>> there is this contrast between what the bond market things and the equity market thinks. >> there's a balance going on. >> the economy is clearly slowing down. >> what kind of slowdown is much less certain. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: live from new york city, good morning for audience worldwide, bloomberg surveillance starts now. coming into wednesday about 1% of all time highs on the s&p 500. following yesterday's very mild gains.

going into what many call the earnings report heard around the world. lisa: considering the fact of the biggest gain or, some 174% year-to-date, up some 1000% since october of 2022. what does a beat look like for a company that's expected to grow earnings by some 70% over this time. >> it is up by a most 160% year-to-date. absolute phenomenal. i feel we all the same questions here. how big is this mode around this company. can the carry on increasing share. >> especially as it's essentially becoming the new iphone. the new nvidia chip and how much with the latest bells and whistles. to your point of how quickly it's adopted and without broadly we will look at the more interesting aspects of the chip which is what they will be talking about is how much you

start to see some of the broad-based gains and market reactions based on application of this chips. not just a massive spend by the magnificent 4 or whatever you want to say. jonathan: analysts this will come as a surprise. breakdown of the bloomberg terminal this morning. 66 buys, eight holds. not a single sell on this name. lisa: we were talking about this yesterday in terms of the idea that that's about 400 500 basis points out by owning it. on the other underperformance. this raises the question of how much this will risk nvidia. how can you actually find the risk that so incredible. but there is this feeling on one level if they disappoint there will be massive crowding to the other side. they won't disappoint. >> very unbranched to think

about the downside risk. welcome to the program if your tuning in. equity futures firmer, scores cross asset look like this. let's get to the bond market. the 10 year yield just about unchanged. the euro negative. the dollar showing some strength. as of yesterday at one point we are on course for a sixth consecutive week with dollar weakness set to avoid based on this price action. lisa: i was reading a number of stories and analyst reports overnight about the question of how far dollar weakness can go and it's a heated debate there's a group of people that say this is a pause with a more protracted dollar weakening cycle especially with the potential fed rate cuts. then you look at growth regions. you start to look at some of the rhetoric out of the euro region for example. you take a look at what's going on in china they're about to issue bonds that could burst the bubble. i don't know for want to go

there. so where will you go. this two-sided debate coming to the floor right now. i think that something i will be watching. jonathan: everyone has their own problems and i wasn't talking about therapy and individuals. but were talking about other countries. jp morgan with some of their work coming out of asia normalizing rates is just one piece of the story. can we rebound growth differentials. lisa: and how do you do that which essentially governments are trying to do to stem off some of their budget pitfalls. this is a huge conundrum especially at a time where you have property market that is so leveraged and so offsides with respect to supply and demand. >> a big day ahead, let's start with the rundown. coming up on the program as markets await nvidia roundups. harris agrees to a first campaign interview and chris of janney montgomery scott and will fed rate cuts might mean for

regional banks we begin that all eyes on nvidia. stocks on pause awaiting earnings from the world was influential stock. the $3 trillion chipmakers results expected to set the tone for risk assets worldwide when reports after the closing bell. steve joins us from city. great to catch up with you. let's get straight to it and think about nvidia coming in later. given the recent price action, the leaderships, elsewhere recently. just how vulnerable or not are we to an earnings report after the bell. >> let's keep in mind it's not this way for every company the s&p 500. 3% of all quarters since 2009 have been below consensus. so it really is going to depend on positioning, on forward-looking aspects of the report where the whole suite is on this. but the reality is we just had a

quarter with nine out of 11 sectors have posted eps gains. we are restoring growth in other sectors. so part of what we've been thinking about is are we just rotating out of tech off the highs. not so much on the stock but on the nasdaq 100. or were broadening the market generally. and we think fundamentally we will see more sectors, more types of companies more earnings and the need to rely on the stock to power the market i think is diminishing. >> just to build in more on the same question, do the gains elsewhere need to be at the expense of names like nvidia or can the whole equity market participate? what are your thoughts on that. >> i don't think there's anything in the aggregate. we just had that opportunity. we came in early august. we were on the leading edge of a collapse. we a lot of de-risking and leverage trades that was a real opportunity.

semiconductor index was down 25%. that was a market dislocation with a really large gain. i don't thing we will be running away in markets particularly at this point in the election. >> before we get to the american election and what that does to cap potential gains i am curious does this basically mean you think nvidia earnings will be less than people -- less of an event people think they are? steve: less of a dependence on large-cap tech is the only thing that can possibly work. now we have not had the view that every leverage company in the world and small-cap was going to have some massive kind of rebound from depressed conditions. not going into those. but the reliance on a single story, a single piece of the ai puzzle being so important that the market has to completely depend on that i think that

dependence has come down some particular the correction of this in july and early august. lisa: the main driver is macro policy is the fed and not necessarily the earnings picture which has been benign enough to allow this broadening out? katrina: -- steve: we have diminishing inflation following interest rates. we have a bond market with some richness to it. and we have economic growth. profits growing and you know what they are growing over 12%. that should be good enough power gains on the market. but if you think this is a depressed opportunity, we just saw that. and the reality is we came back pretty hard from that. we should be looking for very mid kind of gains. everyone has a story about the next bus or the huge returns we have in some corner of the market. and the reality is we are in a

very sweet spot that's been priced decently in the market. of course we look at relative opportunities we think that equities are overbought. >> how much are you seeing companies report adaptations of artificial intelligence outside of say the magnificent seven. we talk about broadening out and earlier in the year there is this idea it would stem from the adoption and the cloud of joy people were getting from the ai. >> it sounds like the harris campaign. lisa: i'm just talking about the euphoria around ai. i'm wondering if we are seeing it. >> compared to the buildout of ai infrastructure the putting tens of billions of dollars in capex for a of companies. it's in that spending. the number of companies reporting ai with their revenue is going up. the actual applications are getting more and more

interesting. you'll see in our business. i think it is probably the case we will see fairly profound economic effect over the next couple of years that can make any single company or sectors profits soar, i think it will be -- recall a couple of companies with a broad stock market is going to have something that's driven as powerfully of ai infrastructure. >> nvidia one piece of the puzzle for the next 24 hours or so. nvidia coming out a little bit later into tomorrow. the big one for the bond market. jobless claims tomorrow morning. all of that in anticipation of september 6 which is the payrolls report for the month of august. mike wilson caught up with us a little bit earlier last week. saying there is potential for another downdraft. here's a quote he shared with us. if we get another negative number the market could react as bad as it did in july at the index level.

do you think we are primed vulnerable to just another show like we saw the start of august over again. steve: i would argue no. the issue is i think since we had this in early august. but we have essentially de-risked beneath the surface. if we take a look at the positioning that we have in leverage trades. we think of the carry trade prude one measure we use in the futures market has come off by 85%. we are not back to the races completely. i don't think that vulnerability is very high. all the people looking at historical analogies of what happens, let's get really apprehensive. so in essence we are already somewhat apprehensive. i just think when the same position for that kind of. look at the global news flow in

terms of control and supply anything on the campaign trail. but this is a market that is taken down its risk level somewhat and it's also brought it back significantly. it's not at the level we were in terms of vulnerability. >> appreciate the input as always. steve going into nvidia earnings after the close a little bit later catching up with the ceo, a conversation you do not want to miss. and the chief of the most influential stocks on the planet sitting down for an exclusive conversation. that is troubling must watch tv. >> especially at a time where they can continue with the growth in spend. you've seen investors push back against some of these big tech companies with how much they're spending in the company shoot back at them you would be unhappy if we didn't do this. >> touched on the issue as well. going back to a be heard from alpha back i keep going back to this quote where he was telling

analysts that the bigger risk here is under investing and not over investing. that's the first place i looked great downstream ai cases around the nvidia story. the biggest customers are the investors of their biggest customers losing patience with the story? are we seeing small cracked, will they get bigger as the year progresses? lisa: whether we see that in nvidia's response will be interesting as this raises the question of if you have some sort of delay to the latest upgrade. the back launch. but there is this question of does that mean people are going to hold off on their investments for longer. so far it's been no. >> up by 0.4%. equity futures just about unchanged. the schedule updated stories elsewhere with your bloomberg brief. >> hsbc's incoming ceo is set to be considering plans to remove

layers of middle management of the bank. sources say that may include cutting the number of heads across its global network. they are also likely to shakeup the executives and roles that will report to him after he takes the reins next month. we are seeing shares of nord stream rally in the premarket. the department store operator offering optimistic view for sales this year followed by better-than-expected results at its discount chain nordstrom iraq. it's the latest sign shoppers are pivoting to off-price options as they hunt for deals. the companies profit for the second quarter also be wall street expectations. nfl owners to private equity firms to buy as much is 10% stakes in their franchises. loosening some of the tightest ownership rules in professional sports. deals are expected to happen quickly with firms including areas management and others all will be vetted and approved. it could sell for as much is $1

billion and could see interest including philadelphia eagles, miami dolphins and buffalo bills. jonathan: steve palio, coming up later. it -- if you're interested in football. steve is coming up later. the opportunities lisa, looking at how unique it is in this country when it comes to sports content. i think of all the tv programs last year the top 100 and the country, 90% i think were nfl games. that's how valuable that content is. lisa: it's fascinating from every point of view because it's valuable for companies but you have to imagine they try to extract value from some of these companies, of the contract start to look different. and that's curious. jonathan: up next on the program, harris taking questions. >> since we had vice president

harris to the top of the ticket, almost everything has been scripted and those unscripted moments are really where voters will have an opportunity to get a sense as to whether or not they >> will vote for her >> november. that conversation up next. live from new york city, good morning. ♪

the best ai assistant isn't one that knows the whole world. it's one that knows your world. a custom assistant, built on watsonx with ibm's granite models, can leverage your trusted data, be easily trained on your workflows and integrate with your apps. it can be tuned to do just what you need. because the more ai knows about your world the more it can help you do. ibm. let's create.

once you know the moves. with godaddy websites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy. jonathan: live from new york city, a calm start to wednesday morning. equity futures lower, things get busier as the session grows older. in the bond market yields about unchanged. under surveillance, harris taking questions. >> since we have had vice president harris ascending to

the top of the ticket there hasn't been a sit-down interview for her. there has not been a debate, almost everything has been scripted and those unscripted moments are really where we will have an opportunity to get a sense as to whether or not they will vote in november. the trump team sees a lot of momentum in the harris campaign and they want to see if they can disrupt that with those unscripted moments. jonathan: kamala harris and tim walz sitting down with cnn tomorrow. this is harris creek faces criticism from donald trump another republicans were failing stick reporters questions and for any substantial -- some of discussions on policy. joining us, wonderful to catch up with you. let's start with the format. what's the reaction to the format in the last 12 hours? >> we found out this will be an interview with vice president harris -- vice present harris.

