>> the most likely scenario remains that the economy is going to go through a recession. >> this is a process to has further to play out. >> we do not expect it is really going to dramatically reverse --. >> this is bloomberg surveillance with john keene, jonathan ferro and lisa abramowicz.

jon: live from new york, this is bloomberg surveillance. netflix a free market around 7%. tom: they still lost one million survivors. to me it was relatively good news that we got out of that. the tech story we get here in the next number of days -- technology. the ecb and all we are going to talk about, equity market have live. jon: best stock has been had at superlow. amazon and apple next thursday,

what are you looking for? tom: the guidance floor on what is very good for them. going the other way, the supply shock. what i am really looking for there, is is this the part they become evermore -- and start talking about what they are going to do with the cash flow. jon: you mentioned china. the london boycott, apparently it has spread. lisa: it started with homebuyers not paying their mortgage payments because their homes aren't actually finished. developers are not finishing the project. now it is spreading to suppliers who supply those builders with material. they are not paying either because they are not getting paid. it is spiraling. the question is, there is still property turmoil out there. a huge portion of the chinese economy. jon: things are getting messier by the day.

from new york this morning, good morning. the s&p up by 10%. followed by a really decent dropping yesterday session. going back to late june, the markets low by three basis points in and around 3% half a day, 3.98. this is for straight days now. you have to go all the way back to february to see a streak like that. tom: going to be interesting to see the reaction here. i will let you pick the italian duration to see how they play tomorrow. francine has to translated. -- has to translate it. >> he says he is willing to. the coalition rebuilt. a lot going on in italy today. a lot of events to watch as well, including in the u.s. with

economic data. home sales, we are coming off of two weeks home related data points in the u.s.. the weakest levels since may, on monday. both missing expectations. this data also seeks -- in the housing market in the face of higher mortgage rates. at 11:00 eastern time we will head over to the u.k. where it will be announced, the final two contenders to replace orest johnson as the prime minister. it looks like liz trust may be the second candidate. that citigroup note earlier this week, dangerous economic recession for the u.k.. cut taxes and disrupt some business operation. finally focus on tech earning. 30% year-to-date.

not just dealing with a gross company. a shut down and try not weighing on the factory in shanghai. look for the outlook on that in the second half to see the picture a little bit better. tom: they always pick the prime minister this way? jon: they pick the leader of the party this way. the conservative party. it just happens the leader of this party will become the prime minister. tom: can we do this in america? jon: you might be the idea we don't have these two year --. tom: every six -- every 60 days, someone is dropping out. goodbye. jon: we get down to a bec decision tomorrow. we have that strategy after tomorrow, am i trading in the

ecb or north string tomorrow? >> it does feel like we got a lot of the clues coming altogether yesterday. suggesting north string will be -- north stream will be open. suggesting considering ecb, we are getting hands of what it might look like. for all the buildup into tomorrow, we have seen a lot of hints and clues coming ahead of time. tom: looking for the theory of fragmentation, elsa, and then there's the application of the theory. does it sound doable to you? what other -- whatever plan they come up with, explained to me how it is doable. elsa: two big questions. what has been talked about in sources, suggesting what you mentioned as far as size and scope.

talking about very loose conditionality. the two biggest, -- all the programs that have been challenged, they passed. but this will be a further step. in the second is, what happens on the political front. the country needs to be -- there are countries across europe that have no intention of doing anything of the sort. lisa: it obviously -- the europe -- the euro has obviously not been as strong. using the dollar index could go up to 112 in the third quarter which is kind of a wild call. john asked the question yesterday, where does that put the euro if the dollar strengthens to that extent? elsa: certainly a lot of scenarios from here. a more extreme scenario talking about -- from russia to europe,

the european recession and under those conditions, you would expect to see the euro a bit weaker. we started the year -- and that was because from december. being where we are now, it feels like the bulk of the movement is behind us. the target is at the 97 level. some of those extreme scenarios pan out, --. jon: every single morning i see more news about europe. nord stream one. not enough on china. elsa, what is going on in china push mark this boycott and what it means for -- markets? elsa: it is fascinating what is going on. it is no different from the way the mortgage markets work here

in the u.k.. actually paying for an apartment before it is finished being built. one is watching for what it means on the economic front. commodities and that is something that not is going to impact around the world. it is still such a heavily managed currency. there is still this widespread expectation that the government will be delivering in october. still pretty cautious on how far that can go with policy. in general, shy away from --. jon: making a forecast on what is happening with gas supply.

