>> the friday morning.

-- good friday morning. we are also on youtube. that is where you will find all of us and we have a special couple of hours coming up. we have caroline hyde joining us as well as dani burger. we will bring you the market moving. the jobs number, all good news. negative revision. so we need to keep an eye on that. we have the s&p up .2%. the dow is flat. the nasdaq is up point 5%. 10 year treasury off of four or five basis points. i thought it was going to be a nice, sleepy friday but news from your homeland and economic news here. caroline: a beautiful macro picture that includes the markets and politics. in my united kingdom, the british pound of .3%. it went the direction many felt

and the larbour party that they can govern and govern decisively. the market likes it. the pound is up in the ftse is up. >> can we expect the u.k. to try to get closer to the eu and will date welcome them back to some degree? caroline: the trade deal negotiated by boris johnson is up for renegotiation in the next 18 months, head of foreign relations in the united kingdom will have to be renegotiating that. they want to make policy easier when it comes to animals, the understanding of the people's qualifications, the ability to travel and move abroad. >> you are flying from london say to switzerland, do you have to do passport stuff? caroline: yes.

>> and you still voted for that as a country? for no other reason i would vote against it. caroline: this is with a generational divide comes. and that is the different. brexit divided general relational he area from area and met -- in the youth were like, i can't travel and work in europe anymore? that is a bummer. >> what are you looking at in the markets? caroline: i'm giving a close eye on the pound and euro. we have the drama to come on sunday in france. the euro unchanged compared to the dollar. we saw the call from morgan stanley to say by french stocks ahead of the election because we are likely to see the worst case scenarios for the markets not coming to bear. there will be some sort of stasis in policymaking in france and a messy coalition but they

feel it has all been priced in. >> we had the unemployment data, non-farms, 206,000. we are supposed to pay attention to it revisions. i know michael mckee it does. what did you see here? michael: revisions, sort of like a dead fish being slapped in the head and it took the joy out of 206,000 jobs added which normally would be good but the prior two months were revised down by the significant amount. it leaves us with the narrative that the economy is slowing. we don't know how fast but it is definitely going down. the revisions show weaker underlying labor market. that is the ultimate story about this. unemployment did go up to 4.1%, but barely over 4%.

big gains for health care and government which are not rate sensitive. but service industries only gained 117,000 but it appears the fed is slowing demand and companies are exploring the hiring process and of all that is the case, then we are likely to see continued progress towards a september rate cut. you look at the markets this morning, they have barely changed the odds of a september rate cut. it is about .7 8% of a full one rate cut and that is where we were wednesday. caroline: the markers may be fracturing -- factoring in

businesses. you have more than 25 years in experience. was this a goldilocks moment when it comes to the jobs data? michael mckee saying that the market isn't really changed on whether we get the september hike and seems to be well balanced and priced in be for jobs data. >> i think it was a good number and revisions are helpful. it continues to build the case for the rate cut. for traders they are going to love it. i think many are are just not weighing in but we will see more action on monday as they observed the new data. i would say it is a good number. we are sort of in a goldilocks moment. we are looking good to the rest of the world as an investment haven. i manage money for families with over $100 million globally and the families love coming here and this is the market of choice for many nonmarket investors because on a comparable basis,

the u.s. stock market is attractive relative to other choices, even with the strong dollar. >> where do we go from here? the data, does it change your view of where you should be allocating assets when you talk to your clients? >> we allocate assets on a long-term multigenerational basis. we have always favored growth over value and favored a large cash cushion to make sure that if there are bumps in the road you are protected. kind of a barbell strategy. i don't think anything we are seeing negates that strategy overall. if you're an investor versus a trader, looking at big trends. they are not daytrading but they are portfolios. more and more types of investors are saying that. you talk to those managing money for individuals and is about alternative.

alternative investments are viewed as a way to get out these days peered all market investments and individual stocks are getting the market unless you are smart and pick a few. it is a big number and that is true globally peered over at thousands of global family offices of all sizes -- globally. over thousands of global families of all sizes. big sponsors are offering smaller chunks and family offices can invest. caroline: i like the point you made on the international money flows and coming into the united states. the u.s. has been the game because of the magnificent seven that became five and may be tesla breaking into positive

territory on the year it means we are back to maybe 5.5 but i'm interested on whether the ai run weather which direction the travel jobs go so go of is still in place? >> i think so because there are so many industries that are thinking seriously on how to include ai in their strategy. you look at the additional efficiencies we can get out of the power grid with ai but not everybody has their equipment yet. there will be a shortage and until a strong alternative to nvidia it shows up, that will still be the best way to play the ai trend. if you look at some of the ai etf's, they are not making the cut because it is a one-stop story. some other trends, one or two leaders trailing behind the big fish. if you're going to get into the trend, by it directly or the

kids college account and forgot about it. when it is time for your kids to go to college, the money is waiting for you. i get leaders will continue to dominate, growth will continue to dominate and so will tack. even more with some of the things going on in europe, a war dragging on, it is still very attractive to non-us investors. caroline: what about investment in emerging markets. and numbers from samsung looking good today. are you looking at asia, maybe not at china but everywhere else more broadly? >> yes, there is always a place for diversification. the institutional model still works. you want to spread your risk or a number of asset classes. asia, china doing well.

japan is coming back and now china unfortunately is the company we have to avoid because of some of the sanctions. there are emerging-market ets our asia x china. i like the trend in mexico. that is all the harder to play in the public markets but many family offices are doing direct real estate deals across the border because a lot of the facilities and where houses are relocating to mexico rather than shipping goods in containers from asia. that trend is going to accelerate. i don't think there will do anything to wreck the golden goose in the business in the united states to stay in power. i think that trend will continue.

mexico's great to look at, asia x china is good to look at. >> thank you for joining us. carol pepper, pepper international ceo. let's get a market update. let's bring in our friend just mentioned. what a look -- jess menton. jess: bitcoin if you look at where it is trading, on pace for its fourth consecutive day of losses. it is also dropped a quarter of its value that it has lost since the march record just because of the height around the regulatory hurdles. a couple of individual movers,

marathon digital if you look at that stop, it is down 5% on pace for the worst day since june 21. riot platforms also down 3% and coinbase down 4%. paul: i was looking at some of the moves and bitcoin got my attention. tom doesn't like to talk about it. i have no idea. somebody will ask me tonight, what is going on with bitcoin and i have nothing for them. caroline: there are worse about selling. now we understand it has moved to wallets of crypto that will eventually be given back to investors. and then also the german government starting to offload. there is a lot of support --

supply-side issues and then making less money. jess: so german authorities are preparing to sell around 50,000 bitcoin they had seized earlier from online criminals. you have that and then you are talking about a failed exchange and returned $8 billion of bitcoin to creditors. there you go, paul. caroline: coming up, we are going to a rather beautiful conference. the former eu commissioner will join us. this is bloomberg.

(♪♪) ♪ well i was raised by careful hands ♪ ♪ yeah, they made me who i am ♪

♪ so i'm off to see... ♪ we invent them. we design them. we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪ at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real. caroline: time to go to the warm southern france. there is an economic conference taking place in the backdrop of

a key sunday vote, a legislative vote, an election and heading to the conference. the former eu commissioner michael barnier joint. >> i am happy to be joined from this conference by michael barnier. do you think this is the result of the bad consequences, eight years of brexit? >> a great victory. i don't think -- the change linked to the british people, i

don't think it is all linked to greg's it 1.i am sure of -- linked to brexit. it is a great solution to repeat that in my book for the tory party to think they will be stronger outside of the biggest free market. >> many across europe have not abandoned the idea but still in your book the great illusion you mentioned a warning to france that the problems of the government being out of touch, the problem of immigration, do think we are the problems in

france the same as the brexit roots? >> i called the first chapter in my book the dyer of the brexit a warning. i always try to respect the u.k. people and my counterpart. i will not change. i will look at the reason why 52% of the british people voted and when you look at the reasons you can look at that in the u.k. , the same roots. you you look at the far right

and the global unemployment, and the route from you to a doctor we have to tackle it and address and understand in france the social anger, the same roots as in the u.k. >> what you think of the possible victory of the far right on sunday? what do you think that would mean for the image of france abroad for investors who want to put their money into france today? >> it remains not to do the same

mistake of the u.k. eight years before. i think we can avoid this and find a way for the new majority in the party but it will be difficult. the program of the far right was in tight business. >> the alternative is a hung parliament where possibly some technical figures forming a coalition. do think that is possible in france and would you be willing to meet part of a new coalition? i remind our viewers that you are a moderate.

>> we have to vote and the people vote in france. they are free and sovereign. i don't know what will be the vote. on sunday night, we will see how many groups and if it is possible to get something different from the far right. i don't know yet. we can't speak about the coalition before we know the outcome of the elections. >> if you are for the prime minister, would you take it? >> it is too soon and we have to respect the vote of the people. let the people vote on sunday. >> one has said he would refuse

to become prime minister if he doesn't have an outright majority. marine le pen has said she will try to grab the lawmakers missing. do you think some in your camp who might be elected would actually join the national rally republican government? >> i don't think so. the people of our party who want to leave have already left a few weeks ago to join the far right. hopefully they will be all elected against the far right. >> do you think there will be, no matter who wins on sunday, a sort of showdown with the eu later down the road on the budget? >> depending on who will be

elected and will be the majority . if you talk about the new majority in france, my goal and wish and conviction is that the people, we have to work together . >> how big are the chances that in a few months and years from now we will have donald trump in the u.s., maryland the pen -- marianne le pen? >> we will see in france sunday. it is impossible to avoid the far right to keep the line. as far as france keeping its rule will be key. what will be the next president in the u.s., --

>> thank you very much for joining us. one of the rare political figures present at this economy conference because none of the ministers from macron's government are here. paul: we appreciate that michael interview with -- that interview with michael barnier. how do we view the u.k. different than yesterday? caroline: closely stability. we have had a landslide election for the larbour party and a very loyal to keir starmer. i think we will see a more

focused and clear cut, less volatility. paul: i am interested in learning more about keir starmer. we don't know what he wants and may be the to do list and how they want the relationship with the eu evolve. caroline: where i grew up, he is a man of government and we will see what he brings to the speech today. paul: the s&p is up 4%. this is bloomberg. ♪

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caroline: we welcome you to a july 5 party here on bloomberg where we go radio tv simulcast to check on the markets that are trying to party, too. a fed rate cut with stocks going higher, bonds doing well, and a release of tension in the u.k. with european trading. the french election coming up this weekend but to break it down from the micro and macro perspectives, what are we watching? >> looking at the s&p 500, up 1% with the nasdaq 100 up 3% year, going into this holiday

shortened trading week. some of the top percentage gainers here, amd is one of the top performers, up close to 4%. micro technology is one of the topic liners, continuing a string of losses for the past six sessions. down 7% since they reported earning results in late june. of course, we were talking about going earlier, ever since tom keene stepped out, another update on that, trading at its lowest level since february, losing a quarter of its value since the high back in march and also looking at digital stocks here, platforms down 4%, marathon digital down 7% with coinbase. looking at the gainers with what's happening when it comes to department stores, specifically macy's, you are seeing shares rising actually up closer to 12%. best day on pace since march 4,

coming after the journal reported a sweetened buyout offer. there's a shakeup happening in the department store industry when you think about amazon. two investment groups have increased bids to take macy's private. you have the journal reporting arc house management raising the buyout offer on the retailer to 6.9 billion dollars. when you look at that stock, like i mentioned, best day since march 4 on paper, but then you have nordstrom's, close to 2%. you have cole's 3% higher. looking at the sub industry group in the s&p 500, for retailers right now that is up 3% this week, on pace for its best week in a month. paul: thank you so much, jess, appreciate that. the retailers, nice m&a activity taking place in the retail

space. i wasn't really looking for this but it makes sense, 2.65 billion dollars from sax to purchase niemann getting help from amazon, of note to me. macy's shares rising on reports of a sweetened buyout offer, suddenly getting action in that part of the world. let's check in with andrea, a reporter in london. what do you make of what we are seeing in the world of -- i don't know, high-end department stores? andrea: we are seeing a lot of excitement in department stores for various reasons. the luxury sector, the u.s. luxury sector had an amazing run after the pandemic. everybody spent stimulus checks and crypto gains, handbags with rolex walked -- watches, that has all slowed. plus a lot of the shares are going online, generally, with the power of these big rands, like lvmh, louis vuitton, do

your, it's all coalescing around the need for department stores to really bulk up. caroline: what is interesting is whether or not therefore we see consolidation and therefore fewer brick-and-mortar options. when will we start to see them pull back, ultimately that's what consolidation should do, cutting costs and leading into -- leaning into operating efficiency. is that what we are going to see? andrea: it's certainly possible, they have not ruled out store closures yet. macy's is growing the luxury arm while closing stores. paul: what was interesting to me is amazon playing a role here, and salesforce for that matter. what is the role of these tech giants in these transactions? what's the angle? andrea: amazon has long tried to get into luxury fashion and it hasn't really worked out. brands have been reluctant. louis vuitton, dior, they will never sell through amazon.

other brands have been reluctant to get involved, they so much cheaper goods and you want your expensive handbags to be in that kind of environment. but this gives them another way into luxury fashion and it could help to build their credibility in this sector. at the same time, we have had real turmoil in the online luxury fashion sector. we had matches collapse, going up for sale. it might be a moment where some second-tier brands that perhaps sold through these platforms might be willing to try another option and it might be amazon. caroline: i'm really interested in this macy's report from the wall street journal, looking at sweetening their offer. the commendation of sax coming together with neiman marcus, what does it tell us about the u.s. consumer? i thought, talking to some of these high-end luxury purchasers

, that the ultra-wealthy were still ultra-wealthy and still spending as they always have been. who is pinched and why is there such pressure? who is not getting money from crypto or stimulus checks anymore? andrea: it's not the super wealthy, they are still spending. we call it the aspirational luxury consumer. so, not super wealthy, more comfortable. it is that cohort that has been hit hard by inflation and by higher borrowing costs. there are the ones cutting back. the more exposure you have to that sector, you know, more trouble are, and that is the the sector these department stores play in. caroline: andrea, always a joy to have you join. thank you indeed, go have a restful weekend in the u.k. meanwhile, maybe that pinching in the middle is what we might see reflected when you think about a vacation at the moment.

where are you putting the bang for your buck? is it about experiences? are you still going for the ultraluxury holiday hotel or are you trading down a bit? we have the perfect person to ask about this. robin harris is with us, ceo of trivago. 71 million americans are meant to be hitting the road this weekend, according to aaa. how many of them are stills oiling themselves on a hotel or are they trading down? -- still spoiling themselves on a hotel, or are they trading down? robin: great to be speaking to you. from an external data we see 5% more americans traveling over the course of july. when we look at google, we also see higher travel marks. holiday data shows the top destinations this year are the same top destinations that we saw in 23. however, the prices went up

significantly. the top destinations, number one, are las vegas, number two is myrtle beach, the third one is new york. prices are up quite a lot. therefore, it makes a lot of sense to compare prices. paul: i can tell you that a lot of people are going to the jersey shore as well, judging by the beach yesterday. globally speaking, travel these days is it mostly within one's own country? or is there more international travel? robin: most americans travel within america and we also see this on other platforms internationally. the domestic travel. of course, you also have many americans who go to mexico, italy, spain, or turkey. most of them are traveling within the u.s.. caroline: how much have people

been trying to navigate the inflationary pressure of -- look, as someone with kids, i started to use airbnb experiences for a home that i was going to stay in rather than a hotel, purely because i needed a microwave, i needed to be doing milk, cooking kids food that i didn't want to spend a fortune on. how much has that factored in to what people are looking for from a hotel experience? cleaning fees, airbnb, people not wanting that hotel experience, what are you seeing? robin: we are pretty much focused on hotels. we offer over 5 million hotels and other recommendations. we are pretty much focused on the hotel. we see a shift in the opportunity in the hotel segment with strong demand. people searching and going to hotels. paul: talk to us about business

travel. where are we pre-pandemic, things coming back, i'm not sure where we are. robin: so, we are already back. when we look at the seasonality and the man for the summer , it's high. that's compared to pre-covid even higher. the demand is healthy, when you look into the market it's healthy. stable and solid. caroline: that's interesting. the u.s. dollar has been doing mighty fine, as has every thing else of late, and i would have thought, mentioning turkey, europe, spain, portugal, people looking at japan finally because it seems to be so much more economical from an fx perspective. has that in any way changed the way in which the ux traveler is looking at opportunities to travel globally rather than

domestically? robin: so, we see that the americans, they stay more in the u.s. and coalesce abroad, so the domestic travel has been increasing. this is also a trend that we see and observed with people going more for mid star hotels instead of high star hotels. paul: if i wanted to make a last-minute decision to go to paris for the olympics, can you give me a room and how much do you have to pay? andrea: so, -- robin: so, this might be expensive but we will find a good offer for you and it makes sense to go a little bit outside the top destinations. travel trends are that whenever there are sporting events or even concerts, big concerts, that pushes prices of a lot and it might make sense to go outside.

caroline: it was cheaper to take your family to europe and then fly back then to watch it in america. [laughter] andrea: exactly -- robin: exactly. caroline: you are bringing price transparency. there are so many ways i could buy a hotel, doing it through various agencies. you are trying to get rid of some of the arbitrage issues we currently face and get us the best price. how much are we seeing murky price points for hotels? how much are we able to get at this one true price? robin: when you compare to pre-covid, you can see there is more price disparity out there. it still makes a lot of sense to compare prices and even more sense than pre-covid. that's the market, yeah? if an prices, it makes sense to

compare it and that's what we are doing. paul: are all of the hotel chains open to doing business with the truvada -- truvada -- trivago's of the world? robin: yes. paul: robert, -- robin, thank you so much for joining us. vegas, myrtle beach, new york, have you been to las vegas? caroline: only for work. need to go for pleasure. paul: forget the kids. have you been to myrtle beach? caroline: do tell me. fun? paul: the kids would like it. a lot of fun, lower-cost, probably one of the best values in terms of beaches. throwing it out there. it can get a little rowdy. caroline: so spring break is not that [laughter] time to go? [laughter] paul: don't go spring break. i still tell people that if

you're coming to the states, and i'm sticking with this, take three or four days for the bay area. san francisco, silicon valley, yes the headline risk has been bad for san francisco for the last several years, but i still tell that, my european buddies coming over for a few weeks, take a few days for the bay area. caroline: you don't need to say on market street and that is ultimately where the pain and pressure has been to travel that the world. it's amazing. paul: great stuff out there, heading down to monterey peninsula. caroline: got a good aquarium. paul: great aquarium, 20 years there. this is bloomberg. ♪

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government unburdened by doctrine, guided only by the determination to serve your interest, to defy quietly those who have written off our country. you have given us a clear mandate and we will use it to deliver change. caroline: change it is. after 14 years of a conservative government in the u.k., labor was the winner by a landslide. that was keir starmer as he became prime minister standing outside of number 10. it's the biggest majority since tony blair sweeping into leadership in 1997. here with us is our acting bureau chief, anna edwards, welcome across the network. what's interesting is the first past the post method of voting in, it looks like a landslide, seems like a landslide, the mandate is there, but is it

truly from the amount of people who turned out? the mandate is there in the sense that he has his hands on the levers of power in the chamber, as he described, giving him a lot of power. you could point to the low turnout and you could point to his vote percentage. but that is how the u.k. system works. he had this landslide victory and therefore has the power to do the change she wants. he's trying to pitch a message of optimism, talking about hope and public service a lot. you and anyone else who has watched this scene will know that there has been a lot of scandal and distraction around u.k. politics with a lot of changes in leadership. certainly he's pledging something of a tone shift and a change in the way they operate. the u.k. economy, fiscally limited with growth being the big focus. already, the new prime minister on the first day putting together his team has already

announced who is going to be the u.k. chancellor of the exchequer, like a finance minister or treasury secretary in the u.s. rachel reeves once worked of the bank of england and comes with a lot of experience and is the first female chancellor of the exchequer we have had in this country. i have watched and listened to the speech from this morning, isaac i speak the same response as most americans, he seemed like a reasonable person, open a compromise, getting things done? is that a fair read or am i just rose-colored glasses? he's an interesting character, very experienced operator. that's why he's a sir, he was knighted many years ago. he plays it down, not because he wants to hide it but because as he has told us many times on the campaign trail, my dad was

working class, a toolmaker, his classic line, so he likes to remind us of his sort of humble background and he is very much a public servant. he spoke many times today about public service and representing the people in ways that resonate with a u.s. audience. that is something important to him. he lacks some of the showmanship and drama we have known from other leaders in u.k. politics, but that revolving door of conservative leaders that we have seen go through into number 10, perhaps the message was changed and the british people wanted a change in leadership style for sure. caroline: of course we have to put this in the context of the french vote, the movement heading to the right, many now perhaps feeling that the u.k. could be almost a safety play, from an investment perspective,

this stability was what ultimately was born out here. anna: you raised this at the start, there is the vote share and the rise of the right arm party, that populist party and the green vote, so there is a bit of a fracturing of u.k. politics, but in the first part of the system what matters is who comes first. then the labour party get these outsized abilities to control politics for the next five years, which does project stability and it is what the market is focused on. we have seen fx investors, stock investors telling us that they saw it coming and that there is a lot of continuity here with a lot of long-term stability. the business leaders we spoke to this morning said that even if we don't agree with every twist and turn of policy, if they are doing things in a grown-up way and promising investment stability over five years, that is something they will celebrate.

caroline: on the nose when it comes to everything policy in the u.k., we really appreciate it. it's been a long day for our british anchors and reporters. we are going more global at this moment. i want to look at what's happening in etf in china. those favored by some of the sovereign wealth funds have seen the inflows spiking recently. the push has come basically as we know the country economically and its stocks have been tumbling. the benchmark heading down this week for its seventh week in a row. bloomberg analysis showing the chinese fund released $43 billion in etf's in the first quarter. the home team basically trying to support the home over all stocks. we wanted to go abroad or in the world of exchange traded funds but we will do that with our ctf analyst for intelligence. what do fund flows look like you're in the u.s.? give us your u.s. perspective as well as global.

>> the china story is fascinating. it really mirrors bank of japan, they bought up etf's like crazy for the past decade. the china national team purchased 50 billion in etf's. to put that in perspective, that's 90% of all the flow into chinese etf's. they are the big buyer. the problem is the people there aren't buying it. they generally want to buy the nasdaq 100. but there are quotas and stuff. it's like they're trying to get overseas to purchase nasdaq 100 in the u.s. markets, but they can't so there are a lot of premiums in those. the chinese government is like a, let's keep it here by propping up the market and that's where it's at. it's a conundrum for the government but our team led by rebecca anticipates another 15 billion in the second half. for investors who like qe type governments, china is like qe crazy. it's going to be interesting to

watch to see if local investors will finally come around to purchasing chinese stocks. paul: give us a sense of the chinese etf market. are the individual investors participating or is it just the government? >> the market came in -- the government came in recently. etf's are not as big in some countries as they are in the u.s. because of different plumbing in the markets. it's growing. it reminds me of japan, again, like 70% of all of the etf assets for the boj, now that china is stepping in this big, there will be a similar situation here. over time they tend to win because they are cheap, easy, all the reasons people like them in the u.s., but they are slowly growing over there, for sure. caroline: compared to the stratospheric growth in the u.s., maybe that has slowed but

more broadly, etf's are on fire this year. >> yes, if you look at the $400 billion of etf flows this year, every month the monthly flow has been above the average. the second half tends to be bigger than the first half, typically. especially when the markets are up. my colleague did a study to look at spy. every time spy returned 10% in the first half in averaged 28% on the year. a good sign that the second half would be big. if it's big and the flows maintain and above monthly average, we could see $1 trillion in etf flows, the all-time average. investors, look, bull markets are good for flows, bear markets are good for market share. people will be buying the chief beta stuff and the exotic stuff, like the bitcoin etf and hot sauce single leveraged etf's and all that stuff. people just kind of buy

everything when markets are up. when they go down the kind of purchase the cheap vanilla stuff. paul: all right, appreciate that, always nailing it, the pride of philadelphia pennsylvania there. i even get to bitcoin. down another 4% today. you blink sent thousand dollars. no idea what's going on. there was all of this spot tf, so important for the ability of crypto in general. we will see that and where the underlying. caroline: there was that pressure from the supply side, many worried about the unloading there. i think also, you know, maybe we will start to see it pick up again if the fed scenario comes back. but for now we have been quite disconnected from the stock market. paul: coming up, returning to the south of france, economic conference there.

the european president there will join us next. this is bloomberg. ♪ okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic?

