>> we are more than halfway through the trading day. consumer prices fall for the first time in more than two years. i'm caroline hyde and this is "bloomberg markets." a quick check. on the back of that ppi number, affirmation we are seeing a turn in the tide of inflationary pressures. the ppi number comes down. s&p 500 rises. nasdaq into the green. big tech had fallen off.

maybe too far, too fast around this exuberance about inflation. 30-year yields up seven basis points. we have an auction on deck. we now get the 30. the bloomberg dollar index down by a quarter of a percent. one of its worst weeks and months. we learned u.s. producer prices fell for the first time since early in the pandemic. we spoke about what the recent economic data means for the fed. >> the key message is weak the payroll status and inflation prints is the window is getting larger. the fed has a higher probability of being able to nail that soft landing. there's a chance the hikes will go down in pace and the destination we get to. if the data continues to cooperate, and we have a long window until september, it's an environment that started over

the last week. they got some room to run. caroline: let's dig into this with veronica clark from citigroup. great to have some time with you. this change in narrative, will it stick? ppi looks better but some signs of food inflation sticking. veronica: i want to caution we should not be overly optimistic after one month of softer inflation data. we saw an overall ppi this morning. a lot of that is related to energy prices. we have seen retail prices falling for a number of weeks now. a lot of the details are showing signs of strength in service prices. we should not be overly optimistic based on one month of data. caroline: many have said we have to look at retail numbers. they come out next wednesday.

is that the next key piece of data to show the strength of the economy and the willingness of people to spend through inflationary pressures? veronica: the activity data could be important to watch. we have seen a slowing in activity data. we are looking for confirmation that inflation is slowing. next week we will get preliminary readings from the university of michigan. we are watching that five and 10-year inflation expectations measure. they tend to move with gas prices which are still falling. if it climbs higher that's a sign inflationary pressures -- caroline: it feels the transitory part is the transport costs and gasoline costs. the expense of going on vacation. still the rent is still really high.

grocery bills are still really high. all right going to see a pulling back from the ablated a .5% levels/-- elevated 8.5% levels? veronica: if we dig into the details of the core inflation data we got yesterday, a lot of the weakness was in things like airfare which is sensitive to oil prices. maybe there is some drop in demand. it was because of things like hotel prices, new cars. the other components of a better signal of the trend are shelter prices and services prices. those are strong. what the labor market data we got last week it shows a tight labor market. wages are picking up. the prices could still rise more. caroline: what do you think of the market reaction to this?

the exuberance too much from your perspective? veronica: we should be cautious about this rally. markets are looking for signs the fed might be turning a more dovish turn. we have activity data that is growing. maybe the market is looking for signs the fed is turning more dovish. maybe that is where the optimism is coming from. we have heard from fed speakers. we are a long way from where they think things should be. caroline: what we have been hearing from the likes of charlie evans yesterday. veronica clark, great to have time with you. we have breaking news. activist investors taking some big bets here. taking a 70% stake in the new

york times. potentially the newspaper company wanting to improve digital sales and margins through subscriber only bundles. the activists investor value act getting into the tune of 70% in the new york times. they share price reaction up 12% in the last couple of days. let's go back to the main story of the day, cbi, ppi and bond market reaction. we had breaking news of how the latest bond market auction has been done. the 30-year bonds drawing 6% overall. pretty strong indirect bid of more than 70%. i'm interested to dig into this. we have a great story out today talking about the difference in viewpoints coming from bond investors and stock investors. talk about the breaking news of the sales we had.

has that shown demand for treasuries at the moment? >> the 10-year auction was pretty good yesterday. the 30-year seems ok. what this story today in the market thinking we may have a recession, most want yields about 3% saying if are going into a recession i will be happy to have bought these bonds now. they are thinking forward to the fed speakers making clear they have to keep going. even if they step down the pace of hikes, they will not turn around quickly. how long can the economy take that, right? the stock market is doing great but the bond market is more suspect of the downturn coming. caroline: we seal the yields pushing higher on the 30-yield now. demand coming back a bit.