and making a forecast of what is going to happen in china. i have no idea. tom: i have no idea. the gas supply and mr. putin centers directly around sanctions. what i would point out, going into tomorrow, we could celebrate by understanding --. it is not going to be the ecb. we get on top of this, he is too shy to mention it, but john has some serious knowledge. lisa: of course he does. tom: i have a wardrobe consultant that might dive into that tomorrow. jon: tk came up to me this morning and said it is the final day i'm going to wear the tan suit and then i'm retiring it. tom: i am retiring this one

because that is sort of the way it goes. nixon was president when i first wore this. lisa: tom, you take the show on the road to a beach, i feel like you should retire it. tom: you can go and go up and not get to the top. jon: the death tone is no joke. tom: getting down is half the battle.

she would say that is where reality lies. jon: it is a beautiful one in new york city. from new york, this is bloomberg. ♪ >> keep you up-to-date with news from around the world. in the u.k., which two candidates will face-off to replace prime minister boris johnson. he was just two votes short that will guarantee him a spot. nhb, prime minister -- told --

it can be rebuilt. markets rally. he didn't have the backing of all the parties in his coalition. the russian leader have some conditions. europe has been waiting. a streaming giants is -- netflix says it will add a million customers. with advertising around 2023. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i am ritika

♪ ♪ it's electric... made extraordinary.

ingenuity... in motion. it listens, learns, adapts and anticipates your every need. with intelligence... that feels anything but artificial. the eqs from mercedes-benz. it's the car electric has been waiting for.

>> the world is going through these two major shifts.

and on energy it is reducing its independence on russia. a huge shift for the world. it has several more innings to go to get it right. jon: president -- david malpass, president of the world bank. the euro just a little bit stronger than the ecb tomorrow. a tenant of 1%. governor putin signaled that north stream could come back. the president said it will only work 10% at capacity next week. tom: there are two parts.

talking about some mechanical peas or something. jon: you keeping up with this, tom? tom: i am trying. our bloomberg washington correspondent is far too young. she earned credibility with mileage in europe, mileage in the -- of ukraine. she joins us in washington. it was so important with the american medium -- american medium -- american media. what did you make of the image i saw last night in bloomberg that was completely unreported in the american press? what did you think?

>> president putin showing the west he is not ostracized. the image that stuck with me, having president putin weight. and he saw how uncomfortable this was for vladimir putin. journalists like myself to wait. tom: a guy out of istanbul. looking at lire as one barometer. not a collapse but what a moment economically. does he have any power and say at that meeting yesterday?

amory: -- and murray. : what is really front and center is an agreement to try to get grain out of ukraine. -- is the one leading these talks. jon: confirmation of what we reported yesterday afternoon here at bloomberg. the eu reporting 16% gas consumption around that. a proposal cutting back to 16%. tom: do they have the power to do that?

you cover this today. doesn't have the power? >> they don't have a choice. they are running on stockpiles in the summer that they would have used in the winter. while president putin has made the clearest yet that those will continue, when it opened up for maintenance, he has this -- that you are -- that you and john were talking about. u.s. sanctions are 20%. putin wants to keep in the pipeline. but he want to europe on its knees to stop their support for ukraine. he will certainly use gas as a geopolitical weapon.

also energy executives telling consumers they need to start conserving energy. this winter is going to be grim. jon: when it comes to putting sanctions on russia, the european -- hasn't broken yet. annmarie: if he was to exit, who would they be dealing with? there is a strong population there that leads a little bit more with ties in russia. it is a difficult one for italy. the government, world war ii, they have a strong ally.

he was given an award by the -- counsel. and how they are working together to support ukraine. you can already see the potential. energy use, this is going to get very difficult for europe. jon: the number we expected to see, but there they are. 15% cut has been the proposal from the eu commission. kailey: starting to take action on demand. on securing supply wherever they could get it. now the conversation has to become one about the other end of the spectrum to avoid having to ration the gas supply that they can get. jon: for president -- that decision tomorrow.

is that a decision for central bank to make right now? tom: tomorrow, what will you listen for in the press conference? jon: it is going to be really difficult. do they have to consent to a new move in september? what happens with north stream one and these gash issues -- gas issues? from new york, this is bloomberg. ♪

jon: live from new york city this morning. good morning. every group in positive territory. equity this morning -- 1% on the nasdaq. nasdaq -- netflix at a very low

