's probably going to keep it fairly generic instinct to the idea has more to do and we will make our decisions at the data comes in. 10:00, the number is going to be interesting because it has been something the fed has focused on. the fact that the labor market is very tight and now it is loosening up and i've got a chart here that shows what most of the endless notes i've been getting are focused on, and that is the ratio of job openings the number of unemployed people. to see how the unemployment rate goes down when the number of job openings is up. that is very logical, basically the beverage curve. you can see the number of job openings is just about at the level it was before the pandemic. people are saying that will signal if we get another drop,

that will signal that we have finally gotten to the point where the labor market is loosening up. lisa: beverly given indication for the federal reserve? i remember when people used to say that it was difficult to believe it was difficult to believe too much conviction, and then the fed leaned entirely on that to make one of their moves. are we going back to that kind of point? >> not entirely, but it is going to suggest that what they see in other labor market data is probably correct and by that, we are talking friday. the jobs report and the unemployment level, whether that continues to rise or not. >> we seen a lot of concern about ongoing inflation in services, and a lot less concerned about goods in terms of disinflation. is that the reason why nobody seemed to really mention yesterday's manufacturing data? that everyone is looking ahead to other metrics? does it sort of makes sense that there are certain things that

don't suck up a lot of the oxygen in the room? >> there's a lot of things sucking up oxygen in the room and i suspect yesterday's supreme court decision did a lot of that. we did see because of the ism number at the atlanta fed lowered its gdp forecast for the quarter to 1.7%. remember a week ago we were above 3%. that will change as we continue to go forward into the month of july and we get more data. markets are probably going to focus more on the idea. i heard you say this earlier, how fast is the economy slowing down? we know it is slowed down, but is it at a point with the fed would need to start thinking about taking action to present a problem? in that case, they are looking for the jobs report, the unemployment numbers to give them a sense of how fast things are going. jonathan: just yesterday, seems to be a bigger focus on the jobless rate and the actual jobs

number on friday. lisa: am sympathetic to the idea that we can't really understand the headline here because the actual labor force has increased so much. so wouldn't it make sense that you need a greater number of jobs getting created everything among stay stable? it is sort of like inflation. essentially if the population is inflated, the number has to change. >> it's been this argue that immigration has raised the number of people available to go to work but immigration has dropped off a lot in the last couple of months so we are sort of expecting that to go backwards. friday i think we are going to see a lot of people bringing up the roulette you had this morning. she said she's not paying as much attention to it right now because of the reason you were talking about, that the denominator rises significantly. but if you look at the rule in the past, it has basically always predict of recession or that you are in a recession. and we are very close right now.

we need a half basis point move. we are at 0.37. it would only take unemployment going up to around 4.2% on friday which is certainly a possibility for us to trigger that. claudia says it may not be accurate, but trust -- doesn't -- just try to tell wall street people. if you get that 5% you are going to have a lot of doom messages. >> it is pretty funny that the one person focused on it is claudia herself. let's continue this conversation and if the panel. great to catch up with you both. ian, what is more important to this bond market right now, the economic data we get this week or the debate that took place thursday evening? >> over the course of the last two trading sessions and has undoubtedly been the political tides in washington and what it means for november. that means that we have payroll on friday but perhaps more importantly next week we get cpi

again and that would give the markets in very good context for whether or not we see that september rate cut jonathan: still some banks suggesting they beat him of this friday is more important than cpi next week. would you take the other side of that? >> i would take the other side of it in a consensus print but if there is a surprise or a sub 100,000 print for headline payrolls, all of a sudden the dual mandate employment aspect becomes a lot more relevant than cpi. jonathan: how are you thinking about that trade-off. does it take some weight away from the importance of cpi next thursday? >> i think at this point the fed really is focused on inflation. the fed needs to see inflation heading back toward the 2% target, and if that is the case,