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paul: good friday morning. caroline hyde, paul sweeney,

here simulcasting on radio and television. we are all over this thing on bloomberg. head over to youtube, you can find us there. jobs data today, jobs numbers came in better than expected on the headline basis, but small -- smart people like michael mckee tell us to focus on the revisions as well, so we will get to that in a moment. we did speak to the acting secretary of labor of the united states to get her thoughts on the u.s. labor markets. take a listen. >> it's another very solid jobs report. 206,000 created bringing the total to nearly 16 million. i have been here before talking about the unemployment rate. we had an unemployment rate wherefore the longest stretch since neil armstrong stepped on the moon, it has ticked up partly because we see an increase in labor force participation rates for primate

workers, people coming into the market and looking for jobs. it's taking them longer to find it but there is a balance between supply and demand when it comes to workers looking for jobs and employers finding what they need. all signs of a strong and steady economy. >> the obvious flaw might be the big revisions for the buyer 100. when you look at those months, do you look at today's data and safety might expect another revision? that the rose enis seems to be undermined with the next revision that comes in? >> i'm so glad you asked that. revisions are a part of the numbers that come out, they have always been a part of the numbers. that's why we are able to put them out every single month and then make sure the data that comes in later is incorporated into it. that is why we look at trends. if you look at by any measure

since 2021, when the president came into office, the last three months of trends, no matter how you slice it, the pie is getting bigger. there are more jobs in the economy, more workers are getting the jobs, and the real wages are up, meaning that working people have breathing room to be able to live. those are not accidents, they are very much fundamental to biden's vision of building a strong america. paul: that was the acting labor secretary speaking to bloomberg. the payroll number better than expected. unemployment ticking up. wages up 3.9% year-over-year. down a little bit from last year, moderating a bit. something in there for everybody . let's get the smart people in here with this karmic michael mckee, covering all the economics for us.

mike, what did you take away from the number? revisions are important, tell us why? mike: that is the takeaway, revisions give us the sense of what the real underlying growth rate is for jobs. we don't know if this 206,000 will last. i would point out that if you look at job creation over the past six months or even longer, over the past six months, five of the six months the jobs number has been revised lower, forward. she was just talking about how you need to look at more than one in order to see the trend. well, the trend has been for revisions lower. we are not being revised down to levels that are concerning, with the one exception of april, but we are seeing a fairly healthy economy and i would say, well, secretary sue's characterization of it as a solid, balanced

economy is accurate. at the moment this trend is just something you will have to watch area paul: bringing in liz mccormick, covers all the bond market stuff for us, she is all rutgers, by the way, undergraduate to mba, she bleeds rutgers red, pretty fun. what is the bond market telling you here on the back of this news? liz: i think that with the way that mike pointed out the data -- nicely, as he always does -- the bond market was like good, it's not a surprise. but when you take it all together with the unemployment rate ticking up, it seems to lean further into what chairman powell has been saying, seeing easing in the labor market. so, the bond market, they kept it in play but rot short-term two-year yield's to a good fall today. it just seems like -- good, this is part of the case that the fed

will ease. i have seen some folks like at jp morgan where they are calling for the first cut to come in november but that the first date opens the window for september little more, putting that play. i think the bond market took it as a relief. not enough to go in over your skis, because remember we have cpi next week, that's a big piece of data where they had the political risk brewing. i don't think it was enough for the bone -- the bond market to go too far in, but the curve steepened and as you as have talked about in the past, people are wary on the long end because of the looming fiscal picture and the debt it seems like it will stay high the u.s. for a long time. caroline: interweaving less where you want to go, but politics with macroeconomic policy. is the market trying to factor in what a trump presidency might look like? has the fed's bonded

in any way to whether this could change policy? mike: no and arguably they will not, historically they don't. they look at it as a completely independent situation. besides, the market is maybe pricing in what it thinks might be the outcome of a trump presidency, but nobody knows for sure. you don't know if the deficit will actually go up or down. so, the fed really can't react, it doesn't know what's going to happen. they cannot make or change policy based on suppositions or theories. paul: has the trading in the bonds and rates market and consistent with the data we are seeing, or are investors taking on big bets, one way or the other? liz: i would say consistent. maybe i am biased, this is my business here, but to mike's

point, what i will add to that is that esther's say that they are prompt and if i don't, ask. they see whoever wins the presidency, the breakdown of congress, no one is seeing kind of strong odds for fiscal discipline. like oh boy, in this scenario deficits will really go down. i think that is why no matter how -- like i said, even with the rhetoric, you don't know who is getting in or if they will do what they are saying, but the sense is that no one is screaming and waiting hands over a pond crisis, but we have a kind of unsustainable fiscal situation if it keeps going on. i think that is why people were leaning away and has more fear on the sugar and. -- shorter and. -- end. ok, easing will be coming, but

we see the long-term rates falling so much if the fiscal house isn't an order in anytime soon. caroline: bringing it back to what liz just mentioned, cpi. ultimately, whether we are in -- we had a big surprise last month. are we anticipating a big surprise again? mike: no, markets are not anticipating a big surprise. they are a slight down dog rest towards target. -- slight down towards a 2% target. in the market for the fed, today the markets have priced in a little bit more of a chance for index swaps, a little bit more of a chance for fed rate cuts in september, but it is pretty much where we were when we went home on wednesday. the other aspect of next week that is going to be important is

jay powell is speaking twice on capitol hill, tuesday and wednesday, and if he is moved at all by these ointment numbers, we should get -- caroline: is he a guy who gets moved? [laughter] mike: i suspect that his main goal is to make no news. if the markets were exactly where they were when he and issues then when he started, he would probably be very happy. caroline: well done. mike: job done. then everyone else will start talking and they will have opinions. paul: liz, looking at the two-year treasury, down nine basis points. as tom keene likes to say, it was just a cup of coffee ago. does that tell us anything? is it notable? is it just buyers and sellers? robin: no, i think it's -- liz: no, i think it's notable. will need to update the story. it's notable because remember when we got about 5%? there was

that talk with a little bit of pricing about the fed maybe having to hike again. remember when that was in the zeitgeist? that got squashed a while ago with the last fed meeting when it looked like hikes were off and as the data keeps coming out , we are again shaving hairs. september, november, even though the head said only one, it was a close call. we could all be wrong, but there has got to be something easier. we have gone through data not panning out before, but the move in the two-year is important. it shows the people taking off the other tail risk for inflation. the first couple months of the year, inflation was looking hot and that has gone away. the tail risk of escalating inflation, the fed fitting to tighten, it's been killed. the two-year going down further is a good sign, but it cannot go

too much further unless bad things happen to the economy, like really bad, as we are priced for two -- if we continue to have immaculate disinflation and market easing, i don't think the market will have much more to do than that. that is why the market is inching down lower and it can't go too far less we get some bad sign or see that we are in discretion. caroline: there have been inflows where we got the shock from france. i'm interested as to whether there is any endpoint for want of safety. liz: i think treasuries are still a safe haven. treasury flowing in, that political risk has eased a bit

with a second round election this weekend. if one of the investors said -- do you want to be long on treasuries outside of the interview from today with what's going on in france and mark i think you are seeing incremental movement into treasuries, but not like moving the market on. but it's there. let's see, it's the year of a record amount of election. in november we will be through the worst of it. they are getting a bit of a haven bid from there. paul: -- mike: the funny thing for the markets is the market knows what it's going to have on monday. we have four more months of this. liz: i know. [laughter] paul: snap elections? we should have thought of that one. kate mckee, -- mike mckee, liz mccormick, breaking down what we

saw the labor market today. headlines coming in, jobs that the unemployment rate ticked up. is it enough for the fed to say that we need to start thinking about rates here? we did see some movements in the rate market. the two-year, really sensitive to the rates and terms of the fed. 4.61%. coming up, backing into provence . the economic conference in france, the euro group resident join us next to give us the outlook. that's more elections coming up on sunday. i forgot about tonight with president biden, he's got the abc thing. there is a lot going on out there, people. stay tuned. this is bloomberg. ♪

paul: -- caroline: political risk, one down in the u.k., another to go in france. there's plenty of economic impact occurring amid this very

political narrative. we want to dovetail both together. paschal donahoe is the euro group president sitting down with us today. >> there are a lot of political figures here this year and we have paschal, euro group president, joining me now. very nice to be with you. thank you for having me on your program. caroline: let's discuss the comments from the german finance minister, who was saying it might be illegal for the ecb to intervene if there is political turmoil in france. your reaction to this? >> the ecb are always inside of a legal mandate around financial markets. but the financial markets at the moment are clearly stable. the dutch economy, from a

borrowing point of view, still stable as well. and i know the ecb will be monitoring the situation and there will always be an inside mandate, as they clearly demonstrate. caroline: you disagree with these comments? paschal: i can understand why the minister made those points. he is talking about what's happening in france, monitoring the debate that's on the way from a public spending point of view. as president of the euro group, i'm aware of the need to take a perspective on what's happening in france and also to recognize that our institutions have very clear mandates that they live within and the ecb, regarding france or any other element of the euro area, they are absolutely clear about their mandate and have always operated confidently and i think they will do so in the future. caroline: do you think the critical difficulties in france for create any issues? >> i'm

very much aware of the election that's about to conclude. i don't want to prejudge what may happen as people go to make the final decision on sunday. but my general point is that we all have a responsibility to manage our public finances safely. that has happened in france in the past. the maintenance on that approach is ultimately what allows the economies to grow again and ultimately what allows incomes and living standards crease at a time in which we are dealing with the effective intervention. caroline: your counterpart, the french finance minister has been there for seven years, since the first macron election, writing about stability in terms of the relationship with you partners. how do you think that will change going forward? paschal: i have to say that the

prime minister has been an exceptional colleague and has led the french economy through so many great difficulties and i see him as a leader in europe. the difference he has made is really important and has been immense. i really value my friendship with him and wish him the best of the future. caroline: are we facing a liz truss moment? paschal: to make the general point, we have learned that when domestic decisions are made, financial markets can fall apart clean. the general clear learning that we have of recent years is about the importance of maintaining market confidence and the importance of maintaining confidence in your future spending taxation plans. all governments are aware of that. be that the irish government i'm a member of or any other government that might be elected. caroline: there is obviously an outright majority in france,

with someone new becoming prime minister next week. do you feel clashes on fiscal rules? paschal: i think we should allow the election to conclude and that the french government assemble themselves and i won't be commenting on this point about domestic political choices. but i will make the firm point that cooperation between the commissions in those respects are really important ingredients continuing to maintain stability of the euro area and all the members of the euro area. france has been an important partner in that approach. i look forward to working with the next french government and i look forward to working closely with the future finance ministers of france, doing all i can to make the case for this approach to our public finances and the value of stability. i look forward to a good working

personal relationship with whoever that is. caroline: he has said that he wants to cut french contributions to the eu budget by 3 billion euros in order to finance some domestic proposals. is that even possible? paschal: these are the kinds of comments that all kinds of governments make. i'm certain you will hear many other government make points about them wanting to reduce contributions to the eu by looking for more from the eu budget. so again, let's just allow the new government to form and then myself and all of my colleagues in the european union, we look forward to doing our best to having a warm and welcoming relationship with them. caroline: sounds like the relationship with italy has improved, for example. do you think that this is a comparison? paschal: well, i

think of the experience of prime minister meloni in many ways has prompted further discussion that we will have here in the future. since they came into office they have made some very important and i believe right decisions on behalf of italy and europe. we have a very constructive economic relationship with the minister. that is another reason that when the election comes to an end and we have a good cooperative relationship. caroline: we have this stellar victory in the labor department with keir starmer. do you think this has links to what we are seeing in france? it's a signal of anger after eight years of consequences?

paschal: that is evidently in interpretation of it. that the promises that were made regarding brexit, in the eyes of many british people it hasn't happened in the way they would have expected. but i interpret it in a more positive and optimistic way, we have seen the british government, the british people make those decisions for a stable centrist government with the majority having the kind of people that are leading it. the british people have said they want stability, confidence, they want the government to lead the u.k. for the next five years. i think that's a very positive signal and on a personal level i wish the outgoing government the best for their futures. caroline: a quick question on ireland, the ministry of finance moved the date to october 1, looks like we are going to be seeing elections in ireland? paschal: afraid to disappoint

you, the answer is no. i expect the next general election will be march of next year. the only reason the budget was changed was there was a meeting happening in the second week of october and i cannot be in dublin and brussels at the same time, change for that reason and that reason only. caroline: many political battles to juggle. thank you. paul: all right, that was caroline over in provence. speaking of paschal donahue, how about a stock story for you. medevac in the day. facebook, all-time have i -- all-time high, i had kind of forgot about meta. caroline: i'm pretty sure that it rose on the fact that mark

zuckerberg was hydro boiling with a beer. paul: i don't think so. caroline: i think that is artificial intelligence generated. so far every story doesn't say is ai, just elon musk throwing shade. paul: but he's carrying a beer? wake boarding? stocks are up 50% year-to-date, met up, that's the kind of market capitalization of 1.3 $6 trillion getting your attention. coming up, political upheaval continues. we will discuss the complicated path to power for marine le pen. ♪ the most comfortable golf shoe in the game. grab your pair today at olukai.com.

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paul: welcome back, live in our bloomberg-interactive brokers studio and simulcasting on bloomberg television and streaming on the internet. go to youtube.com and search bloomberg podcast. politics are front and center, no question. we had the u.k. election yesterday, we have the french voting over the weekend, and in the u.s., i think that we have two candidates. i'm not sure. we will figure it out over the coming weeks. in france, that is where the focus goes now with the election this sunday . significant movement.

caroline is still reporting for us. can you frame out what the french people are going to do on sunday? where can this thing go? caroline: it is very interesting. covering this conference and aix-en-provence for at least a decade, usually everyone is in a positive mood. not this time. today they are campaigning for the snap elections on sunday. there is a lot of anxiety on everyone's faces. all of these executives wondering what is going to be the outcome on sunday. for the first time, there's actually no politicians here. no ministers for macron's government. most of them are going to lose their jobs on sunday. the prospect of a majority of the outside rally is unlikely given the recent polls showing that the national rally would get between 190-250 seats.

that would be short of a majority. still, there are a lot of concerns about potential clashes with the eu. i had the director telling me earlier today, that there is no need to despair, but there will be a lot of attention for the budget in the fall. i had the ceo of a big renewable very concerned about less focus for energy, less focus for renewable. i even had a share partners executive telling me, two months ago macron was organizing a summit and inviting hundreds of internationals, talking about the attractiveness of france. now it is not choose france, it is why france. caroline: what is notable is marine le pen has been doing some interviews. it feels as though she is basically saying don't believe these exit polls. i could still have the chance of

having a majority. she is also warning that the country will be at a standstill until macron is legally able to dissolve parliament in a year. is that what businesses brace for? nothing? caroline c.: gridlock is possibly the best scenario for markets. that is what we would be hearing from the analyst strategists over the next few days. even morgan stanley said it is time to buy french stocks because even if it is outside a majority it will be a positive story for french stocks. clearly we had more than 200 candidates pulling out of the race for the runoff to try to block the natural -- national rally to try to have only duels on sunday and many of the constituencies.

there will be a lot of questions about what the moderates interests do. do they support a far left candidate? when there is a far left against a far right in their constituencies? are they going to abstain? that is a massive question for the moderates because they have a big dilemma when having to choose between the far left and far right. macron would govern with the far left candidate. potentially, if there is not an outright majority for the national rally and we get a hung parliament, he may reach out to a centerleft possibility and that would be the least scary scenario for the markets. paul: how far to the right do you think marine le pen can move this government? caroline c.: technically, the question is, what is she going to do on foreign policy? with russia?

she has been trained to distinguish herself from vladimir putin but there is a question on defense and what it means for ukraine. then the next question is, having a showdown between france and the eu, especially for the budget in the fall, the national rally president said he would cut french contributions to the eu budget by at least 3 billion euros. even if that is technically difficult, it clearly shows that there is an anti-eu feeling even if marine le pen is not talking about frexit like she did when she faced emmanuel macron in the french election. caroline: doing the best of work in 40-degree heat. we truly appreciate you working what will be a long weekend.

caroline connan in aix-en-provence. as we sit in new york, president joe biden is basically looking to quell those ongoing concerns over his age following last week's presidential debate. annmarie hordern sat down with ukrainian president and talked about russia, ukraine, and the impact with france. what did the ukrainian president have to say about the oval office? annmarie: you are 46 years old? would you do your job at 81? pres. zelenskyy: i don't know. it depends on many things. your health, who is around you, your team, etc.. united states now, not in war. in war is a lot of things.

i don't know. i can only wish good health. caroline: he seemed to skirt that one rather expertly. as we see with the international view is on president biden's ability to continue to run as the democratic nominee, but also we get some proof points for the interview later today? >> don't ask me what i'm going to be capable of at 81. if i'm getting out of bed i would say that it's a win if i am up right. it will be a week long kind of test. they have essentially set up an obstacle course for joe biden to run the track and show people that he can do it. it starts with this interview they will do in wisconsin, where the president is also holding a rally today. they will have the teleprompter which we hear is not good enough, so the unscripted interview -- i'm curious to see how long this goes.

does he give stefan off a -- does he give george stephanopoulos 40 minutes? do they do a walk and talk? how difficult will the questions be knowing that this is a former press secretary to bill clinton doing the interview? next week will be a different story. he will go to philadelphia and then it is the nato summit. you cannot fake that. that is time to be the real president with the world watching. world leaders in washington. he will hold a solo news conference at the end of that summit, and that is a difficult environment to control. it won't be with a different world theater, it won't be just two questions, and it will be a chance to see joe biden with less rest and more stress following the nato meetings. let's take this one week as a time even as people start talking about who else may be considered a potential candidate for the nomination.

paul: is there any sense in washington that the democratic party might be working a parallel path? if we come a week from now and it doesn't go well for the president and the democratic party is ready to go to the next step, is there a sense that their stuff going on in the background? joe: there is, but kamala harris would say, you're talking about me, right? even the night of the debate we saw various governors who could take up the mantle, but kamala harris has a good story to tell and better polling numbers than joe biden in some cases. if we were in a world where the elders say obama and clinton sit down with joe biden or jill biden convinces him to not run, the first person he will likely look to his kamala harris as opposed to wiping the slate clean and starting with some mini primary, as some have suggested. if it is a backroom deal where joe biden steps down, takes kamala with him, and we have a

new ticket out of the blue, you will hear "rigged" and "backroom negotiations." i don't think the democratic party is looking for that either. caroline: has there been anything factored in on the fact that the market is trying to understand whether or not we see a more difficult fiscal position no matter who comes into leadership? what have you made of corporate america's reaction? there has been a lot from donors in particular. joe: donors who are looking down ballot. but joe biden had a solid fundraising period after the debate that was supposed to be such a disaster. they may 30 $8 million in the four days starting on thursday, which is pretty impressive. it is more than he has seen in some months.

i don't know if the market is concerned about which democrat, joe biden, kamala harris, someone else, as much as the realization on thursday night that the trump 2.0 idea could be real. to see things like solar stocks and banks moving, to see people try to place bets on what could be a return to a trump presidency, has been pronounced. paul: do we know who really has the ear of president biden? is it jill biden? are there folks that we are not aware of? is it former president obama and/or clinton? joe: joe biden is probably the answer to that question. he has had a strained relationship with barack obama over the years. this is a family that is very tight. when they went to camp david to have photographs with annie leibovitz last weekend it was jill biden and hunter biden who convinced him that he needs to stay in the race and that this

is in fact the right way forward. it is probably going to take a realization inside that close family circle or a reckoning based on what happens over the next week or so to decide what he does next. the administration is trying to check itself as well. jean-pierre held a difficult news briefing on wednesday in which she said that the president have not seen a doctor after thursday night. it turned out he had. one of the spokespeople for the white house had to clarify that yesterday. i will remind everyone that lawmakers return to washington next week. we have a third democrat in the house calling for joe biden to drop out of the race. what will those numbers look like after everyone gets and you're full of the fourth of july parades and picnics? this is all anyone is hearing about in their home districts? a lot of them could be swinging and that could be an interesting backdrop for the nato summit

that the president is trying to conduct at the same time. caroline: i hate to ask hypotheticals, but a hypothetical i will ask, when, if, we hear something, when would it be? joe: a great question, and i cannot pretend to know. in 13 days we have the donald trump accepting the nomination in milwaukee. we are going to be getting on airplanes next week to cover the rnc. he will have an announcement on a vice president. that will suck a lot of the oxygen out of the room and it may buy biden another week or two. mid-august, the convention in chicago, is that the deadline? something needs to break before then. if we are taking this week at a time, let's see where we are in the news conference next week. paul: cohost of "balance of power," one of our key voices in washington, d.c. i think the way that joe is looking at it, week to week,

let's see. he has events next week that will give people more data points, and himself more data points, about what to do going forward. i guess that is where we are. week to week. caroline: i was at a july 4 party yesterday and a friend of mine had a t-shirt that said "a bad day to be british." it is ironic there was the british election going on at the same time. i woke up to the news that keir starmer, 61, is the oldest ever first time running prime minister. in your 60's -- winston churchill did it to a grand old age. this is bloomberg. ♪

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from now on, you have a government unburdened by doctrine, guided only by the determination to serve your interests, to defy, quietly, those who have written our country off. you have given us a clear mandate, and we will use it to deliver change. paul: that was the u.k. prime minister keir starmer, day one after that landslide victory over the last 28 hours. an amazing move in the u.k.. we are awaiting another election in france. a very busy election in the u.k. and france vote in terms of changes in governments. that is a lot to keep an eye on. we have the pound to its longest winning streak in four years. definitely some movement in the markets. dan hansen joins us in london.

what is your view of what we just experienced over the past 24 hours in the u.k., politically? dan: to be honest, my take is it has been a very predictable election. this is a result that was widely expected. it's quite a big change from what we have had in the u.k. and the 2019 election and 2017 election -- really, ever since brexit. there feels quite a bit of calm. you can see the market pricing, the market is taking it in stride because this result was priced in. the idea of stability, and you got a bit of it from what we heard from keir starmer, is a labour's pitch. it is taking government out of the public eye, being in the backseat, but ensuring stability and hoping that that will be the source in the future for stronger economic growth. caroline: british stocks are

still near a record high. the ftse is internationally focused but bond volatility has been quelling. we are talking about a less volatile government situation, a clearer majority, a leader who is ultimately able to lead. what does that mean economically for the u.k. and for the bank of england, who has been eyeing further rate cuts? dan: it is interesting, caroline. in the near term, and when i say near-term i mean the next six to 12 months, the new government will benefit from a decent economic picture. growth has picked up. we had a moderate recession at the end of last year, but growth has picked up. i think the bank of england is pretty close to cutting interest rates. our view is that they could well go for the first cut in august. the question really for investors is about the medium-term picture.

the election campaign for labour was very modest in terms of their promises. the question is, can they deliver a sustainable step change in the u.k. economic growth? that is the question that everyone is asking. in the near term, the picture is pretty positive and we will get the bank of england cutting interest rates relatively soon. paul: the new prime minister, talking about growth being one of the pillars, what economic perspective can this government do to spur growth in the u.k.? dan: a great question, paul. one thing to remember in the u.k. -- and this is true across europe and the western world ash fiscal space is extremely limited -- western world -- fiscal space is extremely limited. a big part of the pitch, as i said in the answer to caroline's

question, is about stability. if you like there is a relative certainty premium on the u.k.. if you look around the world, in europe, you talk about the election in france at the top of the show, i think there is a lot riding on the idea that the u.k. will be seen as a safe haven, if you like. that will get you some way. whether it get you a sustainable growth path higher, keir starmer is talking about 2.5% growth for the u.k.. in the near term they will be a cyclical boost from the reduction in uncertainty. caroline: they have been trying to lean on artificial intelligence leadership. whether or not there's a leadership from a productivity perspective. the new chancellor, as we understand, is promising not to raise the three key taxes, but seems to want to focus on housing. they will have a new, nationally, publicly owned energy.

would a reset of the relationship with the eu be one of those fuel to the growth fire? dan: i think it would be. i think the question is, first, does the eu have the appetite to come to the table and talk about it with everything else going on within the eu itself?also , there is definitely a case for looking at bits of the deal that the u.k. currently has with the eu. the question about a customs union and may be returning to the single market is probably too far-fetched, but there are bits of the deal that can be looked at around alignment, around regulatory alignment, that could produce a growth benefit. the one thing to remember with trade deals generally is that they take a long time to adjust and change. to bank on that as a source for growth, particularly in the near

term, i think is far-fetched. maybe over the five-your parliament, that is something we can think about further down the line. caroline: thanks so much. get a pint. we appreciate him. meanwhile, paul, we have to talk retail. we are going to be talking about how closer to home the wealthiest are still able to spend, but we are getting the strained middle again. it meant that a lot of the luxury department stores are trying to eek out deficiencies. macy's is rising on the fact that they have offered a buyer to $6.9 billion. we have saxon neiman marcus, that bill potentially going through -- that deal potentially going through. we are making these brits work the day after they voted. remind us of the driving force for wanting assets like macy's, which owns bloomingdale's? >> macy's is quite a special

case because it has a lot of real estate. bloomberg intelligence has estimated it has about $8 billion of real estate and that is what the bidders are after. paul: whenever i look at an m&a story i go to see which bankers got paid. on the sacks deal for hudson bay's, advised by rbc capital markets, and the sellers, everybody is getting paid. andrea, what does this tell us about the consumer, retailing, trends? it seems like a lot of consolidation in a relatively short time. andrea: that's right. there are two things going on. you have the department stores under a lot of pressure. we are shopping online. they also have tons of competition. years ago you went to a department store for your autumn

and spring wardrobe, which you bought in advance of the season. now you are buying online. the brands are going direct. they are opening stores not just on the two coasts, middle america, all across the country they have their own stores. plus, you have online challenges. even luxury resale growth. tons of competition. plus, the luxury consumer is under pressure. not the very wealthy. they are still spending. it is the squeezed middle. the cohort that during the pandemic saved a lot of money. they were not going out to eat, they were not traveling, they were spending on gucci handbags and rolex watches. not only are they now wanting more experiences, but they are facing inflation and higher borrowing costs.

it is that cohort. that is a lot of pressure for businesses to cope with, hence the consolidation. caroline: we love having you on. thank you so much, bringing us all things consumer. meanwhile, i rent most of my stuff. paul: you do rent the runway? that is a great idea. i never even thought about it. caroline: the market cap may not reflect how great of a business i think it is. rent the runway --ipo in excess of $1 billion. the market cap now is about $54 billion. paul: is that because people are not going back to work as much? caroline: it is such a hard business model to make square in terms of the margin. i get everything of mine cleaned. five or six outfits every week. i don't know how they make money. paul: it is a cool idea, though. caroline: it is. this is bloomberg. ♪

caroline: welcome to bloomberg,

tv and radio audiences. i am caroline hyde along with sonali basak. sonali: we are seeing still a bit in the market. the bond market after stunning data plus a lot of things to talk about on the geopolitical front with elections abound. caroline: meanwhile, bit of crypto. let's get to the markets because there has been a bit of a rally on our hands thanks to what seems to be an ability for the fed to continue to cut into the year. maybe even september is on the table. we will discuss it with mike mckee. tech stocks, a reprieve. the revisions were what people were worried about into the reading into nonfarm payrolls. the bond market moves reticular leon the short end. -- particularly on the short end.