--. the market quieter and a two year, a 10 year. on a 10 year, 298. still inverted but not much going on with the fed. there is nothing sleepy about what is going on in europe. europe look like this right now. 238. a 10th of 1%. stating what a lot of people are starting to think. -- could become the most likely situation. tom: of the peaks of early july, it is up a little bit here. what we need to know is, natural gas in europe is exceptionally

elevated in the united states. -- than in the united states. jon: the 10 year down by 12 basis points. the german 10 down six. the last 200 basis points. it is at the comfort level. breaking out much wider than what we are. tom: the equity markets, daytrading and such, and talk about results. he is far too shy to talk about results there. a little percentile by morgan stanley. the answer is, the msi you perform leo is on the active guide. the senior portfolio manager,

managing director at the 93 and 95% percentile for a portfolio duration. andy, your idea of short-term is three years. for those that can't get out there, how do they get the courage to think about one year or one-week action and say i want to invest for three years so i can get 95 percentile? >> when the market is down 20%, you look out three years. the returns are phenomenal. that is what people are missing when they say recession. 24%, we have built in a lot of bad news here. getting to a high percentile. the market is down 24%. you just have to start looking for good, quality companies. there are a lot of companies down 40, 50% and a lot of that

into their stock part. tom: give me some names. andrew: the university consumers said --. that level is so bad it is going to improve. prices coming down, optimism is going to improve. where are stocks reflecting that very low sentiment is in the consumer aero. home furnishing, home retail, homebuilding. usually when i mentioned stocks like that, people tell me -- you have to think, things will get better from here. kailey: isn't the conversation

we are happening -- the conversation we are having on the economic growth front that things are going to get worse. ? andrew: no question. at the market level, it is on the battle. market was so slow going into --. how many have come on your show and said dimes is going to be lower? everyone has expected a bad earnings season. the set up was wonderful for beating a low bar. that is good news. the bad news, the fed is not raising rates. we cannot be too optimistic at the margin level for that reason. when you start to search for stocks, there are a lot of stocks down a lot more in the market. there are a lot of quality stocks kailey: lower. kailey: guidance is going to be different.

a lot of cohesion around the idea of the big theme. we have already seen from microsoft, ibm, j&j results yesterday. how large are headwinds with the dollar strength over the last few days? andrew: number one is, there is no evidence when the dollar goes up a lot it leads to weak stock markets. if you look at the last time the dow was up over 10%, the dow was actually higher three to six months later. there is no evidence of that. the reason for that is a lot of times the stock market, the dollar looks through the dollar weakness. it is incredibly different -- it is credibly difficult to call the market based on where your perceptions of the dollar are going. i just wouldn't do that.

you have to think about going into earnings season, how weak have stocks been right now the bar is really low. some of these companies are going to say, the readings are not great because the dollar is too strong. i question whether the stocks are going to go down because a lot of that is already --. tom: it is as simple as that. andrew slimmon, new in that? andrew: that is a good point, tom. usually when you have these, they in in cathartic events or some type of bad financial -- close to the surface. that is what is happening with

cryptocurrency and some of these vendors, it is hard to think that is the case. i am not sure. the market is in a standing mode. on one hand, earnings are ok. on the other hand, usually lows. maybe that happens early this fall. i think the market will be substantially higher. it is too optimistic to get at the market level. jon: you were bearish the lesson we talk. something changed were you. andrew: what changed is that everyone things earnings are going to be horrible. one side of the boat is so crowded. earnings expected to be so weak, that percent has a very

intriguing opportunity. the other thing is, always nervous going into the summer. dad things happen to the market in the summer. working earnings season, getting a lift in the earnings season, but the fed is going to raise rates. how many more times the fed raising rates? any time the conversation pivots from individual stocks, which is what we are doing right now, to the market overall, the market recon was more vulnerable. jon: andrew slim in there. morgan investor. next thursday, not tomorrow, but the week later. morgan stanley. coming from 180 to 185. right now we are 185. wells fargo -- we see a

worsening situation in china. increasing impact. just a little bit of consciousness. tom: do you have a producer? jon: i have a team of producers. tom: i have interns. some of them don't make it to the summer. kailey: you were joking how guests get nervous about what tom is going to bring up on the show. jon: i would never do that to you. tom: you have a producer? jon: kaylee has a producer, too. we have got a little bit on the

nasdaq. a subtle move slower. now down 10%. on the nord stream 2 front, -- to come back online tomorrow. that should come back online tomorrow. we are not sure, if it comes back online, how much gas comes through it. the european getting ready. kailey: it is the most likely scenario that the gas doesn't come back at all. they are saying the winter in 2023, 2024, with that action now , prices could be even worse. european experts for energy right now say the gas cutoff could cause nearly 30 billion units. tom: the euro is giving away -- jon: that is the turnaround in the last couple months.