overall, despite what we have seen steepening in the yield curve yesterday, overall we are inverted. is the bond market saying we are worried about a slowdown in the economy? liz: today it's like let's go back to the people i talk to to make sure they still feel it. yeah, liz. it's like people saying a bear market bounce. it's an off cycle move a lot of folks think we will get steepening. there is so much volatility in the bond market. it is almost head spinning. they are down 10, then up 15. longer-term the fed's path is clear. they have to go up. kind of implying we get to over 4% on the funds rate. some speakers say we sit there for a while. i think the bond market is saying net in the long run the economy has to turn over. caroline: you pointed out, blinken you miss it, we are

trying to measure 2s and 10s. we had the most inverted since the volker days. liz: it was like, did it happen? we went to steepening. that is what we were trying to show. it might have been a quick move but it is telling. people are saying the curve would get to -80, about double from now. don't miss that this happened even though we had the rebound and ppi was softer today. i think a lot of people just think the trend is your friend. flattening and inversion is the trend. it was a pretty crazy day yesterday for sure. caroline: are people caring more about the depth of the inversion or the length? or, jesse three-month -- just the three-month? liz: the first one to show this

yield curve is linked to growth, so inversion means recession. he said the inversion can show the length of the recession. how? he said it is pretty much how long the inversion holds and shows how long the recession will be. he likes the three-month 10-year, which floated at negative. you can see that inverted for a quarter. that's code red. as long as it stays inverted we might have that long of a recession. it seems like the market is saying we don't know but it could be a mild recession. like some of the credit spreads are not giving red flags. it's a mixed bag. god willing, maybe they pull off a soft landing. it does not seem like the market believes it is possible. caroline: here's hoping for everyone with a job and wants to keep it.

great narrative of what the bond market is trying to tell us. let's get you out to the world of business with mark crumpton. mark: health care providers backed by the american civil liberties union are asking the florida supreme court to review their challenge to the state's new ban on abortion up to 15 weeks of pregnancy. it took effect july 1. groups, including planned parenthood chapters want a statewide injunction against the new law just days after it took effect. the order was automatically put on hold when the state appealed a repeal signal to rule in favor of the state. as germany continues to reel from russia's move to cut gas supplies, the largest power producer will spend $5.2 billion in green technologies during the country's energy supply more independent and climate neutral. >> the first step is to become independent of russian supplies,

which can only be managed by additional imports. mostly lng. in the longer-term it is to build on renewables. mark: germany faces potential gas rationing if it fails to secure sufficient reserves this winter. the energy shortage would be unprecedented for a developed nation. senator elizabeth warren criticized fed chair jerome powell for withholding information on trading by central bank officials during the pandemic, calling an investigation into the matter troubling. senator warren is a member of the banking committee that has fed oversight authority. she sent letters to all 12 reserve banks asking for security transaction records for all senior officials since january 1 of 2020. dear governor kathy hochul greenlighted a multibillion-dollar corporate tax break to draw chip

manufacturers to the state. it is aimed at boosting albany's competitiveness in the grind to build semiconductor plants. she signed the bill that would provide important subsidies of the $10 billion over 20 years to build, expand or modernize fabrication plants. president biden side the $52 billion bill to boost domestic semiconductor research and development in the united states. 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 mark crumpton. this is bloomberg. ♪

caroline: this is "bloomberg markets." electric vehicle maker rivian will be out with earning results today. that's as the industry navigates supply chain disruptions, chip shortages, but is not to startups focusing on electric vehicles right now. ted cannis is with us.

