>> welcome to the bn n and bloomberg audience. i am mark crumpton with first word news. today president biden shared his thoughts about canceling the countries that limit in remarks at the white house. >> repealing the debt ceiling? what does that mean? we don't have a debt limits? no, that would the irresponsible. >> the president and republicans are heading for a showdown over raising the u.s. debt ceiling next year. if the gop takes control of congress. treasury secretary janet yellen is among democrats who back the debt limit's permanent remail. tobias first room -- so the

government had taken many steps for turkeys requirements to join nato. say "it is our hope that turkey will recognize this". turkeys president says he is willing to meet to discuss the country's. still, he was to address security concerns more. one of china's top chip designers has already navigated through u.s. export restrictions. this manufacturing company will produce advanced silicon. u.s. security measures were aimed at limiting china's development but -- believes it's trips are not covered by the sanctions, according to people with direct knowledge of the matter. the impact of the covid-19 outbreak will have long-lasting impact on rural thailand according to an report from the world bank.

poverty decreased from 50% to 6.8% but is now increasing since 2020. this comes amid the covid crisis which is paying -- playing a factor in a rural income diagnostic analysis. global news, 24 hours a day on air and on "bloomberg quicktake", powered by more than 2700 journalists and analysts in over 120 companies -- countries. i am mark crumpton. this is bloomberg. >> i am jon erlichman, welcome to bloomberg markets. >> i am kriti gupta. green on the screen with the stock market. a rally. 1.7% is potentially the best week going all the way back to

july for the s&p 500. this is thanks to the tech names rallying even in the face of not so great tech names. don aaron men will dig in that just a bit. -- jon erlichman will deal with that in just a bit. you can see the bond market is moving in a very big way. the front end of the curve getting big and perhaps moving in the opposite direction of the dollar. the dollar is actually weakening against the yen quite a bit. the dollar-yen, 147 is what we are talking about. that is going to be crucial. the ripple effects of the yen and to the dollar commodity market is also crucial. this is how you know a big player is involved in the market. the boj. you can see this because of a giant job. we are going to die -- dive into all of this. >> we certainly want to talk about some of these different flavors we are getting out of

industries that have been reporting earnings this week. on the one hand, star performance from services giant schlumberger. this has picked up over the course of the year because of where oil had been so they had standout numbers. hospital operators are different stories. tenant under 238%. everyone has been talking about the market reaction to stepchild parent snap think quarter, digital advertising has been -- staff chats -- snapcahta's parent. talk about standout numbers from at&t. today, a negative action to verizon which may play into the competition with the telecom industry. >> something to keep an eye on. we had the chance to speak with stephen mager about the recent surge in 10-yield.

>> the valuations today show -- on the recency bias. i can honestly believe that yields will keep going up in the near term but you can also build a possible scenario that there is a hard landing and the yield should be less than 2%. you can built that scenario but the question is what ranging do you put on that. there is a high probability of the fed going to five and staying there forever which does not seem plausible. >> speaking of the fed rates pass, san francisco's president mary daly spoke and said "what you see is a growth below trend in 2023. gdp growth below trend in -- policy tightening that raises and then holds because we have to keep the rates at a tightening level in order to fully reestablish price stability".

let's dig into the commentary. the rbc capital markets chief is here. let us start praying and we have had a continued flood of commentary from fed officials. where did the commons land at the end of the day? >> i would say that for starters, it is a bout time. i have been traveling a ton recently as i am sure a lots of other people in the economics world have. there is so much they urgent opinion out there. people hold very different views. maybe more that i have seen as late. those who had the same exact view where the fed. everybody has an saying the same thing for weeks. they are all corralled into a hawkish camp. i think it is at long last that we are starting to hear fed

officials break away from this idea, talking about the i dia of finally slowing things down and get to the end. it is good for them to say this out loud into get the nuanced commentary going within the ranks of the fed. but, there is some area of economic protection and there has been a reflection of that. if you the market needed to hear this but bullard and daly are expressing views we tend to agree with. we think this comes to an end at the end of the year. we can easily see another cycle start later next year. >> tom, our very own anna wong in bloomberg was quite puncturing -- quite contrary and when she said 5% would be the policy rate in july. his 5% still going to be the peak? that still seems to be the

