>> britain's new leader is promising a major package to help ease the pain. the prime ministers spoke outside 10 downing street for the first time since taking office. >> i have a bold plan to grow the economy through tax cuts and reforms. i will cut taxes to reward hard work and investments. i will drive in my mission to get the field working and growing. >> she is expected to appoint cabinet ministers later today. some of the president's top

former leaders -- eight former defense secretary's and five former chairs of the joint chiefs of staff have signed an open letter saying the political divide and pandemic have made this an extraordinarily challenging environment for the military-civilian relationship. california has narrowly avoided rotating power blackouts due to a heat wave. officials were in the power grid faces and even bigger test today. power demand could reach an all-time high as businesses and schools reopen after the labor day weekend. shares of bed, bath and beyond the client following the death of the cfo who fell to his death from a manhattan skyscraper on friday. he was one of the executives that provided details on the company's turnaround plan. 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. this is bloomberg.

john: welcome to bloomberg markets. >> it was supposed to be a rebound, but that's not what is happening in the equity arc its. let me walk you through it -- the s&p 500 down .6%, so that optimism people would come back and hop back into the markets with egg bets, that's not what is happening in the stock markets right now. some of this is a result of the cross asset picture. quite a bit of bond volatility, up 14 basis points and that move gets even bigger when you look at the short end. this is huge when it comes to the global repercussions of the stock market. how much can the stock market

digest when the bond market is moving by the most it has moved in decades? that analysts -- that analysis coming from bloomberg intelligence. the dollar getting stronger off the pound and yen and euro. oil trading at a 90 to handle after the opec production cut. john: if we go a little deeper on that s&p 500 performance, sector wise, not seeing much interest in most of those 11 subgroups outside of a little buying in real estate and utilities. as for individual stocks seeing more sizable percentage moves, let's walk through some of them. european regulators standing in the way of a grail deal -- that seems to be well received by investors but creates uncertainty for the business overall. certainly a lot of uncertainty

on dwa see, currently down more than 15%. we did hear the latest on bed bath & beyond, a company already dealing with so much uncertainty. this hour, shares down another 17.5%. that being said, when we seek early results that please wall street, there can be a follow-on effect. we've seen that with lululemon today which is up 3.5%. they had better than expected results last week and we have seen a number of analysts boost their target prices. one of the stocks bucking the trend on this tuesday so far. kriti: we spoke earlier in the day with someone making the bull case on stocks. >> when everyone is on this race to the bottom, who can get more bearish and have a more outlandish forecast, that tells

you, sentiment, different ways to measure it, global financial prices slows and no matter how bad you think this is, that's not it. inflation fever is beginning to break. you have corporate consumers that are for now remaining remarkably resilient. it is the fact of the matter today, the u.s. economy is re-accelerating right now. kriti: joining us for more insight is the cio of morgan stanley wealth management. thank you for joining us. is there a bull case for stocks? >> i'm not as convinced right now. obviously, we've seen a sequential improvement in the economy and economic data, stabilization in things like manufacturing ism and things like the labor market and unemployment claims, absolutely. but the reality is we are just

coming into the season, as my colleague wrote this morning and company management is going to have to do the confessional. we are talking about negative operating leverage going into 2023 as the u.s. economy slows from what has been a nearly double digit nominal rate. what we need to remember is we've been in a backdrop where inflation has been running at seven, 8, 9 percent. those kind of inflation numbers help to boost your nominal sale. when you look at strength versus

the rest of the world, which almost universally is weakening versus the dollar. john: many of these important topics are ones we've had a chance to think about for some time. our all sectors created equal? if we retest the previous lows, is not all business factored into valuations? perhaps those a little more vulnerable as the mood starts to dampen? lisa: i think you ask a fantastic question. i think the market has taken a narrow, pedestrian view of what is defense and loaded up on a lot of household sector growers. some consumer staples names, our view is some of those are the exact spots that are going to be vulnerable. areas of the market that have sold off very hard, including