they will be sitting down with cnn. most considered dana bash a serious tough questionnaire. that something people are watching for. president biden and harris really choosing to focus their time in media with influencers, people towards the campaign. but also the fact it is a double sit down. meeting with both harris and her running mate. so that potentially take some pressure off of harris. but the anticipation up until this moment has been because harris has not really faced serious policy questions about her platform and some of the flip-flops she has done since she ran for president in 2020 really before biden shows her as his running mate. she will have the opportunity to do that and explain some of those particularly because donald trump has really hit her along with jd vance on her lack of specificity, on her flip-flops and now she will have a chance to explain that face-to-face with dana bash and cnn. lisa: what's the word in terms of why she chose to make this a

double sit down. you said it takes the pressure off a dozen potentially open up reliability she's meeting -- this question of issue basically not taking charge or is she someone who isn't really in the driving seat? >> i think for one they are still being introduced to the public. both harris and tim walz here, particular when there was concerns about bidens age and voters knew she was the didn't know much about her. i think that's part of the concern here is they are both reintroducing themselves to the public many with tim walz they didn't know him and d.c.. so they're both sort of trying to establish both of their efforts here and i think for tim walz his agenda as governor has been under attack by republicans for being too progressive so i think both of them have a lot of questions to answer in this regard about why they are now moderating an agenda looks a lot more similar to president

biden's. >> i recommend people read david's column, a time when there are a lot of questions by media. in particular about the flip-flops you talk about in particular immigration taking a much harder line or for example four years ago when she said it was wrong and backwards to think more police officers create safety. a key question now she tries to double down on this idea of creating law and order, has she given any indication on the campaign trail about trying to reconcile some of the gaps in her policy perspective? akayla: she's largely running on a record that looks similar to bidens. the one thing the analysts point out is 2020 party was moving so to the left, she was in support of banning fracking, summing this not really popular in those blue wall states like pennsylvania. supporting medicare for all, a public health care system option. and she's now also pushing for

that senate bipartisan agreement on immigration but we saw almost get to the finish line but donald trump intervened making sure that did not pass in the house and other parties in a different place. the party is moderating things like immigration of become a real vulnerability for democrats so there's recognition of the politics of the country and what it takes to win. she is democrats only chance right now. she is trying to win a general election votes and that means undecided voters, independent voters and potentially some republican voters as well. jonathan: let's start with what we know. what do we know about her position on taxes? akayla: we know she is in favor of a moderate raise on taxes. not a huge surprise for democrats. she's also in favor of raising taxes on the wealthy, really beyond that we haven't had a lot

of specifics. the big question is also terrace. trump is arguing he would like to raise tariffs specifically on china but as we see with president biden's administration he left most of those tariffs in place even though he may be necessarily didn't agree with them. i wouldn't be surprised if harris takes a similar stance. >> questions about regulation. i think a lot of people in the tech industry are sort of hopeful about harris. she someone who has been a pro -- pro-innovation and has really worked a lot on artificial intelligence so there are some indications she could be more pro business or business friendly than biden was. reporting some of the biggest names on wall street, through residence and the white house or she certainly been picking the brains of ceos and wall street's trying to get assessments of how the biden administration has impacted them. so she is going to be someone.

jonathan: thank you for dropping by and catching up with us on some of the strategic ambiguity around the harris campaign. lisa: can she have an interview where extensively she will be asked some of these difficult questions where she doesn't give answers or gives answers that are not a potential liability for the campaign. and this is what you are hearing from donald trump's campaign. reconcile these things and when you're not scripted that's when things are more visible to people. it's a reason why this is an important >> >> interview. if you're critical of the fact she's not taking any questions or many leading broadcasters here in the united states of america i think you might have some comfort that there's finally a sit down conversation. you'll be highly disappointed with the format. it won't cut it. jonathan: this is why might -- lisa: this is my question is this it. i think a lot of people do.

did you read about why she towed chose dana bash? msnbc was considered too left, fox was considered to write. abc already did the debate. you had -- cnn hasn't done one of the debates, what is considered friendly but not as friendly as msnbc. >> you think cnn is happy with that. >> and dana bash did the previous debate and considered a harder interview. >> from new york city this morning, good morning. this is bloomberg. ♪ new project managers. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

food isn't just fuel to live. it's fuel to grow. my family relied on public assistance to help provide meals for us. these meals fueled my involvement in theater

and the arts as a child, which fostered my love for acting. the feeding america network of food banks helps millions of people put food on the table. when people are fed, futures are nourished. join the movement to end hunger and together we can open endless possibilities for people to thrive. visit feedingamerica.org/actnow

jonathan: welcome to the program. equity market shaping up as follows. futures just about positive by .05%, adding to the mild gains of yesterday on the s&p 500. it's a quiet start but things will pick up. nvidia, up by about 10% this month alone, that's not nothing, is up another one third of 1%. lisa: if you look at how much added to the overall s&p 500 since chatgpt came out it is astronomical. a question about if it can continue the momentum. what a beat looks like. is it a massive miss?

probably since they have always beaten quite considerably. how much of a runway do they have? we have not seen the adaptation -- adoption people were talking about. jonathan: same thing. lisa: it's wednesday. big day. jonathan: mandeep singh will join us in just a moment. lisa: that's an upgrade for some people. jonathan: it's a long week already. treasury yield shaping up as follows. yields lower by four basis points. tight trading range in the last couple of weeks. the two-year auction went ok. lisa: it was strong. bids outweighing some offers in a more significant way. we have $70 billion and five-year notes being auctioned off. do you see the same kind of enthusiasm for more duration?

that is more of a question. we said yesterday was not going to be traumatic. it wasn't. not so much on the long end. jonathan: things get interesting when you go to two's to five's. jobless claims tomorrow morning. we looking for 232,000 on claims. that's tomorrow morning at 8:30 eastern. that is when a meet is a beat. people will be happy were jobless claims are at. lisa: they are not increasing. it doesn't highlight this massive decline. there was an interesting report. a lot of analysts are scouring corporate earnings calls to understand the language of what they are saying. they are not materially hearing about more layoffs in those earnings calls across the board, in the u.s. and europe. where are the layoffs coming from that will tick up?

when people challenge the gloom and doom and shifting priorities of the fed, how much wea kness is there out there? jonathan: we will find some contradictory evidence to every thing you said. looking at the consumer confidence numbers and the labor market weaknesses. there's a growing share of respondents that say that jobs are not plentiful and hard to get. the labor market will weaken further this year. just more contradictory evidence. lisa: consumer confidence and the headline never came at the fastest pace in six months. you put those together and there you go. jonathan: the fx market somewhat easier. the dollar is stronger today. euro-dollar down .5%. dollar-yen up by .3%. the dollar as things stand, dxy, up by .25%.

if you close up is the first week of strength going back for five weeks. lisa: the fed came out and was perhaps a bit more dovish than expected. there is a limit. the limit is capped by what we see in europe. there's no growth there and how much they are going to cut considering the weakness they have in the backdrop. it raises a question. it's one of the most interesting aspects. how much can we actually unwind that? jonathan: euro-dollar down to 111.30. kamala harris setting up for her first interview. the vice president and running mate tim walz speaking with cnn tomorrow night. there was some disappointment with the format by the same people who were disappointed by the fact she had not sat down for an interview. is that point valid or not? i think it is a valid criticism.

we were hoping for a one-on-one conversation and you get two for one, and that is not what people were looking for. lisa: the fact she is sitting down with walz, though she answers substantively? does it become basically a filler kind of interview where there's a lot of noise from both an awesome any questions? or, can she actually hang your hat on real policy positions that say we will replace lina khan, change the immigration strategy? this is why i've changed. price gouging, this is how it will lower prices considering the pushback. we will probably not get that but people are hoping for it. jonathan: i have changed from my position from the 2019-2020 primary. you have to go to the left a little more to try to win it. did not even get into the primary. dropped out before the voting started in 2020. those positions are not her positions anymore. that is what is implied. some physicians from the administration are hers and

aren't hers. is that what we are supposed to take away for the last three and half years? lisa:'s shape shifting beneficial for her? can she say i reflect the will of the people and this is how i shape shift and this is my criteria and what goes into the strategy? is it more of a scenario analysis? rather than simply trying to state her claim that people can anticipate what her rule would look like. people don't have a sense of that right now. jonathan: we hope this is the beginning of an ongoing conversation about policy. the fact that people are complaining about the format is still an issue and not going away anytime soon . the latest report from bloomberg on apple. cutting about 100 jobs at his digital services groups as part of a shift in priorities for the division. it includes some engineering roles and the apple books and apple news teams.

job cuts at apple are rare. i think this is underlying where the emphasis is started to shift on not just apple but other companies. lisa: this is coming right after the exit of a long time that oversaw the shift to services over product. i wonder if it is as much of a routine kind of stepping aside and shifting back and enjoying his money at a 60-year-old age because why not, or if this is a shift in strategy for apple which has seen lackluster gains in services relative to expectations. they have been gaining revenue but people were expecting services to lead the charge. some media outlets taking off and competitors to the likes of amazon. it's unclear whether that is coming to the fore it's unclear whether that is coming to the. lisa: you had to throw that in. you do that every time you talk

about going to italy to vacation in a villa. jonathan: let's turn to nvidia. counting down to nvidia earnings after the closing bell. the results expected to set the tone for risk assets and a barometer for ai spending across the tech industry. another blowout report predicting the company will project revenue growth of more than 70% for the current quarter. mandeep singh, one of the best joins us from bloomberg intelligence. mandeep:mandeep: good morning. jonathan: can be beat -- can we keep beating and raising? mandeep: historically, when companies have such high growth rates at the pace nvidia is that there's always a pull forward component to what they are doing and there is rationalization in the market. whether the rationalization will happen this quarter or two quarters for now, i think the

latter is more likely simply because the market is undersupplied. these growth rates are unsustainable. right now what nvidia valuation reflects his continuation of this 30% to 40%, and that worries me. you cannot sustain these valuations at, you know, the growth rates a currently are. jonathan: are you suggesting the data center is about to let up in the next 12 months or so? mandeep: every company we talk to is looking for ways to utilize their existing gpu's better and what can they do in the software layer to reduce reliance on nvidia's chips? the only game in town is nvidia when it comes to building a large cluster of models. then you want to do things at the software layer that make it easy for you to ease your reliance. there was this race to get the

gpu's. now the companies are training, they are trying to figure out ways to reduce the reliance. that is where i feel the market always rationalizes. yes, there was a supply shortage. every company is trying to figure out ways to overcome that shortage. that is what will affect nvidia. it has to do with their product roadmap and how well they execute. they probably will execute better than other chipmakers. the question comes down to what are the participants going to go and deal with this supply shortage? my expectation is they will be at the algorithm layer, the software layer to reduce the reliance on nvidia. lisa: i love having you are. always such a breath of fresh air. it's always contrarian takes. throwing a little bit of cold water onto the roaring fire that is enthusiasm for nvidia. when we talk to other analysts, including some coming up, he

will say they have a competitive advantage. no one is coming up against him in a significant way. isn't that the reason why they can continue this growth? there's no one else in town. mandeep: you are right. intel is far behind. broadcom is an alternative. every hyper scaler developing their own chip is looking at ways to leverage broadcom and other chipmakers to do the in-house. they are far behind in terms of executing the way nvidia has. for large languid model players like -- language model players, they want to focus on the applications. why focus on chips when there's so much opportunity at the model level? they will be innovative at the software level. what we have seen is that is where all the -- they have a higher gross margin. that is how the cycle will play out. i'm super bullish on generative

ai and this whole cycle. is a question of whether people will continue to rely on nvidia to develop their next model and the scaling laws apply because the next model will be bigger and better. will it be all driven at the chip level or wildebeest there be software and algorithmic improvements? my bet is the letter. -- latter. the hyper scaler risk. right now $60 billion in incremental revenue you will see from nvidia this year at the data center level. more than half is coming from the hyper scaler's. will that continue? what are his expectations in terms of that hyper scaler capex continuing? there's a bet on sovereign. i want to understand the customer base that nvidia has and how sustainable growth is across their customer base. jonathan: this was awesome as always. mandeep singh of bloomberg

intelligence. the earnings day moves had a move last time. 16% move the quarter before that. lisa: especially when you consider market caps. it's always been swing up. he would how much that is a market driver versus a market crusher when it comes to the idea that there could be a broadening out when you have the behemoths driving the train. jonathan: the stock is up .4% in the premarket. stories elsewhere. yahaira: the two richest people in china sought more than $16 billion wiped out after record-breaking stock selloffs. the founder of beverage company lost 3 billion companies -- $3 billion as shares fellow record 10% yesterday. colin wang's wealth tumbled by $14 billion as a shares fell the most in company history.