we can have a strong payroll report in the fed will still think about cutting. i think the fed focus really is on the cpi next week. lisa: how do you understand what some of the data has been saying in terms of slowing but not slow? there is this feeling right now especially as you look more to the inflation print, there has been this feeling that we are on the precipice of something that can be more punitive for the u.s. economy. steve agreed, and if not, why not? >> i don't agree. they spin some mixed ships within the data that make some of the data look weaker than it really is. so for example, consumers are shifting away from spending on goods and food services and toward other categories. for those other categories are not included in the retail sales. retail sales looks weaker than overall consumer spending when markets tend to focus only on the retail sales report. that is part of what is happening is that consumers are shifting toward pre-covid norms

and that is factoring up in some of the date that people are focused on. lisa: do you agree? >> generally speaking on the consumption side, i agree. but i am a bit more concern as it pertains to what is going on in the employment landscape. we do have higher claims, 2.2%. and there are signs that the fed has been a factor in reintroducing balance to the labor market. my concern is whether or not the pendulum swings too far toward the side of cooling and then that starts to perpetuate itself and it is difficult for the fed to address that without some type of policy response. jonathan: i just want to share this quote with you. a good labor market is not a reason to wait. the reason to cut is that inflation is down considerably. a good labor market is what is at risk if the fed doesn't move.

how do you think about that framing going into july meeting at the end of the month and ultimately when chairman powell speaks in about 45 minutes? >> i would say i'm a little less greed about the labor market at this point than some people are. one reason is that corporate profit margins are close to the highest level since the 1960's. and corporations are not inclined to do massive layoffs with profitability that strong. jobless claims are in the 200 30's. this still looks like a pretty good labor market to me. what has happened is the labor market has normalized rather than weakening sharply. jonathan: this has big consequences for the shape of the yield curve. we were looking for steepeners but we thought it would be driven by a rate cutting cycle cooling the rally at the front end of the curve. could you just put some meat on the bones, are sustainable you think this move actually is? a distant birding yield curve

driven by the long and? -- the long end? >> we all know the story has to do with potentially trump regain the white house and some inflationary implications of that. that is why we had a fair steepener. now transitioning this to a bowl of -- bull steepener i think will require at least an additional flattening impulse at the economic data starts to deteriorate, but eventually what we will see is when it becomes abundantly clear that the fed is about to start normalizing policy rates lower. two-year yields will drop and then price in an extended cycle so we could easily see a 50 or 60 basis point rally in the two-year sector when the process starts, and mansion stephen the yield curve and put the benchmark back in positive territory. lisa: do you kind of agree with

john stoltzfus that this is essentially the bond market looking for attention from the fed? >> to a large extent, the bond market is heightening for the fed at a moment where the fed is considering filing it back. so i do think that to some extent, this is a reminder that they do matter in the treasury market, but only within the context of the prevailing range. even mind, 10 year yields are still below 450 and the real economy still appears to be on strong footing for the time being. lisa: you fit in the market for decades trying to analyze the moment. i'd love your insight into how realistic we can be about some of the potential scenarios that are being priced into the bond market with really thursday night being thought of as a watershed moment. really looking for the potential for a republican sweep and the idea of some of the fiscal policies as well as tariffs put into place.

is that something that you are actively gaming out and think is a bettable type of option? >> we always want to be thinking about all of the various scenarios. but ultimately, market stubbornly price things in until it is pretty sure it is going to happen. before it finally settles on what is going to happen. jonathan: this was great. before we get that first sniff, that scent of jobs data this week when we get the job openings at 10:00 a.m. eastern time. equities on the screen negative by 0.4%. about 43 minutes away from the opening bell. let's get you an update on stories elsewhere with your bloomberg -- bloomberg brief. >> president biden teaming up with senator bernie sanders in

usa today. the two are taking on drug prices writing with be clear, it's not just congress that needs to act. prescription drug companies must also stop ripping off the american people. drugmakers are called out by name. the letter also goes on to say the biden administration is working on legislation to expand medicare's negotiations on drug prices. a check on shares premarket for you, up 1.2%. the ed maker reported second quarter deliveries just above estimates while also re-informing annual production guidance. bloomberg estimates that tesla delivered 440 thousand or there about vehicles in the second quarter, a drop of 5.8% from a year ago. and the u.s. men's national soccer team has had an earlier than expected exit after a 1-0 loss to uruguay. the tournament enter last night