we are talking british pound come of course. u.k. elections, a lack of volatility for the future with keir starmer winning in a landslide majority. the pound is the best performing currency on the g10. crypto is down 2.8%. it is off of our lows but there seems to be selling pressure. selling pressure maybe from the german government. we are currently trading the lowest since february. the s&p 500, remember, we have been and record highs time and time again. the volume is muted as we have the party after the party of july 5. also keeping an eye on eurozone stocks. we are seeing the u.k. etf up .4%. the euro zone had been trading higher. the euro is up versus the u.s. dollar as we go towards the french political moment on sunday as we see the second round of voting. gold up more than a percentage point as we see some weakness in

the u.s. dollar. we have to get to this with one key economist. sonali: our in-house economist, bloomberg's michael mckee joining us on the heels of the jobs data. we are talking about looking at a bid in the bond market strong enough to push the two year yield to a stunning level of for 60. -- 460. it doesn't mean everything when it comes to the rate cuts? mike: investors are cautious because they have cpi and jay powell. we are seeing a gradual move in fed funds overnight, index swaps in terms of pricing in september. we were about 70 basis points of a move on wednesday when we all went home. now, fed funds are at 84 basis points, and the ois are coming

in at 77. a gradual creep into september is what has been happening now. i suspect we will hang around this level, and into next week people are really going to have to be ready for some big moves. caroline: big moves when we look at the cpi and jay powell. what we are reeling from from wednesday is the services print, which was at a four-year low. is there any worry coming from the market that this could be a significant slowdown? or is this a goldilocks slowdown? michael: it seems to be goldilocks. the price on bonds was not the price that you would put on the economy as we have it now or as people believe it now. at this point no one is thinking that the economy will fall off of a cliff. we so weak hiring in the services pmi and we got weak services hiring in the jobs report, so it reinforces itself.

the question is, do we continue to see a slow down or is this about what we are going to have? sonali: what do you think the jobs report means in terms of the totality of the data we are bringing in? michael: it is the second most important thing, behind the inflation indicators. the most important inflation indicators is cpi this month because it comes out a lot earlier and it is more detailed. it is not the target. the cpi is not going to get to 2%, but it will tell us what direction we are going how fast. that is what the fed wants to know. we are still making progress. they would love it if like last month it picked up. caroline: we will see what we get from the cpi print next week. mike mckee all over the numbers, the data, and a bit of the market reaction. what do you invest in when you're seemingly navigating

towards a goldilocks slowdown in the united states? we have the chief strategist at simplify asset management joining us for more. i'm really interested, michael, in your take. you're thinking about how we can increase access to investing. your take on ultimately how we have seen this played out. we are seeing a bond move today, but are stocks going to still be at record highs as we navigate a slightly cooler u.s. economy? michael: there is a real bifurcation in the market. when you describe stocks at all-time highs that is a very narrow description. within the s&p itself you are looking at the eagle waited s&p flat on the year. a very small number of stocks have navigated this advance. we look at small caps. and do something as extreme as look at the russell 2000 medium stock off 20% from its highs in 2021.

the recovery and stocks at all-time highs, i think, is a misleading statistic. it is very focused on a few stocks that are both very large and in no need of capital. if you happen to need to borrow money or issue shares, if you need to get your private business public for liquidity purposes, these markets are largely shut. caroline: unless come of course, you are an ai company. i'm interested when we start to see the spread. many have been talking about investing in energy and infrastructure because that is the spin out effective artificial intelligence, if we get the productivity growth that may impact jobs in the long-term. how haveyou been playing the narrow ness of the bets of ai and can they expand? michael: like most, i have been playing it quite badly. caroline: thank you for telling us. we appreciate it. michael: no, full candor and

disclosure. if i am looking at the environment that exists now, the narrowness of the market, the focus on the idea of the buildout of ai is so reminiscent of the telecom buildout and buildout associated with the.com cycle, people are ignoring one aspect of it which is the processors that are currently being deployed into artificial intelligence, the nvidia-type chips are very power intensive, but alternatives are being developed. that is the miracle of capitalism and innovation when we are constructed with constraints. we figure out solutions because people pay us for it. we are seeing advances in terms of reducing the energy intensity of the load. i would expect that to play out as we saw the incredible advances in switching technology that meant the infrastructure deployed around the telecom cycle in 1999-2000, we ultimately found out we just did not need it. it created extraordinary

clearing prices that we all benefited from in the future. my hunch is that we will see something with ai that is called a positive bubble. it financed buildout and now we get to see if that becomes available at lower costs than we initially expected. sonali: how do you think about the play? if you say the market doesn't have a lot of breath and you're not seeing all those listed in the ai boom, when you see nvidia break so far away from the pack and people benefiting on big-ticket names, how are you finding confidence and finding other areas to bet on when not all boats are rising at the same pace? michael: the one thing that i continually remind people is that you need to invest for your needs, not the broad needs, or the needs to keep up with the joneses. we are seeing a public that is increasingly agent, increasingly looking for security in income, being offered that through

extraordinarily high real yields on government tips and various other types of bonds. candidly, no one wants to pay attention because we become so accustomed to the idea that you can simply save in the s&p 500. that is not saving. that is a speculative investment. stocks tend to rise over time and it has worked out extraordinarily well, but the easiest things to look at your financial situation and say, can i meet most of my objectives with less risky given the drawdown and bond prices and increase in yields and a federal reserve who is candidly telling us they are restrictive and will have to cut? this seems like a fantastic opportunity to take stock of your investment situation and reduce your allocation to equities before others do so for you. sonali: there is a lot of question on how much cash you hold onto in an environment like this where you are still seeing a lot of bullish sentiment and a lot of fear under the surface. how much do you keep in cash? michael: as i indicated, i am

cash-rich. my focus is on preserving the opportunity for investment in the future. i think they're going to be incredible opportunities as people capitalize on the advancements we are making an artificial intelligence. i think that there will be incredible opportunities to reinvent american cities as we watch the commercial real estate debacle play out. those will all require capital. it just doesn't feel like that is right now. caroline: looking at your bio is fascinating. you are counting and managing the new york office, you were working with managing peter thiel's money, and with soros, who was known for his big bet on the pound that went very right. i'm ultimately interested in what your view is of the u.s. being the only game in town. thus far, it has sucked out all of the oxygen in the room, but you are seeing samsung well on the day. there has been an interest in asia, in china on the back of ai.

are there people looking outside the united states and are the people that you manage money for doing that too? michael: india is capturing a lot of attention as the next china. we simplify our funds that are allocated to that. with that said, the most important thing to remember when you start thinking about where do you put your money, or how do you think about capitalizing on international places, is the manner in which we invest has become increasingly systematic. the vast majority of investments by dollar value are putting money in indices. in the united states that is total market funds. that means that there is no restriction on how smal all caps can fall. we used to think about 10%. that meant small caps would remain 10%. total market fund, you remove those restrictions and the largest stocks can become larger

and larger relative to the smaller stocks. the same thing is happening on the international basis. if you step outside of the united states and you look at plans, for example, in the u.k. or australia with the super granulation funds, they are allocated to passive strategies that place no caps on where the u.s. and set up as an investment destination. there are simply trying to stay constant with the market capitalizations. that means that there is no limit to how large the u.s. becomes relative to the rest of the world. it has little to do with valuation. it has almost everything to do with the mechanical properties built to this point. unfortunately, i think that that ties closely -- you mentioned george soros and the pound. the rest of the world is largely trying to pursue currency stability. sonali: that is michael green, the chief strategist at simplify asset management. certainly has experience over a multitude of asset classes. we will look at a couple of

stocks that we are keeping an eye on. you're looking at tesla. it is flirting with green territory on the year. it has been between gains and losses. down on the day and still down on the year, but close to breaking even or the year. keeping an eye on macy's because there is a report of the potential to increase a bid for a buyout offer. we will bring you more stocks through the hour. this is just the start for us, isn't it, caroline? caroline: i'm going home, back to the u.k.. news from the election and what is happening with the labour party being back in power. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh

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sweat isn't sweet. it's salty. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty. sonali: we are going to turn to domestic politics and talk about the u.s. election season, heating up in a big way. president biden is sitting down

today for his first big tv interview since the debate performance last week, widely considered poor. we will bring in the partner at stonecourt capital to talk about his expectations. what are you watching for tonight? all of america's eyes are on this interview, but so are the eyes of a lot of members of the democratic party inking about what to do next, as well as donors for the biden camp? rick: you summed it up well. there is a crisis of confidence in the democratic party over the top of the ticket, the disastrous debate performance just seven days ago by joe biden that has caused a lot of donors and operatives to start questioning whether or not they have to make a change. in this interview with george stephanopoulos, i think it is critical because it has to show joe biden able to perform without a teleprompter, without notes, be able to have a conversation with a skilled

operator media-wise with a great political background, george stephanopoulos, who will run him through his paces for an hour-long interview. it is honestly a high-risk situation. if there is any hesitation or confusion, any kind of still thing of a performance like in the debate -- stilting of a performance, like in the debate, it could be the deathblow to this campaign. otherwise, he has the opportunity to insure people he has the capacity to be the candidate for the party and to be president for another four years which is one of the big questions to be answered. caroline: you can so well sew together what politics means for the market, the economy, and the fact that you were a campaign manager. from your expertise on the campaign, how has the biden campaign managed this? they feel united, but it feels

united against a wave they are working against. rick: sometimes you have to let the candidate, in this case biden, b biden. campaigns were built around lowering risk. it isn't unusual for there to be biden in a bubble, biden overscheduled, these are pretty typical. but when you have a crisis, there is no remedy other than the candidate himself or herself standing up in front of a crowd, standing up in front of an interviewer, and actually being able to have a successful moment. tonight could be the most important moment for joe biden. he's coming on a very critical period of time. summers are usually not this important, but in this case, in this campaign, having been so close for so long, every step

matters. this step is a big one and he will have to do it alone. he is not going to have anyone telling them what to say or do. he has to get out of the bubble and prove to the american people and the democratic party that he is a guy that they can invest in. sonali: when you look at the interview tonight, how much is about the policy, about the progress made during the biden term and the race itself, and how much is about biden's performance? rick: i always been curious. frankly, throughout this administration, why the biden folks have not focused more on the economy? they have a story to tell, and yet they constantly deflect themselves into other policy areas like student loans that don't have the saliency in the selection. this election is all about, are you going to be better off in the future than you were under donald trump in 2016-2020?

it is almost like you have to skip over the biden economic performance. they seem interested in doing that. they have talked very little about it. i will be curious if biden is able to articulate tonight the successes he has had in navigating a very treacherous economy over the last 3.5 years, and whether or not he can lay out a clear vision on what he wants to do in the next term. that is what most of the swing voters are deciding on. if not their economic self interests will be better under trump or biden. caroline: thank you so much for walking us through what to watch later. meanwhile, clear vision is what the british public want after a clear, decisive win coming from the new prime minister keir starmer as labour sweeps to power over the atlantic. we heard from the new prime minister a few hours ago as he stood outside number 10. pm starmer.

we did it! you campaigned for it, you fought for it, you voted for it, now it has arrived. change begins now. caroline: i stand corrected. that was earlier, even before he stood outside number 10, of which he has now taken entry of. someone who has been following the ins and o -- and outs, there is a read that we will get less volatility. a clear landslide victory. is it incredible to think that we were talking about a landslide in 2019 for the opposite party? will this signify calm? signify a clarity of thought and vision for the u.k.? >> it is quite the turnaround. it is amazing what happens in 4.5 years.

you may have seen some july 4 fireworks in the u.s. and we had plenty of fireworks here in the u.k.. keir starmer winning in a landslide victory, 170 seat majority. tony blair scored 170 nine in his landslide in 1997, a big win for labour. the key election slogan was one of change. after 14 years of conservative government, the british public made it clear they are ready for change. it has been a turbulent 14 years, not just the brexit, but a pandemic, the partygate scandal, the energy crisis, and of the inflation spike like you've seen in the u.s. the platform of change went down well with the british people. he pledged to end the chaos, to use keir starmer's words. looking for a fresh start.

it was a crushing defeat for rishi sunak's conservatives. they categorically rejected -- categorically rejected by the british people. this is a really momentous landslide win for the labour party. a big change from back in 2019. sonali: one thing the world is watching is not just the changing politics in the u.k. but the fiscal situation in the markets. thank you for keeping such great energy through all of the coverage. a long day. how have investors reacted to the future of the u.k.? yuan: the win has been priced in for some time. the conservatives did not manage to shift the poll rating at all. they tried to spend a lot of money, tried policy announcements, but the poll deficit with labour didn't

budge. the labour victory has been priced in for the course of the year. investors are expecting this. there is a certain amount of optimism that this will bring some stability. it has been a very unstable situation for the u.k., particularly politically. i think investors are looking for a bit of stability, but it is a difficult fiscal picture for the incoming government. there is little money to spend. they said their first priority would be economic growth back to 2.5% on average in terms of gdp over the course of the blair government and the late 90's and early 2000's. using the growth will be difficult for the incoming government, but they say they are determined. they sounded a cautious note on borrowing as well. sonali: thank you for joining us late in the u.k. covering the election caroline? caroline: we have a lot to

dissect when it comes to politics. we will have plenty in paris as well. more broadly, we want to look at what the market reaction is to the macro, the fundamentals in the united states. we have indeed been digesting those jobs numbers in june. goldilocks, many would say it's a revision down from the previous month, but the fact that we see a cooling labor market, inflationary pressures dialing back, we will dig into the nitty-gritty coming up next. stick with us, this is bloomberg. ♪

sonali: we are going to turn to the job market. jobs day was a big day today as part of the week, month, and a big part of the story of the federal reserve. the market, showing some signs of cooling. the jobless rate rose to the highest since june -- in june since late 2021. we saw payroll growth slowing, but payrolls coming in higher than economists expected. we will bring in stephen kramer, the ceo and founder of work jan, a digital platform focused on promoting the potential of non-desk workforces. if you think about the people

that you work with, how do you think they are taking in the data coming versus the reality they are experiencing? >> let me start by saying that 50% of the u.s. workforce is made up of front-line workers. we are talking about non-desk workers in the field in segments like retail, hospitality, leisure, people who work in distribution plants, distribution centers, so forth. while the unemployment rate rose to its highest over the last two years, if you dig into the report what we are seeing is massive influx of new hiring on a seasonal basis. particularly in restaurants, hospitality, and leisure as a result of a surging amount of individuals traveling in the u.s. now. i think right now, july 4 weekend, it was reported there were 71 million travelers on the road or in the air.

that is a 5.5% increase from last year. sonali: how do you think about this in the context of fragility's people are worried about in the economy? if consumer spending were to slow down more sharply, that would impact those restaurant revenues and other forms of places where you see a lot of frontline hiring. where are the concerns around those fragilites? steven: there is some concern around fragility, and a lot of attention will be put towards september when we see the news on the rate increases and so forth. however, the real story now is how do you get prepared for what will probably be the largest travel season in history? when we think about businesses in the segments i mentioned, it is all about how do you address the hiring needs? how do you on board individuals quickly? how do you retain employees you already have?

a lot of that comes down to doing more with less. to your point, even if there were to be a downturn in the economy and in consumer spending, doing more with less. how do you optimize labor in a way that you need less individuals on your payroll is a key topic being discussed across boardrooms and organizations. that comes down to productivity, efficiency, as well as retention. it costs considerable amounts of money to hire and train a new frontline employee. ultimately, how do you provide the best consumer experience? as we know, consumers are more fickle than ever. caroline: does it have to do with ai? steven: ai is definitely part of the solution to drive efficiency and workflow automation in the field. it does not replace the front-line worker who is working at a desk in the hotel or an associate who may be working in

a retail organization. ai is definitely a big part of the solution. along with tools that enable people to have clear directions on what they should be doing so that they can shed some time off of that activity. training, upskilling, and flexible scheduling. the way that organizations need to staff will change.] rather than staffing by location crowd source around an area. caroline: how does that longer term effect the data we are gleaning from the jobs report? will we get more month by month volatility? are we likely to see a more efficient and effective use of people at the right time and place? steven: for sure we are going to see more efficiency. time will tell how that plays out in the reports, but definitely gen z for example in restaurants, there will be half a million plus jobs added to the restaurant segments according to

the national restaurant association the summer. 20% of those individuals will be gen z workers. those are a native digital generation. the expectation is to have digital tools to do their jobs more effectively. we have seen that when you do not have those tools for those digital native workers they have a loss of productivity. definitely, we will see a more efficient, more productive workforce, particularly in the frontline space. time will tell what the impact will be on the job numbers. sonali: i have questions about the near-term. there are concerns about the market. the payroll growth is slowing, but you pointed to optimism. optimism is what people are feeling. you mentioned the travel industry is on the verge of fresh records. are there places that you are seeing hiring pickup faster than others?

are there areas that are clearly stronger for front-line workers now? steven: definitely hotels. we have multiple customers in the rental car industry. you can see the numbers for people traveling on the roads and renting cars has increased dramatically. we are seeing those hotels and certain areas in travel having higher influxes of needs. i would say the restaurant is an area that is impacted as a result of the number of travelers. when we travel we like to eat out and enjoy ourselves, so we are seeing a large influx in restaurant hiring. the second year in a row where there will be over half a million workers added to the segment during the summer. sonali: even if you are seeing more in hotels and restaurants, where exactly, and what do wages look like?

you have seen such an impact on trade down. i wonder if people when they are looking to travel they are looking to pay less to do it? steven: they are definitely looking to pay less to do it. we have seen payroll stabilize. that was the big story and a big concern of our customers around two years ago. it did stabilize over the last six to seven months. people are looking for deals. let's talk about restaurants. that happened around deals and people paying attention to the amount they are spending is particularly in quick serve restaurants there is a fierce, competitive environment. there are a lot of meal deals and promotions. all of that has an impact on the frontline. the need to have tools to disseminate knowledge and communication and learning down into the field is more important than ever to execute and continue to offer a really high level of customer experience.

although wages have increased, i would tell you that hiring is still challenging. caroline: thank you so much. it is tough to leave it on that note, challenging for hiring, but still a focus on productivity and indeed some very busy people working in hotels this weekend. we appreciate your time. we were talking a little about tech a moment with we want to pivot hard into it now and the future of artificial intelligence. it may not be changing the job market as quickly as many anticipated but in the long term many feel it will. we will begin with you, investment angles for artificial intelligence. they sucked all of the oxygen out of the room when it comes to the nasdaq outperformance and big tech. will it continue? is ai and nvidia the only game in town for the second half of the year as well? >> that is an interesting

question. thank you for having me back. it is always interesting to see these inflections in the market. it has been nvidia, nvidia, nvidia. now tesla is the ai play. sometimes it is an automotive play and when we are excited it is an ai play. i've been trying to pay attention to the multi-network effects. we saw nvidia's run, but who else? we have seen dell take off under the onus of selling to nvidia. we are seeing macron because nvidia needs high-bandwidth memory. i have been asking over the last few years as i look at how tech should be deflationary and create scale as to where does the value enter financial services? media, health care? i've come to the conclusion that software is the missing piece. caroline: the salesforce side of things? daniel: that is exactly right. as i've been thinking about

this, the consumption layer. we have seen reports come out, hundreds of billions of dollars of capex that will be spent on gpu's and ai chips. these are being put in data centers. you have microsofts, google, and amazon selling in the cloud, but it is microsoft, salesforce, work day. all of these names we have talked about in the studio before. people are going to realize you have to be able to consume ai. you have to add value to your sales process. you heard about frontline work, how do you make interactions between customers and their rivals at the hotels and restaurants more seamless -- and there arrivals at the hotels and restaurants more seamless? we are not hearing anything about ai driving more productivity, more revenue, more income for any companies. we are just hearing a lot of buzz. sonali: there was a very buzzy headline on the terminal not

about nvidia. it was about samsung and its relationship to artificial intelligence, the idea that the stock hit a three-year high with profit leaping 15 fold. can you explain the context on where ai is making a difference in more traditional companies in tech? daniel: samsung is super diversified. that is unique because they saw memory and their semiconductor business. but they also sell connected refrigerators. they will sell the next ai generated smartphones and pcs. i look at things like financial services. i have said for a long time that everyone needs banking but no one wants to go to a bank. the ability for ai assistants to help us invest more intelligently and wisely. or we talked about frontline and hospitality. we have a whataburger that is a complete digital kitchen,

meaning that no one works in these places. you have robotics, ai, automations bringing together and experience. there is another conversation about the impact on jobs and how we will keep people employed if all of these things are automated. as a techno optimist i believe that what we are not seeing yet is as ai proliferates, the new sectors and jobs that are created in these companies -- everyone right now is looking for where we will be able to extract value through growth. i think in having conversations with a lot of the ceos that you have on these shows, there is a prune to grow strategy. people are finding efficiencies, driving eps growth to the companies, but will eventually need to accelerate productivity. sonali: even if you believe in the productivity situation in the longer term, if you're having ai make the most of its progress and things that are not so obvious, like nvidia and

places like whataburger, if people cannot spend money at a whataburger because they are not employed, what is the near-term pain? daniel: so, if you look at how companies -- make sure that i understand the question right. if you look at where can people invest, what i look back at is we have to flow through first, second, third network effects. the first will be all companies that provide hardware, including nvidia. next will be companies that build software and platforms that can take advantage of that the third effect is the industry. it will be companies like starbucks who for a long time has been using recommendation engines and filter systems.this is ai and it has been going on for a long time. they can add value to a customer experience.we got use to it with netflix and amazon. companies in any industry, prescription drugs and figuring out how to connect, or where we eat, or where we take a

vacation. sonali: that is of course dan newman we have been speaking to. next, we will have a larger conversation about politics. we are looking at not just elections around the world but the u.s. election season ahead of a critical interview that president biden is conducting that will be aired later today. stick with us. this is bloomberg. ♪

sonali: turning now to u.s. politics, because president biden is facing mounting calls to end his reelection bid in light of his poor debate performance last week. the president campaigning in

wisconsin today and pennsylvania over the weekend, two crucial swing states. to put it into perspective is joe mathieu, the host of "balance of power." there are those two critical campaigning states that he will be in, but also the interview that he is doing with george stephanopoulos that will be highly watched. how do you think about these events over the weekend? joe: the interview -- it is great to have you on today as well -- it will be something that takes place in wisconsin. he will be rallying before a big crowd. he will have the teleprompters. as we keep hearing, we need more than that, and that is the point behind the interview. your questions about how long he will talk to george stephanopoulos and what the staging will be. do they do the walk and talk? their questions about this as we speak and they are keeping that close to the vest. to start off what will be a week-long set of activities.

not just the two states, but we have a nato summit next week in washington, d.c. that will be concluded by a solo news conference that in itself will be a huge test, if not the biggest one, over the course of the week. we saw joe biden on the fourth of july on air force one. he is on his way to wisconsin now. had a few moments where he stumbled. he referred to donald trump as a colleague at one point. he cut himself off at one point when he went to criticize donald trump. here is a taste of joe biden at the white house on the fourth. pres. biden: i was at the world war i cemetery in france, and one, that one of our colleagues, the former president didn't want to go and be a there -- be up there. i probably shouldn't say that, but anyway. joe: he got a laugh, but it wasn't an overwhelming performance on the fourth of july. the question is, what joe biden

will show up at the interview and what joe biden will show up at the rally? we will find out together tonight. caroline: i have to say it is hard to watch. i wake up with the context that we've had electoral change that just occurred in the country from which i come. keir starmer, a statistic of his is he is 61 years old. that is the oldest first-time prime minister that the u.k. has ever had at 61. that statistic amazed me at a time when we are thinking so much of age in the nine states. -- in the united states. joe: donald trump is only three years younger. caroline: is there any way, even if this performance is fantastic tonight, is it enough to overcome the cynicism on both sides? joe: i don't think so. i don't think even the biden campaign thinks that even in

their most hopeful moment. this will need to be a recurring appointment for joe biden, and he will need to clear the bar each time. how many more interviews will be set up? how many more outside of the box events they can think of will be set up? do we need to see him after 8:00 tonight? there's a lot of talk about what he told governors in a meeting this week that he needs more sleep. how does that go if you are the commander-in-chief? i have been talking with democratic sources in town, democratic lawmakers. we have a third one to call for joe biden to step down in the democrat from massachusetts. i was speaking earlier off the record with a biden ally who says that that number is going to go up on monday when lawmakers return next week. you are going to see that letter. it is a question of how many democrats sign it. they have all been talking over the holiday. they have been on the

phone come on zoom, hearing from constituents. when joe biden sits down with world leaders next week, even his own allies may be calling for him to call it a day. sonali: joe mathieu of bloomberg "balance of power," thank you for joining us. a very busy weekend for joe biden and a critical one in the u.s. election season, caroline. caroline: we have to get back to what it means for assets. the bond market prior to the jobs data move to not only on services data and also what would a trump leadership mean? will we see more fiscal spending, higher tariffs on chinese goods, more inflation pressure in the 10-year selloff? in the crypto world, one that you know far more intimately than me, we have seen a lot of play in politics. trump seems very pro-crypto. a different person running against him, what does that mean for the bitcoin price and regulatory aspects?