consensus but could that change in the next week or month? >> it could change fast. we are right now 4.75 on funds as terminal. i have been saying to people that if we are wrong, the bigger risk to us being wrong is not that we are wrong by a hike or two. it is that we are wrong by several hikes. i think that is probably -- at least up until daily -- daly, and bullard, i think that have been a fairly reasonable risk given all the commentary we heard from the fed but as we have been saying, we think that for the most part, fed officials were trying to get on the same page as this relates to the narrative. the reality is economic activity is slowing down and the clip you played leading into our talking here is rights. the risk to the backdrop is you

potentially see job loss that year. economic activity within slowed down much more than is appreciated. there the notion of a short, shallow recession. is it really going to be that short? i can find to shallow but i am not sure how short it would be. from my perspective, i think that you could easily get to 4.75 or five. i do not know if we can make a massive distinction between the two but the bigger weston now and what the market needs to start asking about is windows the first cut come? that is the next thing to change from the fed. they keep saying we are not going to cut, we are not going to cut, then all of a sudden they talk about it. same thing with raising rates this year. they were not going to until the that. >> we will see what happens on

the communication front. let's talk about mainstream things that tieback to wall street. for example, housing. it is a big issue in canada as well. people felt like prices were getting out of reach and low interest rates play a role in that. arguably there is less affordability and they worry about the road ahead. >> i wrote a couple notes about this. housing is in recession and has been in recession. we think it will remain in recession over the bulk of 2020 -- 2023. housing will have a hard time. a fair framing of housing is the thing of housing is it is always about the average buyer. the average buyer is completely priced out of the market. to get affordability back to where it was previous to this massive run outside a mortgage rates we have seen, there are a couple different mechanisms to get there but one is you need to see how prices fall by 30%.

we expect that prices will fall not by that much. this is a long way of saying that housing is going to have a long time over the coming year. >> tom porcelli of rbc capital markets, i could talk to him for a whole day. we thank you as always for your time. take a corporate look on the recession risk. american express shares tumbling after reporting that its provisions for bad loans were higher than expected. bloomberg's caroline hyde spoke to steve squaring who joins us now. thank you for joining us. we had an interesting conversation with the ceo. to what extent should we take that as a bellwether or massive red flag that we are indeed headed for a recession soon? caroline: he is not seeing that. he is not seeing red flags. what is a guy to do? he raises and beats it his shares fall.

this is a company preparing for any pivot that might be needed but as long as there are not white-collar job losses, he is not fearful. to the moment, he says jobs have rose -- are still rising. just after the numbers came out around 7:15 this morning, he is trying to reiterate that american express is a different kind of consumer. you are seeing the likes of blue-collar workers who may start to see weakness and feel the pain with that inflation but his white-collar, more high-end spender, does not change their purchases during inflationary pressures. when they will change their purchases is when they start to lose their jobs so that would be something that gets them worried. he is saying it in the moment column -- moments, "strictly there is no correlation between our customers and the stock markets activity at the moment. he says, we are not representative of the u.s. economy. it is a very high end customer".

to the moment, he is not seeing it. >> it is interesting to hear these comments you on earth during your conversation. it may be easy for us to say this is the reaction to american express versus wall street banks. it almost feels like a story similar to the airlines. people have been out. imagine for american express that the fact people have been traveling again has played into his beliefs. caroline: and particularly, he says even internationally that you are seeing travel spending go up more. even in europe or you may think that the economy is going underground. people, especially the american express consumer is paying. from his perspective, the uptake of new platinum cards was as -- at a record level. this is a company that to his mind is firing on all cylinders. he is not laying off any of his

particular employees. the dusty resilience when it comes to travel and spending. alas the question he asked me. have you trade your spending habits with inflation yet? >> i would like to come see you in new york. i would like to get out and travel so yes, the answer is yes. caroline: you would like to, have you stopped buying that ticket yet? >> i think i have enough food supply from the pandemic. so there you go. caroline: and enough toilet roll on site but that is his point. we are seeing softness but not in his kind of consumer. >> certainly something we are going to keep an eye on. we thank you you us always. elon musk's twitter deals facing another potential headwind from the u.s. government. this is bloomberg. ♪

