call 833.leaf.filter today or visit leaffilter.com. >> welcome to "bloomberg markets ." i am scarlet fu. the s&p 500 on pace or its best week since november. stocks erasing early losses, now building of gains for the week. you can see the vic's coming down to below 15.

lower than before the thick of the market selloff. little changed across the treasury curve. it is sensitive to fed policy. 4.08%. traders have been repricing the need for supersized rate cuts. gold climbed above 2500 dollars for the first time ever. let's highlight some individual equity movers. amcor dropping 7%. quarterly sales declined more than expected. soft volumes in the health care and beverage categories. cisco is up for a fourth day and the highest since april. cisco gave a bullish revenue forecast and embarked on a strategy shift that included job cuts. shifting more into cybersecurity and ai related products.

this week it is about the recovery we have seen from the global market freak out we had at the start of august. it feels like it is in the rearview mirror. investors are rotating into risky corners of the stock market which includes small caps and crypto. let's bring in abigail doolittle. abigail: when volatility happens , it breeds more volatility. what goes down must come up. we are seeing a counterbalance. it really starts -- what is interesting, small caps are up on the week, 2.7%, but it is really big and large-cap. the s&p 500 up the better half of 4%. also the best week since 2023.

in terms of the yen, this is one of the scarier charts i have seen. it is dangling, waiting for sellers to come back in. when the yen was going lower, it was borrowed as cheap currency and then going to risk assets. in july the yen started to strengthen which method trade on wound and there was no longer than a few will for to far, too fast. this shows relative to the small caps when the dollar-yen strengthens, after that the small caps go higher. it really points out the relationship. all eyes are on the yen. scarlet: small caps are a beneficiary among other asset classes of the borrowing of sheep yen. i thought crypto was higher for the week, it is not. abigail: this is one area we do not have risk on. oil had been lower.

i would say there is enough mixed signals. it is easy to think all of that is behind us. scarlet: one reason a lot of people think the worst is behind us -- abigail: interesting point. scarlet: even though it is the unwinding. people are going back to it because it still works at the moment. abigail: the question is, will it continue to? looking at a chart of the yen, the futures or if you look at the nikkei, there is no stability. it suggests sellers are on pause. why is the yen strengthening? 1, uncertainty, geopolitics, when the nikkei sold off 12%, the worst day since 1987 two mondays ago, the banks underperformed. some people say there is bad

collateral at the banks and they are lending out the yen on bad collateral and it will not be pretty. scarlet: jerome powell will speak but you have the big doj governor speaking. he will be talking a lot about the selloff on monday and what their policy is going forward. everyone will pay attention to that. abigail doolittle, thank you so much. we are also closing out a week of critical economic data with a look at housing. new home construction in the u.s. declined to the slowest pace since the spring of 2020. dropping almost 7% to $1.2 million annualized rate. michael sasso covers housing. i am guessing this is a reflection of elevated costs. michael: that is partly it. borrowing costs are hurting affordability.

affordability has been challenged around the country. part of it is elevated inventories. we are at the highest inventory of new homes since 2008 so builders are taking a little bit of a pause. it is a mix of affordability challenges and elevated inventories. scarlet: i am curious whether any one-off items might have affected the numbers. a hurricane impacting construction in the south. are these things that later get made up in subsequent months? michael: i don't know the answer to that. the hurricane was seen as a bit of a lag or drag on southern housing. i think builders are going to be hesitant to really ramp up construction at this point. i do not think they will try to make up the difference until mortgage rates fall and inventories come down.

scarlet: fair enough. i am glad you brought up inventory because we all became acutely aware of the housing shortage during the pandemic. the legacy of homebuilders moving cautiously after the crisis in 2008. you mentioned how inventory is the highest. was a lot of that made up in the last couple years? can you give us a sense of the inventory buildup? michael: there has been this extraordinarily tight market for existing homes. builders saw an opportunity. they need to make up the difference and they went on a fast upswing over the last couple years and that built up inventories to the highest level since 2008. the industry is not that worried. existing home sales and inventories are so low that builders were just making up the difference. they are ok with some elevated inventories.