sonali: a stunning amount of money from the crypto community has been going into the elections, as well as a ton of people coming out of single issue voters. do they do that in droves? caroline: with bitcoin on the downside, seemingly a supply-side issue, we can dwell on all of this. the future of crypto etf's and regulation, let's look at the price point on the day. we have almost become used to its volatility as of late. it seems like it has been on a downward trajectory. it has hit through some key technical moving average levels. it seems as though germany is selling off some of its confiscated crypto. >> that seems to be the rumor. thank you for having me on the show. whether the coins have hit the market i think the answer is likely no.

what percentage will sell, who knows? some will go into liquidity, but this is pretty normal for bitcoin. those who have been in the space, bitcoin has been here for over 10 years, the cycles come and go and we see drops from time to time. the climate for bitcoin and the thesis for what it is about has never been stronger. that's why you see so many calling for pretty amazing positive upside over the next year or so. you talked about the politics of it all. in the u.s. we have a massive debt, we have a massive deficit, we are about to figure out who was the next leader, who will spend the next $10 trillion, but there's not much debate they will continue to spend $10 trillion. bitcoin will be a hedge against the dollar. that remains true in spite of short-term changes. caroline: i am interested in

ultimately how much the crypto narrative is still about central bank policy, still about inflationary pressures. ultimately, the people currently holding crypto are they thinking it is a longer-term paradigm shift, a technical way of more efficiently running money? mike: bitcoin itself is the value stored, that is where you hear the narrative about having a fixed supply currency that is a safer, sounder money. politicians around the world will compete for who becomes the reserve currency of the world. i think the u.s. is still in the dominant position there. on top of it, we have applications built. we are talking about ethereum for running smart contracts. this is where you can take large swaths of the system we know today and put it on transparent ledgers where the activities of

derivatives platforms come of your investment funds, etc. will be blockchain in a way that everyone can see it. sonali: it is a difficult moment. you have bitcoin flirting with 70,000 -- bitcoin's etf approval. on the verge of an approval for a cerium -- for ethereum. while bitcoin is a volatile asset, it is drawing new retail investors into it. with that excitement waning to this degree with the price movement to the downside this drastic, how does that spell a warning sign for what that means for the debut for ethereum? mike: i don't think so. these are long-term plays. we are in the early innings and they are so small compared to other markets we are use to, just part of why they are so highly volatile. whether the etf for ethereum

comes alive the summer, in general people agree the chances look solid it will come in the not so distant future. as it does, that will allow institutional investors to determine if they want to participate. note that the regulators have not improved those etf's, which is becoming increasingly the important part of the yield that comes with ethereum and why people want to hold it. there is more work to be done. in the short-term term, you will see bumps, but this is not long-term challenges at all. sonali: thank you for your time today. have a great weekend. we have so much coming up for you in the next hour. we are looking at a market with a heavy bid in the bond market and still green on the screen when it comes to the s&p 500. don't call it out for a long weekend. stick with us. this is bloomberg. ♪

sonali: welcome to our bloomberg television and radio audiences. vonnie: it is the first trading

day that markets have to respond to this jobs report. there have been three days of jobs data. there was services data and so much going on this week. fed minutes. a lot to react to. sonali: a lot of trading going on. a lot of questions to be asked given there are tons of questions about politics worldwide. the u.k., france, the united states. vonnie: we are getting plenty of market movements. it seems like there's an election every two days at the moment this year. let's bring in mike mckee to talk about the wage and jobs data. pivotal to the fed. more fed speak next week from jerome powell. what will he pull out of the nfp that might echo difference to the markets question mark -- make a difference to the markets? michael: it is slowing is the

key factor. it is slow across the board but we did not see anybody with one exception falling off a cliff. that is temporary help. in the past that was seen as a canary in a coal mine. they will need more than one month's data for that. we saw another slow down in wages but wages are running ahead of inflation. workers are doing ok. as long as next week we see the cpi come down, the fed will be relatively happy with this. sonali: i feel like i'm asking you this question. you might respond like fed chair powell would. we are not political. at the same time, you look at the jobs numbers, how does this play into the election cycle? michael: interesting question. ordinarily you would say the job numbers are relatively good. the economy is relatively good. wages are outpacing inflation.

that should be good for the incumbent's party, and it's not. there are a lot of things going on outside of the economy. maybe by november we will get back to the old saying about is the economy, stupid. right now the economy is sidetracked while the freight train of the two candidates goes by. vonnie: we didn't have the sample triggered. claudia sam is coming on and has a lot to say about this. is it increasingly assign -- a sign we are slowing more than markets are anticipating? they got triggered this time around. michael: it wasn't that close but it is closer than it has been. the issue for markets is they have an overreaction function. they will take anything that happens on a day-to-day basis and run with it because that is their job. the fed only has to make a

decision once every six weeks. they will look through a lot of the data until they get to the day where they have to make decisions. we will have two more inflation reports, the cpi and pce before the fed makes its next decision. retail sales and spending numbers. there will be a lot for the fed to consider that is not in this report. give makes it a little easier to see the path to september. it doesn't guarantee it. vonnie: certainly nothing too alarming for the federal reserve. michael mckee, thank you. we will speak with michael later on. let's get to the markets now and reaction. jess, we have seen a round-trip today and there was a lot of trade on. where are we? jess: even despite coming off the holiday. the s&p 500 is on pace to close at its 34th record, if it can cling onto the gains driven by the communications services sector. you have companies like meta and

alphabet that are driving the gains. on the flipside you have energy stocks lower, down about 1.6% on the s&p 500. i have to point it was happening with tesla. the first half of the year is down 20% through the end of june. if you look at the winning streak it's been on, tsla, it's flat now but had briefly erased its year-to-date losses earlier because of how much it has gained this week. it's up about 24% this week alone. it's been a big run. we had the data when it came to the second quarter delivery numbers that did beat expectations. we had dan ives, a bull when it comes to technology and growth stocks. he raised his outlook because they did drop it from their best ideas list earlier this year. he had a targeted on $275. now it's around $300. that implies a 20% rise from

wednesday's close. another one on keeping a close eye on his macy's. if you look at department store companies, it is up almost 10%. it's best day since march 4. that comes on the back of the wall street journal having the report. sonali: i'm interested in another stock down on the day, rarely down on the day and it's -- it's a rare downgrade. jess: especially because you can use the anr function to see what it looks like when it comes to the upgrades and downgrades for a stock like that. that is something that is rare because it just came off its stock split. they went into effect on june 10. you see a big run up like that before that happens and then it begins to fade. we saw the stock technically enter a correction briefly at the end of last month. if you look at this week, it's up 3%. it's up roughly 35% since it had

attorneys report on may 22. -- had its report on may 22. vonnie: we will keep our eyes throughout the market trading day on those moves. we have a couple of hours ago. if anyone has gone home, i don't know why. let's get more on this market with ross mayfield. thank you so much for joining. it's been a busy week for markets as much as you might not think that looking at the figures. typically when july 4 falls on a thursday the best days are wednesday and friday. that might actually happen again this year. how much is the market reaction to -- reacting to today's market report? ross: i think it is a little bit. you can see treasury yields down a bit. the bigger question is whether the initial reaction is the right one. whether the bad news is good news because it means lower

rates and higher potential for fed cuts, or whether this is something a bit more ominous paired with some of the economic data we had on the others to the holiday. ism services, pmi was concerning. the services economy has driven a lot of the growth over the last couple of years. it came in below estimates. i think there is a little bit of bad news is good news now but i'm not sure that is the right reaction over a longer term period. good for the week but some things to be more concerned about heading into next week with that cpi print late in the week. vonnie: there's a lot to look at the -- sonali: there's a lot to look at. the second half brings an election season. differing's uncertainty on whether the federal reserve will accomplish the first rate cut or not. how choppy do things get from here? ross: we have not seen much volatility. it's been a very calm market despite the macro concerns.

geopolitics, domestic politics, inflation, interest rates. there's been a lot of noise but the market has remained very calm. the vix stayed near historic lows for most of the. you can probably expect some chop. it is not the most groundbreaking call this a volatility will pickup from historic lows. the election will be ramping up. the questions about whether the fed will be able to cut rates. you have earnings which need to come through big to justify valuations. i think you will see more volatility. q3 is typically a weaker quarter. particularly in august and september you see weakness. in election years to get big rallies at the year-end. vonnie: are you repositioning? what are you buying and selling? ross: i do think you need to reposition much. the themes that have been the themes for the last 18 months remain that.

you can quibble about valuation but you want to be exposed to secular growth themes if we are returning to a domestic economy that's growing at a below trend pace. that was the big story of most of the 2010s. the stocks bringing growth to the table because the economy is meandering along. i think quality is a big theme. it will lag get points but at a higher interest rate environment with more inflation uncertainty you want to be exposed to quality name second fund growth and not exposed to capital markets as much. higher for longer. you want to be exposed for secular growth themes, ai and big tech are one of this was to vonnie: how much does it matter to the markets to your client to the democratic nominee will be? ross: i don't think it matters all that much to markets. the betting odds are about the same if you look at the polling for various potential replacements or for biden himself. i don't forget changes much. i don't think the big story

coming out of the election are going to change that much. it is one of those things that it will be noisy. one of the things that clients hear about in my get concerned about. as for the story that matters, 2025 and beyond, the big policy themes will not change that much regardless of who's on the ticket in early november. vonnie: they will be things like tariffs, immigration and so forth. those do affect the markets. are you positioning for some kind of volatility around the election and how do you do that? ross: you hit on 1 -- kind of a secular theme we have been paying attention to is deglobalization. that is no one that is contingent on either candidate or some combination of congress and the white house, but something that has taken hold in the last five to six years and probably will continue regardless of who wins in november. the speed and tools will be different. thank attention to those tariffs, paying attention to the tech cold war with china will be

especially important. those are areas to watch very closely. the big individual tax cuts and tariffs are probably the two main policy themes we are watching most closely coming out of this election. both candidates will have ideas on how to handle both of those. some tax cuts will be extended regardless of who wins. we will remain in this tech cold war but the speed of that process and the tools used will matter to investors on january 1, 2025. sonali: if you think about the market you have not really seen a lot of breadth outside of large cap tech names and some others but let's talk about when you maybe see some of that breadth. do you have confidence to go into mid-cap, even small-cap names on the precipice of a rate cut? is there still too much uncertainty there? ross: i'm not chasing small and

mid. there's huge valuation discounts but even if the fed starts to cut rates in the market is pricing one or two because this year, you are in a pretty restrictive zone. you have a lot of headwinds for small caps. the domestic economy is slowing. if the fed is cutting interest rates is probably because the job market is starting to crack and they get uncomfortable with the labor side of the church. it is -- side of the picture. even if the fed cuts rates on the margins. that is the kind of environment you need for small caps to thrive, that risk on strong to messed economy cyclical stocks outperforming up and down the cap scale. we don't see it here. in a higher rate environment, even if the fed cuts it will be higher for longer. large caps have such an advantage for funding growth, for cash flow purposes. i would not be chasing small caps to be honest with you. sonali: ross mayfield, we thank you so much for your time. i keep saying this to everybody.

happy 5th. keep the holiday vibes going. there's a lot going on. we will turn for the markets directed to the elections in the united states and europe and how the markets are reacting. we have seen interesting trades going on in global markets and big moments for the u.s. election in the next couple of days. we will talk all about it next. stick with us. this is bloomberg. ♪

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interview with george stephanopoulos. let's bring in david westin. what is the message that biden will want to get up as george stephanopoulos asks hard questions. s? david: the main question i would want is how to make sure that does not happen again but we saw the debate stage. any of us who saw that were concerned about his ability to function as a president. you can say it was a bad night, it was a cold, jet lag. how do we make sure that doesn't happen again in some critical moment when he's having to deal with a crisis? that in a nutshell is the critical question the make and people have on their mind. sonali: beyond that, one thing we are asking is what is more important at this point, the policies or the performance itself? david: the policies are relevant at the moment. that is one of the challenges george will have. president biden wiki talking about what he's done for the country and all he has accomplished.

one can agree he has accomplished a lot. he did a lot of stuff. that i don't think -- it was not what he's done in the past. what can he do now? what can he do over the next four years? do we have confidence in his ability to lead the country? ironically i think the policies are almost irrelevant, except as a way of getting to the questions of competence. vonnie: stephanopoulos want to know who the biden campaign and the people around biden might be thinking about if indeed biden does step down. people try to get some kind of color on who he might be thinking about. biden will probably try to sidestep it is at a question we should be incident to the president? david: it's on all of our minds. i agree with you. i don't know if you will sidestep but i don't know what the president will say when george will ask. if i were president biden right now and this is my experience from other crises, when you're in a crisis you don't decide

until you have to decide something. whether i'm stepping down or not, i would put that off as long as i can. there's more data coming in and i want to know more before make a decision. i would duck the question. i think kamala harris is wonderful and their other wonderful people that can run the country but on the president. i intend to remain that until he changes his mind and decides he wants to make an announcement with george which would be very surprising. i think he will say they are all terrific people and can do the job but i'm the one who's best. sonali: the strangeness is you have president biden addressing the american people writ large but his supporters. can you give context around how the democratic party really feels about this moment and the splitting here you are seeing between the people who have supported biden and the people who may be breaking away at this moment? david: there's a lot of reporting about donors pulling back. it makes some sense if you're a big donor and you get a call saying please give us $1 million. let me think about that for a

bit. i don't think that's the most important point. what we saw actually this week was the democratic members of the house of representatives. what really happened after the debate was serious talk. you have seen this in the bond market. it was reflected in the bond market the possibility of republicans taking both houses in addition to the presidency and have a clean sweep. if you're a democratic member of the house, you're asking tough questions. is having president biden at the top of the ticket helping or hurting me in my heart fought race -- hard-fought race? those of the supporters he has to reach out to. sonali: the ripple effects are incredible. david westin, thank you so much of wall street week. we are also going to shift gears and not to talk about the united states with the u.k. we will talk about the election outcome with you and pots. talk about the history and context. what it took to get to the place

where there has been a defeat of rishi sunak and you're seeing keir starmer take the reins of the future of the u.k. at this point. >> what a defeated was for the conservatives. i want to start over some background. it happens a lot more quickly than in the u.s.. at 10:00 p.m. the votes are finished. by midday today we had a new prime minister. it evolves kissing of the hands -- involves kissing of the hands. the new prime minister or prime minister to be visits the monarch. the ceremony is called kissing of the hands. it is unclear as to whether kissing actually takes place. he asks the king's permission to form a new government. the king says do you have the votes in the house of commons? keir starmer said yes. the leader of the labour party wo the u.k. election with a landsliden. 170 majority. tony blair got 179 in his

election landslide back in 1979. keir starmer winning a stunning victory for the labour party. it is a crushing defeat for the party of rishi sunak and boris and brexit. the conservatives crashing to their worst election results in history. that the party that dates back to 1834. a terrible result for the conservatives and we have a new labour government for the next five years. vonnie: what is the first steps keir starmer will want to take to submit the labor footing in the country? yuan: he ran on a platform of change. it's been a turbulent 14 years in the u.k. he talked about ending the chaos. it's been a chaotic period politically. that was his key message. in terms of priorities, the number one priority of the labour government is getting economic growth restarted. he says back in the blair years, the last labour government

economic growth was 2.5% on your. that's a reasonable target. if you're looking at gdp in the last two years, it has not been anywhere near 2.5%. labour keen to get the growth engine started. all governments work to grow the economy faster but he has concrete plans to do that. labour would like to spend money on public services. they have been start for cash in many cases. the public finances are really tight in the u.k. there's not a lot of money to go around. vonnie: thank you so much. yuan potts in london. more elections. there might be stability in the u.k. now but potentially more turbulence in france where we see a second round of elections on sunday. let's bring in pairs bureau chief alan katz. marine le pen is adamant it's not over and she may still get a majority. what is it looking like for the french people now? alan: well, a little confused.

it is not at all clear that marine le pen will get a majority. if you look at the polls yesterday and today, they indicate the national rally, while the biggest single party in parliament will fall short of getting a majority. that's important because the national rally said it will not take -- not accept the prime ministership if they don't have an outright majority which would allow them to pass whatever laws they want to pass. whether that is what ashley dewar not remains to be seen -- that is what they actually do remains to be seen. it looks like they will fall short of the majority sonali: one think i woke up thinking out of the u.k. into this weekend in france, boy, is the world changing quickly. one thing people don't think about a lot when you're the heat of the election cycle and thinking about what this means for a country is what are the ripple effects for the elections in france across europe? alan: well, pretty large.

france has quite a core position within europe. it's one of the founding members of the european union, the second-biggest economy. emmanuel macron has taken up a big space within europe since the retirement of angela merkel in germany. that has become essentially that effective leader of europe. there is no single leader but there is president of the commission. he's the most influential single leader in europe. don't forget his position is not at risk in this election. it's a parliamentary election. it is 32027. -- through 2027. if he comes to this weakened, it affects france's ability to affect the world. it might also have a ripple effect on elections that come in other european countries. just like elections in other european countries, italy or the netherlands, might've had an effect on increasing the popularity of the national rally

in france. it's a far right party similar to the party that giorgia meloni leads in italy. sonali: thank you so very much. that is alan katz from france ahead of a critical weekend in the country. before we let you go, we go back to the u.s. markets. green on the screen. it is like nothing happened over here. there's a lot happening under the surface. we will talk about u.s. presidential elections next and joe biden's big interview. stick with us. this is bloomberg. ♪

vonnie: president biden said to speak in the next few minutes in wisconsin. one of the crucial swing states. let's bring in joe mathieu. the speech is set for 215 eastern -- 2:15 eastern. he's probably going to tout this morningstar report. -- morning's job report. joe: we got a statement from the white house on that but celeste about what he says today and how he says it. i don't know if he's going to be yelling at the top of his lungs or whatever the plan here is. he has to express vitality. everyone is asking what kind of joe biden will show up for the rally today, which will be scripted on a teleprompter. but also for the interview he's doing with george stephanopoulos in wisconsin, this

important swing state against very difficult polls. since last thursday we told you joe biden raise a lot of money after that debate but the public polling is not improving. it's getting worse. look no further than the cnn college new york times. donald trump is beating him by six points. a three point spread before the debate. we saw confirming numbers, the same six points in the wall street journal poll after the debate. there are questions about whether joe biden is capable of turning this around. is the damage done? he will have opportunities over the next week. today with the rally and interview, also a visit to philadelphia on sunday. a very important swing state he frankly needs to win to keep his job and the nato summit will follow next week. that will be a series of important meetings with world leaders that will conclude with a solo news conference. we will be sitting here next thursday talking about how he

will perform in that environment, much like we are now with this rally. sonali: earlier we were talking to david westin and a good point he made that i would love your view on is the ripple effects. when the feelings change around joe biden, particularly from within the democratic party and his own donors. what is the ripple effect it has in the house and senate? joe: down ballot is a huge question. you are asking the right questions. david is usually speaking to the right angles. this is the question of money and coattails. if we start seeing donors, and we are starting to see these initial moves of donating down ballot to congress, senate, gubernatorial races, lester joe biden. i have -- less to joe biden. the fundraising was frank lee impressive following the debate. joe biden and his related committees pulled in $127 million for the month.

$38 million was after the debate, thursday, friday, saturday, sunday when that was what anyone was talking about. we will need more time to answer the money question. there is a convention that is set for chicago in august and nothing has changed yet. if joe biden does affect step out of the way, he will be kamala harris we are talking about. same delegates and potential donors and same ideas on the issues. this could take a couple of different paths before we know. vonnie: it seems like her name comes up constantly. are a lot of other contenders out of the race if biden steps out? joe: she's the vice president so her name should be considered the first here. it's interesting that over the past couple of days it's been a bit more of a concerted conversation. cnn found her in a tie, leading by a couple of percentage points but within the margin of donald trump and performing better than joe biden with important groups. women.

50% of female voters backing harris over trump versus 44% provide. similar when it comes for independent voters. she has a pretty good story to tell. that would be the next thing after joe biden. she's on the ticket. if we start looking elsewhere, governors like gavin newsom or gretchen whitmer. i don't think as they look at 2028 want to stand in front of kamala harris and block the first woman of color from potentially being the next president of the united states. sonali: joe mathieu, we are looking forward to all of your coverage of very, very busy week and for president joe biden. we will switch gears and talk about the u.s. election but now talk about it with henrietta treyz, director of economic policy research at veda partners. i need to cut to the chase. in your most recent note on july 3, you wrote you believe biden is going to drop out. how did you get to these odds

and what drives that analysis? henrietta: thank you for having me. the odds have been increasing ever since thursday night's debate. my clients are investors. they love to hear hard numbers. that is how their minds operate. i put odds on a lot of things. in this case i think the inevitable outcome here is joe biden gets off the trail. i agree with everything said those far. i expect kamala harris is in the lead to replace him and has the machinery behind her to make it relatively painless transition. what has driven this is that the foundation behind biden staying in the race is the idea he alone can fix it. when lloyd doggett from texas came out earlier this week and basically said i disagree with that premise, it unleashed a dam of opposition to biden being able to say i alone can fix it

the way he did in 2020. as long as the narrative is gone, as long as the foundational pillars needs to be biden is out of the way, the real question becomes how do we replace joe biden? what comes next? is it kamala harris? doesn't need to be a wide-open convention with maybe some ad hoc debates between gretchen whitmer and gavin newsom or kamala harris? do we pass the torch to biden anointing her and passes along her delegates and say you are not necessarily bound to be with me but i would like it if you would now migrate to kamala harris? i think the party would take that up rapidly. 70% already dropped out of the race. david made a point that you don't necessarily need to make bad decisions quickly. i don't see any reason functionally why democrats should hand the rnc the gift of announcing their replacement before the rnc actually takes place. d could be a couple more weeks and then we will get the announcement after the rnc and i

think that mix perfect sense given the circumstances. vonnie: that is true, strategy-wise, but it doesn't look great of the president is holding on. how vital will he need to sound to get any kind of pushback on this current drumbeat to biden leaving? henrietta: there's a couple of things at play. it is the middle of july. travel numbers are through the roof. everybody is out of the country. americans are not -- americans are off. people are not heavily engaged. with the polling showing us voters are very quick to transition away to a new candidate. they have been primed for that all year. i have been calling this the invisible primary. voters don't think biden will be on the ticket in november. 40% of people don't know if trump is going to be in jail are not. this men's group of humans out

of the voting public really unsure about what's going to happen next. the latest reuters poll shows 20% of americans are undecided about how they will vote. those are crazy numbers. 23% are saying they might change their minds. i think biden and the democrats as a whole given the fact that is july, they have some time to breathe and go into this with maybe a plan. i think the tension is building. people will be very excited to watch what happens next. it is a national story now dominating all headlines, as is appropriate and probably will for the remainder of the cycle given the sheer scale. sonali: a lot of uncertainty. a lot of tension and perhaps for the democrats this one sentence in your note as well creates a lot more attention. the sentence you write . right now no democratic candidate can be trump. -- beat trump. explain that thinking. henrietta: it goes through the

rust belt. wisconsin, michigan, minnesota. some polling is up and play. pennsylvania in particular. kamala harris does not do as well as joe biden does. scranton joe wins pennsylvania because he's from there. a lot of d.c. has moved on to who would be the running mate if it is kamala harris? would you pick somebody from pennsylvania or one of the midwest states? could it be gretchen whitmer in which again -- michigan polls better than biden and trump and that state -- in that state. that is the biggest concern right now. name recognition. all the candidates not named kamala harris have very low name recognition. as i mentioned, the american public is primed to get up to speed on somebody quickly. it's fascinating to see how quickly france and the u.k. can pull together an election. it is serving as an interesting guide for the united states and

the democratic party and say we can do this quickly if we want to. sonali: one thing we have been talking about here is the investor reaction and how swift it's been in certain moments of this early part of the race. one thing after president biden's debate performance, the reaction of the bond market really as a reflection of what could be expected in the house and senate if election outcomes were to change drastically towards the republican party. how quickly do investors reposition heading into november? what things are investors most prominently looking out for? henrietta: it is weird. there's a lot of questions about willoughby a red wave -- will it the a red wave. i know what that's disconcerting to folks. it sounds like an inordinately popular president, a great policy agenda, a lot of ideas voters support and that is not the case with the republican platform now. you can see donald trump is

doing a lot of damage control on abortion, project 2025. those agenda items are wildly unpopular with the majority of americans. what the republican -- what investors are looking at is this strange scenario where it sounds like you are about to elect donald trump, which should be the base case now. you will get a red wave. that sounds like maybe everybody in america is supporting donald trump's agenda. that is not the case. the case is geographically and statistically every single senate seat that is up that goes through a swing state also has a democratic senator at risk. that would include nevada, arizona, michigan, ohio, pennsylvania -- not ohio but pennsylvania. those are states donald trump would win and that's all the republicans would need to win the senate. my odds have been 90% that the republicans win the senate. in a scenario where trump wins and the senate and they have the

control, which i expect they will, there's only a 5% scenario where the house doesn't also break for republicans. the margins are really tight. it is just five seats. democrats could pick it up at 37% of americans don't know whither congressman is. when you're in the voting booth and polling line by line, the majority of trump's voters are men. i expect they would all vote down the line republican. not the idea of checks and balances because we have not in since donald trump stepped on the scene and 26 team. there were zero split ticket states and in 2020 that was only one in maine. position for a red wave if you think trump is going to win. the narrative there is inflation will rise and spending will rise, both of which i agree with. vonnie: there was a lot of disappointment with kamala harris after the election now she seems to be polling well. she has not had a chance to make her case to the megan public and

various -- american public in various issues. i'm talking michigan and women. henrietta: specifically women. she has a substantial increase with women. those voters were primed to be interested in another candidate not being joe biden because they did not support trump. i spent this morning looking back at the 2020 election and the outcome. they are not more women going to trump now then where the case in 2020. there are less. not more meant going to him now that there were in 2020. there are less. the available basket is two things. undecided voters, independent voters, female voters disproportionately and low education voters. those are traditionally a democratic voter base. you would expect them since they are women there is a greater possibility that kamala harris speaks to them better on the case of abortion then joe biden never has. the potential to pick them up

when it's one of the most important issues is in fact the most important issue to a number of black women voters. there is phenomenal polling on that. suburban female voters. vonnie: thank you so much. that is henrietta treyz from veda partners. we will continue to talk politics. just biden -- joe biden speaking a 2:15 eastern. we will speak next with susan levine on the all important jobs data from this morning. this is bloomberg. ♪ l-day energy starts with clean hydration. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty.