reservations have been strong. 24,000 reservations at the end of november. how are we seeing reservations turn into sales? ted: thank you for having me here. we sold 3000 vehicles today the u.s. 95% of the electric van business . almost a third of the segment share. we are seeing tremendous demand. people pencil in the numbers. i'm saving repairs and fuel with prices going up. it's a better business decision for many customers. caroline: you are offering the sales initially but then servicing. i'm interested in what sort of vehicle sales looks like in terms of profitability. ted: ford probe is focused for productivity beyond just vehicles. software, charging, service, financing bundled together and

set of fragmented suppliers the businesses have to deal with. we see new profitables for us we had not seen before. paid subscription services, recurring revenue streams that unlock new value for ford. caroline: your background is interesting. you have been the money guy at ford. you are then investor relations. you have served globally serving in latin america and russia and the u.k. what is the difference between a u.s. fire and -- higher and european buyer? ted: in the u.s. we are further with pickups that are electric and vans. 40% of the volume. in europe, we came from behind but we have a great product and instantly we are moving in the segment. as a put together this plan to get to 600,000 units of global

production electric vehicles next year, we have an opportunity with the gray products we got coming to change the business. in europe they drive shorter distances. capabilities are different. for the drivers, they are driving diesel manuals. now it is a driver's delight. in a market where it is tough to get labor. caroline: is there enough infrastructure to support all of it? is there a worry they can get the charging when they need it? ted: when you talk about going electrified, we did a manager survey. 60% say it will be a major headache. what is the headache? charging. what they think and what we provide, we have end and charging solutions that ford provides to help them through that. they don't know how to do it. they think they will go out on public charging but there is no reservations. you have employee paid time

charging. no. they can charge at home. we reimburse the drivers. or, we set up charging at their facilities so they have a better solution and lower cost so they can charge the most optimal levels. caroline: from 2017 to 2020, you are in charge of the battery part of the ev business. how was the supply chain right now? how are you able to meet the demand you're currently at? ted: it is a colligative world. ships, batteries, tigers, oh my. we are constantly on it. it takes a lot of preplanning. i can't imagine a start up with no proof of production. how do you login battery supply, battery plant supply and chips and other components in a world where there is no stability right now? you don't have a supply chain team that is a veteran. who was suffering? my commercial customers. they need to roll 10% to 50% of their fleet every year and they

can't get the vehicles to do their jobs serving customers. caroline: are commercial buyers going to be more pro ev then retail buyers? ted: it is different. why do you have seven seats? you just have one kid. they have excel spreadsheets. they know their investment return and the benefits some vehicles can do. new places to store things, carry things. how are on board. backup power. these are new tools you never had before. caroline: new tools you need to provide, the team and you. how was the reorganization from a labor perspective at ford? ted: our customers have both internal combustion and better electric and we are doing it together. the team is focusing on model e in the retail space. our team is building a great platform of broncos and

mavericks and super duties. we are working around the world to line up to win in each of those businesses. caroline: the job reduction is not impacting your part of the business? ted: we all have to be more efficient every day and we are bouncing to new areas. more software in the cloud. i need charging people and experts. we need to be more efficient as we have always done in manufacturing and inefficiency and automation. caroline: that'll help support profit. i'm interested if the profit margin -- ted: i will not talk about the exact margins. we are happy there. we are leading in the u.k. the leading vehicle in the u.k. is a commercial van. the new business, the parts business, software subscriptions in the ford plus plan, the

charging business are higher-margin businesses. they are recurring revenue streams we did not have before. was connected software job vehicles, this is a completely new with asian ship with our customers. caroline: great having some time with the. ted cannis, great to have you here in the building. this is bloomberg. ♪

caroline: this is "bloomberg markets." now something that caught my eye. a chart from the behind-the-scenes producer who

gives us the nitty-gritty. yesterday we were euphoric they sang we were in a technical bull market or the end of a bear market. 20% off the lows on the nasdaq. pete drew my attention to this chart. when you exit the so-called bear markets, if we can call it that, we are seeing some really decent performance overall. 8% this is what happens. you get gains after the exit from the bear market. averages in terms of how much the nasdaq is up, 4.8% on a monthly basis. you generally on average get in excess of 9% in terms of returns and the nasdaq. over six month, almost 15%. 23% growth in terms of the overall valuation and the nasdaq over the course of the year. we're not saying it is the end of the cycle. many say this could be a bear market rally how we get a further declines to come.