six basis points on the 10 year. a bit of a turnaround in this market in the last 10 minutes. now down .25%. from new york, this is bloomberg. ♪ >> keeping you up-to-date with news from around the world. communities ravaged by heat. holding off on an emergency decree. former state secretary -- to help reestablish hikes which china. politics today require -- to

help -- conflict between the u.s. and china. a reaction to the concern that the supreme court might consider a ruling extending those rights. in the u.k., the largest trans union trying to spite will low inflation pay rates. other public sector workers -- the national health service. pull the plug on an etf. launched at the end of last year, the fund gained only $12 million in assets. it was a rare --. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i am ritika gupta. this is bloomberg. ♪ if you wake up thinking about the market and want to make the right moves fast... get decision tech.

for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity.

>> 50 basis point increase will be among the choices on the table. jon: it is not locked in. in newspaper ad comes out two days before a decision. lucky him that he doesn't have to worry about that. we want to check in on the euro. a little bit of euro strength.

in the last 20 minutes or so. saying a fool cut off of russian gas is a likely scenario. europe is repairing without going into an ecb meeting tomorrow. tom: you can go all gloom and doom. it is a very correlated move. the vix goes a little bit gloom, 24.67. it is not just seen through euro. jon: basis points 296. this is what you want politicians to be doing, preparing for the worst. you don't want to be surprised with russian gas later this winter. it has become the most likely scenario for most people. tom: germany and defense on the

military side is well. jennifer mcewen is with us out of ucl. travelers shot here that looks at global economics. four point 9.4% inflation. is it the same as double inflation -- in the nine estates? is all the same or is each -- different? jennifer: it is very similar forces to the drive of inflation. in terms of reduction in the real spending power and the difficulties they have. it is clearly weighing on spending, especially here in the u.k.. elsewhere, it seems to find --

picking up. tom: focusing on inflation, just a core measure? are they looking at topline inflation as a study this through the summer? jennifer: a variety of indicators. underlying inflation, given the -- looking for signs providing the headline. speeding through to that more underlying --. there has been a pickup in wage growth as economies and sector inflation and other measures of core inflation that is really worrying for those prime pressures going forward. kailey: clearly going to be worrying -- the bank of england.

how far can i take it to get inflation under control when you have a deteriorated -- you have a deteriorating outlook? jennifer: in terms of weighing the pressures, very clear in both. in the u.k., we think u.k. will fall into a recession. we think the bank of england is going to be forced to raise the interest rates. to 3% next year. kailey: what about the ecb? jennifer: the ecb we think will be about 4%. kailey: they can get there? we are talking about a european recession, you think the ecb could -- at 2%? jennifer: it will take a lot longer. it will depend a lot on underlying conditions. the end year is the pickup.

wage negotiation suggests the administration is becoming sustained. in the years case, we think it will dip into a recession related to the uncertainty around that. the ecb is going to have to press ahead. tom: jennifer, we are pausing for a moment of silence. we go into the most arguably the important ecb meetings tomorrow. what will you listen for from christine and philip lange? jennifer: it is going to be important whether -- it will be a pretty clear signal where it stands. we think it is more likely for 25.

that is where it will go. some indication of whether it is going to pickup the pace going forward. some confirmation of that, we are penciling in at 25 this time. tom: when carlin is one of the giants of economics. does the algebra in windy carlin's textbooks still work or are in -- or are we in such an unusual territory that the textbooks don't work anymore? jennifer: you mean with the labor market? tom: i will let you take it where you want. i question whether the mathworks anymore. jennifer: so much has changed. a concern around gas supply and the pandemic we are recovering

from. it is a difficult moment to know whether that is normal rates. what kind of rate of interest might be restricted. what rates are very accommodative. watching very closely to judge. that is why there is so much uncertainty at the moment. it is very clear the housing market --. jon: jennifer, thank you. the ecb, can they get to 2% given what is going on right now? the statement just came out from the european press commission saying, a new toll in the european capital market reduced gas -- by 15% until next spring.

this is a proposal. the conclusion, the most likely scenario -- of russian gas. tomorrow, when a lot of this information drops, a concern we reported -- -30%. tom: we all will wait for mr. putin. it is tied directly into sanctions. jon: down 2/10 -- from new york, this is bloomberg. ♪

millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network, with the carrier rated #1 in customer satisfaction. that's a whole lot of happy campers out there. and it's never too late to join them. get unlimited data with 5g included for just $30 a line per month when you get 4 lines. switch to xfinity mobile today.