energy, including small-cap stocks and pockets of health care are where there are some very interesting buys. kriti: what do you do here then? if you start talking about perhaps a recession on the horizon rate bear case to be made, what does it take to turn the market story around? lisa: i want to be really clear. we are less constructive on the stock market but we are not worried about an imminent recession in the u.s. economy. that's exactly why we are approaching our portfolio construction with a very broad active stockpicking approach. we do think we are going to be in an economy that avoids recession, that experiences modest growth, but it is going to be more in the services side of the economy, in things like health care services, financial services, some of those capital

spending linked areas like industrials, like infrastructure, like energy. you want to be stock pickers into any incremental market weakness and those companies where expectations have been set low and have supportive and constructive valuations are where you want to be. john: just to build on your comments about energy and the weakness we have seen in some of those names, in canada, we have a large weighting for the stock market toward commodity stocks. are you starting to think about leaning beyond the u.s. in terms of sector calls given the environment we are in right now? lisa: yes. thank you for bringing that up. in addition to being active stock pickers in the u.s., we want to lean into global diversification here. we know given the moves outside

the u.s., the impending recession fears in europe, the continued struggles china has had that it is the average investor inclined to abandon those markets, especially as we have gotten into an environment of a strong u.s. dollar. we are encouraging people who have a patient value by us go the other way and to start looking for good opportunities in that european market, in the japanese market, in emerging markets, including china because we think at some point in the first quarter of 2023, the u.s. dollar is going to peek. when that happens and the dollar weakens, you end up getting a tailwind and we can see some recovery out of china, some stimulus and some improvement in

the energy picture in europe. that is where some positive upside surprises might come. kriti: always a pleasure to have on the show, we thank you as always. u.s. energy prices spilling over into the currency markets. we will connect the dots. that conversation, next. this is bloomberg. ♪

♪♪ energy demands are rising. and the effects are being felt everywhere. that's why at chevron, we're increasing production in the permian basin by 15%. and we're projected to reach 1 million barrels of oil per day by 2025. all while staying on track to reduce our carbon emissions intensity in the area. because it's only human to tackle the challenges of today to help ensure a brighter tomorrow.

>> looking very closely at political pronouncements and that u.k. does face some serious headwinds. we've got a big balance of payments challenge. the pound has had a tough time over the last six months. i think there is a very strong need for the government to provide not only reassurance to businesses, but short-term help to get through this winter, but to markets that it does get the fact it cannot keep on printing money to bail out people from these challenges. john: this is bloomberg markets. that was the former u.k. chancellor speaking earlier about how the markets are

keeping a close on the global action being taken to address the economic turmoil. let's get some insight on the energy crisis in europe. joining us is kevin crowley along with cam price kevin, i want to start with you. on any regular day, you have your plate full. it's hard to ignore all the moving parts tied to europe. what would you say about where we are in the energy story right now? kevin: europe has been increasing exponentially on the prices for natural gas. we are expecting government intervention to come at some point and it seems like now is that point. the u.k. today announced 130 billion pounds worth of consumer protection, to freeze energy

prices, which is a huge intervention. there's another further 40 lien pounds worth of production for small businesses and we are expecting other european countries to follow later this week. this is where the pedal really hits the road here, where government really has to come help out consumers and businesses because this is a crisis that can send the euro into recession and has the potential to send the continent into a depression. today, we are seeing government say we are not going to stand for that and throwing the balance sheets hind this crisis. kriti: kevin lays out a pretty grim picture and now we are

talking about parity not just for the euro but the pound as well. to what extent has the currency market been driving the story here? cam: it has been a big story for months. what this has exacted on the europe, the u.k. and other countries as well, even looking further afield to asia, it's a significant variable in driving currency weakness. there's a sense authorities in europe have to do something, and as kevin said, we've seen the first iteration of this in the u.k., but there is no such thing as a free lunch. the government can't just wave a magic wand and dispense goodies to everyone to offset this crisis with no externalities.

when you talk about things like a government stimulus in an inflationary environment, the exact opposite is to mitigate the consequences of inflation. that is going to have an impact on broader markets. in the case of europe, we are talking about price caps or trying to dictate the level prices trade out, that becomes difficult because it can have supply consequences. as the u.s. found out 50 some years ago when richard nixon imposed price controls here in 1971. john: for companies having to wait and see and in the interim deal with all this volatility, the idea of potential margin

calls seems to be increasingly getting attention in the marketplace. anymore you can tell us about that? kevin: recently, 1.5 trillion of margin calls being affected here, this is an estimate by norway's state run oil can any -- state run oil company. it speaks to that government intervention. governments around europe are going to have to intervene as they trade in the market because there is more collateral needed in natural gas and power prices. so this is an effort to avoid the drive in liquidity and, as we know from the financial crisis, when liquidity dries up is when everything starts to collapse and the eu is focused to make sure we do not have a

moment like that in the gas and power markets. john: those are some big concerns and we will be watching closely. we have to pick up this conversation again. thank you for joining us. we are going to move from the energy story after this break to some news in the world of finance. pcw naming its new ceo. we will tell you why this move comes at a pivotal time for the bond giant, next. this is bloomberg. ♪

john: this is bloomberg markets. time for today's for what it's worth -- we are looking at the number 220 billion -- that represents the assets of tcw group. the firm hiring longtime goldman

sachs executive kenny koch as its next president and ceo. let's bring in our wall street watcher, sonali basak who has been covering this news. in terms of this sizable announcement, how surprising is it? sonali: it is pretty surprising. not in the sense tcw wasn't expecting to have a new ceo. we knew david lippmann would be stepping down. but the move was surprising because she was recently elevated in terms of her role at goldman sachs and she has been at goldman sachs for 20 years. folks who worked in the asset area for that long, it's not a surprise. when she becomes a rare woman to lead a firm of this size, it comes at an interesting time in the asset management industry overall where there has been a lot of movement across and among firms. kriti: four tcw in particular,

why is it pivotal time? sonali: we mentioned david lipman said he would be stepping down but you have one of his top bond managers saying he would step down, so you have a change in talent, a lot of new executives at the firm and assets, while it is $220 billion, it's one of the largest mutual funds, certainly in the fixed income world. but assets are down just a bit from their peak. she will be looking to grow assets once again. she ran a $300 billion equity portfolio and then some at goldman sachs, so her growing tcw will be an interesting time ahead. john: speaking of goldman, this is not the only big news we are hearing. there top recruiter is also on the move. sonali: there were two announced archers. one only joined about three years ago and was part of the firm's management team. goldman is not alone in the

musical chairs we are seeing. there still a lot of movement on wall street when it comes to jobs and it's interesting to see it happen at the highest level of the firm still. so it will be interesting. this is a man who is there to help on recruiting silicon valley and was responsible for a lot of the changes you saw at goldman when they had done a lot through the pandemic. kriti: let's get a quick check on the markets because once again stocks are on the move. we see the s&p 500 down .6% and the story is all about currencies. the dollar still hovering at those record highs. john: whether we saw a technical bounce and are back to the interest rate story, we will see. after three weeks of challenges for the s&p 500, as we head into the afternoon, we have seen that weakness which we will continue to watch. this is bloomberg. ♪

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ritika: britain's new leader is promising a major package of support to ease the pain from rising energy bills. the prime minister spoke out for the first time since taking office. >> i have a bold plan to grow the economy through tax cuts and reforms. i will cut taxes to reward hard work and lead business lead growth and investments. i will drive reforms in my mission to get the united kingdom working, building and growing. ritika: she is expected to appoint a cabinet and ministers later today. below to mayor zelinski urging wall s