it is offsetting some of the low inventories into existing market. scarlet: thank you for clarifying that. the other thing we got was building permits, a leading indicator for construction. that also declined in the month. beyond lower rates, what are people saying we need to see for building permits to turn around? michael: i think some of it goes back to inventories. you will see builders ramp things up again when they start selling off some of these. rates are still at 6.5%. that is almost double what they were a couple years ago. the whole industry, existing homes, sellers, new home sellers, everyone is waiting on race. scarlet: as our traders and investors. michael sasso, thank you for joining us from atlanta. coming up, texas instruments is

set to receive billions of dollars from the chips act. we have more on that coming up next. this is bloomberg. ♪ are now being analyzed and restored using the power of dell ai. ♪

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scarlet: this is "bloomberg markets," i am scarlet fu. it is time for the stock of the hour. we will focus on chip companies. applied materials is falling after giving a fourth quarter -- in line with expectations. investors were looking for a bigger payoff from. all that ai spending texas instruments is also lower. it is set to receive billions of dollars in grants and loans. let's bring in ian king.

he joins us from san francisco with decades of experience. we pay attention to applied materials because it is a key supplier to intel and samsung. it is giving a forecast that did not disappoint but did not impress anyone. how high was the bar here? ian: obviously everyone is very focused on the data center spend. the demand for these high-end chips like nvidia. there was an expectation built-in this would create a flood of demand even for equipment. what is missing from that equation or a couple of things. demand for the types of chips and industry equipment. what is going on in the china market in general where as you

know, a lot of u.s. companies are finding themselves restricted by the u.s. government's rules. scarlet: demand for chip equipment for other chips, not ai chips, might not be living up to those elevated expectations. the u.s. government dismissed a request for a $4 billion project. how big of a blow are these types of decisions or do they not matter much? texas instruments won $4.6 billion but the stock is falling. ian: it is a lot of government money being allocated to these companies but none of it has been sent to these companies yet and they have to actually do what they agreed to do before they get anything. it is improving the cost of capital.

a high-end costs $20 billion. to billion dollars or three billion dollars helps but it is not -- scarlet: that is a really good point. do companies request grants for commitments they have already made? are they making plans based on the availability of federal funds? ian: texas instruments is a good example. they were doing this anyway. they told investors if we get the money we think we deserve from the government it will help facilitate. they said it will help improve costs and help us go faster and bigger with these projects. it is a nuanced argument they are making to investors for why this matters. scarlet: right. how quickly does the federal money come through? they have to go through with it and then get the money. does it come in years after the fact? ian: it absolutely can be.

it is based on achievements. as we know from history, you build what is called a shell, the actual building. when you show you have demand, you paid for the really expensive part, equipment and applied materials, what the government wants to see is, you built a factory but that does not mean anything. we want to see you making the chips at the kind of volume you said you will do and that you will get the bulk of the money. that could be years. scarlet: thank you so much for explaining that. bloomberg's ian king, an expert on all things semi conductors. kamala harris is set to unveil her economic plan in a campaign speech this afternoon. this is bloomberg. ♪

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scarlet: this is "bloomberg markets." i am scarlet fu. two hours from now vice president kamala harris will unveil her economic plan at a speech in north carolina. she is expected to call for a ban on price gouging. food inflation continues to be a concern for voters. a deal under by kroger and albertsons. laura davidson is here with more. the proposals she will lay out, is this something she is continuing from the biden administration or are these fresh proposals? laura: this is her first foray into distinguishing herself and putting out new ideas. this is a recognition that inflation and food prices in

particular are one of the top issues for voters even though the monthly inflation numbers have cooled, consumers are thinking about what things used to cost four years ago. food prices have increased 20% over the course of the biden administration. voters are thinking about whether to vote for harris or stick with trump. scarlet: i mourn the loss of sub-10 dollars lunches in new york. we know harris is promising to target price gouging and price-fixing within her first 100 days of office if she gets there but there is also talk of price controls. price controls do not have a great track record in the u.s. laura: this is controversial. trump called this a communist-type proposal. this has not been done on a federal level. a lot of these proposals remain to be seen how they would work if actually enacted. we are in the poetry phase of

the campaign. candidates are putting out ideas that hit at issues that people want. we are not at the legislating phase. scarlet: it is kind of like a wish list. laura: exactly. in her broader speech she is talking about housing and other issues. scarlet: it is like "i hear you." she is looking to direct government agencies like the ftc to look into big m&a deals that might make it more difficult for people to get lower pricing down the road. were talking about having pricing power. what does that sound like to you in terms of keeping someone at the ftc? laura: this suggests the road the administration has been on in big tech is something they are looking to do for big food. in this announcement about price

gouging, harris and her team have talked about the kroger-albertsons deal. this is an issue at the executive level, meaning they do not need congress to do it, they can start targeting deals that have pressure on people's pocketbooks. scarlet: i believe she singled out or really looked at the meat industry as one area they can target. laura: meat has been one of the key drivers of pricing and has been a problem since the pandemic. we look at this holistic look of , what can we do realistically knowing energy prices are not going down and prices will not fall from where they have been but we can slow the growth? these are the different tools in their toolbox they are looking at. scarlet: thank you for giving a preview of what we might hear from kamala harris when she starts speaking in just under two hours. let's continue the conversation

on what vice president kamala harris is likely to say with terry haines. how are you thinking about what we will hear from kamala harris. you heard laura give us some broad brush strokes. how much detail will she be able to say? terry: she will not be big on details. anybody in markets looking for policy detail in this speech, it will be like grabbing jell-o. there will not be a lot there. what she needs to be doing --you hit it exactly right a minute ago --she needs to be going into the convention all about empathy. empathy, empathy, empathy will be the key in her mind to getting the maximum amount of independent voters, people who are not convinced of her yet as she goes into the november election. what you will see in this economic speech is largely that. when you get down to the details

on these sorts of things like price gouging, there is absolutely nothing there. the idea is we will go to congress, we will work with congress to get more power for the federal trade commission and i will try to work with states attorneys general to try to do something. that is a long recipe in washington saying i will not be able to do anything but i want you to know i feel your pain. scarlet: it does not serve anyone's purpose on the campaign trail to talk about the nuts and bolts of policymaking. when you mentioned empathy, does that mean listening or solving? terry: it means listening. i think it means listening, it means demonstrating understanding. she will call for solutions as the campaign's press release says she will. i only point out for markets that the vast majority of this is next to impossible to

accomplish for a president looking for a very likely split political congress in 2025. scarlet: fair enough. not too long ago we have the trump train premised on what happened during the first trump administration. after the debate and right before the rnc, the trump trade was in effect. is there something like a harris trade? can you make an argument for one? terry: i can make an argument that one exists. it will be largely status quo. she will differentiate herself from biden and she is doing so in a number of different ways. some of which have to do with the economy. by and large, remember in every other year is washington policy is never about the president. it is about the president working with president times congress. in this situation what you have is a very likely congress that

continues to be politically split, this time a tiny majority democrat house and a tiny republican majority senate. and that majority harris will not be able to achieve a lot. what you have for markets is a mixed message on revenue. on one hand she is very much for fed independence and on the other hand these proposals are bad for fiscal. they push back on mna as you point out which is a driver of the economy. finally the housing proposals, markets also will not like. scarlet: absolutely. when it comes to housing it is something the white house has very little control over because it is depended on interest rates and supply which is in the hands of builders. terry haines is founder of policy. that was kamala harris who has arrived in raleigh, north carolina. she will be do to give a policy speech outlining her economic

plan at about 2:45 eastern time. when she begins speaking, we will bring you there on bloomberg television to give you full coverage of the event. you are looking at the s&p 500 and other equity markets. index is holding onto their gains of a moment. little movement in yields with a two-year at 4.07% and the 10 year 329%. -- three point 89%. ♪ the answer is j.p. morgan wealth management

>> from the world of politics to the world of business, this is

"balance of power." ♪ live from washington, d.c. joe: it is still the economy, stupid. kamala harris gets return. bottom to the fastest show in politics as the vice president outlines or policy proposals today as donald trump did earlier this week. we will talk about her plan with the campaign's senior economic advisor gene sperling. now on the trail. consumer sentiment rising for the first time in five years. another economic indicator hits an all-time high. volume at the port of l.a. the executive director gene seroka will be with us this hour with analysis from her century to panel. rick davis and jeanne zaino are with us.