match. the tournamentcontinued with brazil meeting columbia at 90 5 p.m. eastern, and that is your brief. jonathan: how many people do you think you know that that is being hosted in this country right now? that some of the best football players in the planet are the united states? lisa: i would sam biased and not able to enter that because i'm surrounded by people who might have other interests. jonathan: i don't think they've done a very good job. >> people who know football and soccer no. jonathan: i've heard more about the cricket in the last few weeks than this. jonathan: every day on this set i hear plans to get tickets to those games. i'm definitely biased. >> we've got to broadcast live. jonathan: i'd like to think there's going to be a better ref in two years.

up next on this program will set you up for the day ahead as we can you down to the opening bell. about 41 minutes away. this is bloomberg.

♪ >> jonathan: equities on the s&p 500 -5%. counting down to the opening bell. jay powell speaking at 9:30 eastern from central portugal. job openings data coming at 10:00 a.m. on a wednesday. absolutely stacked because we closed on thursday. all of the above. there is a u.k. election taking place. this week is so busy. friday, the big one, payrolls. 200 k looking ahead to the

payrolls report on friday. david rubenstein and host of bloomberg wealth is the latest interview with josh friedman. you can watch that an :00 p.m. eastern time. looking forward to this one. what do you need to know about josh? >> josh freeman was a middle-class upbringing, boston. went to harvard college. he then goes to a place not as well known at drexel. event drexel imploded. when drexel imploded he started his own firm with a roommate and they built it into a gigantic credit shop which has done very well. $26 billion now. a japanese bank just bought a

big stake in it. they are in very good shape. given spectacular returns to their investors over many years, and he's a very smart person. had a chance to spend some time with him recently and i can see why he's done so well. lisa: it's going to be wonderful to watch, i will be watching and i can't wait to see it. i'm going to shamelessly switch the topic just slightly because we been talking about the celtics. we don't have steve on the show to really respond to this. we want to ask you, is p evaluation time to sell? >> they've owned the team since 2002 so it's been more than two decades. not surprising to sell after two decades. clearly they paid a much lower price. i think they paid low to mid $300 million for it. today isis -- i suspect the team is worth a few billion.

new teams with no players are probably going to go with $4 billion to $5 billion. it's going to be a good payday for those investors. many investors went into it. after two decades i don't think you can fault somebody for being willing to sell their team. lisa: would you be willing to buy if some of the major league -- not just baseball, but the fit of valuations that you see out there currently being floated? >> i would rather buy at a lower valuation then some of these prices people are offering today, but i did pay a fair bit of money for a baseball team. when the orioles came to baltimore in 1954, the purchase price was $2.2 million. and we paid over $1.6 billion. so prices do go up. there's no evidence of anybody buying sports teams in recent decades losing money on it.

jonathan:jonathan: this was great. looking forward to david's interview. bloomberg tv, 9:00 p.m. eastern tonight. do not miss this a little bit later on. tomorrow, james athey will be joining us. kit juckes, jordan jackson, mark mccormick. particularly the best steepener we've seen in the yield curve over the previous two days. >> can i just say it sounded a lot more fun to dance at an orioles game at the orioles are in first base then betting on the macro trends in the market right now. that is all i can say. jonathan: we will have a little chat with david in just a moment. the opening bell about 35 minutes away.

(♪♪) (♪♪) sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals. food isn't just fuel to live. it's fuel to grow.

my family relied on public assistance to help provide meals for us. these meals fueled my involvement in theater and the arts as a child, which fostered my love for acting. the feeding america network of food banks helps millions of people put food on the table. when people are fed, futures are nourished. join the movement to end hunger and together we can open endless possibilities for people to thrive. visit feedingamerica.org/actnow

matt: i am matt miller and we are waiting for an tesla numbers. markets are down. the countdown to the open starts now. ♪ futures losing steam as investors await friday's jobs numbers. central-bank leaders try to manage the message at a gathering at portugal. tesla's deliveries are respected to slump amid a price war in china.