for now as we gain around the inflationary pressure dialing back a bit, you can see tech continue to perform. we will discuss how opec is playing into this. this is bloomberg. ♪

mark: welcome, i'm mark crumpton with first word news. you can president zelenskyy says russian forces lost nine combat aircraft in crimea this week. speaking at a conference in copenhagen, president zelenskyy called for more funding and weapons for kyiv and then denmark and the u.k. pledged more equipment. house arrest until october 9 for a journalist who staged an antiwar protest on the main tv news channel. she appeared at a hearing after an investigative committee with the fbi opened a criminal case

against her under a law spreading information discrediting the russian army. she held up a sign inside the cage saying let the dead children hard your dreams. offsetting surging inflation stoked by the russian moved to cut gas supplies. the german chancellor said his government has the energy crisis under control, nearly half of german homes rely on gas for heating. they face potential rationing if they fail to secure sufficient reserves this winter. republicans found -- wasted no time tearing into others in response to the rate on the

former president tone. the committee chairman have pledged to hold a congressional hearing and subpoenas. republicans are expected to take the house and could take the senate majority also. 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'm mark crumpton. this is bloomberg. ♪ >> welcome to bloomberg markets. caroline: i'm caroline hyde. with check on the markets because halfway through the training day we are saying risk on tones with the market. the s&p 500 up 5%. today we got the back of it but we are still holding onto degrees of 12 points overall on the nasdaq. we question how far this run up

on the tech space has gone ever since inflationary pace starting to look better. we saw cpi, the 10 year yield bouncing back after we saw an option that may did not get quite as much as we used to. but a lot of indirect investments coming in and we saw a decent takedown from the bond market -- bond option. i seeing -- we are seeing a steepening of the yield curve. it's more in the fx space. jonathan: on -- jon: on the stock, disney an obvious one, streaming numbers and part performance. up more than 5%. we've seen bumble under pressure on its outlook. pfizer impacted by litigation worries right now and a canadian player with stronger than expected sales.

they are out of their chief fall and winter period but sticking with canada, i want to get to breaking news. bay street is at the center of the market. canada. i cannot -- something is affecting the core. we want to bring in our managing editor derek. one of the key providers provided an update. what more can you tell us? derek: before 12:30 p.m., the lights went out in toronto, including where berg has its toronto euro feis bloomberg has its toronto bureau. it's a good chunk of the financial district. particularly eased of jones street that divides toronto between east and west. caroline: as you are looking at

what is happening on the overall benchmarks in canada, are raising any impact from volume? it does not look like are. derek: it does not appear it disrupted the stock exchange. we spoke to a couple of traders who said their activity is normal. they may be working on backup generators as we are at bloomberg. but it is affecting traffic. we heard a number of sirens going via, but so far not trading as we could tell. jon: were taking a look at some live shots as well. there has been various reporting about possibly a crane impacting some of this, hitting a power line but we are waiting for more official word from the official word. you were talking about an area

that was just starting to get back to the financial business as we look at the major powell providers, they are investigating the issue right now. it is already a very hot summer so we are going to be talking to people to find out who is affected by this. derek: that's right. there are hundreds of thousands of financial workers in the greater toronto area concentrated in a small section of downtown toronto, coming up from lake ontario. there are not quite as many people today, given a wednesday and a thursday in the middle of august. but there is a lot of activity and people whose plans are disrupted, elevators not -- we are tracking it and will be

updating it. caroline: thanks for jumping on the phone with us, derek decloet . -- how to interpret the recent economic data we have had. >> we don't think we are clear the risk. the dollar trade could come back. it is close of the top but not of the very top right now. at the beginning the year we think the economic slowdown will begin her, the rates path will be more friendly to market and risk on is the biggest double negative out there. caroline: stephen englander there. we want to get to the markets now, with winston. always great to have some time with you. what are you making out the dollar? it's been down three or four

days. is that likely to continue? >> thanks for having me, always a pleasure. we looked at the jobs report. we do not get that far up on the huge deal, 500,000 jobs gained, etc.. but yesterday's ppi knocked the leg out of the dollar rally. i have to agree with your previous guest, i think the dollar is on its back foot for now but it should reassert itself. in the fx market, if you make it on the dollar, what is the other side of trade? it's all relative. you look at eurozone. looking at germany, the shortages. the u.k. households in the fall and in january.