pdd is the owner of the popular shopping app timu. it signaledconvincing concerns over asia's biggest economy. bitcoin posting its biggest drop since the broader market selloff in august. trading as low as $58,300, although it has retraced some losses. other major tokens also unwinding some other gain from last week. traders are looking ahead to results from nvidia after the close today with a bellwether ai and chip companies back to did shape investor appetite for risk. dan evans won the longest match of the u.s. open since tiebreakers were introduced in 1970. his upset win taking five hours and 35 minutes. evans also fighting back from 4-0 in the fifth set to win the

marathon match. carlos alcaraz moved into the second round as did iga sqaitec. -- swaitek. jonathan: please it comes into the studio. i have pulled a muscle in my arm. what have you done? i was playing catch. playing catch? five hours without intensity. lisa: but they stretch and they have lots of training. i don't have a trainer to go play catch. jonathan: your body just can't do it used to do. i feel the same thing. lisa: did they have to be taken off the court? jonathan: i set i pulled my back of the night standing up for half an hour. my back went. up next, dealing with the trash. >> we saw a short squeeze last week in the smaller banks in particular. that is driven by technical dynamics.

there is still a lot of trash. jonathan: that is up next. you are watching bloomberg tv. ♪ ♪

(♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like?

of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com jonathan: stocks are positive, up by a pound .05%. bond yields going nowhere. the dollar stronger, which goes against the grain of the last few weeks. 111.26 on euro-dollar. dealing with the trash. >> we saw escorts chee -- a short squeeze last week. that was driven by technical dynamics but also the prospect of increased demand for things like loans and perhaps improvement in the balance sheet

assets they have. there is still a lot of trash. i don't think inflation is gone. you have to be aware that. jonathan: kbw regional banking index hitting a slide. christopher marinac remaining constructive. loan growth is very modest this quarter. companies are being careful to extend new credit and most are wary of new lines. chris, welcome back to the program . banks have had quite a run. 20% in some places since the presidential debate. the move more recently, how would you describe that and how would you do stings between solid names that will improve in months to come and quarters to come and maybe the trash your names you want to avoid? -- trashier names you want to avoid? chris: we will be in a trading range until october.

september should be generally positive. most banks are not seeing any new credit quality problems. when you talk about banks being labeled trash, that's the perception that credit will deteriorate in the quarters ahead. to some extent that's depending on the economy. we think banks will benefit from lower interest rates. the official fed policy cuts that they starting to month could be beneficial to the cost of funds for banks and interest rates widening. it will give relief to real estate loans that have to be worked out. lower rates will help the sector. we still have an economic cycle to contend with. jonathan: when you dissect the last couple of months you noted the end of june and the presidential debate. how much of this has been about a relief on lower interest rates and about political considerations? chris: it's much more about the fed and little about the politics. we have a lot to uncover as it pertains to their glittering environment. we shall have the basel 3

rules. we will see title capital standards. that is not going to go away. it might just be watered down from the original proposals. we have more wood to chop as time passes. i think the fed rally in rates has helped. we will see evaluation marks at september that help. we sell have to work through the credit perceptions of the quarters ahead. lisa: that 5% rally on friday after the fed speech and they said the time has come to start lowering rates, we saw the biggest rally at that 5% rally going back to the end of last year. does that mean rate cuts will be positive for the regional banks even if it comes with lower growth? chris: the biggest issue of the past year in silicon valley failing was the cost of funds surging and the whole catch up of apposite costs. that has come and gone.

we are seeing wholesale borrowing costs roll over the past two months. if the fed cuts rates in the fed funds index comes down, deposits can begin to adjust. many are waiting for the fed policy move to lower their deposit costs. it will benefit things in the fourth quarter and the first quarter of next year. we have concerns about the valuation of bank securities and that it's better every quarter. the marks will be 3%, 3.5% positive which is a big move quarter to quarter. lisa: these rate cuts prevent some consolidation a lot of people think is necessary? chris: no, it will accentuate the consolidation. we saw an uptick in deals in the last three weeks. another two midsized banks merged in the midwest. i think more that is coming. the news with capital portends additional regional bank considerations. the fed is open to consolidation.

the capital roles will spur that when they become adopted at the end of this year or early next. lower interest rates will change the perception. we will get through the election and we will have our knowledge on where regulatory reform goes. i think lower rates will be beneficial. it changes the perception for the space. i think real estate workouts which need to occur will be benefited from 25 to 50 basis points of lower rates. jonathan: how different is this moment? we talked about lower rates and we go on to say a slower economy does not sound too good for the financials, for the banks. what is this moment so different? we are talking about lower rates and a slower economy but banks will do well? chris: thanks had pressure on funding heading into 2023. when silicon valley failed, everything changed. liquidity changed dramatically. now that we have banks growing slowly the capital retention will be greater.

we have the valuation marks improving. we have less pressure on funding. i think the banks can be very successful with zero balance sheet growth, retained earnings and have more flexible as it pertains to working through the credit issues that are still out there in the commercial real estate. lisa: what are your top bets given it will lift all boats but some will be lifted more than others? chris: first citizens, for third. we like sonovis. wintrust. even though new york committee was the vein of everyone'-- bane of everyone's concerns back in march but it's back on a good basis. jonathan: what is it about that name you like? what is the feedback from clients when you suggest it? chris: on the our community, the losses in the mortgage -- the multifamily book is much less than perceived. many owners have tax issues if they don't pay.

they will not default. they are going to repay. some loans will move and get refinanced with freddie mac. the company's value will bottom. it will take a few more quarters for them to get back to profitability of the company's credit worries and a lot of fears about the positive -- deposit runs were not true. there's a come back happening on nycb. jonathan: chris marinac, the final comment regarding nycb. we did mention it to me times this year but when we did it wasn't good. lisa: it came with the policy shifts in new york city that led to a devaluation of loans to rental properties because of some of the rent rules and other properties that are residential in new york city. the question about whether this is a policy or just looking at the base observations if you

don't get default. this looks like valuable stock. what is trash, jon? jonathan: did you see some of the moves since the lows of last year? absolutely phenomenal. huge moves. lisa: they are coming up such a low base. they got beaten up so badly and had such low valuations. the question of how sustainable the moves are given there is some of skepticism. some people call them trash. jonathan: who would do that? who would do such a thing? not all of them. just some of the have traded higher off the back of the relief rally surrounding the lower rate story. that's it. that's all. not a buy everything moment, but it has been. it should be. lisa: is new york community bank everything? jonathan: ok. coming up -- you are trying to get me in trouble. david rogal, jon lieber, stephen pagliuca, daan struyven.

all that and more. ♪

>> be careful what you wish for if you're hoping for an aggressive cutting cycle on the part how the fed. >> we need restrictive policy. it doesn't need to be as restrictive. >> there is room for inflation to surprise on the upside. >> i don't think inflation is gone. >> this is "bloomberg surveillance." jonathan: the second hour of "bloomberg surveillance" starts right now. the equity market unchanged on the s&p 500. futures going absolutely nowhere

after yesterday's mild gains. the nasdaq up .1%. small caps down almost on the russell 2000. things you're getting a lot more interesting in the next 20 for hours. after the close, burning from nvidia. tomorrow morning, 8:30 a.m. eastern, jobless claims in united states. they are the two big hits of the week. nvidia earnings later, jobless claims tomorrow. lisa: nobody is doing anything this morning. when do i have to pay attention? after the bell at 4:00 p.m. that is compelling. how many people are still the office and preparing to actively trade and you have a $300 billion move in nvidia? what is that due to the rest of the market? we have to continue to explore today at a time where this market is very dependent on one specific name. jonathan: have a put to bed the concerns of early august? the jobs drop after the ism

manufacturing. jobless claims were a little higher. the big growth scare of the lack of hire and implement -- higher employment. lisa: let's be honest. yesterday we talked about consumer confidence. you had it coming to the highest level since the beginning the year. there is no weakness. what are you talking about? look at the jobs echo vacations and it came in significantly weaker if you look at confidence of the job. the rate was dropping to lows we saw an 2021. you have the same clarity you have two months ago. jonathan: and if you consider

the vice president the incumbent. she will face questions from cnn. the format. people have been critical. we have not had many sit-down interview. we have had zero. they are critical because of the format because the vice president will be sitting with her vp pick for the conversation. lisa: that's part of the whole game. this one is pretty valid. it's important understand how she thinks so you can extrapolate how she will rule and govern given the fact she has shifted her policies. i go back to less criticism and more of what we need to hear. the policies the business community is looking for. one of them is melina khan. another is explain your tax policies, price gouging. how will that lower prices considering the pushback from the business community? it goes on and on. not to mission tariffs, immigration. key questions, which is why people still throughout that this is a huge risk heading into november considering we don't know the answer to these questions. jonathan: we are moments away from the conversation about the fiscal trajectory. don't miss that.

equity futures unchanged on the s&p 500. welcome to the program. yields lower by a basis point. 380.84. the dollar showing some strength against pretty much everything in g10, including the euro which is down .5%. coming up on the program, david rogal on the fed policy path. daan struyven of goldman sachs and what he said he cut his oil outlook. we begin with stocks facing the next big test with nvidia earnings after the closing bell. investors looking ahead to first round of jobless claims numbers tomorrow for close on the fed's path. david rogal writing the following. "as the fed recalibrate, we see curve steepen out. 60 basis point steeper than current levels. that's a pretty normal curve shape and a soft landing type environment." david joins us now. we will get to the curve in the

moment. i want to talk about valuations. how attractive is the current set up in fixed income for you and the team? david: it's an incredible time in fixed income if you look at valuations. you can get almost a 2% real yield. you look at the tips market. you go back a couple of years, for a decade we averaged -1% real return in cash. that was the era of financial repression. bonds are providing more hedging value in portfolios as inflation comes down. you will see the countercyclical monetary policy. you should get more hedging value. it is not inconceivable in a severe growth downturned you get a high single-digit return in the bond portfolio. as the fed recalibrate's policy you will see curves normalize. that will drive money out of cash and into intermediate fixed income. we have seen more investors looking at the total return product. we should be looking at active, diversified and flexible strategies. if you look at bond indices,

they are becoming concentrated. over 40% of the ag in treasuries. as deficits continue you will see the treasury weights increase. we recently launched an etf off the strategy. we hold 20% of treasuries, 30% of portfolio in non-ag assets. jonathan: kimye get to your thoughts on cash? -- can we get to your thoughts on cash? people that, this program and talk about the $6 trillion cash in money market funds, you say one thing needs to happen before we see the other? david: you are starting to see investors get ahead of it. we have seen strong inflows into bond funds this year. there's a lot of money. not just $6 trillion in money market funds. household net worth is up to $150 trillion. there's a lot of drive powder

that can come into the market. lisa: there's a question of how much the cash can go into duration. the issue of how much value yields are axley providing and how much further they can go. at the core of what jon is getting at, how much of that is locking in 10-year yields that sub 4% when you have questions of actually going to go lower. isn't that the case? david: the intermediate part of the curve looks attractive to us. on the fed, if we look at the front and at what the set is saying, we see the cycle as more of a recalibration. we are pricing 100 basis points of cuts at the next three meetings. we are pricing terminal rates below three. there is uncertainty on what the front end will do and where terminal is going to be. when you look at the intermediate sector, valuations are ok. we see it as more of a recalibration cycle. the market at the front end

seems to be a little ahead of itself in the valuation perspective. lisa: you are not talking what the long end. why? david: it's not a place where we are allocating significantly in the portfolio. we want to be more cautious. when you look at the fiscal trajectory, it is worthwhile to take a step back and look at how it's evolved. for many years we had countercyclical fiscal policy. when unappointed rose you saw the deficit expand. in 2016, we evolved into a procyclical fiscal policy. tax cuts. that was continued in 2021 with stimulus. i think what we are today is more structural deficit spending. the cbo forecast is forecasting 6% of gdp deficits in the next 10 years and a 20 point rise in the debt to gdp ratio. if you look at government spending, most is nondiscretionary. the scope to improve the deficit alec will involve some pain --

outlook will involve some pain. the fiscal trajectory will be with us for a while. you are seeing a lot of demand for fixed income from the household. if that takes a pause you can see more volatility in the market. jonathan: cannot build on that? -- can i build on that? treasury markets allow them to act countercyclically. correct me if i'm wrong. are you suggesting when we go to the next economic downturn and the deficit has to expand more the treasury yields might actually rise and not fall? david: i would not necessarily go that far. you can see a steeper curve that perhaps normally if we were in a severe growth downturned. i would not necessarily go that far. jonathan: you think bonds act as a ballast in the portfolio? david: for the most part. i think you are seeing that more today in the last two years for

sure. lisa: just to put numbers on it, happy quantified the asterisk premium associated with the structurally higher fiscal deficit? david: it's a hard thing to do. i think by most measures today term premium is fairly low. term premium has come down across most measures. a lot of it is determined by where you think the neutral policy rate is going to evolve to. there is uncertainty on that. if you think the neutral rate is closer to 4%, there's not a lot of term premium and the bond market. the neutral rate is closer to 3% to where the fed's long-run estimate was, valuations look more reasonable. lisa: how much you care about bond options? david: they are going pretty well. you look at the two-year note auction yesterday it was a good day for the treasury. jonathan: one is the failed auction happening? lisa: i'm waiting for other people to be waiting for a failed bond option.

are the people watching this as closely as i you? do people care when i care or is it just me in a vacuum? that is my question. david: people are focused on about when you look at the metrics for most of the bond auctions they look healthy. the debt to cover ratio looks good. jonathan: appreciate it. david rogal. lots of thoughts about this curve normalization we need to see to encourage the cash to start coming out of money market funds. lisa: the normalization is talking about seven years, not beyond that. there's a question mark people have. the reason why it's an interesting conversation is it is not the first time we have heard that. we heard that from so many people. the long end. i don't know. yields of beef affected by the fiscal trajectory. then bob michele comes out. what are you talking about? money goes into bonds. jonathan: is happening in good times, at least relatively good times compared to where we have been previously. let's get an update on stories

elsewhere. yahaira: u.s. special counsel jack smith has filed an updated indictment against donald trump on charges of trying to overturn the 2020 election. the new indictment cuts out claims related to trump's communications with government officials after a blockbuster immunity ruling from the supreme court. it is including the same charges accusing trump to conspiring to reverse the outcome. the parties are set to file the report with the case's judge later this week with proposals on next steps. warren buffett continues to unload shares of bank of america with his berkshire hathaway selling at additional $982 million. berkshire has trimmed its stake by him was 13% in a series of sales since mid july, generating $5.4 billion. berkshire still remains the bank's biggest talk with almost 904 million shares worth nearly

$36 billion. another big podcast deal. travis and jason kelce have signed a three year $100 billion deal with amazon for their popular new heights podcast. it allows amazon to sell ads on the show's video and audio feeds and distribute it globally. it includes the show's back catalog. it launched in 2022 and saw a massive boom in listeners after travis began dating taylor swift the following year. that is your bloomberg brief. jonathan: thank you. does she get a cut are not? isn't that what you want to know? lisa: what is the association with the taylor swift effect? 10 million versus 100 million. what if she is my sister? jonathan: up next on the program, studying global ties. >> president biden has been clear in his conversations with president xi that he's committed

to managing this important relationship. we are working to ensure the competition does not end with conflict. jonathan: a brand-new note from dan either. the date is here. the godfather of ai on deck. get the popcorn out. this is bloomberg. ♪

♪♪ ♪♪ beaches jamaica sale is now on. visit beaches.com or call 1-800-beaches.

jonathan: here's the note. the day is here. the godfather of ai on deck. get the popcorn out. after we get the numbers. look at that later on bloomberg tv. in a nutshell we expect another drop as jensen and co. are the only game in town with $1 trillion of capex with the jeep use is the new oil and gold. lisa: he's been talking about how this is revolutionizing the

economy in ways that go beyond what the railroad did. he will be joining us tomorrow at 6:00 a.m. how bright is the outfit? how may different patterns? is there some sort of scale? the better the performance, the brighter, the bigger, the more fluorescent and multifaceted. maybe there will be tassels. jonathan: he likes the clash. dan is coming up tomorrow morning at 6:00 a.m. equities right now totally unchanged going into the s&p 500. yields lower. a basis point on the 10-year. under surveillance this morning stating global ties. >> president biden has been very clear in his conversations with president x he'si committed to managing the supportive relationship responsibly and the outcomes of the summit demonstrate that.

we are working to ensure the competition does not lead to conflict and we find ways to work together where our interests align. jonathan: jake sullivan and his chinese counterpart kicking off a second day of talks, set to discuss issues including foreign-policy and trade. bloomberg reported sullivan blame to make clear he won't speak for the next administration. "harris would maintain the status quo with regard to taiwan and would prioritize keeping the u.s. out of regional conflicts." jon, and somebody says the approach of this administration as well. in many ways it has not helped. if that is the approach do you ignite more concern and perhaps not less? jon: the goal for both administrations is to keep guardrails around what is obviously a declining competitive relationship. nothing sullivan says when he's in china or harris and her team

say in the next couple of months is going to change any of that. washington views beijing as a rising threat. they are willing to take actions and steps to contain the threat. they don't want to get involved in another war or actual hot conflict. that is what the visit is all about, keeping channels of communication open, maintaining warm relations. despite what they are saying, we think this is about signaling that there's content to be that continuity -- there is continuity, which is in contrast to what trump is trying to do. jonathan: let's talk about tariffs. tariffs in the early part of the trump administration were about a lack of reciprocity. they were putting -- we will go further unless you do x. then it became about national security, more so under this administration.

when it comes to leverage, this is what i'm struggling with. the lack of clear evidence we can find any real lever to gain leverage over the chinese to influence their foreign policy. what can the west do to influence the chinese to change their view about how foreign-policy should be conducted? jon: i think the big think you getting at is taiwan. the chinese absolutely have been resolute that taiwan is a part of china and someday will be reunited with mainland china. that is the single biggest flashpoint and biggest redline for the chinese the americans -- they don't want the americans to cross. that is hanging up in the background of this entire discussion. one think you did not mention with tariffs is jobs in the u.s. that is what the tariff regime is about. decoupling from china, especially in a second trump administration, bringing jobs back to the u.s. and that's a

bipartisan thing with divided -- the biden administration subsidizing green energy to bring in construction back to the u.s. to create jobs. that threat of taiwan is out there. the chinese have been clear the u.s. cannot cross the redline. the americans are saying our goal is actually to protect ourselves but also bring jobs back to the u.s. lisa: you talked about continuity from the last administration to the new one, whichever it would be. do we have a sense of what kamala harris's policies would be? jon: not really. she has not laid out a specific china policy. she has not really laid out a lot of specifics on any policy. at the convention she did make a point to talk about a strong national defense. we don't know what that means and the u.s. have massive fiscal challenges. that will determine the path of the national defense and the size of its military over the foreseeable future. harris wants to be strong here but that could mean anything.

one of the questions for her, one of the big challenges is what happens when there's a provocation. what happens when the chinese try to stop the philippines from resupplying the second shoal during her administration? we don't have a sense of that from her. some personnel will be left over from her vice presidency. most of the biden people will probably cycle out. it is difficult to infer what she will do when the 3:00 a.m. phone call comes. lisa: how does this framed your conversation with clients? jon: the question about what harris will do is on the mind of every person we talked to. on domestic policy it's a lot easier to predict. she will inherit the biden platform. it looks like most other democratic platforms, which won't be that different. it will require congress. on foreign-policy, presumably she will continue which even doing with ukraine, they continue this strategy of

engagement with china. what the specifics of that look like, the people making the decisions, these are big questions our clients are asking. jonathan: we can sit all day and complain about the lack of access. they will be a little bit of access, a sit down conversation with her running mate. the complaints will continue regardless. i look at the results. whatever you think about it, the strategic ambiguity, the lack of access, the lack of clear policies, it is working based on the polls. we have been talking for a while about the so-called double haters. how deep is that pool of double haters? how well is this administration or this campaign have they done at tapping into that reservoir? jon: they are doing a great job consolidating support among the democratic leaning independents who did not like joe biden. you see this in harris's approval rating in the poll numbers. it looks like over the last few weeks a lot of voters have come back home, both to the trump

campaign and harris campaign as both numbers have supportive -- have risen but harris by a lot more. that double heater group will probably a lot less relevant in this cycle than it was in either 2016 one trump and clinton were the least liked candidates ever, 42020 one trump was so deeply unpopular -- or 2020 when trump was so deeply unpopular. harris is doing a good job presented herself as the normal reliable protectable option relative to donald trump. jonathan: making it less relevant makes it a bigger issue for the trump campaign. as you noticed, there has been a ceiling. the former president suffer from a ceiling of support. if that is the case, what is his strategy and how does it differ to kamala harris's? jon:'s strategy is to do what he's done the last -- in 2016. pull out an inside straight in

the electoral college and win barely enough to get him there. he needs to win probably a conversation of pennsylvania and georgia. north carolina looks more competitive. he's going after young black voters and after young hispanic voters. he's going after the disconnected voters supporting rfk . people who were not regular voters. it's a high-risk strategy with that's what he's got because he's not your typical politician. jonathan: jon lieber, appreciate it. the latest on the relationship between the u.s. and china and what it means for the world, and the latest in the horserace going into november. lisa: the horserace and the lack of knowns is interesting. every person who analyzes markets and invests as mentioned this is the wildcard hanging out there. people don't have a sense of what either candidate would look like in practice when it comes to foreign policy or economic policy, which is why we're hearing companies holding back from making certain moves or trying to get ahead of the election of your borrowing money to avoid volatility.

jonathan: let's turn to the price action. equity futures unchanged on the s&p 500. a big day coming up. earnings from one of the most influential companies on the planet. numbers from nvidia after the close a little later. we will catch up with the boston celtics co-owner as nfl owners vote to let p.e. firms invest in their teams. this is bloomberg. ♪

jonathan: stocks unchanged on the s&p 500, going absolutely nowhere. on the nasdaq going slightly somewhere kind of getting the small caps, relative outperformance but this is pretty muted stuff so far this morning. i will stop scraping the barrel. switch the board and get to the barnier. had a decent two-year option yesterday. five today, seven tomorrow. a reluctance from a guest from black rock a moment ago to go too far on the curb. concerns about the structural fiscal deficit in this country. lisa: there is a feeling that at some point the music will end because you are borrowing in the

good times not just the bad times a lot of the spending is nondiscretionary so it will have to keep going unless there are some hard decisions the likes of which are very unusual in washington, d.c. there is a question of how much it will affect the options and some of the demand. so far, unclear. jonathan: he is looking for a steeper curve and we need that to encourage more money to come out of the money market funds. we have people on the program and the competition surrounds the $6 trillion of money market funds in the household wealth to unlock some of that wealth and cash, you need to see curves start to normalize a little more. lisa: i am channeling phil kemper really. cash on the sidelines come just put it in equities. what are you waiting for? jonathan: make it happen. let's turn to foreign exchange. the foreign-exchange story is interesting with regards to what happens in the bond market or rather what is going to happen with federal reserve policy. dollar-yen at 1.4435.

for today at least we have some dollar strength against the bulk of the g10 if not the whole of the g10. over the last month, some serious dollar weakness for five weeks. we heard from the likes of stephen chen in the last 24 hours, and i think his point on what might happen with the fx market is pertinent to the competition in china and japan also and may be other parts of the world about unlocking big outflows. chinese companies may be enticed to sell $1 trillion, a $1 trillion part of the denominated assets, and that could mean a strengthening of the chinese currency up to 10%. but not everyone is thinking about. lisa: especially as there is prospect of growth in other regions like china. japan is a less clear story about whether they repatriate that money. my big question is, how much is this because there is a believe the federal reserve will cut rates more aggressively than the ecb?

earlier this year we would talk about how the ecb would definitely cut rates more than the federal reserve. now is a question mark. tbd. that is what we heard when we talked to ecb officials in jackson hole. basically, just watch. you will see what we will do. how often they will move is still hanging out there. jonathan: the euro negative today. investors are awaiting nvidia earnings after the closing bell and expectations are very high with analyst predicting the ai giant will project growth of more than 70% for the current quarter. after the numbers drop later today at 6:30 eastern time, ed ludlow sitting down with the ceo. do not miss that conversation. we had some fireworks on this name. a move of 9%, 16% the quarter before. lisa: fireworks is the absolute correct word because they are shooting upward and not shooting down. 16% gains, those are all gains, not losses because of the outperformance.

mandeep singh had a wonderful question, which is how long can they rely on some of the hyper scalers, the big tech players financing their entire shift? how much will that continue versus a broadening out in demand? how long can they sustain that spending? jonathan: i want to get to the record move. bear with me as a scroll. it was the end of july, the record market cap move we saw. lisa: i am not looking for it right now. i don't have it. jonathan: we will get to it right now. it is in front of me. give me a second. $329 billion in market value added in a single day, the biggest market cap move in a single day in market history. lisa: to me the fact that that is the biggest market move has become normalize. plot expecting another record move today. the base case of 10% is close to that of $310 billion. this has become everyday type of reactions. the penny stock of nvidia that is the biggest stock out there. jonathan: seeing the treasury

market too. that is that story. meta closing and augmented reality studio as the company shifts its focus to artificial intelligence. the studio was first lost to compete with snap cap and allows developers to make digital filters that are overlaid to videos in the company's apps. the story we were talking about seconds ago. lisa: basically the ai story has overwhelmed the idea of the metaverse and how all of our little agents, our little avatars will go and connect with other avatars. that whole story has gone the way by being overwhelmed. jonathan: they have changed the name again, haven't they? lisa: to ai? artificial? jonathan: credit to mark zuckerberg. when he sees something, he goes all in and has the ability to say we are pulling back and going all in elsewhere. lisa: going all in on his jewelry company? doesn't he have a jewelry company with chains and stuff? jonathan: watch the exchange

with emily change. quite a change from mark zuckerberg. the nfl ushering in a new era, voting to allow private equity firms to have a stake of 10% of its franchises. boosting the valuations of teams that had already been surging to new highs. joining us now, the co-owner of the boston celtics and atalanta football club. welcome back to the program, sir. i want to talk about exists in world sports and what until this moment has not existed for the nfl. can you walk us through private equity and the traditional view of taking a controlling stake in a company and the operating business and the decisions that it makes? what are we about to see take place in the nfl? steve: that is a great question. people are confused a little bit in that the private equity model applied to the nfl and the nba

is very different. i would call it more investment fund policy rather than private equity policy. classic private equity firms go in and by the companies and try to grow them -- buy the companies and try to grow them. that is not the case with sports investments. sports investments would be done by specialized funds. and they take limited partnership stakes that are limited to 10%. i think 30% in aggregate in the nba deal, and they would be made to open up the market for folks who want to invest in sports companies, and they have created an asset class so it is a bit of a misnomer to say it is private equity. it is a passive partner position so more people can have access and capital into the booming sports business. jonathan: by improving the liquidity for some of these companies, does not necessarily

increase the valuation? how do you think about that? steve: it does not necessarily increase the valuation, but given the values, for example, that average nba team 20 years with a slope of plus or -$300 million but now it is $3.5 billion or so so the amount of capital involved to buy an nba team is large and will be helpful in terms of filling the capital gap, which used to be filled by wealthy individuals but the numbers are huge at this point. lisa: what do you think about unlocking value in some of these names in terms of where these sports teams can be seen? i am wondering at some of the cable news versus streaming channel arrangements are negotiated, do you think a greater degree of pe involvement or just outside investment involvement is going to expedite that shift to the higher bidder, not necessarily to some of the classic cable channels? steve: i think the leagues that

do a really great job, a great experience with the media, and the nba contract is up by 2.6 times from last time. the nfl contract is up dramatically. what really is to the upside is sports have become globalized now. 2002, there was no streaming, no capability for massive, wide, global distribution. that has changed with streaming. now you used to that you use to -- you used to count fans in tens of thousands and now you can count them in hundreds of millions. i think what we are seeing is a long-term trend of globalization of sports. it is one of the few programs that is very valuable to the players. that is why you are seeing such increases in the rights. lisa: i like that you win

global. i know that you go global and you have gone global, particularly in italy. jon is jealous and talked about it all the time. we want your life. there is a question of whether you like international sports, european soccer still as the mainstay. i see jon sighing with frustration as i call it soccer rather than football. i wonder if you want to stay with that theme or go back and invest more in the u.s. after the celtics investment as well as others. steve: i think everything is situational. investing is all about the price you pay and the trajectory you think this will go on. we felt it was a fantastic franchise with atalanta and so far that has worked out. we were lucky to win the european championship. so it was really situational. we look at clubs all over the world in football and other sports and it is all about where

you see the trajectory going in the price you are paying to get there. jonathan: let's talk about the trajectory and we can compare and contrast global sports with what has happened in the nfl. i was looking at the nielsen rankings. 93% of them were nfl games. which is absolutely phenomenal. they have just dominated the highest rated tv shows in this country for the last couple years. can you say the same thing about global sports? when we talk about european football, have we hit a plateau when it comes to tv rights? do you see a way of unlocking more value? we talked five years ago and 10 years ago and thought we plateaued. again, the reach is growing because of streaming and channel capabilities. they have gotten more sophisticated about how to buy the packages. i don't think we have seen in

part because it is so valuable to the audiences and the nfl has done a fantastic job. the league has parity. they have games that are important every week. the nba has done a fantastic job of growing viewership and access to the game. i don't think we have seen the end of that yet because the global, worldwide internet companies, facebook, amazon, and the old media, they need this programming and those eyeballs. that is incredible in the usa. 93 out of 100 programs were sports nfl related. jonathan: can you say the same thing about european football? steve: i think european football, they continue to change the format of the champions league, uefa, serie a, and they make a broadcast schedule is better. right now we are in a little bit of a lull in media rights in european football because the streaming wars just ended.

really ended six months ago or a year ago would people realized there were too many streamin opo everybody has cut back on programming. we had these cycles. it is a momentary low, and right now -- lull, and right now things are less robust but we will come back when there are mergers and acquisitions and you go back to four or five players competing for these sports properties. jonathan: your name was associated with chelsea football club a few years back. i wonder whether you still have that interest in applying another club in european football -- acquiring another club in european football. steve: we think it is continuing to grow and it is a great opportunity. there are lots of things you can do to expand the reach as i said . jonathan: could you share with us cities, places, countries of a better idea of the clubs you

have looked at? steve: yeah. media rights are down in france there are some interesting clubs in france that need capital to grow and come back. the french market will come back. there are some opportunities as we have seen in the u.k. to move teams from one division to another, so i think france, the u.k. jonathan: are you in any active conversations right now? i imagine if you were you cannot reveal the details but are you in any right now? steve: we are talking to several clubs right now. we cannot talk about who those are but there are certain clubs we are talking to. jonathan: good to see you as always. when that news comes, looking forward to catching up with you. lisa: i just want to see a day in his life. how many games does he go to? is it every night?

whether he cheers from them -- for them all. would he ever by two teams in the same sport? jonathan: football apparently. lisa: do you read for both of them or avoid and not have a favorite child? jonathan: i love steve. let's give you in a bit on other stories with a uber brief. yahaira: donald trump is adding a pair to his team after they both endorsed his presidential campaign. the move aims to widen his electoral appeal and a close race with vice president kamala harris. kennedy suspended his own campaign last week and said trump offered him a position in a future administration. meanwhile, apple is cutting about 100 jobs. bloomberg news has learned the iphone maker cut jobs and its digital services group as part of a shift in priorities in the division. the layoffs included some

engineering roles, but the biggest cuts were made to the team responsible for the apple books app and apple bookstore. layoffs are relatively rare and apple. the company made at least four rounds of reductions in 2024. spacex is delaying the first ever private spacewalk for the second day in a row, this time because of the weather. spacex said it was standing down from liftoff opportunities today and tomorrow because of unfavorable weather forecast in the spacecraft splashdown areas off the coast of florida. if it gets off the ground, it is scheduled to be a 15 to 20 minutes spacewalk by four private astronauts. jonathan: thank you. up next, wall street souring on crude. >> this is not the kind of market where it is produce or die. we have much larger corporations running the show here, and i think they will find it much more difficult to kind of discipline non-opec production. jonathan: that conversation up

next. you are watching "bloomberg surveillance." ♪

jonathan: live from new york city, equity futures on the s&p 500 unchanged through most of this morning, unchanged right now on the s&p. in the bond market, use lower by more than a basis point. crude right now down 1.8%. under surveillance this morning, wall street souring on crude. >> this is not the kind of market where it is produced or die. that is not the case here. we have increased well productivity and much larger corporations running the show here, and i think they will find it much more difficult to kind of discipline non-opec production if they are really talking about the permian than they think.

jonathan: here is the latest. oil slipping again ahead of key u.s. data. don revising his forecast to 77 dollars a barrel -- $77 a barrel, writing we still assume that opec will raise production in q4 as the market is potentially shifting from an equilibrium where opec supports spot balances and weaknesses volatility to a more long-run equilibrium focused on discipline non-opec supply. daan joins us now. when you say disciplining non-opec supply, are you talking just about shale or everything else? who are you talking about? daan: mostly u.s. shale because shale is in the short cycle that responds within a year or so to price changes. apply elsewhere in the world is mostly long cycle where it takes typically many years. taking a step back, over the last two years opec has been effective at balancing the

market by adjusting supply and to keep prices in a fairly narrow range by crude standards. if opec goes ahead with raising production and it is a close call, we may potentially shift to a new equilibrium with more volatility where the new floor under old prices becomes the breakeven price of u.s. shale producers. jonathan: let's go back to the experience of the middle of the last decade. there was a real effort from the saudis to discipline and almost punish shale producers. shale producers came out of that much stronger. what is different about this time compared to then? daan: as you point out, u.s. producers have very strong balance sheets now. the reinvestment rate is significantly lower. 50% of free cash flows are reinvested in projects. so i think that means that to engineer a given slowdown in u.s. shale growth, you arguably

need a bigger drop in prices because those producers, their production plans, they are fairly sticky and very strong balance sheets so to us that means that a very sharp drop in prices is not that likely. it will more likely be a gradual shift. lisa: some people would argue that structurally what you see right now is you have not seen the increased production by opec-plus and what you have seen is actually inventories getting taken down eight out of the past nine weeks according to some industry data. i am wondering, at what point do you see this as kinda feeding on itself, especially with lower rates that might sustain the recovery? how much of a counterpoint do you take to this? daan: absolutely. we only have a modest and gentle the client in prices next year . despite a moderate but meaningful surplus we have, why is that?

only slightly lower prices. the main reason is we think oil currently is slightly undervalued meaning prices are attached lower, and also, if you get the fed cuts, you should get some upward pressure on valuations and prices because the opportunity costs of holding oil is lower when interest rates go down. lisa: i apologize in advance for this but your predecessor jeff. who now is at carlisle came out yesterday and said there is going to be a huge spike in crude prices because of lower rates and because of this super cycle that you see on the heels of the investment and some of the infrastructure plays we have seen globally. why do you so vastly disagreement that? daan: first of all, i would like to thank jeff for everything we have learned from him. it is building on the shoulders of a giant. i at repositioning is very low and very light at the moment. oil prices currently look and

that is precisely the reason why despite a meaningful surplus in 2025, we have a base case of only slightly declining oil prices. jonathan: $77 is the average for 2025. daan: correct. jonathan: how much of that is about chinese demand? daan: i think that is a big surprise this year that the demand-side has been socked. actually, demand outside of china is surprising to the upside. in the u.s., europe, india, but i think the slowdown in china of demand growth which is mostly structural is an important factor for markets in the coming years. to put it into context, in the five years before covid, china was growing its demand of oil by almost 600 tbd every year. in the first half of this year, oil demand growth from china was only one third. some of it is a macro story. some of the factors are oil

specific. fuel switching to ev's, fuel switching out of diesel into liquefied metro gas, which is now cheaper as well. some of those are more structured. jonathan: we are starting to see that and other commodities as well such as copper in china. daan: so i think the 2000s, the super cycle was a super cycle where there was very rapid growth in china gdp and especially the property sector lifting demand prices for oil commodities. we will enter an area with greater divergence in terms of the demand. i think a pretty solid long when demand outlook for copper, the green metal of the future, gold because i think the chinese at the central banks are searching for more assets in an uncertain world. but there are other metals where the demand outlook is bleak because of the structural grind down and demand. jonathan: this was an absolute

clinic and we have to do any again soon. thank you, sir. daan on the commodity market and crude and finishing on everything else. lisa: i thought that was a fascinating conversation. you have to come back. i am think about the transition other forms of energy are curtailing the potential gains in oil and that is something that is fascinating to me at a time when we still don't understand how much that has affected the drawdown in stockpiles in the u.s., even as the driving miles have increased dramatically, so these are some of the questions he really highlighted. jonathan: average price on brent, 70 seven dollars for 2025, a little lower from where we are right now. brent crude, $78.43. coming up several guests. from new york city, you are watching bloomberg tv. ♪

your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire why do couples choose a sleep number smart bed? i sleep great now that my side is as firm as my heart desires. my heart desires soft. matching your job description. sleep number does that. your ideal firmness and effortless comfort, all night. during our biggest sale of the year, save 50% on the sleep number® limited edition smart bed and free delivery when you add any base.

>> there is this contrast between what the bond market thinks and what the equity market thinks. >> there is a balance going on and that is a good thing. >> don't think it is a recession but the economy is slowing down.

>> the chances this is a slowdown is stronger now but what kind is much less certain. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: another quiet morning but it will not be a quiet afternoon. from new york city this morning, good morning. 90 minutes away from the opening bell, the week begins on a wednesday, waiting for nvidia. the scores look like this on the s&p 500, down by a 10th of 1%, down three on the russell. the numbers drop from nvidia after the closing bell. we will have a conversation with the ceo, exclusive sit down. the godfather of ai at 6:30 eastern time. jobless claims at 8:30 tomorrow morning. lisa: we all have our popcorn out. you know the summer is almost over, right? jonathan: so i am told. lisa: another quiet morning.

the week starts august. the idea of everyone on vacation will be interesting. i keep coming back to this. the idea of what we will see with dan ives's popcorn he will be eating after the bell today. how much volatility will beget? how significant could the moves be on the heels of liquidity and complete lack of conviction? and one name that accounts for such a significant part of the overall index, 6% of the s&p 500 at a time where $300 billion market cap moves have become the norm. jonathan: i am a september type of guy for the end of summer. in new york, push it to october because it is warm enough. lisa: that is undetectable. you say all the time when we come in on january 2, no one can say happy new year but you can say happy summer until october 1? complete in akron is that complete anachronism -- complete an acronym.

jonathan: if you have waited to say happy new year to say happy new year -- if you have waited two weeks to say happy new year to someone, they are not that important to you. lisa: how long for the summer? jonathan: is that an american thing? lisa: have you got anywhere? what vacations did you go on? jonathan: that is the question you ask? i am more impulsive and organic. do you plan conversations with people? is that the second question after, what do you do? first question, what do you do? lisa: that is what people say. jonathan: that is the number one question in the united states for americans. lisa: the number one question is, where do you live? and then you figure out what they do. jonathan: you listen to accents and figure out everything else. what do you do and what have you been up to this summer? that gets you through

conversations. lisa: it is not that regimented. jonathan: i like to ad lib, just to have a chat. lisa: most people want to know where they went in the summer. it gives you a sense of who they are. jonathan: to compare and contrast. lisa: not a competition. jonathan: how did you fly? lisa: this is not a status symbol. jonathan: it is about status. give me a break. lisa: it is not how i roll. jonathan: what do you do? what else is it about if not status? lisa: i don't ask people what they do. it is a thing. do you like when people ask you that? jonathan: we are three minutes into this show. do i like asking people what they do? no, not at all. lisa: that is something else. jonathan: check him out. have i revealed too much? lisa: i don't know. jonathan: snoozing going into the video earnings later on. in the bond market, use lower by almost a basis point.

coming up this are emily, angelo , and stephen on if the next jobs report will be more important than core cpi. all eyes on the video. markets trading in a tight range in a make or break moment when the chipmaker report after the closing bell. emily john hancock calling it the earnings report heard around the world. it is historic that a company of this size has been able to grow at such a degree. emily joins us now for more. the obvious question off the back of that quote, can they continue growing at this rate for the next year and maybe more? emily: yeah, this is like an asset allocator's dilemma when one stock represents an entire asset class. in fact, nvidia is bigger than five of the sectors in the s&p 500. so if they miss the big question is, is there a further rotation out of tech?

if those assets go elsewhere, that could be huge for other parts of the market. we have seen momentum, which is basically nvidia and broadcom, has not seen as much love coming off of the august lows as other areas of the market like low volatility so this is extremely significant. i was going to make a joke like there are earnings after the close today? but i think this has been more important than some of the key economic data we have gotten with powell's speech at jackson hole last week, certainly all eyes are on this report. jonathan: there were moments in july for the jobs report that seemed to shakeup this market in a big way for a couple of days. there were moments when the improved participation were at the expense of some big tech players. is that the way you see things going forward from here? emily: i think it has been such an unusual environment for cross asset returns right now. you are seeing this area where long dated bonds, gold, and then you have european equities and

small-cap value stocks. the secret lives of asset allocator's, we think about these connections all the time and they sort of don't make sense. on one hand, the market is pricing in the soft landing scenario, which has been helped a ton by a weaker dollar on the idea the fed will be coming aggressively. it has helped cyclical assets outperform. this quarter, the risk on asset classes have been the winner. but at the same time, you have other market participants pricing in this bad news scenario in areas like gold and long dated treasuries outperforming, so we are in this very strange period right now where the music is still kind of playing but everyone is not quite sure when the record might stop. lisa: you sound a little frustrated. i was reading this note and could file. get the asset allocation wrong as small-cap value is the best performer, the idea you could be right and the market could move against you. this frustration with how you

focus on what the fed is saying and the contradictory data points do you take a look at what companies are saying? is that the reason why nvidia earnings might be much more important to you that some of the contradictory data we are getting out of the u.s. labor department? emily: yeah, the macro picture is certainly important, but it is about as clear as mud right now as we can see from the cross asset performance. the data, this disinflation narrative is intact. we still have initial jobless claims. they perked up a little bit last week, but they are still at low levels. the consumer is doing just fine. the business survey data has picked up a little bit after softening in july, so that combination of the disinflation narrative and better-than-expected growth is something really helping markets continue to run here. i think the challenge is, when does that growth actually become bad news? the fed is probably cutting

because something is wrong, so this is an environment where you have to look at the fundamentals. we want to find areas of the market that can maintain margins , that can show better earnings results in this sort of never ending late cycle environment, and that is one reason you can knock on tech all day long but the earnings are there and that is a key reason we have continued to embrace tech companies but also diversify that with areas of quality at a reasonable price and sprinkling in more defensive equities. lisa: you said at a reasonable price. that is the big concern people have with tech. is it a reasonable price after the game for nvidia -- gain for nvidia itself? i am wondering how you see rate cuts affect valuations of big tech companies? at one point it was thought to bolster them but it did not better weather the rates were low or rose because they were still making money. now, do rates matter to big tech

at a time when they are investing their cash piles in bonds and on the margins higher yields are benefiting them? emily: yeah, they don't matter as much to tech. i think it is pretty well insulated. these companies have so much cash, great balance sheets, great return on equity. we look at different regimes, whether different regimes for inflation or rates or political regimes, the technology sector in the united states comes out on top every time. again, because of the earnings growth, we are bumping up on 30 times forward earnings for the s&p 500 tech sector. yes, that certainly feels frothy, nowhere near the 50 times forward earnings we saw during the peak in 2000, but the earnings are delivering. just looking back at the last earnings season, of course we still have this one name to add to the calculation, but we have seen so far tech earnings about twice that of the broad market. so i don't think valuations being frothy are necessarily a catalyst.

they can stay that way for some time. i think you need to see some major shift in earnings dynamics or earnings leadership to see tech take a big step back here. jonathan: this conversation goes against the grain of the other conversations we have had the last few weeks. i know you follow the program so you are aware of that. the participation we have seen elsewhere, small caps, all-time highs, equal weight on the s&p 500, encouraged by the faith that a lot of people have with chairman powell on the federal reserve that they can extend the cycle. the chairman wants to extend the cycle and they don't want to fight it. what are they getting wrong? emily: yeah, i don't get it. you are looking at small caps rallying on the idea that the fed will cut and the cost of capital will come down, but we have to remember the fed is probably going to cut because something is wrong. either growth is slowing, the unemployment rate will go up, and that is not farewell for more cyclical areas of the markets. the frustrations coming during this time, we are seeing

cyclical assets outperforming this risk on participation because the fed is coming and importantly because of the weaker dollar. if you look at the upper performance of european equities, it is all currency so far this quarter, so the idea that the fed will cut so aggressively here but again they are probably cutting because growth is slowing. that should not benefit cyclical parts of the market. right now it is, but we would fade that trade and look for higher quality assets and look to -- you know we love bonds. look to the income potential inherited and high quality bonds to ride out the sleep cycle environment. lisa: just to put a bow on it tomorrow you saying the downturn will be more significant for us to get the cuts that are currently priced in, or that the fed is not doing too cut very much and will ride it out? which is it that you see as the most likely outcome? emily: the second scenario, which is of course a soft landing scenario that markets are priced on right now, that

would be great. it is possible that would happen, but you are betting against the odds. it has only happened one time and the fed was well ahead of it in the mid-1990's. the fed is usually cutting because something more nefarious is happening. doesn't need to be scary. it can be profit margins shrinking and companies needing to lay off workers. we think that is the scenario that happens. it is hard to see right now. i think until you see initial jobless claims picking up meaningfully come until you see high-yield bond spreads and the music is playing and is starting to get louder now in a good way for investors, but when it stops it usually stops pretty quickly and at that point it may be too late to lead into the incumbents now and available -- now available. jonathan: what did you do this summer? emily: i have so much conviction in the conversation you guys just had. i am with you. summer does not end until the end of september. back-to-school, not listening. summer is still happening. jonathan: love it. thank you.