vonnie: u.s. hiring and wage growth down in june while the jobless rate rose to the highest since late 2021. let's discuss with susan levine, ceo of career group companies. thank you for joining. there was a lot of chatter about

temporary help going down substantially. what can you tell us about that trend given we have seen it over a number of months? susan: i believe the temporary market is down due to the fact that actually many of these workers aren't able to gain full-time employment. the full-time job market is driving the temporary market to decline a bit. i read that as well and know it. vonnie: what are you seeing in terms of the industries that are hiring now? susan: health care is up. tremendously so. professional services actually remains to be going get a strong pace, as well as private services. there's an uptick now in creative, which for a while post-pandemic really took a big hit.

that is really coming back. many, many industries are on the upward tick for hiring full-time employees. sonali: when you see a job market that is still hiring but you do see payrolls slowing, how do you describe -- you were in the world of recruiting -- the leverage there is between employers and employees? who holds the power at this point? susan: it's an interesting question, because we have been in the market pre-pandemic, post-pandemic, and i will say that what was once a very strong candidate market is slowing down and getting back to a normal pace of hiring now. i think there's a misunderstanding there because things are now moving to what i will call a normal pace, people

are viewing that as a decline in being able to find that perfect job. employers are more cautious. they are taking their time. it is slower but we are a leading indicator in the industry. i see it all. hiring remains strong. sonali: what does it mean about optionality? if you are somebody that was previously working from home post-covid three times a week are you able to find a job to that effect anymore? can you have the flexibility? can you ask for a raise as easily, for the time off as easily? susan: remote -- i'm not going to say gone are the days of remote. when the majority of the company and the executives are on site they are expecting for the employees to be on site. there's a hybrid schedule that

people are willing to allow depending on the industry. i also feel employers today do want the collaboration, the innovation, the mentoring happening on site, not remotely. there is some flex ability. maybe -- flexibility. maybe it is one day max or two from home. most people have returned to the workplace. vonnie: you noticed about a third of candidates admit to using ai to write either a cover letter or resume. does it work? is it getting them jobs question mark susan: i don't know if it is -- dobbs? -- is a getting them jobs? susan: it is certainly cutting down the time those candidates have to spend themselves to read the cover letter, to put together the resume. a lot of employers are suspect today.

they are beginning to be able to suss out what is really your voice and what is so perfectly executed that is potentially ai. sonali: susan, thank you for your time. that is susan levine of career group companies. we appreciate your insight in what has becoming an increasingly complicated job market. one place susan was talk about was hiring in health care and artificial intelligence. let's hone in a how ai is increasing efficiency for the workforce. joining us now is stephen green e. you say ai and some people are excited if you're an investor. if you looking for a job you might be more worried about ai and understandably so. how do you think about the way ai will start to interact with jobs even more?

steven: thank you for having me. we are seeing ai not replace workers but supplement them and give them what we call superpowers. i'm not smart enough to know how it will impact the clinical side of the house. i have not met a doctor using ai to dramatically change how they see patients. i am meant to meet a radiologist who uses it to scan an mri differently than they otherwise would have. we see the impact on the administrative side every day. what we do is voice ai. we allow practices to call insurance without a person actually having to be on the phone. as a human sounding voice that can make calls. it can wait on hold and navigate a menu and present just information. all without someone having to be involved. the phone call is just one piece of that. we allow practices to not have their teams waste 45 hours a day on the phone. we are taking a small part of their day off their plate but

they're still at your minutes about a work they have to do after the fact, like a were dating patient care, dealing with patients, calling pharmacies, things we cannot do. it's a supplement, not replace it. vonnie: your interesting case study in how ai will work and perhaps promote productivity. there's also the idea that we need to learn how to be able to solve for error in ai. what problems are you coming up with/ you had six month of data between practices and insurance companies for about six months. steven: the first piece is that the more data we get the better the product gets. at the beginning of when we were doing this we had called data put together that we tested. the more patients, the better it gets at navigating certain issues and replicating human speech. i would say we are in an advantageous position. we have invasions -- invested. it is not just that the best

technology wins. inferior technology wins because they can navigate the orchestration layer better. most of our time is not spending the model but figuring out how to integrate this into how practices work so they can actually use it to their events. we are getting tons of data. we are getting better models the better models get. we are trying to find parts of health care where you can have that -- as you mentioned, it is not perfect. it is going to get better over time, especially at the beginning you need to allow for certain errors. when we think about the things we are calling for, there are lots of use cases where you need to tolerance to be relatively low. we have the human in the loop. if there's a call the ai can't make we have a team that can get them the data they need. we have found there are lots of really interesting use cases.

if you take an average practice, they might have a stack of claims they have not gone through in months. those claims represent tons of revenue they are currently sitting on but cannot collect because no one has time to pick up the phone and call insurance. we can make those calls for them. sonali: if you're on the consumer side, if i'm on the phone and i want to talk to my doctor, and that's also a pretty tough to do these days, how can consumers expect the real difference here? bullet always be for the good honestly? steven: on the clinical side, you will still want to talk to a physician. there are certain touches they can make with ai that can supplement that, especially if the physician is spending time doing it ministry to work and not seeing patients. i don't think that will replace the physician touch. it will replace the back office work that's causing tremendous health care burden across the industry. vonnie: congratulations to you. can't wait to have six more months of data so we can speak

to you again and see how everything is going coming -- everything is coming along. that is steven greene. when you get the voice of the other end of the line that sounds like a real voice, maybe you won't know anymore if it's actually ai or human. there can be a human in the loop. standard practice ceo steven greene. we will speak more jobs in the next two hours. we will hear from president biden speaking in madison, wisconsin at 2:15 eastern or roughly thereabouts. we anticipate he will talk about the job support but will want to message a lot about his personal status right now as it comes into question. markets are higher on this friday, july 5. we have the nasdaq 100 up .9%. it might turn out to be an update after all for these indices. this is bloomberg. ♪

vonnie: welcome to "bloomberg markets." nonfarm payrolls. a lot to talk about.

it is not just post jobs data. tim: we thought it would be kind of a quiet week. we have a big u.k. election result. biden holding a campaign rally and we will bring that you live as we get them and of course the payroll numbers. vonnie: markets are on the move, get into earnings season. we have fed chair powell speaking. we are wrapping up the activity. it's interesting to see stocks on the move with the nasdaq 100 up .9%. to repeat the numbers, in case somehow you missed them today, we have june nonfarm payrolls up 200-6000 with revisions downward to previous months. the unappointed rate of 4.1% but not triggering. 20 oh get to someone who knows more about the inner workings of the nonfarm payrolls are and the impact of the bond markets and yields, michael mckee in studio. the revisions were important. are they typically this important to the bond market? michael: not typically but basically this is one of the

largest sets of revisions. they go back and revise the prior two months. 111,000 jobs taken away is quite a bit. it evens out the number we got today to the last two months and suggests the economy and labor market are relatively strong but not as strong as the fed might've thought. tim: my question is about when things go from bad news being good news to values actually being bad news. the labor market weakening is good news for the fed. it was a fed friendly report. look at the bond market. at what point do they see too much softness in the jobs market? michael: they predicted 4.1%, which is what we have by the end of the year. does it stay at 4.1% or does it continue to worsen? that will be the big question. does the sam rule apply in the current macroeconomic situation?

tim: vonnie was talking about earlier. michael: call her up. the other half is wages are still rising. 3.9% year-over-year basis. if you're looking at the cpi and said of the fed's pce, workers are getting ahead in terms of paying over inflation. there is good news and bad news. vonnie: they are getting ahead but at least that did not tick up. is that enough to calm the fed that inflation will not be ticking up thanks to wages? michael: were not there yet. they look at closer to 3% as a stable level of wage gains. it is a level you wouldn't want to see if you had to percent inflation, which is their target. they are thinking that's a little high. the progress and coming down with the labor market cooling

and a lot of the labor market cooling we saw today hit the services sector which has bothered the fed because there primary input prices wages. if we're seeing wages come down if you were jobs, it will take some wage pressure off going forward. tim: the june payrolls report is behind us. next week we hear from jay powell. he with you his semiannual on a teary policy report to the senate and house. then we get june consumer prices out on thursday. michael: yeah. it's going to be quite a week. the cpi will be more of the focus. jay powell is probably not going to give any indication of where the fed is going to go. he will even probably dodged questions about july. nobody thinks it will do anything in july. in september, head of the inflation reports come in between now and the september fed meeting? that is why the markets will pay

more attention to cpi then to powell. it's interesting to hear what he has to say about how the fed is thinking about the progress they have made so far. vonnie: commentators say the fed should be on the move. tim: i think it was get on with it already. vonnie: that's exactly what he said. michael: the fear is they end up behind the curve. they would be looking at the sam rule which to explain it a little bit is the three-month moving average of the unappointed rate minus the lowest three month moving average number of the past 12 months. sounds complicated. it is not that bad. you can do it on an excel spreadsheet. if you get half a percent rise then in theory from the low you are in recession. however, you have to look at why the unemployment rate is rising. normally in a recession it's

because jobs are going away. in this case jobs are not going away. more people are going into the labor market. there's a greater supply. we have a higher unemployment rate. not to predict what claudia will say but i think she has noted this is a question about the accuracy of the rule in this particular situation. vonnie: there could also be exceptions to the rule that has proved -- michael: if we hit the rule it doesn't matter if claudia some think it's accurate or not. the markets will forget anyway. that is what they do. vonnie: exactly. particularly the last 18 months or so. michael mckee, senior correspondent on all things economy and jobs related. let's move to somebody else who knows a lot about this area. jane oates at working nation,

nonprofit focused on employment. she's a former u.s. department of labor official in the obama administration. what was the take away for you today on the state of the labor market in the united states now and how much it might be weakening? jane: i was thrilled to see more people entering the labor force. that labor market participation rate has been just stubbornly stuck. it is great to see it come up a little bit. i was disappointed to see the huge drop again in temporary help. that temporary area is where a lot of people get back into the workforce or get their first job. tim: why do you think that is happening? jane: the easy answer is to say it's all the layoffs in tech. a lot of the temporary workforce was specifically in tech. places trained people. that had associates or bachelors degree in a specific thing. they did data analytics or some kind of data visualization

software. since all the layoffs are happening there's not that need for new talent in the temp space. i'm watching it. it is down 500,000 plus in the last three years. that's a lot of a decline. vonnie: for sure it is. what more could the administration do right now? it comes out every month and says we have been to make a fantastic job. it happens proactively. policies have created all these jobs. is there more that can be done? jane: the only evidence we see this month that things are starting to work is the uptick in construction. construction and manufacturing have been relatively flat. the increase this month in construction, the 28,000 witches over what the average has been is a good sign the infrastructure money is starting to kick in at the local level. i will take that as a ray of hope and hopes it continues. tim: president biden weighing enough of the numbers came out. "we have work to do.

wages are going faster than prices and more americans are joining the workforce. too many americans are feeling squeezed by the cost of living." that is his the hardest thing it space is things like chicken and eggs and gas can start to come down. housing prices are still stubborn. people are seeing that, especially young workers trying to by their first house or move out of their parents home and get their first apartment. i think it will take a lot of time. i do think there has got to be continued work in congress to make sure there are policies in place to make sure first-time homebuyers get a good chance at

getting that first home. vonnie: the payoff between inflation and wage gains, it's a finely balanced one for the worker. what is the sweet spot where workers are getting enough to cover inflation but not stoking inflation by getting those rises? jane: the best thing is when we see people working, more full-time people. one of the great things is a lot of workers. the number came down in what we call discouraged workers by almost 500,000. i think people are moving from temporary employment, from part-time employment into full-time jobs. it takes the pressure off things like health care. people get benefits. people have paid leave. they can have sick days if the kid is sick or they get sick. that is something that will remove some of the pressure. the other thing is more stores have to join the band like the walmarts and targets making an

effort to lower prices. the price increases we saw during covid in goods are still stubbornly high. i wonder if there is not ways to bring this prices down. tim: one area of concern for you is the idea that the youngest people are eligible to work are not necessarily working now. when you think about those jobs that the teenagers get, 16 to 19 years old, talk about why that's a focus for you. we don't hear a lot about that. jane: you know me too well. that's the bottom line. this has been a drumbeat i have had for years. even when i was in the administration and working nation tries to cover the young people as well. if you don't learn those employability skills, think of your first job. how to get there on time. you learn how to do your job. you learn how to work with others, work in a team. if you don't get those skills, schools can't do it. it's unfair for us to look at high schools, community

colleges, four-year institutions and say they should be doing all these things. they can train us and teach us to think, to problem solve. they can't teach us the things we learned uniquely on the job. you are right. the high double-digit unemployment in that 16 to 19-year-old age group is going to pay deficits to us in the future. we will see those people struggle to get a foothold in the workforce. vonnie: where are we on minority hiring? there had been some progress made on that. it feels like it's potentially stalled. what can happen in that regard? jane: there is still some progress. if you look at the labor market per dissipation rates, the latinos and blacks are increasing every month. the bottom line is the un-implement rate is still stubbornly higher among people of color than it is of whites. i'm not quite sure with that is.

i certainly feel as construction adds jobs in commercial construction and home construction, they have always been open to hiring people of color. even hiring often times people who may have a criminal record. i think that's all positive news. i think a negative news is until we see the other sector that's been great on hiring people across the border, men and women, manufacturing, until we see real job growth there i don't think we will, you know, make real improvement in the numbers. tim: we have 40 seconds left. we are waiting for president biden to make remarks at a rally in wisconsin right now. what do you want to hear from , the jobs front -- hear fro m him on the jobs front? jane: he has to motivate people to come back to work and motivate employers to continue the hiring trend. tim: jane oates, thank you for

joining us on this jobs friday in new york. that is jane oates at working nation, a nonprofit media organization focused on employment. also a former u.s. department of labor official in the obama administration. the dow is flat right now. s&p 500 higher by half a percentage point. the nasdaq is higher by .9%. we will hear from president biden in a few minutes at a campaign rally in wisconsin. this is bloomberg markets. ♪ it's salty. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty.

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tim: welcome back to the special edition of "bloomberg markets" on this friday afternoon. president biden facing the most consequential weekend of his clinical career. the president is scheduled to speak at a campaign rally in wisconsin in just a few minutes.

we will bring that to you live as soon as it happens. later, the president sits down with an interview with abc news. joining us now to discuss his joe mathieu, host of balance and rick davis, republican strategist at stonecourt capital. in the last week since that performance at the debate last thursday night we have increasingly heard the drumbeat of calls for president biden to step aside grow louder and louder. no members of congress, only a handful are coming out and saying he should actually step aside -- now members of congress. joe: we got a third on the fourth of july. congressman seth moulton from massachusetts aligned with the biden white house, an ally of joe biden was with us on tuesday kind of feeling this out live on the air as he was struggling with this whole concept. that is the case for a lot of democratic lawmakers. i spoke with one off the record this morning remind you they are all home right now for the

holiday. marching in parades and talking to people at picnics. you better believe this is what they are hearing about. does joe biden dropping out? what are you going to do about it? the democratic lawmaker to a spec many more of these when they returned to washington next week. bloomberg news reporting the last two days that dozens potentially of house democrats could sign off on a letter expressing that feeling to joe biden when they return they are waiting for an in-person conference meeting that will probably happen on tuesday morning. they will be back in town monday night and you will hear more about it with this interview today. the rallies in wisconsin and philadelphia in the rearview mirror and the beginning of a nato summit in washington. the president will have eyes from all over the world on him over the course of this next week. vonnie: as you say, there will be an onslaught of appearances from president biden starting in the next few minutes in madison, wisconsin. we will see that internet week. rick -- into next week.

rick, is there somebody who they said they have to go that biden would consider going? is it completely biden's own decision? rick: the nuclear weapon is barack obama. the president has a close relationship with joe biden. biden served as his vice president. he is still seen as the most influential figure in the party. he's not been very political since leaving the presidency. he left the stage the joe biden. for him to actually be willing to step in and make this kind of effort on behalf of the party to change in such a late hour the democratic nominee for president would be pretty extraordinary. most people feel unlikely, but he's certainly has the capacity to make that affect. this is a joe biden family

decision. one in which we know they are grappling with and doing everything they can in a short time to try and beat back this discussion of him leaving. they know what the consequences are today. today he has a rally where he has to show he can carry a message and he has to do it in a way that betrays his age. then this interview with george stephanopoulos tonight, that is really critical to his ability to carry on his campaign. that will be the first time we see him without a teleprompter. that is what got him in trouble at the debate. the question is can he survive the interview tonight? vonnie: joe, we've had two people today, david westin and henrietta treyz saying he doesn't have to go now. it might be helpful not to hand the republicans a new name right now. does washington think that's

going to happen? what are the murmurings in k street and beyond? joe: you get a different answer with everyone because no one actually knows. i'm not sure joe biden knows where he will be a couple of weeks from now. it seems like they carved out a week for themselves. the weekend, the nato summit. that is with a solo news conference with joe biden. think of these as the bookends. the interview, the saloon is conference next thursday that will probably be late in the day. he will be exhausted and will have had meetings all week talking with world leaders. that will be a big test. more than just two reporters that we get in a bilateral news conference. then we go to milwaukee. there will be news likely right around the time that joe biden is doing that conference on a vice presidential candidate for donald trump. let's assume a beam milwaukee buys another week. then everyone focuses on chicago when we actually have the nominating contest -- the process for democrats.

this will seem pretty urgent at that point if joe biden has not been clearing these hurdles we are talking about now. tim: to a lot of people it probably does feel urgent when you face the deadlines and you think about balance being -- ballots being printed. time is of the essence for many people watching this. rick, i'm wondering about donors moving the needle and to what extent donors have the power to actually push the current president assad when it comes to the top of the ticket -- current president aside when it comes to the top of the ticket. what could they do? rick: you need cash to run a campaign. biden has shown great resiliency and fundraising. in the last quarter almost $250 million in q2. a great haul. cannot be sustainable? we have seen many democratic donors, very high-profile

ones announcing they will withhold further donations until they know better what's going on in the nomination. the real question is could he survive another bad report? that is not going to come until probably early august. by then all these events and activities that joe biden or joe mathieu was talking about have already taken place. as you point out, there are requirements to be on ballots. there's a conference call scheduled by the dnc right after the republican convention to get delegates on and formally nominate joe biden. in order to be able to make the deadline for the ohio ballot. time has run out. it is not likely to be money that pushes biden off the stage. it will be his own capability. that is what everyone is watching today. vonnie: something like 30 days to have the nomination. even then there might be a tiny bit of leeway.

in terms of national getting the message out there if it is somebody else, is sooner not better? rick: i think the rationale around not giving the republicans a new name before their convention is sound. white hand them a microphone when they are -- why hand them a microphone and they are gathered for a week? is not so much about donald trump, it's whoever the new nominee is. sure. there is an advantage to delaying it. the reality is that this campaign really doesn't even start up in earnest until after the democratic convention and labor day. we are excited this is the most active campaign probably in history in the summertime but as we have seen in the polling data the summer is not a place to get people's attention. the reality is that there is plenty of time to make a change and form a campaign and raise

the money you need for the big sprint in september and october. tim: rick says there is time still. rick worked on campaigns so certainly worth taking that into account. joe, i wonder about the attention focused on and to what extent that actually hurts democrats. for the last week the media has been totally focused on whether or not president biden is going to step aside and he can actually serve four more years if reelected. not on the issues, not on the policies that separate him from former president trump. not on the campaign -- what the campaign wants everyone to be focused on. i don't see how that changes in the near future. joe: this is why democrats are freaking out. that is why it is not about money. there is a big dark cloud logging out the sun on all of the stories right now. there's a reason we have not heard much of anything from donald trump. is this not remarkable?

since the debate last week, a week now, a couple of truth social post but essentially he's giving joe biden all the oxygen. whether that is discipline and is listening to his advisors, that maybe one thing. it speaks to the moment here. everyone is looking at joe biden. if he cannot clear what are frankly some pretty low hurdles, the bar is very low, to get through an interview without stumbling or halting, without forgetting his words or misstating something, that is what people are asking for right now. let's see if he can do it. vonnie: george stephanopoulos will be asking difficult questions. if you were george stephanopoulos, what would you want to ask him? rick: there's a whole chain of things. how was he feeling personally? there's a whole side the american public wants to understand, like what the day in the life of joe biden is. he even went out to have his way to tell democratic governors

last wednesday i need to get more sleep. i'm tired. that's part of my problem. i think stephanopoulos needs to get under the policy and rhetoric and give the american public a view of what's going on with this guy. is he really an extraordinary 81-year-old who's been able to survive three and half years of a very difficult administration and a compass great things and he can handle it for another four years, or is he like your grandfather who you don't give real responsibility to and is a wonderful guy but you wouldn't hire him to be president of the united states? that's the key test tonight. what capacity does joe biden have to think on his feet, articulate his plans and connect with the american public? it is much less to do with policy and a lot to do with joe biden as an individual. vonnie: up to fairly recently it was donald trump's mental acuity people were more, you know,

obsessed with. now it seems to be biden's. is there any way the democratic leadership or anybody surrounding the democrats can switch the narrative once again? joe: it depends on his performance. people try to point you back to the more wild things donald trump has said on the podium. that is different than the age issue. even though they are only three years apart just questions about whether joe biden can get through the day, get through the evening. they call him the 4:00 president. he said to the governors he needs more sleep. that is kind of a different matter here. when we look to folks in our own families who were at this age we wonder what is going on with this president. he will have to show people not only does he have the acuity and stamina here to be able to add live his way through a difficult interview, but has the white house been hiding aside of joe biden from us? he doesn't do prime time news conferences in the east room. he doesn't talk to us on balance

of power. we see a slice of joe biden's life and there are questions about whether we will see the whole picture. when karine jean-pierre spoken the news conference earlier this week she was not able to say if he had seen a doctor. she suggested he had not. he had seen a doctor since the debate last thursday night. the white house had to come back and confirm that today. what is the full picture here? what is his day-to-day? have any time since the get up at night? how well rested as he? this is the commander-in-chief and in some cases you have to be able to stay up for days on end to do the job. is joe biden able to do that? tim: literally traveling around the world and getting 2:00 a.m. phone calls. i want to leave things with rick and have you weigh in on what democrats should do next. let's say the president decides to step aside. it is his decision. we're are looking at live shots of him just having landed in

madison, wisconsin on his way to this campaign rally. who should democrats choose for the top of the ticket? rick: as you know these are two wildly unpopular candidates. it is as if donald trump is more popular than joe biden. 76% of the country does not want to vote for either of them. the democrats have a unique opportunity that just about anybody reasonable at the top of the ticket, if not joe biden, will immediately have a significant advantage over donald trump. because they won't carry all of the baggage the two candidates currently have and everything we have seen in the polling indicates voters want somebody they cannot rely upon that is normal and will shepherd the country forward, be capable of serving as commander-in-chief, and not be joe biden or donald trump.

the donald trump campaign is incredibly nervous that joe biden exits the stage and they have somebody over the next 60 days that will have a much different profile with american voters and a much more difficult chance of beating them on election day because now he will be the oldest man in the race and the least popular candidate on the ballot. i think this has all kinds of ramifications for the donald trump campaign, almost more so than what is going on with the democrats. >> donald trump wanting secret documents cased paused after the immunity ruling we got a few days ago. donald trump asked the florida court to weigh the supreme court opinion on the case and wants the secret documents cased paused after that immunity ruling. that's joe mathieu host of bloomberg's and rick davis of

stonecourt capital as we await president's campaign remarks at a rally in madison, wisconsin a crucial swing state. tim: bond yields down across the curve, the two-year down to more basis points and at the 30 year down five. it vonnie: a huge day for yields. the whole curve shifted. the 210 part of the curve perhaps more than the long end. let's bring in somebody that can tell us more michael mckinley of bloomberg news and at bloomberg intelligence rights and strategist ira jersey. michael, how big of a move in yields is this considering we have seen several roundtrips for yields this year? michael: the softening we are seeing in labor, now has the markable -- market more comfortably priced in 50 basis point or two race -- basis

points. tim: michael, they are still working on getting your microphone up. it was genius what you were saying. you will get to ask the question again. i want to bring in ira jersey with us from new jersey bloomberg intelligence senior rates strategist. same question. since we have seen such a round-trip when it comes to rates how do you look at today's news and the drop in rates across the curve? ira: the market thanks they need an excuse to cut interest rates. when you have a slowing job market that is certainly one of the key indicators. it's not a huge surprise that we have had a bit of a rally on somewhat softer data, particularly the little tick in the unemployment rate even though it was incremental overall. the fact that the front end is rallying so much as a signal. not so much that the fed will necessarily start cutting early,

but at the federal reserve might cut more than the market was thinking before. you look throughout the curve with shorter-term interest rates , futures, now the short term entrenchment -- instrumental look at that everybody in -- uses to hedge, you look when you're 18 months out from today does have rallied the most. i think that the signal that nobody really cares in the macro if they cut in september, november, or december. it's where they get to at the end. we are starting to think that maybe instead of cutting 3.5% they will only cut 3%. that starting to be priced into the market now. vonnie: michael mckenzie, it would be nice if you reacted and explained about why we are seeing the jobs report weakening ever so slightly and such a big move under the bond market.