you look around and one thing i'm certain of is that the u.s. is in stronger shape relative to other major countries. that is the main reason it is bullish. due to the market misreading, the market is always right and this time it was wrong. the fed is screaming they are tightening much longer and much higher than with the market is thinking and the equity markets are not paying much attention. i think that could come around later when the data comes out. jon: against that backdrop, how close are you looking at these comments from fed officials after inflation data yesterday and specifically for anymore? it seems like the initial take away from at least some of the comments was that they won't be derailed from this rate hiking plan. win: that is correct. i think what we have seen in the

last week and a half is a master class in central-bank communication. we have the fomc at the end of july. and right away, the fed came out and said hold on. you are misunderstanding. that message, i think is quite clear. as you point out, in the wake of the july call, the data on inflation, they are saying again we are not going to determine that. knowing the fed knows long -- how long we will tighten, we don't know how the downturn will be. we may get a recession. don't know how quickly inflation will come down. i think the equity market is pricing perfection. it is a razors edge. also, the fed i think are doing a great job in navigating the treacherous waters. but it is not going to be able to snap your fingers and get inflation down 2%. i think the fed is being upfront

about it, saying this is a difficult and long road. caroline: encz not just for the fed, of course the federal reserve is central bank seemed as well. but we have seen the bank of canada be very hawkish. the bank of england, what america having to follow suit. mexico used to be the next one. i'm interested in what this means in terms of the rush for the rest of the world and whether soon or -- sooner we will see latin america have to start typing. win: what america was the first and most aggressive of that region. i would think of it as the lease hawkish. somewhere in the middle. this is a global phenomenon. people are saying the central bank, but they got it wrong. but everyone got it wrong. no one was planning on a ground war in europe that would drive

up commodity prices. i think they are doing what they can. but one reason most of the central banks have dumped toward this is they have no idea what is coming next. they are taking one thing at a time, one meeting, one data point at a time. i think if anything, all of the central banks are going to err on the side of hawkish and us. inflation is much higher than it should be for a variety of reasons. but i don't see many central banks being able to pivot, especially the market so pricing and sometime in the first half of next year, i don't think that will happen. big mispricing. some of the emerging markets that have rates, like that one was almost 14%. it may be small breadcrumbs and minor cuts. but the global environment is

still for central banks. jon: thank you, win thin, brown brothers global head of current strength -- currency strategy on the dollar outlook. opec to push into surplus quarter. that as u.s. gas prices fall to the lowest since march. denny adkins is part of the team of oil associates and joins us now. you think back to the decision on production activity recently by opec-plus. it was modest and maybe this outlook feeds into that in a bigger way. >> for sure. the revision into their forecast was largely due to a downward revision to their demand expectations. so at the end of the year they expect demand to grow by 300,000

barrels a day less space on this -- based on this forecast. and that is not largely due to demand destruction reserve -- concerns, it is partly due to the china lockdowns and increased political tension in russia. caroline: how are you looking at these different institutions giving their outlooks? i thought oil was big today. but they came out and said we see demand higher than we expected. >> yeah. the adjustment does run in contrast to the change the iea made yesterday. but opec remains more bullish on demand than the iea does at the moment in terms of their entire demand outlook. so this actually brings both of their numbers closer together. but it highlights the fact that there is a lot of uncertainty

surrounding these forecasts come up outlook for oil demand for a number of factors both on the supply and demand side. jon: at the end of the day, but say there is a need for more product in the market. to clarify, on the capacity side, who is front and center? i imagine so the idea and uae has a lot of the pursestrings. danny: they are gently front and center but they've been testing the upper limits of their capacity. a lot of the supply growth going forward is expected from opec and the iea, it is loza going to come from non-opec countries. part of what is driving the uncertainty is u.s. oil production. the public producers are more clear in their guidance and what they are expecting for output. but we are seeing some growth from private producers production in recent months with higher prices. caroline: jenny atkins, great to

