>> does not matter how you slice it, i think there is a tight labor market. >> record demand from labor and the supply side is falling short. >> i don't see unemployment --

significantly given how many unfilled jobs there are. >> the more numbers that show the economy is slowing, that will take pressure off the fed. >> this is "bloomberg surveillance." jonathan: good morning. we are live on tv and radio. i'm alongside tom keene and lisa ran bridge -- lisa abramowicz. i am jonathan ferro. tom: summer, september 2 is the biggest report of the year. jonathan: then we get to the fed meeting in the big debate about whether we get a pause. we have had pushback. tom: are we going to be at neutrality as we end the summer? julia coronado, i thought, was

brilliant. to be get into destruction mode in the autumn months as we try to figure out were neutral is? jonathan: we have had a lot of complaints this year. -- this week. tesla, elon musk. a warning internally saying he has a super bad feeling. lisa: i've had that song in my head," i have got a feeling." what does this actually mean? can we take him at his word? 10% of his staff to cut is specific. is he looking at supply chain issues in china, demand issues? what is going on here to lead him to have this super bad feeling? jonathan: in the last hour, we did talk about companies failing to come out and talking about how bad things might be. we are certain to hear more and more from companies.

we heard from microsoft yesterday, tesla today. lisa: the response has been more in-line with taking things in stride being ok with what they have to say. microsoft, $600 billion charge due to the stronger dollar. there is a difference in the tone and the type of revision and guidance. do even consider elon musk and his bad feeling as guidance? jonathan: yes. if you look at amazon, i don't think we have had a market. over the last two weeks, it is up about 20% since a week ago. i really do not want to give -- tom: i really do not want to give my opinion on this. during times of stress, free cash flow wins out and you can

pick those stocks off to bloomberg and discover if you think they are. jonathan: a bear market rally, some would say. tom: you are always going to see that. we do not pontificate on the typical's of an intermediate bull market and all that, i will pontificate about the underlying economics which i think we see as a good american economy with the fed has a lot of lifting to do. i think it is fair to say that we pontificate about plenty. jonathan: negative two. taking a bite of the week again on s&p 500. in the bond market, yields are a little bit higher. your 10 year, 50. looking at the market, a little bit softer here. we are lower. 115, 97. lisa: what date are we watching?

a lot saying this is the most important indicator. frankly, for what kind of deceleration, we do get the report for the month of may coming out, i'm watching participation. people coming into the market after leaving during the pandemic, will they come back? a lot of people saying that there is a hidden slack. there will be one mystery. we are hearing from him speaking to jonathan. i see ductility good report into the inflation, how does he talk about a better for and how this is a talking point for the administration in terms of momentum and consumer. president biden will be speaking from from the convention center. 10:00 a.m., services data. this has been one of the issues

that people are looking at, has been grow strength and a lot of inflation coming through, even if you get deceleration. do you see that continuing? have you start to see a pushback from consumers, based on the higher prices they have to pay to go out to eat and stay at hotels and do other things? jonathan: that is what to watch. who was a defect of size surprise this week. looking for to the data. let's start here. you think a pause is growing at the federal reserve. we have had a pushback. what makes you think that is what is developing here? >> i think that it is all about the data. do they start to decelerate? i think they have clear and convincing signs of decline. i'm not sure if that september,

november, early next year. with think these monthly prints of inflation will decelerate. i think demand is happening every day. the big question is, how much of that buffer is still there for the consumer? it is declining every date when you are at the gas pump or grocery store. if the job markets start to show some moderation, i think the consumer will start to pull back. i will argue that data is actually important. we will see if the fed is print to regain optionality. they really want to see that monthly deceleration. tom: we have a report and you have it on your note that it will be an asymmetric reaction. layout -- laid out for us -- lay that out for us. >> i think the markets are

pricing in a strong way. i think if we get a weaker number or weaker wages, i think the market will have a good sign that that growth market we are talking about is here. are we moderating to trend or below trend? if there is a reasonable slowing, i think people will notice that they are below trend. jay powell talks about lowering job openings to actually laying off people. as the market starts to see that, it one point do people start to see that they are letting people go. i think it is asymmetric. i think a strong number is priced in. given we all know about the labor markets, i would say sentiment, the soft data would