it might not be a big move this year but in general eight basis points is pretty big. michael: we had july 4 yesterday and a lot of people aren't under the market today. you have two big events next week. jay powell's semiannual testimony at congress and the cpi. i think the cpi data is what the market is waiting for to get data. the market is still not pricing in 100 basis points in cuts that the fed itself expects for next year. that would be the next leg of the trade. if you get signs inflation is cooling, the labor market is continuing to cool down here you will see their mind correct -- the market get more comfortable pricing in what the fed expects for next year. if that will help the front end. this is a market where i think the front end will lead the charge. the uncertainty is, how much can the backend rally given the election will increasingly come into focus?

you will be reminded all the time that spending won't slow down. the deficit will continue to rise and i think you will see a restoration of a positive term premium back into the curve. tim kotek you talk to people every day in the bond market that are buying, selling, participating. on a day like today, after the fourth of july when you said not many of our office, who is? michael: strategist and investors. people monitoring the market. in terms of taking on new positions, putting new positions to work here you really have to see how the inflation call pans out for the year and i think next week will probably be more important. and it will be interesting to hear jay powell. is he more dovish? does he stay very tightly focused saying we want optionality, we are looking to do at least one cut this year? that is what the market needs to take on board too. i would say today's movement can

be exaggerated given this and liquidity. vonnie: what will jay powell want to convey to congress? our rug: i doubt he will shift substantially from the june meeting. things are slowing down, but not quickly. he can point to a lot of data suggesting that the job market is getting more into balance. i think he will use that again. i think he will stick to the medics. the monetary policy report is 70 odd pages. i have not been able to read the whole thing yet. it just came out a couple hours ago. that did not say anything much different than the minutes wednesday. i think he will stick to that script. i think he has to. remember, he is talking for the whole committee, not necessarily his own beliefs. if he is asked, what you personally think? that could be more interesting. he starts with the senate this

time. if you and i afterwards might be more technocratic, more technical, as opposed to the political grandstanding that often happens in the house of representatives, that will be the following day. tim: you still have a weekend to set back and enjoy time outside reading that report. monday we expect a full summary when we speak to you. before that i want your thoughts on the way that rate investors have thought about cuts this year after today's data. it was a mixed report. we spent a good portion of time at the top of the show going over it. did you see a reset in how traders are thinking of cuts from the fed? ira: a slight recess for this year. making a higher probability of september. september is now a live meeting. i would suggest the data may not be we can have the fed is comfortable starting to cut in september. keep in mind, the words to listen for with jay powell next

week after the data we have received is, we have risks of cutting early and risks of cutting too late. he was asked specifically earlier this week about whether or not september was when they would start cutting rates and he said, every meeting is live. we will let the data lead us. it depends on the next two months of data prints as to whether or not september is when they first cut. frankly, unless you trade the instruments, it does not really matter. i am looking more at the late 2025 instruments. that is really what tends to move the two year note, the 5-year note, and the rest of the treasury yield curve. >> --vonnie: we used to watch the five year five year forward a lot and now it is the one you're 18 months forward. where else should we look for indications? michael: i think that's where

you start. there is a debate in the market as to whether the fed will have to cut more aggressively than consensus. if rates slow down it is better you be faster with cuts to start and then stepped back and wait to see how things pan out. over the next 18 months you will see, i think, the majority of cuts. i think longer term you can make a pretty good argument that inflation will probably be stickier. you have supply chain issues still evolving. we still haven't really got beyond the covid experience in terms of how it is changing the economy. i think you can argue that the long-term mutual rate is probably higher in this environment, particularly with spending. there is still stimulus coming through the economy from spending we have seen under the biden administration well. tim: in terms of the next catalyst, next week is big. we hear from jay powell on capitol hill. we alluded to that moments ago. we get inflation data thursday.

what is bigger news for you? michael: inflation numbers. tim: mike mckee said that also. it is interesting looking at the bond market at the moment, unwilling to go beyond pricing in two cuts. we began the year with six cuts priced. the market has been very disciplined. it's been burned pretty hard in the past by trying to anticipate fed pivots. they want to see inflation numbers. if inflation numbers are cooperating, moving in the right direction it will give the fed is the ability to go in september. it is live, but not fully priced. ira: mike makes a good point. the fed needs cover at some level. some indicators suggest the economy is running pretty quickly. and if they cut interest rates people are worried. a lot of investors i talk to are worried about re-acceleration of inflation if the fed does cut too early. you need to see inflation

numbers come down. this will continue to be key. it will give them the cover to be able to cut interest rates, especially if they cut as early as september. vonnie: you probably know i was going to ask about the sam rule. we will speak with claudia later about exceptions to the rule and so on. does today's data make it likely we are anymore closer to a recession? ira: maybe a little bit. but typically, i have gone back in history and looked for percent changes in employment and household and establishment. those are all running at levels like in the mid to thousands or 1990's. when you are growing the employment by 1%, 1.5% per month on an annualized basis that that is typical and that is right where we are now. the question is, will it decelerate further?

that is where the fed forecast and everyone forecast will matter, whether you think the economy is cooling and having a soft landing or whether you think we will go into recession. it's not unusual for the federal reserve to start cutting interest rates when payrolls are positive, but declining. at the same time, 200,000 jobs created per month if you believe that number. i know that anna wong and folks at bloomberg economics have questioned the validity of it. if that is correct to the economy is fine. at least the job market and that part of the fed mandate is not bad with a 4% unemployment rate. tim: we are focused on politics. we will hear from president biden in a few minutes. what are you watching when it comes to rates if there was to be a big surprise in the coming days? michael: watch the curve. last week we got a nasty bare steepener. today we are getting a bullish steepener. that is the way the market

prefers to see the curve steepen. a bearish steepener would be problematic. vonnie: thank you for keeping us on the straight and narrow, or, on the curve, i should say. that's bloomberg intelligence rates strategist ira jersey remotely and in studio, bloomberg news' michael mckenzie. we will hear from president biden in a few moments wheaties in madison, wisconsin for a rally. of course, it's a swing state. and all that before and important news with george stephanopoulos later on. all eyes are on the president's performance today. stay with us. this is bloomberg.

vonnie: sterling strengthening today after an election day yesterday in britain. britain did indeed vote and we have a new prime minister, keir starmer promising a government of stability and moderation this

morning after leading labor into a landslide when. ewan joins us with more from london. what steps will keir starmer take into the weekend and beyond? ewan: we have had july 4 election fireworks in the u.k.. 61-year-old former lawyer keir starmer, a little older than recent prime ministers. in u.s. terms making him a very young man. he brings a lot of experience to the job and has won by a landslide, a big victory for the opposition labor party and a crushing defeat for rishi sunak with the party of brexit and boris johnson booted out by the british people. he has started appointing cabinet with rachel reeves in place as at the new chancellor heading the trajectory department -- treasury department the first female

chancellor in britain. we have had three female prime ministers but never a female chancellor. for once, she is an economist, unusual leading the department. a former bank of england economist who will be in charge of finances. a new foreign secretary david lambing has been making efforts to build bridges with democrats and the trump team out of the u.s.. he went to harvard law and is reportedly a friend of barack obama's as well. those are two key appointments already in place from prime minister keir starmer. tim: we are a global program. at this time of the day a lot of americans are listening. can you give historical context? contextualize how big of a moment in history this is for keir starmer to win and for labor to win in a landslide like this. how big of a deal is it? yuan: an enormous electoral swing. the electoral cycle changes in the u.k. every 15 or 20 years or so.

we have had conservatives in power for 14 years now, since 20 10. the last time they won the bid was in 1997. tony blair won a majority of 179 in the house of commons. keir starmer's majority is very close, 100 70. it's a big win for the labour party. cast your mind back to 2019. they had a crushing defeat led by a very left wing leader called jeremy corbyn. kind of the bernie sanders, if you like, of british politics. it did not go down well with the british electorate. they turned themselves around, moderated their agenda, pivoted back to the center and put forward a very moderate program of stability pledging to end the chaos. it's been a turbulent few years in the u.k.. we have had five prime ministers over the course of the tour years, not something we are use. they are promising to bring back stability and in keir starmer's words, and the chaos. some of the --vonnie: some of

the instability was due to the dreaded word brexit that was not used an awful lot in the last few weeks. what about now? what kind of relationship does keir starmer want with europe and european politicians bearing in mind we don't know who some of those politicians will be get even? yuan: there is plenty of political uncertainty in europe. lots of bridge building with the u.s.. there are plenty of questions in the campaign about how keir starmer would deal with a president trump. it's very fair to say they are two very different personalities. keir starmer is a rather uptight, serious figure. he does not really shoot from the hip. he thinks first and it speaks in a very considered way. of course, we have had unusual partnerships in the past between 20 blair and george w. bush who were famously quite good friends and allies, from different parties as well. that seems possible.

but i think that biden and keir starmer are on the same side of the political spectrum so perhaps that is a partnership that could work. on the important questions of european relations, you are right that brexit was the year a dog never barked in the u.k. election. nobody talked about it. parties were having to not mention it. we are all a little bored of it, frankly. the labour party says it won't rejoin the european union or the customs union or the single market. they doodle -- they do want closer steps with -- closer ties with europe. labor did not want to leave the european union in the first place. they are clear they only want incremental moves. tim: incremental, gentle steps. yuan potts joining us from london. a look at sierra white to go ac of red. but going to fall in for a

fourth consecutive trading session reaching the lowest level since february. could it labor's sweeping win leading to more regulations for crypto? there's always a crypto angle, fair to say. the policy lead at the crypto council, a global alliance focused on advancing crypto innovation. she joins us now. laura, the markets right now are not optimistic. perhaps you could argue it was priced in, but we are seeing crypto slide no matter what we are talking about now. how do you view the labor win in the u.k.? laura: a historic win. 412 seats out of a possible 650. that's a very convincing majority. but labor have not made any statements about crispo -- any public statements about crypto assets yet so the industry is understandably a little nervous about what direction labor will go in. it represents an opportunity for the industry to reengage and

highlight the importance of the crypto asset ecosystem, underscore what the big issues are, and work together building a robust regulatory framework. it's important to remember that in the u.k. the regulator is independent. these changes in politics will not influence the mandate of the regulators, certainly short-term. vonnie: in labor now aren't there more fiscal priorities then crypto and crypto regulation given so many countries are fighting for the lead on crypto anyway? laura: we had 14 years of conservative government. it is of inevitable there will be other things on the labor priority list ahead of crypto. i think there are three very key areas of labor can focus on to make quick wins. one is around stablecoins. the u.k. government needs to finalize legislation to bring stablecoins within the regulatory perimeter.

this started under the conservative government and now we need labor to continue to trust and rely on its policy experts and lay that legislation as quickly as possible. the other area is around staking. staking is a really important technical infrastructure activity that insurance the security of the broader network. how and where staking into place with financial services regulation is crucial to get right. the third area, i think the labor government should be focusing on, his financial promotions. in the u.k. we have had rules governing how you can advertise and promote crypto since the beginning of the year, but, those rules are pretty broad in terms of territoriality and have a lot of complexity. understandably firms are struggling with certain aspects of implementation. we would love for there to be clarity from policy makers in terms of what is and is not in scope. tim: in the u.s. it is a lot of money from crypto going to presidential candidates, and

especially down battle -- down ballot candidates, even more so. was crypto a part of the campaign for the candidates? laura: i don't think it was to be honest. as i said, there have been a lot of issues in the u.k. over the last few years. we are still reeling from covid. we have a cost-of-living crisis. we have high inflation. the nhs is on its knees. we have a junior doctor strike. there are so many issues that a lot of the parties have been focused on and i think that is a reason why labor has not necessarily pushed on its digital assets agenda. but, now is the time it can do that. because, crypto assets in the u.k. are here and here to stay. it's no longer a question of, do we want to them in our market question -- market? f it is who'd we want to regulate them, us or someone else? vonnie: thank you laura

navaratnam policy lead from the united kingdom. joe biden is not formally the nominee yet for the nub democratic party and may not end up being that. he is speaking in madison, wisconsin and in a few moments we will bring his comments to you live because all eyes are trained on the current president now, speaking later on to. david westin host of wall street week joined us in our studio. all eyes will be trained on him because he needs to show a lot of vigor, youth and ability to can be completely off the cuff year. tim: that would be a tall order on the best of days. having said that i think the appearance in the rally might be the easier of his two tasks today. it appears right after that he will sit down with my old colleague and friend george stephanopoulos and george will try to put him through the paces to try to demonstrate to the american people that what they saw on the state was truly an

aberration. tim: we love talking to for a lot of reasons and one is because he ran abc news for years. if you were running abc news at a moment like this what would be the meeting you would have had with stephanopoulos and his team ahead of the interview? david: when i wasn't there i would sit with the anger and political director in this case, the political director probably, of the evening news. vonnie: and more lawyers. david: to really go through what is the strategy? what do we want out of this? what will we try to deliver to the american people? you go through the strategy overall, but you don't micromanage. george is a pro that knows politics in tv news terribly well. at the same time, it seems to me it's clear what the overall goal would be pure to try to demonstrate to the american people, if the president can, that he is capable of doing the job. part of that, for me of -- me at least, just as a citizen, is, what does he think happened that night in the debate?

and more importantly, what steps if you taken -- is he taking, can he take to make sure it won't happen again? having a bad night when it is a vladimir putin invading poland or something is not a good thing. vonnie: it's difficult to know how to respond. the old adage. how do you respond to, when did you last to beat your spouse? it's hard to prove a negative. he started saying i need to go to bed earlier and so on. that is not really promote confidence. david: listen, it's very hard no doubt. i think in president of the u.s. is a hard job from the get-go and you are not graded on a curve. maybe that is fair or unfair but that is how the world works and what the american people expect. at the same time, i think it's a question of seeing how agile he is, how much in command he is, how much he understands the significance of what is happening and how he can really leave the country forward.

it's a hard job, i agree. there is nothing easy about this. but i don't see any other route. i mean, i don't think he can just do a rose garden strategy and stay in the white house and expect people to vote for him given what they saw on the debate stage. he has to come out now. he has put himself in a jam to some extent. he has to take more risks, ironically, rather than less to overcome that impression. tim: something we talked about earlier with joe mathieu and rick davis is the idea that from the debate last thursday night until now, david, everybody has been focused on this one singular question. and it the other questions that come along with it. what they have not focused on is, what differentiates the two candidates? how are their policies different? how are they promising to run the country in a different way from right another -- from one another? i am wondering, from the perspective of somebody that has worked in media for an entire career if that just continues if biden does not step aside and

then there's basically no coverage of how he is a different candidate. vonnie: he has made it an issue and it displaced questions about policy. i think part of george's task tonight is to get the president to go beyond all of the wonderful things he has done. he has accomplished a lot. i think that most people objectively would have to say he has. he got a lot done. no doubt. but it's almost irrelevant for the moment. it's not a question of what you did, but what you will do over the next four years. are you up to that job? he has put himself in that situation. i think if i were advising him, i would say that's your one job. you have to do that. we won't get to the policy things unless you get past the confidence question that's now on the agenda. vonnie: it has really taken the

eye off donald trump's court cases. he has been quiet on that front. david: isn't it remarkable? it seems to be a different donald trump from 2016 or 2020. all of a sudden he is disciplined, being quiet. it's that adage. when your opponent is destroying themselves, get out of the way, don't contribute. the only thing i saw was him disowning the 2025 plan that has been floated. if anything, he kind of tacked towards the center. that's not the donald trump i thought we knew. tim: either somebody is advising him or he is being uncharacteristically restrained right now, david. we saw that at the debate. a question i had was, i know that rules were agreed upon by the two candidates. not to harp on the debate, but the whole reason we are talking about this is because of the debate. having the former presidents caught off when he was -- cut

off when he was not speaking probably did him a huge favor because he just let biden speak and it hurt him so much. david: isn't it ironic? president biden and his team really wanted that debate. if they are the ones that agreed to it. they agreed to all those terms and structures perhaps thinking that donald trump would not be able to abide by them. at least watching it, i thought it benefited him. it made him more concise. he had to get the answer done and if he did not the mic would be turned off. you do not have an audience of plato. he did not go over the top to get reaction. it led him to appear to be more disciplined and focused. it's a different question of what -- whether what he was saying was true or not. but it was done in a focused, discipline way. vonnie: how will biden come to this decision? it will ultimately be his decision, yes, his family, supporters, and so on.

will he continue to put in huge days with lots of public appearances? david: second question first. i think right now he's in a position where he has to do more rather than less. i don't think he can dell back. i don't know what president biden or his team's thinking. we can refer to what we have been taught in the past. that the main question for him is who can beat donald trump? his belief is that he is the only one who has beaten him or can beat him. there is a question if his mind is being changed as he sees numbers coming in now raising questions about all that. and the other thing, projecting from when i had my little crises running abc news, i learned when it is all coming in at you and you are really in trouble, do not decide anything until you need to decide it. there's a temptation to rush in and try to decide things prematurely. but you don't know.

if i were him, i would say let's wait a few days and see what happens with the numbers, with my performance in the interview. let's just take some time and let this absorb. you can overreact in crises. there's a lot of hydraulic pressure to do just that. tim: what would be the moment he needs to decide? just ahead of the convention? so there is -- not necessarily some brokered convention but a switch ahead of that? david: i think there is more pressure than that because ohio, it has to be some period before the election. i think there's a time in late this month, july that they have to have a virtual convention where they get the nomination, right? tim: a printing of the ballots. david: exactly. so his hand may be forced. i don't know if that will be changed. it sounds cumbersome and i don't know if you would want to do that. i don't think it's just waiting

to the convention. he has to make up his mind before that. making decisions one-day versus one week from today i am not sure if that makes a difference. he might say, i want to get to the nato meetings. for him to say i am no longer a candidate on the eve of the nato meetings, pretty important, i'm just projecting, just speculating. if i were advising i would think about that. vonnie: kamala harris will be publicly completely supporting the president and everything that comes out of the white house. but privately, she must be wondering if she could start making phone calls, get in the public eye more. is she stymied? can she do nothing for herself? david: i don't know the internal dynamics, but if i were advising her, i would say that right now you have an audience of one, joe biden. you need him to come to the conclusion that he wants to step aside and back you. i would say to her, i would not

do anything that might jeopardize that and the rest will take care of itself. it won't be better making those phone calls one or two weeks from now that it is today. but if joe biden got the impression that you are trying to push him out, i think that could backfire. again, just speculating. no inside information at all, but that is the way i could think about it. tim: we expect the president to take to the podium at a campaign event in madison, wisconsin in a few minutes. typically we don't tape campaign events for a lot of reasons, but this one is different. i think every event will be looked under dish -- looked at under a new microscope in the wake of the event that happened last week. does this even move the needle? because it's not a debate. it's not him off the cuff with nato leaders. it's not him at a press conference. it's the joe biden, potentially, that we saw last friday in raleigh, north carolina, a

completely different joe biden then the thursday night debate joe biden. david: the world is very different since the debate. earlier i would have said, absolutely not. we don't take campaign events. they should buy airtime if they want to do that. we don't give it to them. some people have criticized the media for doing that to donald trump in 2016, giving him too much coverage of campaign events. but i'm not making those decisions anymore. it is above my pay grade. i think you can't -- he can't afford not to take it in case he does make news. if something bad happened it would be big news. you don't want to be caught out on that. it's a symmetric. -- asymmetric risk. vonnie: how much can everybody pry into his medical history, his current medical state? can we know every last detail given that we did not for donald trump many times?

david: personally i think there's a limit. i don't think we have a right to see every confidential doctor's analysis of his state. i do think, as i say, we have the right to know, is he up to doing the job? part of that answer, i think, has to be, what was the problem? from his point of view, what was the problem? we have had a three or four explanations so far. he was tired. he had a cold. he was jetlagged. he is the president of the united states and knows himself better than anyone else knows him. from his one to view what was the problem? that's essential to know, how do you avoid it happening again? i think for the american people that's the most pertinent question. vonnie: we will hear from joe biden in a few minutes from the campaign stop in madison, wisconsin. i want to bring in somebody who has been watching the u.k.

election and everything going on in the u.s. right now, tina fordham. tina is a geopolitical strategist and founder of fordham global foresight. before the u.k. it, can i ask your impression of what is going on in the u.s.? it took a left turn. we were highly focused on everything court related to donald trump. and suddenly we are focusing on whether president biden could even run another time. tina: for me it was entirely consistent with what we were thinking about this election. there are too many variables, too many new factors and fluidity in this race for it to follow a typical u.s. elections playbook. that is exactly how it is playing out. things are starting to come loose. tim: i guess the question is, how much more loose can they become before things, i guess, become tighter? that is a question a lot of democrats are probably asking right now, tina.

tina: absolutely. we are observing how campaigns and leaders, no matter how dedicated they are cannot control everything about the process. that is what we are witnessing now. i have encountered a fair amount of hostility for my observations straight after the debate saying i think that that performance was a game changer and age is not reversible. of course, biden will do better in other contexts, other environments. he's a very competent politician with a great deal of experience. he has presided over an important economic recovery, as far as i am concerned. but americans are right to ask if he can serve until 2029. it's not a matter for his communications team to simply provide reassurance.

vonnie: exactly, tina. by the end of the day we will have commentary from joe biden. we are waiting for his comments from madison, wisconsin. if joe biden steps aside and somebody else comes in. kamala harris, gavin newsom, whoever. what would it do for donald trump's chances of winning? we who have had to head bowling now and we are very far from election day. navaratnam very far. i would make the case that if a change is to take place on the democratic ticket it needs to happen in the next few weeks. the nato summit in two weeks time is a major signpost. it's next week. the u.s. will host in washington world leaders including the new u.k. prime minister keir starmer and possibly a new french prime minister, almost certainly a new french prime minister. a lot of change in the global

environment. it would also be an opportune time for the u.s. head of state to speak to allies. but that might be a faster timetable than the white house and biden team are prepared to look at. tim: we have an article out on the bloomberg about allies being concerned overseas about the current president's ability to win election come november. i wonder if pressure, -- what pressure, if any, that could put on biden to step aside? tina; there will be reluctance from u.s. allies to put on any pressure, for sure. but part of the reason, if not the main reason why u.s. allies and indeed, my ceo and investor clients here in new york are so concerned about biden's estate is because they are so worried about a return of donald trump to the white house. that is a consistent view across the political spectrum.

just because of the fear and implications of a trump 2.0 on the global trade environment, tariffs and security. here in europe with security and war the number one issue. vonnie: you probably did not think you were coming on to talk u.s. given the british election we just had. does anything change under a bridge and write a -- does anything change in britain radically pretty soon? tina: british voters certainly hope for a change. they gave the conservative party that has been in power for 14 years a real drubbing last night. it was something to behold. something that will be surprising for u.s. viewers is rishi sunak is already out of downing street.

keir starmer has met with king charles. it has all changed. same with the chancellor. there is no grace. -- there is no grace period. there no lame duck period. the new team will be in their seats in the coming days. a labour party government, with a majority, represents a significant change, particularly, a departure with brexit. remember, that is probably the signature achievement as such for the outgoing conservative party. but, the cupboard is also bare for sir keir starmer. and he is really -- has really made the biggest promises about returning u.k. to growth because growth here is languishing and restoring public services. business is actually back in labor for the first time i can remember. tim: that was a part of his

speech, this morning for me and this afternoon for you that really struck me today. the idea that government is there to help and the services are there for the people. you do not necessarily hear that here in the u.s.. a lot of people think government gets in the way. that is the philosophy of a lot of folks in the u.s.. can you explain how things like the nhs have been under pressure and how it is such a loved organization that was crucial to the labor victory here? tina: crumbling public services appear in the top three concerns for british voters. it will surprise americans on the right to understand is that the nhs is a much loved national institution. look with horror at the united states and the idea of medical bankruptcies. that does not exist in this country. so finding a way for the nhs to be more efficient in light of an aging population and everything else is a major task, to be

sure. and, one i think any incoming government would have to be looking at tax increases. american viewers need to resist a temptation to put everything in u.s. terms. the u.s. -- the labour party has a socialist in its name. it has taken steps to cultivate ties in the city of london, our equivalent of wall street. and frankly, the conservative party has not been the party of business for some time. with brexit they kind of threw financial under the bus. labor will have no honeymoon. their landslide victory is probably more of a kicking to the outgoing conservatives. somebody called it a loveless landslide. i think that is probably fair. and it has also been a

completely peaceful civilized drama free transition. i think this should be inspiring for us americans. vonnie: a drama free transition. gosh. when did we last have one of those? tina, we will keep in touch through the next few months. tina fordham, geopolitical strategist and founder of fordham global foresight on the british elections and what is happening in the u.s. right now. you would not believe it, because it has been so captivating waiting for joe biden to speak and talk jobs and everything we have going on today, but we are less than 45 minutes away from the market close today. i am sure many people have gone to the beach. it was a very intense market day with a lot of stocks higher and indices moving higher. the nasdaq of about 1%. let's turn to the markets and bring in jeffrey klinghoffer,

head of global investment at thornburg. i don't remember where nvidia was the last time i spoke with you, probably more than a year ago now. it is certainly changing the market. i am curious about your thoughts as to whether nvidia will continue to be the story going forward or whether the economic data, the micro picture will be more important? >> nvidia certainly was not the star. it has always been a star but it was not the star one year ago that it is today. it's made itself important. more important psychologically than anything else because it seems to be the only stock anyone cares about now. you can understand why. they are at the forefront of the ai trend and the ai trend seems to be moving markets in general. so it will continue to be important. and what is interesting is nvidia is really a very small company. it is in a very small group of

stocks that have become so structurally important to the market because a lot of what has moved to the markets higher over the last few years it's their earnings growth of the small number of stocks. that earnings growth has to continue. we are talking about earnings growth 40% on the year or more and it has to continue at that pace for the market to keep moving. yes it's nvidia. it's also google, microsoft, apple, etc.. tim: i want to bring in jeff klinghoffer, cohead of investments at thornburg investment management. are you concerned about such a small number of stocks that are mega caps tech stocks that are responsible for so many of the gains we saw the last two years? jeff: i am concerned on some levels, absolutely. but really we should be focusing on not just the breadth. at any given time there will be a couple very large leaders. the markets are growing 40 or