my kind of person. lisa: great. i think a lot of people would like to have the easy summer if you do not work any do not have kids that no longer have summer programs hanging around trying to figure out what to do. there are other pressures that might push people to embrace the pumpkin lattes. jonathan: futures down. with your bloomberg brief now. yahaira: hyundai plans to double its lineup of hybrid cars as the demand for electric vehicles slows. it will bring the number in the lineup to 14 as it adds large and luxury vehicles. the company kept its ev sales target unchanged at $2 million a year by 2030. hyundai also announced a $3 million share buyback as part of a plan to boost investor returns. meanwhile, warren buffett continues to unknown shares of bank of america with his berkshire hathaway

selling. berkshire has trimmed it stake by almost 13% in a series of sales since mid july. berkshire still remains the bank's biggest stockholder with almost 904 million shares worth nearly $36 billion. u.s. mortgage rates fell again last week to the lowest level since april of 2023. according to the mortgage bankers association, the contract rate on a 30 year fixed mortgage went to 6.44%. drop lead to a small rise in home purchase applications last week. that is your bloomberg brief. jonathan: thank you. we are hoping that will unlock real supply in this market and hopefully people leave rentals and start buying houses and things get more competitive with landlords as well and attendance saying go fish. hopefully for people who might be renting in the next six month or so. lisa: what did you do this summer? jonathan: up next, the morning

calls and reviewing -- previewing nvidia earnings. that is next. ♪

jonathan: the estimate for next friday at the moment is 155. only a handful of estimates in so far. citi just published theirs. they are looking for a 50 basis point cut from the federal reserve. these are the numbers they are looking for. they project 125,000 new jobs and the un-appointment rate to remain at 4.3%, so the bar i have to say is pretty low for citi to get the 50 basis point cut in september. they are looking for 125 next friday. lisa: they want to see there is a deceleration.

other people not so much. the bar is high, including for a couple guests we have coming up does it matter ultimately? others are talking about this. one of r-star 25 basis points and then 50 basis point to indicate to the markets we are not freaking out or concerned about the economy? that might be the path to take. jonathan: if the rate for july 2023 was the right rate for that economy, how do you explain this is the right rate for this economy given how much has changed in 12 months? when you start to think about it that way and consider how off-site the fed might be, some people say they are not, some say it is between 100 to 200 basis points, so what is 25 in the grand scheme of things? lisa: but then you can make argument, what is 50 in the grand scheme of things? jonathan: sure. lisa: others say 25 basis points will not move the needle but it

will indicate they are cutting and then they can go further without putting the market even further. jonathan: we pick up on that debate in about 10 minutes. look out for that in a moment. equity futures -.1% on the s&p. the opening bell one hour and 10 minutes away. the bond market unchanged. jeffries maintaining a hold rating on nordstrom on the back of second-quarter earnings results. the analyst saying the retail sale was less of a tailwind than originally expected. the second call from citi, raising its price target on forex to -- on clorox to $165. expect a favorable set up. finally, hsbc. the great potential of the new cancer vaccine as it progresses through trials. let's turn to tech. bullish on nvidia ahead of this afternoon's results.

he is looking to the black woodchips thanks to the greater market share. angelo joins us now for more. compactor the program. the question we have to lead with is a question you have been addressing in your note as well. when will the data center let out? one movie start to see some softness in the year ahead? angelo: i don't know if you start to see softness, but you definitely see some sharp deceleration in terms of the data center capex spending. we are looking at a 35% to 40% growth in calendar year 2024 from the big spenders out there. we know who they are. the names we kind of look at getting as you go into calendar 25, initially, more of a deceleration to 15% to 20% growth. still very good growth. what are we looking at as we go into 2026 and 2027?

right now, our placeholder is 5% to 10% growth hold as we look into 2026 and 2027. we see potential upside to those expectations, more upside than the downside, but that is how we are looking at it. not necessarily a let up in terms of capex spending but a sharp deceleration from unsustainable growth trends we are seeing. you are seeing it right now in nvidia's numbers. they saw their data center business grown north of 400% the last two quarters. that is not sustainable. that will continue to decelerate. jonathan: we are talking about the size of the pie. the pie will continue to get bigger but not the same rate. is there any upside and is there a threat coming from anywhere? how big is the boat around this company -- moat around this company? angelo: that is an interesting question. people look at the competitive

pressures as far as gpu's are concerned. you have the likes of which we love what they are doing and we like the recent acquisitions they have made. they are definitely kind of feeling out what they need in terms of to better compete with nvidia on the gpu side of things in a growing market. that is great from a competitive standpoint. but as you look more broadly for nvidia at the data center wallet share, as they relax some of them -- as they rode out some of the new offerings with blackwell and a new kind of spectrumx ethernet offering out there, this new blackwell offering is really intended to be more of a part from offering rather than a gpu offering. what we mean by that is not only the gpu but the cpu as well will be more on based in nature as we see the databases take off. we have not seen on-base cpus out there find success in the

market. when you look at intel's recent guidance, they are now seeing the orders on their end but we think you will see something different over the next couple quarters from nvidia, specifically as they turned more into this platform based offering, and that will give them a leg up in terms of the revenue potential the next 12 to 18 months. lisa: hyper scalars, the biggest investors in nvidia. how long until nvidia is almost a competitor to their biggest customers? angelo: it is interesting because to an extent they are. they have a big investment out there in a company where they are -- they have a big stake and they should be getting a ton of gpu's out there as a service type offering for that company. nvidia definitely has the potential to get more on the cloud oriented side of things. obviously, they sell their own full suite kind of systems out

there, and over time, i think there is definitely some concern out there from some of these players out there, especially with what nvidia has done on the software side of things where if you are an enterprise customer, you can go directly with new video and by the systems but that said, it is so capital-intensive in nature where as we think it will continue to sit with the big cloud companies, and i don't necessarily think nvidia wants to get to that next level where they are directly competing with some of these come companies even though to some extent you could kind of see that taking place. jonathan: this was awesome. got to do it again soon, follow up after the results. the other thing we are focused on as well, any sign of investor fatigue whatsoever in downstream use cases because that is when the pressure starts to build and

they will start reducing investment decisions a little bit. lisa: we have been talking about this and you put it really well. is it a perk or a deficit you have four or five companies that are the main buyers? those are companies that if they make bank and have plenty of cash but on the other hand, they can decide to turn off the tops and that would be very difficult for nvidia. jonathan: at the moment at least it is a real strength. coming up, stephen and colin on my stephen stanley things chairman powell made a little mistake on friday. that conversation, up next. ♪

ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional. professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff.

climb a ladder to clean out your gutters again. you know, that's peace of mind and then some. so, how do people sign up? call 833 leaffilter today to schedule your free inspection. or visit getleaffilter.com

jonathan: futures on the s&p 60 minutes out from the opening bell and little softer across the board on the s&p 500. likewise in the nasdaq. we are down by 0.1%. down by half of 1% on the russell. lisa: maybe this was single-handedly because of emily rowland coming out and saying, really, guys? she basically said it does not make sense with the idea the economy is softening and the fed will have to cut rates. why should small caps have to outperform? that is maybe what you are seeing today although it is hard to drop too much conclusion from the action this morning. jonathan: there are a ton of views out there.

reducing interest rates not for the right reasons and that is why she does not like the rest of the equity market away from big tech. lisa: she is saying to buy quality even though it is expensive simply because they are delivering the earnings i just have trouble understanding what valuations look like with lower rates after the rally we have seen on the heels of higher rates but also higher growth. it becomes a challenging moment where remember when big tech was a rates play? jonathan: of course, yeah. lisa: it was lost and has become a rates story now or not? jonathan: previous regime, so not long ago, buy tech. higher rates, better growth, buy financials. had a guest on earlier basically saying lower rates are better for the banks given the experience of the last year, and vice versa with the tech story as well. kind of flipping this all on its head the last few days. lisa: or you can make it simple

and single rates good for big tech high rates good for big tech. that is what we will see after the bell today. jonathan: it has been a series of beaten rates regardless of what you see for the federal reserve. the bond market, yields lower on the two-year. let's finish on foreign-exchange and talk about these outflows to the fx market engineered by lower interest rates and the federal reserve. this overweight consensus trade building up the last couple years of money that has seeped out higher rates and higher rates have been in the united states and that has been a story of dollar supremacy, u.s. supremacy, u.s. exceptionalism. are we on doing that with a few rate cuts and the federal reserve? is not enough to trigger outflows? lisa: people were saying that and today, not so fast. honestly, this will be the difficult decision.

the ecb officials we spoke to in jackson hole all had one concern, weaker growth. poster child, germany. how do you talk about the potential for a couple rate cuts in the united states on the heels of not weakness we have seen but to normalize rates is undermining the idea of a stronger economy we are seeing in the european region. jonathan: the euro-dollar, 1.11, just about. vice president kamala harris and her running mate tim walz taking part in their first joint interview on cnn tomorrow night, the first substantial interview for harris's she replaced president biden at the top of the democratic ticket. if you consider those other exchanges with reporters on the sidelines to be a broadcast interview i guess. this is the first. lisa: this will be very highly watched, perhaps as highly watched as some other events as a new calendar item before september 10. a key question to me, is tim walz a liability to her?

if she doesn't answer with real policy, does that become a problem? the complaints will get louder. people want a framework or a rubric to help she will govern. jonathan: it has become an issue. this is the bias of the media. we want to see the exchanges. but don't you want to know what you are voting for and terms of policy instead of just vibes? lisa: we ask this if it was being an issue but it is working in the polls. jonathan: trade is on hold ahead of the market make or break moment. any disappointment is expected to roll the markets given the company weight in u.s. indexes. nvidia is up almost 160% year-to-date. after the numbers drop, ed ludlow sitting down with the ceo at 6:30 eastern time. we will catch up with ed in

about 20 minutes. if you have questions for him commission over. traders keep an eye on jobless data as the labor market becomes a sticking point ahead of the fed decision on september 18. stephen stanley with this to say. i am especially anxious to see the august employment report. while they will both be important, i would gauge the august jobs report is likely even more pivotal than the august cpi meeting. things have changed a lot in the last 12 months. good morning to you. stephen: good morning. jonathan: you do not love that powell gave up optionality. was that a mistake? what do you love about it? stephen: yeah. i think my view is the fed will go 25 in september. it seems like it is where most of the officials were leading up to jackson hole. you heard words like gradual and methodical. there seem to be a lot of tea leaves pointing in that direction. the markets were only discussing whether the fed would go 25 or

50, not whether they would go at all, so he pretty much locked in a september move, ok, fine. i guess people wait and let the data dictate what the market will pass in, which can be dangerous if the markets go a different direction than the fed was intending. jonathan: let's explore that danger. i assume you mean a big surprise in the unemployed report. you are saying that is why it is dangerous? stephen: i think that would be fortuitous in the sense that the markets would then probably scale back their expectations naturally. i guess if it goes the other way and the numbers are somewhat weak again, not disastrously weak but a little soft again, the fed is still thinking they really only want to go 25. it is the first move and we want to be cautious but the markets are way ahead of them. jonathan: you think it is a conversation that begins at 75? stephen: i don't know about that but the odds of 50 would go up if the labor report is on the weak side.