be leading. i think the markets will be -- if it slows. lisa: some people say it will get more room to pause or hit the brakes with how quickly they would have to raise rates. you view that as a positive because it might lead to something suffer, why do you pushback on that? >> fairpoint. i think inflation is too high. they cannot suggest that they will slow. they need that clear and convincing sign. this is when governor wallace says he want to see 2%, the fact that my control a lot of the increase in inflation. if they are targeting to percent, i'm not sure the committee is there. there is no way they could have that concern about growth, if they are targeting three and half or even for at the end of this year, i think at some point when they are at neutral or

above neutral, the constructive slowdown. right now, we are well below neutral. qt has just started. i think you'll get a lot -- i do not think you will get a lot from the fed. that is why i am not nervous, i think we are looking in that quarter is pretty far away. jonathan: talk about where the bond markets are for you. 219 right now. where are you on that story? ? , have we seen the highs are for -- >> i think we will be very range bound. we have had a pretty big move in real rates. now markets are concerned about growth, i think will stay at 275. i think the markets will go from

high inflation, that will hike a lot. i think that will keep us fairly range bound. i think that range holds for the rest of the year. we are uncertain about how much we are slowly. jonathan: one of the very best. take you. -- thank you. the number is one hour and 20 minutes away. tom: is that the key number we are worried about? i don't think so. let's review this. precrisis, 200 was where we were. people model 150 as "normal." we are still in this recovery. jonathan: i think we will get some kind of deceleration. people expect that. you can never just look at the number in isolation.

how much more demand is a take to squeeze out from this? tom: we will have a look at the ecb as well. sebastian and i were going back and forth. 118 euro 12 months out. strong euro. jonathan: that is one of the most divisive ones i think. tom: yes. jonathan: currency positive or currency negative when the ecb will make a move. euro-dollar right now 107. 36. coming up, equity markets. it has seen better times than the last couple of weeks. from new york. this is bloomberg. ♪ >> quibi of today. tesla ceo says the electric carmaker need to cut stock by 10%.

muska sent out and email that he had a "super bad feeling about the economy." it could mean a loss of almost 10,000 jobs. president biden with an evening address for the white house he called for a ban on assault weapons and high-capacity magazines. he knows they're unlikely to ban the weapon. he called for raising the age to buy them from 18 years old to 21 years old. 100 days since vladimir putin launch the invasion. they have gathered momentum. the original plan failed but moscow change their goals and are focused. global food prices hit a near record. 's fell 6/10 of 1% from the

previous month. the invasion has reduced -- one of the biggest shippers of grain and vegetable oil. global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i kriti gupta. this is bloomberg. ♪

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>> the type of inflation that i do not believe the federal reserve has the policy and tools to do much with it right now. i'm not blaming the federal reserve for where we are but i believe most of the problems we live with our policy generated more than supply generated. jonathan: a fascinating

conversation. futures this morning, negative six or seven tencer 1%. nasdaq down. we are down by around three or 4%. tom: some of said, that is a story that has been pushed aside. it comes up again as people start to rationalize. we are focused on 8:30 a.m. and that jobs report. this is an important report. jonathan: serious data we are expecting. this big conversation about pause. that is where the conversation is feared -- is. tom: maria tadeo is with us. emily is in washington. let with both the you on the

summer. emily, this was dominated in november. emily: it is. we have had a number this past month. we have a number coming up. big question most people in washington are looking for, how far of a hold president trump still has on the republican party. we have seen evidence both ways. donald trump has scored some victories, other places where he has not endorsed come out and win primaries. then, there is that general. the some of these candidates trump has supported are not able to get the support they need from independence to pull off the victory. tom: maria, your summer is the oddest summer i have seen in my lifetime.

paris, london and the rest of the airports. you have a clue where the war in ukraine sits at the end of the summer? we have no idea? maria: no idea. going back to your point about the boom in the tourist tick. i was in madrid a week ago, you could not find a hotel. you could not find a flight. i was in paris, he could not find a decent price hotel. there is this idea, yes, europe will reopen the summer. finally, coronavirus has passed us in this is the right time for the european economy to tackle what it is good at doing, welcoming taurus and tapping into the service industry. more european leadership, they have to keep ukraine on the map. this is something that is not a matter of politics but values. the biggest difference is the close proximity. a war that is lasting now 100 days.

for european officials, very hard to stomach and get use to something that looks like syria and central europe. lisa: is at this point inflation is at the highest levels in history on not garnering the same sort of political response and liability that they are in the united states? maria: is funny. very similar narrative here. they say, this is happening as result of the war in ukraine. they point to the russians they talk about all this important inflation. of course, all of this is up for discussion. in europe, this is another cultural difference, there is a clear separation between the european central bank, the commission of the governments. they do not want to get too involved.

we know that in the past, having questioned. they do not want to go there and openly criticize christine lagarde. we are seeing that there is criticism from other members. we'll have to wait and see how this peaceful period will continue. lisa: president biden does not have the luxury of trying to keep it clean. the federal reserve is its own body. how is he going to respond to the employment report? how much of the messaging will shift? >> i think we will see it shift a little bit. we are checking bidens or marks to be a 10:30 today. there was an op-ed earlier this week saying, if we do not hit astronomical growth like we have experience in previous months, it is ok. we are moving to a new stage of recovery.

they still need to be able to point to low unemployment and a good job market. they cannot point to inflation. that has been higher than what we are expecting it to be. we heard treasury secretary janet yellen admit that she had been wrong with how long it would last. democrats understand it is a huge liability. they are trying to switch the narrative. supply chains and leg stations looking at supply chains and the executive orders we saw this week from president biden. jonathan: what is the future of some of those economic voices at the white house? are we going to see a change? emily: to a certain extent we have seen that pivot. i think to a certain extent,

we're hitting the point were white house officials, there are certain factors that are beyond their control. what they can do with oil, with a can-do with food prices and the supply chain. we expect them to keep a message what they can do. difficult because republicans will push the narrative that this high inflation is a direct result of the covid bill that was best -- passed back in 2021. jonathan: thank you. emily wilkins there alongside maria tadeo. 8.1%, the data point. you have to give a hawk something unhappy about. that is such a massive change.

maria: there is this question of why we have not seen more volatility with a complete reset of the regime in europe. this is on the heels not only of a toy five point rate hike, but it was priced in from september. looking at this and thinking, can they? jonathan: yields are still climbing. they are still climbing. we have not seen chaya. tom: sebastian is an outlier. are we mentally there for that strong year? i don't think so. jonathan: 126, another multiyear high in today's session. coming up, looking forward to the conversation with a rep from

morgan stanley. that is just around the corner. ♪

jonathan: jamie dimon says a hurricane is coming and elon musk has a super bad feeling.

coming into friday, s&p 500 just about positive by half of 1%. we pull back now. mastec 100 is down a percentage point. we will see how things evolve. into the bond market and treasury market. higher on the session by about 18 basis points. the remind the conversation about the fed. we have another one from the ecb. similar stage for a rate hike. here's how we look at the bond market in germany. this is on a german tenure yields. that is up 30 basis points of the last week. tom: you see that in euro versus yan as well. i think what you stated at the beginning about the gloom that is out there. we need to reframe a reset.

even lisa has been more optimistic. we went from the may report to this june report. we have gone from a 30 2a25. that is a constructive tone. jonathan: is that your benchmark, even lisa? lisa: people say i am bearish, i try to look at corners. this is the issue. i hope to everyone who is try to push back on the possibility of a soft landing being fantasy, i hope this people are wrong, myself included. the issue is, you see a lot of potential headwinds that are coming out in different ways. we're seeing talk about them. i worry about that. jonathan: think about things

pushing back against the pause. microsoft announcing foreign-exchange. tesla and musk. what do you make of all the information? considering where we have been? lisa: the consensus in my view has been that people have gotten ahead of themselves. there is too much strength in the u.s. economy delete await resection in the next 12 months. and data is still strong. there is resilience. what pushes back against that if the fed reserve does more aggressively? jonathan: that was not that bearish. lisa: thank you. jonathan: i do not accuse you of being a bear at all. lisa: [growls] jonathan: what was that?

[laughter] >> psaki start to get its mojo back after dipping. -- stocks starting to get its mojo back after dipping. elon musk about that bad feeling. there's a lot of talk about a recession and whether we will get to one. it is not so much about dipping into a recession, there is still a slowdown in sentiment and spending. interesting commentary. three months ago, there was a surprise when he came out and said that he thought there was a lot of softness, not only in what he was seeing but he talked a lot about the fed and interest rates and how aggressive the fed would be. the shares are down. sales can be flat.

it will now be extended. they will actually resend job offers that have already been named. police preparing for something that will be a little bit worse than good. call shares are higher. it was supposed to be a deadline to buy this company. if you came in, one from sycamore in the 50's. they bid for this around $64. it was rejected. take that -- take from that what you will. therapeutics on more than doubling here. spirit airline shares moving slightly lower here.

spirit airline shareholders should take frontiers of bid to buy the company. tom: thank you. there is an indication of strident nominal gdp. american airlines and the others. jonathan: here we go. near is from american airlines. the second quarter view is off. -- is up. tom: a huge move. jonathan: it is the same old story. they see second story -- second-quarter capacity story at the low end. anyone trying to book a flight in america is not surprised by this at all. tom: there is. there is the data. travel can ebb and flow. let's go right to. the chief u.s. economist at morgan stanley, let's get to it. when you go to the airline bone -- boom, do you guys have a

grasp on the trajectory of nominal gdp that may signal a slowdown in american airlines? >> we have to get past a surge of demand for services. i think that has been well telegraphed. think of what we experience with goods, purchases, and goods, prices when that pent up demand was coming through. now, we are continuing to shift that through services. everything comes down to the labor market. as job growth slows -- i take to heart what companies are saying. you will see hiring freezes, open positions closing by the end of the year. i will be watching the because, once that pent up demand is

filled, income drives consumption. and labor income in particular. nominal gdp is strong now, it will not be as strong for the full year. we are still talking about 6% growth rates on nominal gdp. that is quite high. not quite as high as double-digit which we had last year. lisa: it seems like there is a consensus right now, at least this week. it seems unlikely there will be a recession in the u.s. in the next 12 months, toy for months seems more likely. do you push back against that are due think that looks like a base case? ellen: i think it is easy to go out tears on the horizon in say, yes the probability of a recession is quite high, that grows the moment the fed start talking about hiking. policymakers tend to hike until somebody breaks. chair powell is confident he can

course crept quickly and keep the economy growing. we are complacent around, over the last couple of decades, we have had very low inflation. we forget that high-end inflation is what typically leads to recessions. it is important to include that in the model. 35% chance of recession over the next 12 months. that is not negligible. we are watching to see if that continues to rise. it has been sticky around 30, 35. lisa: what is the leading indicator going forward in terms of consumer data with respect to the university of michigan sentiment or is there something else? ellen: sentiment is difficult to gauge. rather than headline sentiment, i do put some weight on buying plans which are down.

they do already have pent up demand that has been satisfied. i'm not sure those are telling me recession more than a slowdown in consumer spending, what households do in terms of their approach to homebuying does matter. residential investments, small share of gdp. it reaches far across the economy. lisa say, so goes housing, so goes the business cycle, we are seeing strong demand and affordability. we want to be sure that we do not see a sharp correction in housing for sort of a guide lower. continue to look at things like building permits as that traditional leading indicator. jonathan: 50 minutes away from that jobs report. if i can give you one data point, what number which like?

ellen: labor force participation rate. i want to continue to see that. i want that to pick up. we need to create a labor market and that is one healthy weight we can do that. jonathan: always excellent to hear from you. looking for to payrolls. 318 is that medium estimate. i think we should return to the american airlines news. it was down too early in the week. if you speak to retailers, they will tell you things are tough right now. if you speak to airlines, this consumer is looking strong. revenue is up 11%-13%, that is the guide now versus 2019. people -- tom: people choose. let's compare and contrast with what we saw with target, walmart and the rest and retail. they are making choices and the

american economy. in particular with inflation, some are crushed and others just keep on moving. jonathan: stocks are down. lisa, we are getting used to the story. lisa: we wonder if it is k-tel of two sites here with certain places seeing those gains and others, not so much. jonathan: futures are down and the nasdaq is down. job support is 49 minutes away. this is bloomberg. ♪ >> keeping you up to date. i am kriti gupta. your support should have the smallest gains since april. the mean estimate in the bloomberg survey says -- jobs were added. there is a downshift in average earnings growth. elon musk wants to pause hiring

at tesla and cut almost 10,000 jobs. he emailed that he has a super bad feeling about the economy. the blackrock ceo expects inflation to remain elevated for several years. the primary reason is the supply chains. you think the federal reserve does not have the tools on their own to fix those problems. in turkey, inflation soared past 73%. that is the highest going back to 1998. consumer saw food and entergy prices jump. deutsche's inflation has been in the double digits for much of the past few years. bristol-myers has agreed to buy -- therapeutics, valued at $3.7 billion and represents a 122 pristine -- premium to closing price. they expect the deal to close in the third quarter. american airlines says they are

doing better than expected in the third quarter. that is versus the last pre-pandemic year in 2019. the estimate -- global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i am kriti gupta. this is bloomberg. ♪ girls... the chess club has gained an edge on our bake sales. we need more ways of connecting with customers, fast. i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech like robotics and ai. that could really help us manage inventory. and boost our sales. and save us a ton of dough. who are these people? ey, of course. who else? as long as i can keep working from home. we all know nobody makes ginger snaps like i do. your ginger snaps are safe.