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>> this is bloomberg markets. i am kriti gupta with jon erlichman. a massive moves in the japanese yen. it hit 152 and then we saw a massive lower down to 147. japan has intervened to prop up the currency. we kind of knew this would happen to some extent but it was just a question of at what levels. what is your take on this move? >> we obviously broke 150 pretty recently. kind of jiggled around under this. then overnight, we moved through this pretty decisively. it looks like there was speculative activity and people stopping into dollar longs which the left the market a little more exposed.

the boj has come in at a surprising time. they level is not surprising but the time was surprising. they have been pretty aggressive in this, showing their hand in directly intervening in the market and we have had quite a large reaction in late new york morning and into the afternoon. >> how does this situation continued to play out? what do we have to watch for going forward? >> the issue is the underlying drivers of the exchange rate kind of still ¥.2 weakness. this on the capital account side. we have the fed continuing to be hawkish and u.s. rates continuing to move higher. then we have the boj pursuing what seems like an insane policy of capping jjb yields at 25 basis points. are the current account side,

japan is running close to a record trade deficit which is contrary to the normal state of affairs. to date, there has been little evidence of japanese investors wanting to admit overseas earnings which could potentially be some support for the yen. if they see the same differentials we see and the same trend that we do. until something changes in terms of the relative market policy between the u.s. and japan, japan's trade account or behavior of domestic investors, there is still a real tailwind for yen weakness. all the boj can do is ensure there is not an undue amount of speculative activity exacerbating this trend. >> 20 seconds on the spot. 152 is what grabbed intervention this time. is that the level for next time? >> i do not think so because the pattern is the interbeing, you

move lower, consolidate debt, and grow higher. a more likely level is 1.55. i suppose there is a -- in the entered see -- the currency markets. that speculator is getting sucked in which is the most likely timeline. >> cameron crise, thanks a lot. it was a short-lived rebound for canadian retail sales. rate hikes continuing to get back in consumer demand. we will discuss that next. this is bloomberg. ♪

>> this is bloomberg markets. i am jon erlichman alongside kriti gupta. another chapter in the twitter saga. we were in reporting the white house is waiting security views of elon musk's venture and his

plan to buy twitter. the twitter stock chart is starting to look as awkward as my dancing because there are various layers of confusion prayer walk us through what is happening. >> sources tell us various agencies are motivated by elon musk's comments on the war in ukraine and how spacex will handle starlink's use of ukraine and his posts criticizing twitter -- the government. they want to look at the twitter purchase with outside investors. we can debate this and it is important to state the white house issued a statement friday morning saying they are not aware of any security review of elon musk sore his business. -- elon musk or his business. >> we have this conversation with the u.s. government when it

came to tiktok and the idea of national security threats. there is thought in the market that could this inhibit the deal itself. what do you think? you have to -- >> you have to go off the share reaction, not just the immediate plummet. also the reaction from the white house when they said there was not a security review. fantastic having of this chart. this is a soft indication of where they think this will go. we clearly did not see this coming. the key piece of bloomberg reporting is thinkers are both sides of this deal are working diligently to get this done. the paperwork is done and the bank is getting ready to issue the debt to musk so this was blind siding us. the administration is looking into this asset a broad master that -- for our sources tell us that this is the early stages. they do not know what they will do and the white house says this not happening. >> coming back to the bankers

and the lawyers, in terms of where the stock is trading right now versus the deal price. does that complicate matters? >> no, elon musk has been open that he is overpaying for twitter. and lots do not see twitter as a $44 billion company. this has been a horrible year for social media stocks. the fundamentals have been dragged out from them like a rug. it complicates this but we are moving towards a deal. t four cents a share is what we expect and there is a deadline. let us see what happens. >> something we will keep our eye on. as always, twitter shares are down 4.6% on the day. we started off the day down somewhere between 8-10% this morning. broader market, green on the screen. the s&p 500 is higher, pushing

up 1.8%. the 10-year yield, 4.22. bloomberg markets the close is next, this is bloomberg. ♪

>> the most crucial moments in the trading day. this is "bloomberg markets: the close" with caroline hyde, romaine bostick, and taylor riggs. caroline: we are kicking you off to be close. two hours left. can we you turn again? the whipsaw is real. romaine: this is a major whipsaw. despite all the volatility this week, you're talking about a major god -- major guide. caroline: