jon: i am jon erlichman. welcome to "bloomberg markets." kriti: i am kriti gupta. we have a sell of on our hands. the s&p 500 down 4/10 of 1%. it was actually in the green despite bad tech earnings overnight. alphabet and microsoft dragging down the index. the nasdaq underperforming. down over 1%. bonds catching a bid. as you have worries of recession and a slowing economy it creates

a bull case. look at the 10 year yield. down about eight basis points. there catching the bid. with yields lower the dollar is weaker against the canadian dollar. what is interesting is the bank of canada talked about raising interest rates only 50 basis points. the expectation was 75. we will dive into the nitty-gritty. brent crude trading up 2% on the day. jon: you talked about that tech wreck. let's dive into the names contributing to the weakness. microsoft, concerns of the outlook for the cloud business. those shares are down close to 7%. bigger decline at this hour for google's parent company alphabet. worst day since march of 2020 as the worry of the digital advertising outlook continues to play out.

spotify down 12% today. yes, they continue to add subscribers but there are profitability questions. and then we wait for this earnings train to continue chugging along after the bell with this streak getting ready for meta to report. we are looking at that stock down another 5%. kriti: a key part of those earnings are the fx had wins. a lot of that coming from the bank of canada. unexpectedly slow the pace of interest rates. take a listen. >> we need the economy to slow to rebalance demand and supply and relief price pressures. we expect growth will stall the next few quarters, in other words, close to zero. but once we get through the slow down growth will pick up, our economy will grow solidly and the benefits of low and predictable inflation will be

restored. jon: let's bring in theo r.g. . the canadian economy getting a dovish check mark today. not sure if that is ultimately the way things play out, but what was the tone of what the bank of canada had to say today? theo: it was a pivot from the bank of canada. very dovish for the economy and talking about how the economy is flirting with recession. hardly any growth the next 12 months or so. they decided they are going to slow rate. we expected 75 today which would have been the same as we got in september. they increased rates a full percentage point in july.

we are getting a central bank starting to gear down, talking about coming to the end of its tightening cycle. tiff said we are not there yet and rates will increase in the coming months, but they are hinting this very aggressive hiking cycle, one of the most aggressive in the history of the bank of canada, is nearing its end. kriti: we know around the world there is starting to be friction between the monetary authorities and fiscal authorities. what can you tell us about the reaction from canada? theo: we have not heard reaction from the government yet, but we have been hearing some criticism within political circles of the bank of canada's policy. opposition lawmakers complaining the bank of canada's tightening policy is imposing too much damage on the economy. i would imagine that the

government of canada, which is the liberal government, is quite happy not to have to worry about with the impact of higher costs could mean for indebted households. that is the thing with canada. they have some of the most indebted households anywhere in the world. this will be seen as relief for many of them. jon: certainly, the debt loads have grown since the financial crisis over more than a decade. thank you. theo argitis joining us in ottawa. let's bring in charles st-arnaud, former economist with the bank of canada and now working for alberta central. we have talked about the idea of central bank pivots but it feels there is a possible roadmap to be watching with central banks. the idea of gearing down, you shift down and wait to see where things go from here.

what was your reaction to this decision today? charles: on our side we were expecting 50 basis points. we were not expecting they would be as aggressive. for us, it was not a big surprise. we are getting to a point where we have had very big increases in policy rates since the beginning of the year in a very indebted economy. it is time for the bank of canada to take more of a wait and see approach or get more data dependent. that is what they are telling us today. kriti: one of the things that seems to be some sort of decade-long ptsd on the side of the border is the idea that in the 1970's, this is the mistake paul volcker made. they may be pulled back to soon. do you think that fear will resonate in canada? charles: the fear could be there. i think it was explained well in

the press conference. there is the risk of doing too much too quickly but also doing too little. if we look at policy, we are well above the neutral rate which the bank of canada thinks is between 2% and 3%. may be closer to 2% given the debt in the economy. we should start to see the impact on growth. but the bank of canada is not telling you they are done. they say, do not expect 75. we will continue to increase but expect more 25 basis point increase depending on where inflation is going. jon: some people saw the headline and wondered whether you might to see similar language coming from the u.s. federal reserve. as you look at the differences between these economies, how would you answer that question? charles: i think in the u.s. there is still more to do.