have time with you. coming up, filling the gap. banks pulling back from financing by out. details. this is bloomberg. ♪

caroline: this is bloomberg markets. i'm telling height with jon erlichman. one of the great stories on the terminal, taking on the big banks, a fund for large-cap loads. our reporter joins us on this story and why apollo is doing this. >> we are seeing an interesting development in the past couple of months, it is getting for --

getting tough for bio financing to get done. there's widespread concern about the potential for recession, rising interest rates and that is causing wall street banks to pull back from extending their balance sheet to get the deals done and from investors who are more hesitant to invest and support the financing. that is creating an opportunity for a private credit fund for alternative asset managers like apollo to step in and provide the financing. jon: that is helpful context. my thing about wall street banks historically using their balance sheets, at least to generate business elsewhere -- elsewhere, for players like apollo, what the math here? is there compelling economics in moving more aggressively to this area? >> yes. apollo has a large credit business. it has been a key part of its growth strategy for several years now. and the way the deputy chief

investment officer described it to me is there essentially -- they essentially see an opportunity coming out of the limited number of players who are able to step in and support the loans over a billion dollars. they can get nice protection and nice collateral package. they can get a good interest rate and really provide findings that people need right now. jon: helpful context, allison. where mentioning a well read story on the terminal today. allison mcnealy joining us with the latest on apollo's move. we are taking a break but we will get more details on the developing story in the center of the financial district here in toronto, a power outage has been affecting various businesses. we will be back with more details.

jon: this is bloomberg markets, i'm jon erlichman with caroline hyde. a story we mentioned at the top of the hour, we've been watching a power outage in the toronto financial core. they said this affects 10,000 customers. we've been seeing some live shots on the waterfront. there is no confirmation at all but this is a live helicopter shot from our sister channel, cb 24 and some wondering whether or not a crane had impacted powerlines. it's come back to what we do know for now. bloomberg's andrew beal has been helping us to cover the story and joins us with more. >> hi, jon. there are two strands to the story, the area affected by the power outage is shrinking so they are making progress.

but the center downtown being evacuated according to our sister channel and they have been showing this footage of a crane in the port area having apparently, what we have not had confirmation from the electric company, and appropriate -- apparently report disrupted or tore down the power line. caroline: a bad day, about few days. this is one of the most miss -- the most read stories. how long could it be before we get back online? andrew: apparently hours. a lot of important buildings have backup generators, but in this square, our piccadilly circus or times square with giant billboards, a lot of those signs are electronic and a lot of them have gone down. we're looking at potentially hours of disruption and it is fairly sticky in toronto today.

we're looking at a temperature of about 26 degrees. not a fun time to be working in a store without air-conditioning for example. caroline: i feel for those people. andrew bell, thank you for keeping cool and the story. i don't know how your sectors are and the moment in general, but this is hard to predict. certainly we all depend on the backup generators at times. jon: exactly. we did get confirmation for the toronto stock exchange. they are still up and running. many businesses are ready for this but we are talking about an area that really represents the center of financial activity in canada. bay street is like wall street. caroline: at every turn there's an issue on the supply side, whether an accident, global narratives, pressure in terms of prices, everything. we continue to be reminded of

the importance of energy right now and how we continue to service it at whatever the price. from new york and in canada, this is bloomberg..

mark: keeping you up-to-date with news around the world, the first word with mark crumpton. the load of air zelenskyy says -- ukraine president zelenskyy says there were nine planes destroyed by -- from -- nine russian plans were lost. the rejection of ukraine will be bigger than the post-world war ii marshall plan and a return to relative stability, mcdonald's says it will reopen restaurants and give and western ukraine. feis in kyiv and western ukraine. -- in kyiv and western ukraine.