lisa: what is the argument to not move aggressively based on the argument that inflation has come down materially and monetary policy is significantly tighter, more restrictive than it was six months ago or a year ago simply by virtue of that discrepancy? stephen: i think two sets of points. one would be on the fundamentals. the economy is still seemingly by a large healthy. gigi growth was to put her percent to 3% in q2 and it might be similar in q3. consumer spending has been strong. we have seen a little something in the labor market but it does not feel like economy is just tumbling off of a cliff. at the same time, infection has come down but is not quite back to target yet, so there are arguments there i think for going cautiously. more importantly for me is looking historically at the way the fed has tended to operate. they tend to be more cautious at the beginning of a cycle and the

reason is they like to go on a series of moves. they don't want to go back and forth. they don't want to ease and then have to come back and tighten again so that kind of tiptoe a little bit and they have done that historically both in hiking and in easing cycles. lisa: is your biggest issue with market pricing right now the magnitude of rate cuts or just the pace of how quickly the fed gets there? stephen: i think it is the latter. i have been pretty aggressive on how much the fed would do by the end of next year, and the markets have come in line with that at this point. i just don't see them moving in 50 basis point chunks over the next few meetings. lisa: did you not read anything into fed chair jay powell not using the words you mentioned, gradual, methodical, those types of language indications we heard from other fed officials? stephen: i think that was significant, and i was surprised. i thought he would try to push the market off of the 50 basis point move. i guess my take away after having a couple days to think about it is i feel like maybe

his audience was not so much financial markets as it was the general public. i think he felt like he was obligated to give the broader audience, whether it is the political realm, the media -- chairman powell speaks a lot to the broader public, and i think he just wanted to say, heads up, we will be easing soon. for the markets, that was no news. the markets had been debating the size of the moon. jonathan: there is a word that jumps out, and that is my confidence. there is a separation between his belief and the committee beginning we had a guest making that comment as well. i was trying to think whether this was the federal reserve chairman tried to push the committee into making a decision that they were reluctant to make. you could see that from the minutes and the july meeting that summer pushing for a rate cut and a lot were not ready to move. you could sense that in terms of the speech at jackson hole. in the 24 hours before that, we have policymakers sounding

somewhat reluctant to reduce interest rates in september and certainly reluctant to go as far as he did in that speech. i always wondered whether this was mario draghi-like, pushing the council to make a decision they were not to make. how much daylight is there between him and the committee? stephen: we will never know for sure. powell has tended to try to operate by consensus for he has not been as much as greenspan or bernanke, someone that has tried to pull the committee hard in a certain direction, but that may be going on behind the scenes. there is no doubt that when you get close to a turning point, that is when the nuances and the shades of gray come out. we have seen that. we have seen some people who are clearly more eager to get going than others. perfectly natural to see that at this point in the cycle. lisa: does it matter how fast they go? stephen: i don't think it

matters in terms of one single move, what it might mean for the economy. does it matter they go 25 or 50 in september or whether they go in september or november? it will not make or break the economy, but i think it makes a difference in a sense that it will manage market expectations, and financial market conditions matter. powell and others at the fed have told us so. let's say hypothetically the fed goes 50 in september. i would have to imagine the markets will price in 50 again and again and again. jonathan: maybe more. stephen: do you want to feed that beast? jonathan: before you go, what is your number for next friday? stephen: i am a bit optimistic and think the numbers will be better. i have 190 for payrolls and the rate back down to 4.2%. jonathan: the median is 155. small survey. still putting together those estimates.

thank you so much. if you are joining us just now, we are 50 minutes away from the opening bell, so welcome to the program. in little negative by 0106% -- 0.06% on the s&p 500. underperformance on the russell. looking for something close to 200,000 on payrolls next week from stephen stanley after we heard from andrew of citi a bit earlier this morning. looking for 125,000 in their estimate. lisa: the delta and the pace of getting to lower rates is why it matters. you mentioned a couple put officials on the committee talked about the potential for a july rate cut. we have some color from our colleague out of the fed team on bloomberg news on who those numbers were, which i thought was interesting. the new york fed president and austin from chicago. i wonder if it is important in terms of the metropolitan areas

in the northeast or how we can extrapolate this out but some interesting color, especially with john williams looking for a cut as easily as last month. jonathan: called a discount rate. others suggesting that was a push elsewhere. the other thing i want to talk about is the bond market so let's turn to the fixed income. the two-year versus their tenure right now, let's call it effectively flat. let's call it that for the sake of the conversation. why would i want to take on additional duration for basically the same yield that i can get at the front end of the curve? we get a lot a bond salesman say reinvestment risk. other people would suggest to really unlock the cash at the front end of the curve you need a high yield at the login what we heard from blackrock 43 minutes ago was exactly that. you need the curve to normalize so blackrock and him specifically looking for the curve to normalize, looking for something like zero to 60 basis points of steepening.

you get 60 basis points of steepening, he thinks his start to unlock some cash and people started to pointed further out along the curve. lisa: to be the big test will be tomorrow. we have $44 billion of seven-yearand -- seven-year notes being auctioned off. the lack of certainty, even if you don't believe ultimately it will face off with the market pushback, there is a real question about how much this has already been discounted, the idea of the fiscal overhang in the u.s. jonathan: collin extending duration, has it become less attractive? >> it has become less attractive. i wanted you to be the first want to hear it because we have been talking about it for close to two years now. all the points you made are the key reasons. the risk war between investing a 10 year at 3% and the idea of rolling t-bills because you are

at that decision is less attractive now. the 10 year can hover in this range for a little bit. we agree with the points he made about the yield curve steepening. we think it should steepen for good reasons. if you look at historically what happens in a normal, still positive trend work environment, the yield curve should be steep, so i think we see short-term meals fall following the 10 year and it can hover around for a while. from a tactical standpoint, it is not as attractive but investors can consider it. we are saying at benchmark direction we are not pounding the table as much as we were whether tenure was at 4.25% or 5%. lisa: i can hear bob michele in my ear saying do the people really care about the yield curve dimensions here? are they really trying to do calculus to understand how much the curve is going to shift at 3.83%? on an absolute level, why would

you say all things being equal yields would come down so you can have conviction that with any slow down enough for the fed to be cutting rates you can invest in longer-term bonds and be just fine? collin: i think just fine is a good way to put it. if you hold for that term of the bond, you get certainty there, but there is this potential opportunity down the road once the rate cuts come. going back to the point before, that risk-reward does not look attractive. how do you get regular investors to understand what a yield curve steepening means? at the end of the day, it is yield and income. i can still earn higher income with short-term rates, short-term investments. as the fed begins to cut rates and once the yield curve normalizes, we think maybe then there will be more of an opportunity once the fed gets to -- there is no magic number but once he gets to the 3% area and we see a 10 year still in the 3% to 4% area, that will be attractive for a lot of individual investors. lisa: you are focusing on how to

get the most income at a pretty safe moment, and i am wondering. you are talking about investment grade bonds. spreads have come in pretty significantly. why is this still the correct way to add income rather than duration or some other ways to play it? collin: if you look at duration, there is risk to the downside should our outlook turn incorrect. we see yields rise and that is a big sensitivity to increase interest rates. if you look at corporate bonds , we are not that concerned -- corporate bonds, we are not that concerned. we are worried it could slow but there is no recession on the horizon. we are seeing signs here or there but not in the next quarter or two. in the investment grade market, fundamentals are still strong. we are seeing the share of triple b bonds come down and we think the companies have those ratings for a reason. we think you are in good shape, but the yields have come down also. we talked about risk rewards.

spreads are no weather investment grade or how yield, and if you look at the ig market, we could have gotten five phone 5% yields a year ago -- 5.5 percent yields a year ago and now we are looking at 4.5%. we would not dive headfirst into triple b's in case growth slows more. jonathan: if there are limits to price appreciation given how we reset things, are you questioning the efficacy is a balance of the portfolio or is that a step too far? collin: a step too far. jonathan: thank you. you can see what i'm trying to get at. lisa: i appreciate it. i think it is a good way to create some drama on a pretty drama free morning, but i am with you. there was a moment where bonds were not the balance to the portfolio. people with two gold and bitcoin. they are still going into gold and bitcoin, but i wonder if that dynamic has shifted back to

what has been traditionally. jonathan: i have asked that question twice this morning and blackrock and schwab saying that is not the case. equity futures right now on the s&p a little softer going to the opening bell. about 402a let's give you an update on stories elsewhere with your bloomberg brief. yahaira: we are seeing retail stocks move into the open. shares higher premarket after the company he outlook as it made progress at cutting expenses and reducing toy levels but reported a revenue mr. the second quarter citing the challenging consumer environment. footlocker shares are falling in the premarket, down more than 8% after the retailer ported earnings that failed to satisfy investors. footlocker beat on revenue and snapped five consecutive quarters of negative comparable sales, showing a 2.6% gain in the second quarter, but not a big was not enough to sustain the stock's 46% rally since its

previous earnings report in may. britain's dan evans won the longest match at the u.s. open since tiebreakers were introduced. he took five hours and 35 minutes. evans also fought back from 4-0 down in the fifth set to win the marathon match. elsewhere, carlos alcaraz comfortably moved into the second round, as did the women's stop cd because the optic -- woman's top seed. jonathan: we will set you up for the day ahead including earnings from nvidia. we will catch up with ed ludlow who has a sit down conversation with a sit down conversation with the man at the top of the company this afternoon. ed just around the corner. ♪

[introspective music] recipes. recipes that are more than their ingredients. ♪ [smoke alarm] recipes written by hand

and lost to time... can now be analyzed and restored using the power of dell ai. preserving memories and helping to write new ones. ♪ ♪♪ ♪♪ ♪♪ ♪♪ sandals jamaica sale is now on, visit sandals.com or call 1-800-sandals

jonathan: 38 minutes away from the opening bell. equity futures softer by 0.1 percent. the bond market quiet. unchanged on the tenure. the trading diary calendar for the next 24 hours, nothing quiet about it. nvidia around the corner. we will get fed speak from raphael bostic tomorrow and another round of jobless claims and a second meeting of u.s. gdp on friday with core pce and u. mic sentimenth. ed ludlow sitting down for an exclusive conversation at 6:30 p.m. eastern time. ed stopped by to catch up with us. fantastic work by you and i am looking forward to the conversation later. what is the leading question for you and the team? ed: there is only one question, which is when does what is happening beyond hyper scalars? the story around nvidia's basic that they make a high-performance gpu or aix and the reader and all the

investment and the capital expenditure we have discussed is concentrated in just five names, which is the biggest cloud providers plus meta. for all the big picture forecasts and the debate about how enduring this investment cycle is, there comes a point where you have to ask, when is there going to be more than that? the small and medium-sized enterprises, governments. because it is hard to see the long-term demand but in the short-term there is no sign that the demand is fading. lisa: no, which is why it seems people are prepared for a potentially a $300 million -- $300 billion surge. i wonder if we have a sense from him about what the next phase is. we were just speaking with angelo zino, talking about the potential to move out into systems, which is what we will hear about the blackwell program. how much is this them getting bigger and eating their own customers? ed: the idiosyncratic story is exactly as you describe.

new video wants to do more, occupy a broader space which includes services and software. when you think about the basics, we are talking about gpu's that go into a rack that go into a server that go into a data center. they want to provide more of those complete systems, but actually, people call him the father of ai for obvious reasons. he has a firm grasp on the end use cases of what ai development is unlocking, be that robotics or x of health-care or drug development, things like that. he likes to talk about that but what i don't have a clear understanding of his for every dollar spent or given to nvidia, does he have a firm understanding of how many dollars are coming up for the customers in terms of topline growth or whatever it is for them? that would be quite interesting to discuss as well. jonathan: looking forward to the conversation. join us tomorrow morning following that one. sitting down with the ceo of nvidia at 6:30 this afternoon.

lisa: the liability of getting too big. i am wondering at what point they want a bigger share of the pie at a time when they already are the biggest company in the u.s., possibly the world soon to become a so some of the migratory pictures are interesting. jonathan: it is interesting the line of questioning that ed has prepared. it is less a competition about them and more of a conversation about their biggest customers right now. lisa: how long can they keep investing to the degree they have been? we will not get pushed back until they get some real return on investment. jonathan: look out for ed. tomorrow, daniel ives. lisa: one person. jonathan: dan, brian, anastasia, earl. good luck for the rest of the trading day. from new york city, this was "bloomberg surveillance." ♪

katie: futures on hold. 30 minutes until the start of the cash trade. i'm katie greifeld. sonali: i am sonali basak. matt miller is off today. "bloomberg open interest" starts right now. ♪ katie: the countdown to nvidia is underway. the world's most valuable chipmaker reports after the bell this afternoon. investors betting another blowout quarter. tonight, nvidia's ceo joins ed ludlow for a special edition of bloomberg technology. don't miss that extrusive sit-down at 6:30 p.m. eastern. also keeping an eye on retail.