50% and the expectations of continued growth for a time that almost becomes impossible. the market collapses under its own weight and as an additional challenge the u.s. economy is shrinking and we are waiting for biden to take the stage for politics to reassert itself. but really, rates and the fed have been what is behind this extreme expansion, concentration from growth companies and i worry about that given the continued deficits as we look forward. tim: the deficit is coming up. it doesn't come up all the time. we talk about it when we look at the bond market but it does not seem like markets care about deficits yet at this point here. you are shaking your head like they are starting to care a little. how concerned should investors be about the spend? we hear a lot about spending from the two front runners in the republican and democratic tickets, but not a lot about how we will -- they will pay for this stuff.

nir: look at the debt to gdp. we have been here before in the postwar period. it's not unprecedented. i would not yet say this is a crisis. we are at an inflection point and we have to see where it will go. we don't want this to get to two times, two and a half times. so if we can ground of the economy and rein in spending given the gridlock in congress etc., i think we are ok and that's why you are seeing the bond markets. if you see 14, 15, 16i would be surprised if the bond markets don't react. vonnie: jeff, i want to come back to you. in fixed income you say you are playing defensive because spreads are tight. but that can change on a dime. the move index has been incredibly volatile. jeff: that's exactly it. in the world of fixed income the beauty of it is it is back.

income is higher, not just from the world of fixed income, but dividend paying stocks to the global atmosphere. there are a lot of adverse -- interesting places investors should focus on. the question has been, not in fixed income, but equity markets is how far can nvidia run? how far can some of these mega cap took companies really run quest -- tech companies really run? there's reason to believe they still have some room. but if you take starting valuations and look five, 6, 7, 10 years, we look more internationally about giving investors a smooth ride. fixed income, going back to deficits, it's not that there is likely to be a freak out moment but this is directly entwined to how fast inflation can fall and therefore how much central banks have the room to cut rates to cushion the next cycle. we have not emerged from a world where cycles will happen and we are in the midst of one now. central banks continue to have their hands tied. vonnie: you have to wonder, if

we do see a cutting cycle began, does it also allow markets to rally? we have had a massive rally so far this year, 14%. previous years it has been incredible, at least since the pandemic. to the extent that an 8% return seems paltry now. when a comes out and said, you had a 10% return, amazing. you come out and say, i could put my money in the s&p. does that continue? nir: i think we are all playing a big game of chicken. look at the international markets over it since 22010. they have been awful. absolutely awful. the u.s. market writ large has been fine, but not amazing. if you want to attribute the returns again we come back to a handful of stocks. i hear from a lot of people who say to me my exposure at apple, google, microsoft is 90% of my portfolio. what do i do? it's implicit recognition the company's not going away. i won't wake up tomorrow and

fear these companies won't have the market share, won't have a great market share, let's say. but they may not be the performers they were. then the question is, how long will we all hold our breath and hope the country -- companies continue to carry the entire global stock market? it's a problem everybody has in their portfolio at least implicitly because the market has become these companies. one third of the market. when people talk about the market you almost have to say, what are you talking about? if you're talking about the s&p 500 one third of it is just six companies. that's what i mean by the game of chicken. everybody is sort of paralyzed. they know what they need to do be they need to diversify. when you look in the rearview mirror and you see everything else has stunk that's difficult to do. i would say quickly, on rate, i know the forecast. i have to take the other side. i just don't see the fed moving to cut rates in a meaningful way anytime soon. and very quickly i will say that. vonnie: do you mean until

september or beyond? nir: look at what they did in 2021. in 2021 in the spring inflation started to tick up and they did nothing until the fall when it looked like it was a pattern. they still did nothing. they started messaging that hikes were coming. they did not hike until one year later. look at the fed. look at the record. look at what they are saying. i think you have to believe them. i think they are saying to you, we won't even talk about moving until we see a sustained inflation rate that is near our target. i don't think we are there yet. i think we are at least six months out from aggressive talk. i think we are probably another six months from action. that's the way i read this. tim: sounds like there is a column in there. nir: i hope so. tim: jeff, nir was talking about diversification. i want to get to those topics. broadcom avg out you argue is a place to go up 53% so far this

year. and outside the u.s., even though nir said some of those markets have stunk, over orange and a vodafone group are two of your picks. make your case. jeff: on broadcom you are seeing an incredible spending grace in the world of ai but you aren't seeing the use case come through. you aren't seeing broad enterprise solutions that can really change the world. as they use case is forced to come to fruition in a world with higher rates and more choices, i think that is where you continue to see the strength from companies like broadcom. you don't have to just play nvidia. you can play a little broader as the world of ai broadens. as we look internationally, the world of income is back. the world of dividend paying stocks is back. as we look at companies like orange and at some of the other telecoms abroad as well as the financials in the euro zone, really, the compelling case is you're earning a 6%, 7% dividend

along the way and have the potential for equity upside. i want to touch on one more thing. the world of rates. i agree the fed should not cut. the question is whether they do. the market is very focused. almost, at a necessity, adding these rate cuts but i think we should question if those come to fruition. tim: we are waiting for president biden to make a speech at a campaign rally in madison, wisconsin with the focus certainly being on politics over the last week from a lot of people that would not normally pay attention this early or this late in the presidential race depending on how you define it. how could some sort of major hiccup with the democratic ticket change the way you think about markets and investing? nir: i have an answer that's quite boring. i think in general, my baseline proposition for you is markets don't care about politics. tim: really? nir: i will be the first two conceded that politics has been injected into the business environment and, therefore, at

least, implicitly into markets, probably more today than at any other point in my lifetime. but still at the end of the day i think markets ultimately care about earnings. we have been talking about concentration here. i think the fact there is so much concentration inside the market tells you you have to draw a straight line between the politics and the particular companies to see real movement in the market and i don't see that happening. david: what about a corporate tax rate that gets moved lower or higher as a result of who wins the election? nir: that's a real possibility for moving markets we are raising the question is whether markets believe anybody can really do anything meaningful in this gridlock environment about that. i think that markets will give you the answer. my guess, if you want my guess, my guess is markets won't take the proposition seriously. and you won't see them moving on it. but, if they do, i will be the first to say.

vonnie: in a fundamental way, or, immigration, for example. any movement on immigration, or, any extension or lack of extension to the tax cut, jobs act, for example? nir: i don't think so. as evidence i would propose that you look at the immigration policies under trump. the look at immigration policies under biden. you really cannot imagine a big difference. very difficult.

>> an entirely different to get. i think it can move markets. i think it will move marketsf. donald trump is probably not as good this time for markets. tim: speaking of that, the current president is making his way to the podium in madison, wisconsin. thank you klingelhofer and nir kaissar a columnist is that it covers markets for bloomberg opinion. now let's go to madison,

wisconsin to hear from president biden. pres. biden: wisconsin. thank you, thank you, thank you. thank you. thank you. hello, wisconsin. wisconsin, wisconsin. i have to think somebody. gaylord nelson, i'm back. he first introduced me to wisconsin a long time ago when i was a kid. i'm only 40 now, but i was a kid then. the brain now, thank you for the introduction and volunteering for our campaign and special thanks to one of the best governors i have ever worked with in my life.

we have a former governor, jim doyle. the mayor. the mayor of this city. we have a guy with a tough time winning elections, getting owning 70% of the vote. so many local leaders including the chair of the wisconsin democratic party been wicklow. ben. folks, did you have a good fourth of july? if you are wondering whether trump has it all together, do you ever -- did you ever hear how he explained the fourth of july when he was president? an explanation of how america won the revolutionary war. i am not making this up. he said in his fourth of july speech five years ago that george washington's army won the

revolutionary war by taking control of the airports from the british. [applause] and they talk about me misspeaking. the airports from the british in 1776. it is true. he is a stable genius, this man. my friends, i am in wisconsin for one reason because we will win wisconsin. we will win it. let me tell you how we will do that. you know the reason. because of you all in this room, to start with. we will stand up for women in america. we will restore roe v. wade. to all the land. we will stand up for the right to vote again. we will fight for medicare and social security, childcare, elder care, paid leave. we will grow the economy and keep lowering the cost of prescription drugs to expand

health care for everyone. we will protect our children from getting weapons of war off our streets. that is what we will do. the idea that more children die from gunshot wounds in america is so wrong. it is sick. it's really sick. we will keep confronting climate change. and most importantly, we will save our democracy. [applause] you have probably heard we had a little debate last week. i can't say that was my best performance. but ever since then there has been a lot of speculation, what will joe do? will he stay in the race? will he drop out? what will he do? here is my answer. i am running and i am going to win again.

because, folks, i am the sitting president of the united states of america in no small part because of you. that's not a joke. in 2020 you came through for me. i am the nominee of the democratic party because millions of democrats like you just voted for me in primaries all across america. you voted for me to be your nominee, no one else. you, the votes, the voters did that. despite that some folks don't seem to care who they voted for. guess what? they are trying to push me out of the race. let me say this as clearly as i can.

i am staying in the race. i will be to donald trump. i will beat him again in 2020. and by the way, we will do it again in 2024. i learned long ago when you get knocked down you get back up. i am not letting 190 minute debate why about 3.5 years of work. the governor said i have led the nation through the depths of pandemic to the strongest economy in the world and that is literally true and you and i aren't finished yet. you have probably noticed that a lot of discussion about my age. i know that i look 40. i keep seeing stories about me being too old.

i was not too old to create over 15 million new jobs. to make sure 21 million americans are insured under the affordable care act, to beat big pharma and lower the cost of insulin to $35. was i too old to relieve the student debt for nearly 5 million americans and grow the economy? was i too old to put of the first black woman on the supreme court of the united states of america? to sign the respect for marriage act? was i too old to sign the most significant gun safety law in 30 years. my critics say, sure, but, he

did all that in the past. what about now? what about the thousand jobs we announced yesterday? let me ask you, what do you think? do you think i am too old to restore roe v. wade? do you think i'm too old to ban assault weapons and protect social security and medicare? to find child or elder care for working families in need in the nation? to make billionaires finally pay something beyond 8.2% in the tax rate? do you think i'm too old to be donald trump? i can hardly wait. anyway. folks, let's focus on what really matters, running against the biggest liar and biggest threat. the biggest liar in the biggest threat to our democracy in american history. that is not hyperbole. over 150 presidential historians

voted him the worst president in american history. the worst. as i have said before, he has the morals of an alley cat. [applause] he lies about the economy. he is one of only two american presidents who left office with fewer jobs than when he came into office. you know who the other one was? herbert hoover. i called him donald herbert hoover trump. he lies about the pandemic that he totally botched. the truth is over a million people went on to die. he told us to inject bleach in our arm. he lied about how great he was for veterans in his administration. he called veterans who gave it lives serving america. i was just at normandy on the beaches of normandy and all through that area. he said -- i have trouble saying

this because my son died as a consequence of iraq, he called them suckers and losers. by the way, i am glad i was not with him. because you will not talk about my son that way. how do we know he said this? a four star marine general, his own a former chief of staff was with him and he told us, that's what he said. he's not the only former trump official to warn us how bad it trump is, including the former secretaries of defense, and even his own a vice president. that says a lot about who donald trump is. and it says a lot about what he is not. by the way, i cannot ponder --. i guess i should not say it. i cannot be prouder to have your support and the support of our

great vice president of the united states, kamala harris. donald trump is a convicted felon. he was found guilty of 34 felonies. trying to hide hush-money payments to a porton star. another jury found donald trump sexually assaulted a woman in a public place and he has been fined $90 million for defaming her. this so-called great businessman owes her $400 million in fines after being convicted in new york state of business fraud. already convicted. $400 million. donald trump is just a convicted criminal. he's a one-man crime wave. [applause] . pres. biden: and his biggest lie

of all is he had nothing to do with the insurrection of january 6. we saw it with our own eyes. he sent thousands to attack the capital. you saw police being attacked, the capital being ransacked. the mob hunting for nancy pelosi. gallows setup to hang mike pence. let me ask you something? after what donald trump did on january 6, why would anyone ever let him be near the oval office again? folks, the question this election is, what kind of america do we want to be? do we want to be a country of anger, revenge, and retribution or a country of hope and optimism and possibility?

i want a country where women have a right to make their own health care decisions. donald trump wants an america where abortion is banned and women are punished. i want an america where health care is a right, not a privilege. donald trump wants to throw tens of millions of that could not get insurance under obama care off of obamacare. i want america to have the very wealthy begin to pay their fair share. the last time out when he was president he gave them a $2 trillion tax cut, the largest deficit of any president in one term. now he has announced he wants another $5 trillion tax cut after already leaving the largest deficit. it's hard to make this up. i want to protect social security and medicare.

he wants to cut social security and medicare. so that he can cut taxes for the very wealthy. i want to ban assault weapons require universal background checks. you heard what he promised the nra. i will do nothing about guns. that is what he said. i will do nothing about guns. he means that. i want january 6 insurrection us a full prison term. donald trump wants to pardon them. folks, you cannot be pro-insurrectionists and pro-america at the same time. this is so serious. you can't love your country only when you win your -- when you win. let me close with this.

the american presidency is about character. the character of the president who holds the job. with the immunity the supreme court just talked about, it gets down to that. it's about honesty. it is about the president's decency. his integrity. do they respect you? or do they excite violence and hate? can they uphold the constitution and the oath of office? i don't think it's an exaggeration to say that donald trump has failed every one of these character tests, everyone. and what's worse, the supreme court ruled that there are virtually no limits on the power of the presidency. it sounds bizarre, but that is what they ruled. it's a frightening decision. according to an extreme majority of the supreme court, the president is now above the law. we just celebrated the fourth of july. that says we won't be ruled by a king. and then the supreme court went

and approved this new law. it's a dangerous precedent, especially if donald trump returns to the presidency. just think about it. the second term, whoever is the president will point -- appoint at least two new appointees. the second donald trump term there are no limits. supreme court justice soto mayor warned us about that in her dissent in that case. she noted that based on a majority decision, donald trump can take out his opponents, physically take them out. take bribes, lead a coup, and be immune to ever being held accountable for it if he did it while he was president according to the supreme court. where are we? he could really become a dictator that he promised to be on day one. for over two centuries, america has been a free, democratic nation.

and i will not let donald trump take this away. folks, this is not hyperbole. the race is about our freedom. it's about democracy. it's about the very soul of america. are you prepared to fight for that? i know that i am and i will. folks, i have never been more optimistic about america's future. because, the american people are decent, good, honorable. just remember who in god's name we are, the united states of america. think about it. there is nothing, nothing beyond our capacity when we stand together. let's stand together with this

election and exile donald trump. god bless you all. thank you. vonnie: that was president joe biden at a campaign rally in madison, wisconsin, a crucial swing states making a lot of jokes and a lot of points and, basically, hitting out against anyone that might assume he won't run for democratic nominee to be president once again. he said he absolutely will, that he is the only one who can beat donald trump. let's bring in host of balance of power was also listening. he did pretty well. joe: sure. depending on what metric you are using here, he was in full voice. not the frog in the throat we heard at the debate. he was a bit more measured, not speaking too quickly. we have heard a lot of trouble

getting around his words last thursday. a bit different now, the daytime joe biden we have become a more used to seeing. but her makeup, more color in his face. some of his advisers had been concerned about him looking a little pale at the debate. and i think as we heard from the press secretary earlier this week he has recovered from his cold they were blaming a week ago. the real news here, though, is he said it full throated play. i am running it will win again. he referred to people trying to push him out of the race, suggesting maybe he does not like the conversation he has been hearing so much. he did make a nod to kamala harris, thanking her for her support here. he promised to win the state of wisconsin, which, as we discussed earlier, is key to his winning the white house. it's not just his rally today. he will sit down and do an interview without a script. you saw him using a teleprompter in a sit-down interview with george stephanopoulos and that will get the most scrutiny.

we've seen joe biden do a lot of rallies. this isn't new. he needs to do this to run for president. it's the interview we turn our attention to next. >> the message in the last 20 minutes from the president, it was clear from the jokes he made at the top all the way to the exit music, tom petty, i won't back down, the message absolutely clear. i am running it will win again. i am staying in the race and we will beat trump again in 2024. i am not letting one a 90 minute debate wipe out an entire life's work here he joked about a stable genius at the top and how, at the time, former president trump talked about the fourth of july and airplanes in the revolutionary war. but again, the teleprompter. not a debate. does this change anyone's minds? joe: probably not in this case. i am sure that it was a lot of fun for the president. he had a very supportive, protective crowd there.

we heard somebody yell "lock him up" when he talked about donald trump being found guilty of 34 counts. he brought a sense of humor. i think that maybe gives us a sense of what we will see with george stephanopoulos. when he came out he said, i have been here since i was a kid, i am 40 now. poking fun at oneself goes a long way dealing with an issue like this as opposed to getting upset or angry with what broder's telling them what they should be doing. i would expect to see their joe biden smile as this comes up a couple times as we just saw with george stephanopoulos. interesting line. i am sure they have tested this over the last couple days. i'm not too old to create over 50 million new jobs, not too old to sign this and want be too old to restore roe v. wade. we got a peek into may be the new stump speech. it might be something we can take away. of course, a full throated message from the president that he is staying in the race and plans to beat donald trump. look, this will be the case until it is not.

but it is at the first time we have seen him in a situation like this since the debate and it is an important moment for him. tim: bloomberg balance of power host joe mathieu live from washington, d.c.. we what i to get back to everything you have going on in washington. u.s. hiring and wage growth slowed in june with the jobless rate rising to its highest level since late 2021. gus crochet from pnc financial services group joins us now. i want to talk about the latest economic data, the payroll figures we got for june. we are just coming from hearing from president joe biden. you are chief economist pnc financial services group and you watch closely who was in power in washington. how are you thinking about economics and the u.s. election? gus: i think no matter what the result is of the presidential election, we are still likely to have gridlock in washington with one party controlling the white house and the other party controlling at least one house of congress. so, i don't think we are likely to see big changes to fiscal

policy in 2025. so, therefore, i think things will stay roughly status quo, where we have an economy expanding, we have inflation stalling. and at the big driver of the economy in 2025 will be what the fed does with interest rates. vonnie: earlier we heard from nir kaissar who thought we would not see an interest rate cut this year but we are priced in for two with the dot plot and the market pricing in very close to that. gus: i think we will see two. i think today's job report was slower jobs growth, slower wage growth. a little higher unemployment rate. that is exactly what the fed once before they cut rates. i think we will continue to get news on inflation that shows it slowing. it does not need to be at 2% for the fomc to cut the fed funds rate. i think that we will see further progress on slowing the inflation over the next few

months. that will give the fed the leeway to cut the fed funds rate later this year and in fact i expect to see two cuts in the fed funds rate in late 2024. tim: what changes your view there? i know you write that november and december is when you expect cuts. what data what you have to see to call for an earlier rate cut? gus: we would need a more substantial slowing in the labor market. inflation data is less important there. if job growth starts to flow more significantly, or we see the unemployment rate move up more quickly i think the fed will be more concerned about the state of the economy, the potential for substantial weakening of the labor market and they might cut in september. i do think they want to get through the presidential election before cutting. they don't want to be drawn into the politics of this. unless we see that substantial softening in the drop -- job market the fed holds on until november. vonnie: i think they will push

against the idea they may be holding off because of the election. they have always said they are completely independent, gus. but whether november, september, beyond, there will be a cut at some point. will it be too late. even if it goes against what you think now? how much damage with that have done to the economy of that is the case? gus: obviously, we won't know until six or nine months from now whether the fed is too late. that said, i still think the economic fundamentals look pretty good. we are adding a lot of jobs. we have wages now growing more quickly than inflation. look at consumer spending. look at how many people are traveling this holiday weekend. i think that consumers are overall in good shape. there is no indication of a allete up there. i think the economy is strong. i think it can withstand the fed funds rate staying where it is near term. whether it is september, november, i don't think it makes a big difference. but i think that the fed does

want to cut rates because they are concerned that the longer monetary policy stays contractionary, the greater potential there is a for a session, not in 2024, but mid or late 2025. tim: gus faucher chief economist pnc financial services group thank you for joining us this friday. we are a few minutes from the closing bell on a holiday shortened week. the nasdaq and s&p 500 trading at records, around the best levels of the day. vonnie: can you believe we made it to the second half with a rally on our hands again? tim: march continues higher. vonnie: the wednesday and friday of this week if july 4 is a thursday are higher. tim: the nasdaq up 1%. the dow up .2%. the s&p 500 up .6%. next, the closing bell. this is bloomberg markets.

you feel the difference when you get it right. stay salty.

[no audio] tim: the verities, stocks finishing close to their best levels on the day, all-time highs for the s&p 500 and the nasdaq 100. still waiting for things to get settled. but it looks like that i will finish higher by 0.2 percent.

the s&p 500 at a record, higher by more than zero point 5%. the nasdaq composite, higher by zero point 9%. another record for the nasdaq. vonnie: a 30 for the record. tim: i was hoping you would say. the number. after 31, i forgot. vonnie: 34th. surprise there is even that many trading days in the year so far, i mean we are halfway through, but could there be 34 records? let me take you through the imap function which tells us what sectors did so well and which ones di't do so well. it most sectors did well at that for energy and financials. don't forget we start getting the big bank earnings next friday. financials lower 0.3% after the jobs data. communication services are the

best performing sector, up 2.75% thanks to meta which ended up 6%. may be due to the tweet made by mark zuckerberg's team yesterday of him wakeboarding, of course. [laughter] it was a confusing day. but then market cap a lot to react to from the data during the week, to the data this morning. tim: wakesurfing and drinking a beer and holding an american flag all at once. that is how mark zuckerberg spent his fourth of july. let's look at yields, yields lower across the curve. the 2-year is down more than 10 basis points. the 10 year is down eight basis points, 4.27%. 30 year, down five basis points. vonnie: our next guest is with us, president and chief moore can strategist at 22v research.

and bloomberg jess menton is with us. jess, am i right, is it really the 34th record for the s&p 500? at athlete -- have we started on a theme that will take us through the second half? jess: i am glad you brought up the record. the first half was the second best, if you look at the pace of records through the first half of the year, there is some size and scope. usually when you have a strong first half like that and you have the s&p 500 gain at least 10%, there is a median gain of 5% by the end of the year. obviously there is seasonality that comes into play. but a little different catalysts can happen in the next three and a half weeks that we were talking about a couple of days ago, over the next 18 trade sessions you have fed chair jerome powell on capitol hill next week. you have cpi next thursday.

earnings season with big bank like j.p. morgan next friday. and then we have a number of data points, big-tech earnings later this month. july 31, the next federal reserve decision and we will hear from fed chairman jerome powell that time. all eyes are on powell next week. the only difference between what we hear from earlier this month this week is the jobs report. when i speak with my sources, i don't think there will be any significant change in his tone. he tends to be more political when he goes to capitol hill. he will probably reintegrate what he was saying earlier on. he will speak on tuesday as well as wednesday, but usually you get the announcements, and is pretty remarks will be two hours before premarket trading, 8:00 a.m. tuesday morning. vonnie: dennis, i am curious if we've had that many records so far, do we continue having records, do we continue to see

money pouring into u.s. equities too? dennis: i would imagine no. i would imagine the thing driving this equity market higher which is extreme safety trades, you could see some rotation out and obviously higher indices along with that. you could see some rotation out of that if we avoid a recession, economic growth stabilizes and economic conditions ease which seems like the next six month you can see some rotation into some of the indices that have lagged, which would theoretically at least slow the advance of the s&p. but with all conviction, i would say yes, you will see some slow returns. but everything is very closeted right now unless you want to make a credible case that inflation is around the corner. tim: one question i have had for over a year at this point has been what happens to money

market assets when the fed cuts rates and when the rates come down? it kind of got lost in the holiday, but money market as it claims to a record six point 15 trillion dollars. where does that money go and when does it start moving? dennis: it starts moving once the fed starts cutting. theoretically it shifts out on the curve, right, we should start to see the yield curve steepen and as its deacons, short rates come down faster than long rates and money moves out of the yield curve. and presumably into riskier assets. it was what i was talking about when i stepped broadening out the indices to small caps or high yield or things of that, companies with debt risk, they should theoretically do better than be a receiver of those funds when the fed starts to cut. it's all under the premise of of course, that it is a non-recessionary cutting cycle. tim: jess, how are your sources

thinking about the money in money markets right now? jess: i was actually working on a story about this recently to see where yields typically were on average in the last 30 years whenever there is a cutting cycle. because a lot of those cycles were very aggressive rate cuts if you thought about during the.com bubble bursting, during the housing crisis, or the pandemic. you had an excessive amount of rate cuts. the average point where yields would be would be 2%. we are far from that. it's different now because when you think about, the economy even the latest atlanta that gdp now figures are hovering about 1.7% roughly, down from where it had been, 3% a few weeks ago. and we haven't gotten the june data yet. it can be a volatile number. it will be interesting to see in the next few weeks if that number and the data keeps going higher or lower or if it stays the same.

