>> green on the screen, the risk rally across the word. i am pretty good at. bloomberg markets -- i am kriti gupta. bloomberg markets starts now. kriti: green on the screen not quite at session highs. that is good news for someone worried about how much mentoring we were at on friday. does it continue? i would not call it a fundamental rally the dollar is weaker.

look at that inverse correlation where the flows are hitting. over one third of s&p 500 revenues from overseas. no wonder the stock market is exposed to what is happening to the dollar. the 10 year yield is higher. that screams risk on. not volatility in the bond market is not there either, almost seven basis rings. looking at outside growth, even brent crude is on the same page, up almost 5%. we will get back to the stock market and talk about what is driving the trade. there are two big stories, the bank story and the trip stories. goldman sachs coming out strong with earnings and intel perhaps getting a bit out of congress, perhaps chips are helping. we will affect all of it. the stick with the banks for now . we heard earlier from goldman

ceo. >> given the challenging operating environment, we are examining spending and investment plans. as a result, we are taking the number of actions to improve operating efficiency. we have made the decision to slow hiring velocity. kriti: for more on goldman and bank of america, let us bring in the sonali basak that i want to start with hiring. that seems to be something that is not talked about. sonali: this is the first thing to say, we are on watch. while wall street is worried about margins, goldman says it has operating leverage. it will not be the only company to say so. for goldman sachs, that means that when annual performance reviews come back, and they had to suspended that during the pandemic. that is a way to see who is

performing the most at a tough time. goldman beat on return on equity, on efficiency. they are saying they want to be more efficient. when you look at goldman, it did not take as steep of a loss that you saw in breakdowns based on spread widening but that whitening is where you see cracks across wall street. the question here is what kind of impact does that have into investment banking performance as they look to be there, especially for lending clients? kriti: let us go back to hiring. there is a lot. we got some headlines from apple, which is planning to slow hiring and spending in 2023. you also have that spending slowdown not companywide, but they will not add new staff in certain cases. perhaps some of that slowdown in the banks is also happening in

tact. you see apple shares going negative. does the rest of the market follow? let us bring it back to -- and bring in jason goldberg. thank you for joining as. how concerned are you about hiring when it comes to the banks? jason: not particularly concerned. investment banking fees had a robust 2001, this year, second quarter, 50% year after year. banks built up and now you are going to see a leveling off as pipelines have come down, but he remains a good business. pipelines are still elevated. to the extent that volatility subsides at some point, you should see a return to growth. sonali: to what end is this good for investors?

that banks have leverage in terms of flow and hiring plans. to what extent do those plans become firing plans when businesses start to slow down? jason: banks have gotten prudent in terms of managing costs. the opportunities of the next couple of years will be less than the last few years given the shift in the environment banks are prudently reacting, but there is leverage inherent in these models. if you look at the banking industry overall with the leverage being negative over the last couple of years, we think we will see it improve over the next several quarters, particularly benefit that income benefits. kriti: let us bring it back to another indicator of a recession or non-recession coming forward and that is a hesitation it to finance more deals. deal volume has fallen off a

cliff. goldman's numbers help their bottom line. walk us through it deals might look like. jason: you have seen a slowdown in activity. goldman is the leader and that continued into the second quarter. backlogs remain strong. in m&a, all the reasons you had to consolidate over the last couple of quarters continues to be whether it is technology or adopting a more competitive landscape. there is a lot of corpus there that are going to need capital at some point. expectations have changed over the last six months and you need to see companies adjust for date return to market. sonali: if you have seen hundreds of dollars lost in the loan market. how much a black mark is that when it comes to underwriting

standards? when it comes to whether a bank knows whether they need to start handing off the baton? kriti: you certainly -- jason: you certainly have seen some markdowns this quarter. it is been manageable, nothing like 2008. markets shifted, banks reacted, but if you look at backlogs and risk management, banks were better off this cycle than prior when. kriti: senior analyst for equity research and bloomberg's own sonali basak, thank you. mark: welcome to the bnn and a bloomberg audience, i am mark crumpton. the penalty phase of nikolas cruz again today. he pleaded guilty to 17 counts of first-degree murder at marjorie stoneman douglas high school in 2018, that he is

contesting his sentence. jurors will decide whether he gets death or life without parole. 14 students and three staff members were killed. in italy, some in draghi's coalition are working on a last-ditch plan to convince him not to resign. some members of the movement are ready to turn their backs on party leader giuseppe conte. they are trying to determine whether that would be enough to persuade draghi to stay on ahead of confidence bows wednesday. he offered to resign last week. sri lanka will elect a new president this week. the are what need the support of lawmakers and protesters to get the country out of its worst economic crisis. the acting president, among top contenders for the job, is extremely unpopular. he claimed fascist elements for

escalating tension. bloomberg has learned that russian gas -- has cleared -- declared force majeure on at least three european gas suppliers, meaning it cannot fulfill its supply obligations due to unforeseen circumstances. they had already been curbing supply to europe and of closed their main pipeline for maintenance. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪

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to increase supply for the u.s. the saudis share that urgency. we will see the steps in the coming weeks. kriti: that was president biden on friday when he wrapped up his middle east visit but expectations have fallen to the wayside. the studies announcing decisions will be taken according to market logic -- the saudi's announcing let us start with this trip to saudi arabia. was it necessary, given the warehouse just -- that the white house just said that gas prices are coming down? >> great to see gas prices coming down off their peak, $.50 a gallon. there are now more than 20,000 gas stations across the country where gas is selling for less than four dollars a allen, this

is not a mission accomplished moment. this president has pledged to do all he can to ensure that we have an ample supply of oil to ease inflationary pressures, particularly at the pump. his release of the strategic reserve, 240 barrels, when you include global partners, are already in the system. he continues to push to ensure ample supply. kriti: but part of the reason prices have moved is because of that stronger dollar. is that something that the president is worried about? jared: it is something the president is interested in. a stronger dollar is something we typically support. broadly speaking, when you are worried about inflationary pressures, a stronger dollar

helps by making imports less expensive. our imports are a smaller share of gdp than in china or europe, but that still makes a difference. the trade in global oil is in dollars. that is another part to take into account. but at the end of the day, having an ample supply of oil and refined capacity is essential to easing prices at the pump. we are talking about the presence of near-term agenda but he has been assertive about the importance of it removed -- moving to renewable energy. kriti: attacking, change, but the president has been vocal about increasing refining capacity. what incentive is that there to increase refining capacity but -- when the administration has

made it clear that that is not a worthy investment long-term. jared: i think the key word is transitional investment long-term. there will be a period we you -- move toward renewables. our agenda is walk and chew gum. we have to bring the american public with us. that means entering that people can afford electricity, heating, gas for their cars. we would like to see the number of electric cars go from 6% of current sales to half in the number of years but that transition will take a while. we will need both sources of energy. kriti: one of the drivers of inflation is also food inflation. that is something that the government largely subsidizes the u.s. has the biden administration be more food subsidies? jared: i will get to that in a

second. they'll glide you have taken us from gas -- i am glad you have taken us from gas. gas and root is probably 20% of household budget. one thing i wanted to be sure to hit on is chips. we have legislation before congress that can make a difference when it comes to the production of semiconductors that are important throughout our economy and the innovation space. autos are key in that sector, but it goes out to the level of national security. republicans and democrats have agreed on these measures time is now to move that when it comes to other commodities, prescription drugs, we have a plan to bring that down. that is going to be before congress. we have democrats lined up on that, same with lowering the

cost of health insurance premiums. on food, we have agricultural programs in the mix, some of which help increase farmers' yields good but not unlike the drop in gas prices, we have seen a decline in commodity prices, including in the food space. kriti: let's talk about those chips,, futex -- if you look at with the bilges said, there are -- invested in the likes of china. although it incentivizes ringing that capacity home, it also has exception for a lot of the chipmaking facilities based in taiwan and elsewhere. what is the point of the bill? jared: you are missing the forest through the trees. this bill invests in domestic production of semiconductors.

it is the largest effort i have seen to do just that. it is critical in competition with china. it has some transitional elements, but the best vote -- evidence of that is a number of top producers and manufacturers of microprocessors literally telling policy makers that if we pass this quickly, they will spend tens of billions setting up factories here. that is the key point and something republicans and democrats have a agreed on. time to get this bill to the president desk yesterday. kriti: back to the dollar. dollar strength is a problem for a lot of countries and also for anyone looking to buy american exports. has the president considered currency intervention? jared: i heard no discussion of

that. when you are talking about the strength of the dollar, it is straightforward to understand where it is coming from. we have got headwinds but also strong tailwinds that often get underreported. most recently, the decline in the price of gas, but let us not forget about strongest labor market in generations. i heard reported on your station this morning a strong earnings report from some banks and they talked about the strength of the american consumer. we have strong tailwinds. that relative growth rate between us and our trading partners is one reason for the higher dollar another reason is the aggressive have it by the federal reserve, something the president supports. i would put that into the

analysis ahead of any intervention. kriti: cute bring up a strong american consumer -- you bring up a strong american consumer, but -- you have microsoft saying that is a problem. is this something you would ring to the president? jared: it is definitely something we talk to the president about. he is interested in the dollar and the treasury secretary, that has long been her purview. the key issue is that this is one of those variables that is not all tailwind or headwind. it is both. i talked to you about the relative strength of the dollar representing solid economic growth that often gets underreported. by making imports less expensive, it helps on the inflation side and probably puts

pressure on the trade imbalance. you have to look at all the variables. when you do that, we would consider that to be a positive development, particularly in $2n stabilization funds at the discretion of the president, even though it does happen through the president -- 30 treasury. coming up, we will get back to that bloomberg scoop on apple as it dries the s&p 500 to a session low. plans to slow hiring and growth in some divisions next year.

kriti: back to the story driving the to the session low,

bloomberg reporting that apple is planning to so hiring and spending four centimes in 2023. mark, walk us through what is happening. mark: as apple prepares for 2023, the company is going to reduce hiring and spending growth for some teams. this is in response to the recession that some are worried about. the company taking a cautious tone. this is not companywide. apple has more cash than anyone. they will be able to sustain any issues from this looming recession in all likelihood. they are doing what they need to do by not hiring as aggressively still, they have a packed product roadmap that includes a virtual reality headset. the apple watch, this is a big

deal. but they are taking a more cautious tone. we have seen amazon, tesla meta- have these more cautious approaches but apples is more limited to some teams rather than companywide. it does not appear that apple has layoffs land. kriti: he went where i wanted you to. this is just a hiring slowdown, no layoffs for see layoffs that apple? mark: i do not think the company has plans to lay off. this is not a hiring freeze, but they will be backfilling in some positions next year but the amount of hiring well slowdown. kriti: movement markets to accession dollars, at the is about flat at the -- the s&p 500

is flat at the moment. this is the benefit of not having that exposure. the 10 year yield is higher, risk on rally. we will dive in in the hours ahead. this is bloomberg. this is bloomberg. mom: how was school?

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mark: sanctions against russia or colossal challenges for the country's technology. vladimir putin said he will not give up or allow the nation's economy to fall back five decades. he says moscow will intensively seek solutions by relying on his own resources and the domestic innovative companies. the european union of one policy to you for sounding an