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>> it is politically sensitive and why the fed officials never outright come and say it. i think they do need labor markets to cool. that will involve the unemployment rate ticking up to release some of the inflationary pressures. jonathan: wells fargo going into the payroll report. futures are negative.

nasdaq rolling over a little bit more, down more than 1%. yields are a bit higher. the team over at city is just publishing. downside risks in the under limit rate. the .4% today. hikes in the job market which stronger wage growth. even if job growth slows to around 350 k or below. tom: publishing moments ago after lisa rolled them in the last hour. he says, this will be a goldilocks era. he says, that is good for risk. then he goes on that he looks for cold porch down the road. -- porridge down the road. jonathan: headlines from tesla as well. lisa: elon musk will be possibly

cutting 10% of its staff. at what point does this raise a liability going forward? jonathan: the stock is down around 5%. i think some of that could contribute to what we are seeing at the nasdaq. tom: we can go in our to halfway through the jobs report. the senior ecology analyst and bloomberg intelligence, an extraordinary team. i have to go it tesla first. let's start with first principles before john gets technical. is tesla a tech company or a car company? >> clearly they use a lot of ai and that puts them in the tech bucket. fundamentally, it is an ev car company. they have a lot of innovation they have done on the ev side.

have a lot of engineers who are working on ai. they have push it out by a few months now. there is a lot going on. we saw that with advertising, microsoft cutting guidance. it is not a surprise that tesla is going with these job cuts and rollback and guidance. lisa: is elon musk a massive liability for a serious company? to have someone coming out and talking to executives that he has a super bad feeling, how much does not undermine the credibility of this public company? >> i think it is just an acknowledgment that they are not seeing that kind of demand. i do not attribute it to tesla.

every company out there is noticing some sort of demand deceleration. they are probably ahead of the curve. the sense that we are getting these businesses to pull back aggressively on advertising and slowly it is trickling to the restaurant economy. lisa: how much does this have to do a demand declining and how much is it not getting the parts to sell, cannot provide the profits they are looking for? >> i think this one has more to do with demand. the reason i say that is that we may be at the early stages of noticing that. when you model that out, clearly every company is seeing some kind of slowdown in terms of pipeline. the consumer is also pulling back. i think the factors suggest to me it is more to do with demand. tom: as we do best on

surveillance, to segue over to broader technology, given the economics jobs day coming up, how do you adjust the value or analysis of big tech revenue growth for the rest of the year? do you deemphasize it or is it more important? >> it is more important. big tech was holding in terms of showing great numbers. with microsoft taking down guidance, even though they attributed to fx, it is a sign that those days are over, especially at the cycle. you will probably see more estimate cuts from big tech going forward. we already know what is going on with facebook. google is also exposed to

advertising. big tech will start doing takedown estimates, not just micra soft. jonathan: on the fx, excuse or region -- reason? what do you make of it? >> that goes to show that over there, i dollar is getting stronger. any company that has more international exposure will have a bigger impact. jonathan: thank you. bloomberg intelligence. the dollar is up around 4%. is it an excuse or a reason? tom: i think it is an outcome. rate differentials are part of the game right now. we're talking about germany and europe. i do not see how you have international equity rally, which people have been calling

since the queen's coronation. it cannot happen without weak dollar. jonathan: the ecb is hiking interest rates. is that what you want to buy? tom: that is just one pair. i will not make a buy, hold, sell. what i am focused on is the general miss elephant in the room, the reopening of china. jonathan: but demand there in the stimulus maybe to come. that is a more constructive view. lisa: let's tease out what you just said, a symptom, reason or a symptom in terms of perhaps the reason why we are having less demand for these goods and companies overseas? this is the key question. are there signs of a deceleration in demand or is this just noise because of

circumstantial issues, supply-chain disruptions? that is going to be at the heart of a lot of jobs data as we try to take out how much weakness these company see coming from demand. jonathan: i find the dollar peak to be strange. i'm uncomfortable when the fx does that. lisa: typically that is assigned there trying to excuse weakness on a broader level. this could be different. we are also seeing fundamental weakness overseas, to your point. jonathan: futures are negative. nasdaq 100 is also down a little more than 1%. jobs report is about 34 minutes away. you are familiar with the estimates at this point. if you're just tuning in, 318,000 is the median estimate for the jobs report. the previous number was for 28,000.

-- 428,000. ♪ the polar start dropped just three games in her semis and will head into saturday's final the favorite to claim her second ruling garros title. the men's semis take center

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