remember, a lot of the cpi data that had been sticky, we saw improvement in those numbers recently. it will be interesting to see how that flows through. but to your point, when it comes to money market funds, it's a question whether you have those rate cuts, they might prevent a massive amount of money -- it might not necessarily be a dramatic pace. . it usually takes about a year before you start to see that coming up. so the question would be, what does the rate cut picture look like and how that would feed into the story of money market funds. vonnie: 5567 on the s&p 500 right now. -day forecast with raised eyebrows a few weeks ago it really isn't looking that far away or 6000. most forecasts are for some upside and so for some downside. dennis, what would you be buying, given that the best performer today with meta

platforms? dennis: that would be sticking with bradley cyclicals and defense, that has been working. from there, i would be thinking hard about regional banks, really hard about some energy names. i would be thinking hard about material names or deeper cyclicals and general, based on the idea that yes, economic growth has slowed. but keep in mind, is it stabilizes here, which we has a high conviction that it will, then the medium-term growth outlook will improve, meaning your next year economic growth. that tends to favor deeper cyclicals. you will need to see some confirming data like economic surprises. but i believe that is the next. did i do think we'll be chasing early cyclicals of when you are already down 1.5% of the atlanta fed, and surprises are at the lows. of retail sales will be critical in thinking about that and other high-frequency data points, but that is the area i would be

looking for now. vonnie: you are saying then that the laggards will lead us to new highs from here, but that is a bold call, right, if you will actually put your money where your mouth is. it will be stuff to out of the chip stocks and pushes the laggards right now, with not? dennis: let me clarify, i have a tattoo on my back about "never short monopolies." [laughter] vonnie: picture or it didn't happen. [laughter] dennis: so i wouldn't be sure to those names. it would be more rotate into it deeper cyclicals at the expense of defenses like pharma, things that will be a source of funds. i would say other quality names that aren't tech, ai-related, they are trading at multiples and it would be using those as a source of funds. but there is nothing in the macro backdrop that suggests you should be negative on meta. nothing in the backdrop that

suggests a i spend is about to fall apart. maybe that happens in the future. but i think you are looking at this at this areas as a place for catch-up, but i wouldn't be sure to the megacap tech names for reasons stated. tim: 19 stops in the s&p 500 today had 52 week highs. they include apple, amazon, else of that, microsoft, meta platforms, netflix, or quote to name a few when you're talking about those megacap tech names. we are talking politics today and asking our guests given that there is a lot of drama i guess you could argue, would it comes to the election in november. how are you looking at political risk? dennis: purely through the lens of will there be a sweep or not? when i think of political risk, i think of the liz truss moment in the u.s. as pertains to the u.s. treasury yield, what is going on with france and central

spending. if there is a sweet one way or the other where trump and the republicans sweep and you have a significant tax cuts, tariffs, et cetera, you have a potential large issue for u.s. treasury yields. on the democratic side, some of the spending programs can come to fruition. that is the lens look at it when post-debate there was a shift to trump's. treasury yields went up a little bit in the created issues short-term in the market. to the extent there is hope that biden beach club, that should calm treasury yields and make it less obvious -- biden could beat trump, thhould calm treasury yields. it comes down to, we'll be spending more money at a time when physical orthodoxy is necessary, where it is required for the deficit to at the very least not grow from here significantly.

tim: jess menton, is the selective come up on the radar, political risk when it comes to a lack of gridlock in washington? jess: typically what happens if you go back through history during presidential cycles, a lot of times people like to think about voting with their pocketbooks, but a lot of times, it is geared towards gridlock in congress because if there is gridlock, it is harder for extreme policy measures to be passed, with a you are looking at energy regulation, big-tech regulation, health care regulation, clean energy. it is hard for that to happen if there isn't a consensus in congress. that is actually what traders look for most, whether both chambers will be one sided with the other. obviously it is a big deal who will be president, that there are a lot of things beyond that the traders look at and how that specifically impacts industries in different sectors and specific stocks too. tim: jess menton, thank you very much, from bloomberg news. oh, so, dennis debusschere, chief market strategist at 22 of the research, thank you so much

for joining us on this friday afternoon. records across the board on the s&p 500 and nasdaq. vonnie: quite phenomenal. these stocks can do no wrong. if you bought at the beginning of the year, how happy would you be right now? tim: i try not to think about decisions like that. vonnie: me too. on the other sides of you have natural gas lower. tim: we will look at that. and next, we stay on politics because we have the latest on the crucial weekend for president biden as he prepares a sit-down interview with abc news. this is "bloomberg markets." ♪

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pres. biden: you have probably heard, we had a little debate last week can't say it was my best performance. but since then there has been a lot of speculation. questions of what we are going to do.

is he going to stay in the race? [applause] is he going to drop out? what's he going to do? well, here is my answer -- i am running and i am going to win again! [cheers and applause] tim: president biden speaking to supporters at a campaign rally in madison, wisconsin just moments ago. now, he prepares to sit down for an interview with abc news. joining us from washington is joe mathieu, host of "balance of power." the madison, wisconsin event is in the president's rear mirror at this point, how big of an issue tonight is the focus on the abc news interview? joe: this will be the beginning of a series of tests of course we see during the week and doing a rally like this shouldn't be big news for joe biden. granted he did say he is staying in the race, ok, but of course he wasn't good to see anything different unless he was dropping out -- i am thinking about maybe not running in the race -- you

have to act like you mean it even if you don't. we will go through some stages here. as you mentioned, george stephanopoulos will sit with him in an interview that will be unscripted as a pause to the rally we saw. people are still wondering what happened on thursday night. as he says, he didn't have the best debate. why not? was it because he had a cold? the white house said he had jet, but he had return from europe 12 days before the debate so surely jetlagged couldn't have had a lot to do with it. was he over prepared? does he, in fact, have trouble operating after a certain hour at night? that is what this interview might seek to explore and you better believe a lot of reporters will be asking him questions like this when he holds his nato news conference next week following the nato summit here in washington. . a lot of important meetings that will also test the president in real-time.

vonnie: we were joking a little bit about what the opposite of "kingmaker" would be in washington, d.c. and now the washington post is reporting that senator warner is leading efforts to get biden out of the race. what are you hearing from congress and the feelings among those in the house and senate on what biden should do? joe: we have all been having a lot of off the record conversations with lawmakers when they are out of town. they will be back to town next week and bloomberg has already reported in the past couple of days that there could be dozens of democratic house lawmakers signing off on a letter to the president asking him to step down. three are on the record, congressman seth moulton joined the list on the fourth of july in a local interview in boston. but what will it feel like if it is in fact dozens: on the president to step down? clearly a different conversation behind-the-scenes. when we see this interview

and see how the president performs next week, that will tell us about the near term. we are taking this one week at a time because after next week it's on to milwaukee and the republican convention and i would expect to hear a lot of decision-making from joe biden, and something dramatic happens and we have to allowm for that that is joe mathieu, host on bloomberg's "balance of power," keeping an eye on on everything at the moment. the jobs report showed a slowdown in hiring next month bolstering the prospect of fed rate cuts potentially this year. many are watching to see if it will trigger the so-called sun rule, the room being with her the increase in the unemployment rate would be a half point higher than the rise in the unemployment -- done the highest number of the unemployment rate in the last 12 months. am i getting this wrong,

claudia, chief economist at midcentury advisors and also bloomberg opinion columnist. your rule was not triggered, but only barely. what jumps out to you? claudia: first and foremost, there was a little good news in this report. the labor market is in a very good place. we are in a sustainable place which means this is not a strength or heat that you should look at and say we need the labor market to be weaker and it is causing inflationary risks. this is a place that we could stay and it's a really good labor market. four point 1% unemployment rate is historically, and objectively a very good unemployment rate so there is a lot to celebrate. the thing the sahm rule, and other data point to is some

softening. we needed that moderation and to get back to normal, but we don't want to go too far south here. so there are warnings of historically, with even small increases in the unemployment rate that it can pick up steam and translate into a recession. historically going back to world war ii, what does that look like, what does the threshold for increases look like? we are close to what has held up very well in the past. it's not a prediction ironclad in nature, it is what historically has passed and it is a weakness we should keep an eye on. and the fed should especially keep an eye on. tim: so the fed should keep an eye on it and react to it, when do you think the fed should react so they are not behind the curve? claudia: the federal reserve should begin easing as soon as possible. july frankly is not likely.

tim: well, it is possible. claudia: anything is possible. the fed should be easy -- it was clear from the recent inflation data that it could be very much confirmed next week. there was a case going to do the cuts. now what the fed should take as a message from today is one, you don't have a strong labor market, the labor market no longer needs to ease to get inflation down and you can't use it as an excuse to wait. we had the luxury of time. they don't have that anymore. they need to look at the data. my read is that it is time to cut. my read of the fed is that they will cut in september, not july. vonnie: if it should be july and it goes to the september and beyond november potentially, how much damage could the said due to the economy by not moving in july. claudia: their policy tools act

with a lag, so it will take time . it's hard to predict how all of that goes forward. they have an opportunity the sooner they act to start easing or put differently, when we think of all the different parts of the economy that we have seen come back into some form of balance, including inflation, the federal funds rate is really the last piece that has shown no signs of normalization yet, so the federal reserve can get into this process and get in sync with the economy and the sooner they do that, the better, and the longer they wait -- i am not predicting a recession right now, not predicting that the federal reserve is down the economy. i am saying it is time to get going because we want to do this responsibly and the sooner we do that, the more likely we will be to pull that off in a much more smooth, nondisruptive way.

tim: does the fed find itself between a rock and hard place with the election in november and the september fed rate cut could look political or too political and opening up for criticism? claudia: the fed is not a partisan institution. i take them very much at their word both having worked at the fed and with these fed officials previously. they have a hard enough job to bring the politics of who wins and who loses. i think the issues they are having right now are confidence issues about inflation and these go to demons of the past in the 1970's, or 2021. i don't think this has to do with politics. the fed knows that that's just how this works, so i am not worried about that piece. tim: claudia, always love it when you join us. thank you so much for joining us on bloomberg markets on this friday afternoon. claudia sahm, chief economist at new century advisors and bloomberg opinion columnist.

vonnie: i feel i did a bad job trying to explain the sahm rural. tim: i was so glad you got that assignment, go ahead, please historically it indicated recession. vonnie: so we are seven basis points away from the trigger. i just had to get that. tim: thank you for doing that. [laughter] coming up next on bloomberg markets, we check in on the path of tropical storm beryl as it slams into mexico after leaving a trail of destruction through the caribbean, next. this is bloomberg. ♪ ♪ with so many choices on booking.com

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tim: beryl is weakening after pummeling mexico's yucatan peninsula. it left a trail of destruction to the caribbean that may reach $5 billion in damage. joining us with the latest is bloomberg's will wait -- will wade. for someone who covers energy, and specifically nuclear energy, how are you watching a storm like this? >> we always watch hurricanes to see what happens to oil and gas production because so much of those platforms in the gulf of mexico can be affected by these storms. right now we are watching beryl and it is headed northwest and we think it will hit southern texas or the northeast corner of

mexico sometime sunday night into monday, but if the track turns and it goes more north-north, that will take it straight through the gulf and the oil production areas, so that is a big threat. vonnie: it will be an active year for hurricanes, but we may not see the type of reaction you might expect from particular markets, like oil or natural gas. having a hurricane does not mean the price will go up and the supply down. will: we have been watching these things come through for decades. when the storms come, they shut the platforms down, when the storms pass through, they get them back on. it depends whether or not they get the refineries. when they hit the platforms, they get production going again, but if a storm and knocks out a refinery, that can affect production for a while. tim: it is remarkably early to be talking about a storm such as this. will: today is friday, but as of

monday it reached category five strength. that was the first time we've seen any storm get to category five this early in the season in records going back for years and years. this is all a climate change thing. vonnie: explain that to us. people in the caribbean and in many areas have been experiencing these constantly. how are they worse now because of climate change? will: it is simple, warm water. brian sullivan, i have been learning at his knee for years, warm water is like jet fuel for hurricanes. it supercharges them. with climate change, we have warming oceans, so as of -- i think it was in may, they were saying the waters in the gulf where the temperature they usually get to in august just because the heat collects in them. warmer water fuels the hurricane, dumps more rain, more damage. tim: we always note whether is

not climate and climate is not weather but the two are bound to each other. i hate to draw too much from one storm and one instance of water being warmer earlier this year, but is this the new normal? will we start seeing hurricane seasons start this early? will: maybe? i cannot be definitive on that. we know the planet is getting warmer, the water is getting warmer. this is kind of how it works. i'm not the expert, but i've been watching these for years. my unofficial prediction is you are right. vonnie: it is a la nina year, and that makes a difference? will: the el nino, la nina things affect weather patterns. it is making cooler waters in the pacific so it will not be as big a threat there. we are seeing the warm water here, it's the gulf, but they

call it the atlantic storm area. vonnie: it's one of those areas where most markets shot at 4:00 p.m. on a friday -- the weather never stops. we want to continue with this subject. we want to bring in the publisher of the weather wealth commodity newsletter. he advises hedge funds and farmers who need to tell the future to the extent that you can to hedge these markets. talk to us about this particular hurricane, now tropical storm, and the season that is likely to be. does it mean all commodity prices will rise? jim: first of all, absolutely climate change is a factor. not la nina right now, which i don't think will form until the late fall or winter. just to recap, the last hurricane that hit the houston area -- this storm looks like it

will come up the coast closer to houston -- was 2017, and the price of crude oil actually went down as demand was weakened. that is why you are seeing natural gas prices solving. a much cooler period in their midwest has pressured natural gas. i expect this storm to re-intensify on monday and perhaps go up the coast. could be an explosive development to a category two by monday. vonnie: that is the energy markets. you are saying for the natural gas market, it impacts demand more than supply, so that's why we see the price go down to crazy lows when you see a weather event like this. not so much the case for crude oil maybe. what about soft commodities like whatever gets planted in these areas? do whole crop seasons get

ruined? jim: not really. typically hurricanes are affecting some of the equity markets. bond prices can be hit in certain areas where there is exposure to climate and hurricane risk. stocks like a company for regenerating batteries tend to go up. i'm looking at a drought developing that may help the wheat market rally, and the bearishness we are seeing with this year in markets like sugar and cocoa that are major bull markets because of el niño destroying crops this year. we can look at increased production for those commodities. from a soft commodity perspective, this is more of an energy blade. -- an energy play. the southwest gulf near texas, this actually hurts demand and will weaken crude oil and

natural gas prices. tim: i want to go back to something when you were talking about the effect of climate change. you have been doing this for 35 years. i'm wondering if you can speak to any data you have seen in recent years that has major job different as a result of the climate shifting. jim: certainly has. we have seen multiple hurricanes go from a cat 1 to cat 5 within 24 to 36 hours. never happened in history. absolutely the climate has been warming. this makes the computer models we have wrong at sometimes. i have a program i have been developing with a friend from m.i.t. that takes into account climate change and tries to project whether six months to nine months in advance for commodity traders and farmers all over the world. i'm learning things every day. chaos theory, climate change, things are always changing.

we just have to keep one step ahead of this for our clients because the weather has become so extreme all over the world. tim: where are you seeing the most extreme weather right now? what parts of the world are you seeing that? jim: with the war in ukraine going on, the last thing they want is a drought. it is a little bit too late to affect the wheat crop, but there may be some in the wheat market from the psychology of the drought in ukraine, we have seen particularly coffee along the equator, problems with vietnam, droughts in northern brazil, the amazon being depleted. some of the tropical commodities, coffee, has been affected. the grain market right now is on edge with droughts in the midwest this summer. right now crops are pretty good. i'm watching this closely for clients. we have been in a bear market for the last year. that is something to figure out

right now. that could happen deeper into the summer. parts of the midwest turn hot and dry. vonnie: you down there in florida. every time we speak about orange juice futures and so on. you tend to think of cocoa prices and so on. i'm not sure people really think about the orange juice market. where are we at with oj? jim: we've had citrus -- had a citrus disease wipeout 70% of the orange crop in florida. the market is affected by brazil's weather. we had a drought in brazil the last few months and as a result more demand post-covid for orange juice. we are seeing orange prices go. over. four dollars -- go over four dollars. if we have an active hurricane season, and one or two hits

florida we could have a jump in prices later on. vonnie: that would be a relief, but not for orange growers. that is the thing, we get such full agility in commodities markets and it is all about feelings and forecasts and a reaction. we were speaking earlier about joe biden saying how important it is for the campaign to realize they don't need to react quickly, they can wait for something to happen. there is no need for a hydraulic reaction. that is what commodity markets do. there is this hydraulic reaction immediately when they think something is coming down the pike. jim: it's not like holding amble -- holding apple or amazon or nvidia. commodities are so volatile. 90% of people lose money and commodities because they get in after the fact. i try to second-guess models.

maybe buy puts or sell calls as opposed to futures which have more risks. when everyone is short on a market, like grains, what an change -- what can change that? when do people that are short run for the hills? i have been doing this for 35 years. using options is the safest play in many of these markets. tim: it raises the question, what do you think the market is getting wrong right now? jim: what it is getting wrong? well, markets never lie, do they? [laughter] tim: i have heard that. jim: people expect natural gas prices to soar on a hot summer. we saw natural gas go to three dollars three weeks ago. the psychology, not reality, that the midwest and northeast would have a record hot summer.

the heat is really out in the midwest, potentially decimating the wineries again, may be affecting some wheats and seeing municipalities in california. the market was wrong about natural gas. we have five warm winters in a row. it will take one hurricane after another to get into supplies of the gulf of mexico and a really hot late august, september, and cold winter for prices to go back above $3.50, something i don't see any time soon. tim: what should be on our investing audience's radar? jim: the grain market has been in the doldrums. now we have a drought developing in ukraine. the midwest crops are generally pretty good except for flooding in the northwest part of iowa. if that stays hot and dry during critical pollination -- [indiscernible] that is something that is a possible bull market later on.

from a bearish perspective, we saw cocoa go to historic levels with over 500% rally over the last year and a half. la niña forming later this fall and winter, being bearish sugar, bearish on the tropical commodities is something i'm looking at longer-term. buying puts on rallies. if we see a rebound in global production of soft commodities, it's on my radar now for the next eight to 12 months. tim: jim roem, her publishers the -- roemer, he publishes the weather newsletter. why do they call you dr. weather? jim: all my friends from vermont won't talk to me because i don't have a phd. i was doing a forecast for 40 ski resorts. somehow they thought it was good. i was pretty accurate 40 years ago forecasting the weather.

vonnie: so it was a serious moniker. [laughter] tim: catch him on the slopes. [laughter] jim: there are sharks down in florida. there is no snow. tim: catch him on the slopes in vermont in the winter. he's joining us from sarasota, florida. markets are closed but a record day on the s&p 500 and nasdaq. vonnie: if you did not sell at the end of the first half, you are quite happy you took that risk. the nasdaq was up 1%. it continues. tim: coming up next, we are talking travel with the points guy. this is bloomberg. ♪ sweat isn't sweet. it's salty. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right.

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tim: at least 71 million americans are expected to travel over the july 4 holiday weekend. the tsa warning travelers to expect long waits at airports. the managing editor of the points guy, an online

publication that helps readers find the best deals for flights, hotels and more. we like looking at these tsa figures because it gives us a good idea of the economic health of the consumer. it's one of the many measures of alternative data we look at to understand how consumers are feeling. what can you tell us about how consumers are feeling about discretionary spending? >> things are still going gangbusters. it is really impressive. tsa has had seven of the 10 busiest days ever in the past month, so you see business demand has finally recovered almost completely, leisure demand remains very high. we are seeing a few signs of softening in markets like paris, and hotel occupancy in places like hawaii, but overall the demand is there and more. it is really record-breaking and impressive. because it has been going on for years now. this is the first summer in three years that i've actually seen deals even this late into

the summer time, so if folks have not booked last-minute trips, there is still opportunities. i know air france did a warning because demand has been weaker than expected due to the paris olympics. i think that is an interesting data point. overall demand remains strong. vonnie: that counterintuitive thing, you think demand would be stronger because of the olympics. tim: you don't want to go because it is too crowded? vonnie: possibly people that are not interested in the olympics don't want to go. it could be the bedbugs. [laughter] clint: i don't think it is. a lot of attractions are closed, it's hard to get around, prices are really high for hotels. i think there is multiple reasons. i also think you are starting to see some fall off in the insane levels of demand there was for places like europe, like florida, like hawaii. you are starting to see that saturation point may have been reached in some of these places and so you are starting to see weakness. vonnie: are people getting

adventurous again? not that they weren't before, but it feels like there was a time when war was everywhere. now it doesn't seem like that is dialed back a little bit? clint: it's interesting. you are still seeing people willing to travel despite the war in ukraine, hotspots around the world, the middle east. the major u.s. airlines have returned service to israel. you are seeing some recovery around that, but i think the bigger trend is that everyone still wants to travel. everyone wants to post that selfie in front of the national monument, the roman coliseum or whatever it is. that is driving a lot of demand too. you see these pictures on instagram and everyone wants to copy that. tim: what a world, instagram driving travel. no question it helps with discovery. what about japan? we talk to a lot of folks about travel, and they keep bringing

up over and over japan. not just anecdotally, but we have several producers on our team who have just gotten back from visits to japan. seems like everyone is going to japan. clint: japan has become much more accessible for americans. even a decade ago it was harder to get around. there was not as much english, especially in tokyo. i think that has changed. you have to remember how strong the u.s. dollar is. international travel for americans is so much more affordable now. i think japan was one of those places that was closed for a long time during the pandemic, so once it reopened, you saw this surge of demand and that has not let up. and it's an instagram magical place. i was there too this year. [laughter] tim: so you can add that to the list. clint: flights to japan are still really expensive. all of asia pretty much still. you have not seen the chinese

market reopened. the number of flights is still down. asia remains a bright spot with pricing. tim: where is the place nobody's going get but they should be? what is the place where in a few years you could have gone now and say, i went there before everyone was going? clint: places like estonia and albania. the word is starting to get out on those places too. i would rather go where the u.s. dunker -- u.s. dollar is strongest, a place like turkiye. you can get a five star hotel for $200. to me, that is destination worth pursuing. some of the undiscovered places, eastern europe, places that may be are not first on travelers lists, some of those secondary cities and countries that are off the beaten path more. vonnie: it is a controversial destination, but i feel it is becoming more of a potential destination, saudi arabia.

do you see many people booking tourist trips to saudi arabia? clint: saudi arabia is investing so much money into the tourism infrastructure right now. they made it a bit easier for people to visit. i still don't hear a lot of people going. i know the government is really pushing travel writers and others to see it. they are building a new city from scratch there that looks pretty remarkable. so far i do not see a lot of folks going there aside from a cultural standpoint. but that could change. i think saudi arabia is, like other middle eastern countries, really wanting to get that tourist dollar and diversify their economy. vonnie: it is interesting to watch and see what places have to go out of fashion because of politics, such as russia. people cannot and will not go to russia and it is not clear when they will again. there are other countries like

saudi arabia where a few years ago it would be inconceivable. maybe it's getting less inconceivable. let me ask you about your tips. when is the best day to book? what credit cards should be get? clint: i could go on for an hour, but i will give you a few general ones. there is no perfect time to book a flight, but there are days where it will be generally cheaper. if you travel on a saturday or midweek, you are not competing as much with the business travel. if you go in the shoulder season, which is where you need a coat to go, think september, november, and again in the springtime, there is usually less crowds. it is cheaper to travel during that season. i love shoulder season travel. that is a tip i always tell people. google flights. google has some amazing tools you can use to find cheap flights. you do flight trackers. they do google explore where you

put in your home airport and hit a button and it shows you the cheapest places you can go all over the world, anywhere from months out to a couple days ahead of time. some cool tools from google that i love. credit cards, my gosh. get a good credit card that has a big sign on bonus. if you're just starting out on that, get one that has a transferable currency where you get a big sign on bonus and you can transfer those points in two different airlines and hotels. i like the chase cards, and i transfer them to hyatt hotels for some amazing redemptions. there's all kinds of good stuff out there. tim: does it seem like the deals have gotten worse? that you are not able to find value with points the way you work -- the way you were 5, 10 years ago? clint: it has gotten more expensive, but there are workarounds. you can still get a business class seat on air france for 50,000 points, you just have to learn the tools better.

that is why the points guy is so important. we teach you those workarounds. everyone is evaluating. tim: i need to send clint my travel plans and he can help me book something. i can never find these deals anywhere. clint: you have to be really watchful. vonnie: it is like a first stock split or something. i'm terrified that united at some point will say your x- something thousand miles is only worth x-hundred. vonnie: -- tim: that is what happens to me. i book something and it is so high it makes no sense. clint: don't sit on those miles because they are not earning you interest, so get those sign-up bonuses, use them right away. vonnie: i guess you could gift them. tim: to me. anyone who wants to, send them to me. vonnie: clint, thank you so much. it has been an absolute pleasure getting all of your tips and

tricks. we will sign up for the points guy newsletter to see what will come out in the next few months. tim, where is your next vacation? tim: my next vacation is a cycling trip in the west of the u.s. vonnie: wow. tim: that is coming up in september. i do need to book tickets. i have not done that. vonnie: what happens? do you bring a bicycle? tim: i will bring a bike in this case. it's with my dad. it will be fun. he's doing a big trip from montana to new mexico. vonnie: you are talking about a pedal bike, not a motorbike. tim: i will join him in colorado for the last 10 days or so. what about you? vonnie: i won't have an instagram handle for anything. [laughter] tim: are you going anywhere? vonnie: no, i have just been around the middle east. we will talk about that on monday when markets reopen. thanks so much for joining us. happy 4th weekend.

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