they are probably still looking at more increase. they do not have the same debt in housing that we have had in canada. the u.s. has less rate sensitive then we are. the fed might be able to increase then we are seeing in canada. kriti: what about saying, commodity prices. canada thrives when the commodities thrive. if you look at wall street estimates for where oil is going to be, wheat prices, minerals and metals, they are higher in 12 months. should that not be positive for the canadian economy? charles: it is positive. but it is not necessarily impacting the economy as broadly as expected. if you are in a province or resource rich province, like

alberta which has huge reserves in natural gas and oil, you are benefiting. if you are based in ontario or quebec you have to import, it is negative for you. i would argue a couple of weeks ago energy in terms of trade shock we have had is probably less positive than it has been in the past on candida. a lot of those revenues, yes, they have doubled revenue but a smaller share of those are staying in canada because 75% are foreigners. that trade shock is not happening and it explains why we have not seen the canadian dollar appreciate as much is expected. jon: charles, the path ahead with the rates might be cooling but in terms of when you might see, for example, a central bank like the bank of canada actually

lower interest rates on any signs of a cooling economy, when would you see that happening? charles: i think in terms of the right path it is guaranteed. we should expect at least another 25 basis points increase in december. and it could be likely another one in january. it depends on if we start to see core inflation turning around and the brought inflationary pressures being reduced. but i would not be surprised, depending on how fast the economy slows next year -- the bank of canada is saying the economy is stalled but they do not want to say the r word. next year we will probably have contraction in the first and second quarter. i could imagine we could see some tweaking of the interest rates may be starting july of next year or october of next year. i am not expecting a new easing cycle.

may be just small adjustments to the downside, maybe 20, 25 basis points, 50 max. jon: thank you for your insight. we continue to track the story. charles st-arnaud, chief economist for alberta central and former economist with the bank of canada. we will take a quick break and when we come back we will hear from the ceo of mobileye. this is bloomberg. ♪

kriti: this is "bloomberg markets." i am kriti gupta alongside jon erlichman. mobileye surging after making

its debut. we turn to ed ludlow for more with a very special guest. ed: i am delighted to be joined by the ceo of mobileye amnon shashua. you have gotten your company into millions of additional vehicles before the end of the year. amnon: that is already booked. our plan is to view the spectrum for full autonomous driving as a spectrum of solutions. we started with a basic solution which is our silicon connected to cameras along the car and parking cameras. all this is being used for an eyes on, hands-free driving. and then for modular expansion by adding active sensors to create eyes off solutions.

for example, you start with the camera at the front facing camera and you can have eyes off autonomy on highways. you can add imaging radar and condensed traffic. you get a robo taxi. it creates a spectrum of solutions and we have already been shipping the system, 50,000 cars already, with the system. ed: how critical is china to the growth story for your business? do you see the business growing with pace in china, which is a really important global auto market? amnon: we look at china and there were two attractive things. one is the market itself. market share has been going up over the years. but more importantly, we found china is slightly more tech forward than the rest of the

world. we took advantage of putting our latest innovation starting in china. this system with 11 cameras is called supervision. it is already shipped to china. generating interest with other oem's and in the past five months we started getting significant traction with six oem's already designed into the base system. ed: what about doing business going forward? we know about the trade restrictions of tech in china. do you see the need to build new partnerships in that market? amnon: we have multiple partnerships and that market. we are less concerned about our product. the i chipq is not a supercomputer. you cannot write any code you like. it is built with specific purpose.

we do not see our chip at the forefront of export controls. we are focusing on building a great product, creating partnerships, using the tech forward approach to then migrate this to outside china. it is proving itself quite successful. ed: you founded this business in 1999. it is kind of coming full circle but intel retains controlling interest. is intel's controlling interest an advantage or hindrance to growth? amnon: i will say for the past five years under intel or the best five years of mobileye's life. we had 800 employees from intel coming mobileye employees. we got imaging radar, fmcw, i had full control of the company, no stress in managing the company. going forward should not be different.

we have a bit more now on my shoulders, on my team's shoulders to run a public company, but in terms of the relationship with intel, it is positive and we will continue to be positive. ed: you and i have been talking about this for years. do you really see a business where mobileye makes money from true autonomy? when does that happen? when does mobileye start making money as a service provider and not just a maker of chips? amnon: what has changed in the past five years -- not changed but more nuanced -- when you talk about autonomy, it is not just robo taxis. there are competitors focused on robo taxis but we see something much more nuanced. what i mentioned before, adding more active sensors. a robo taxi is just one end of a

long spectrum of solutions and we are working on it. we are at the final stages of certification of our robo taxi. we have about 10 poc's with public transport operators next year that we made public a few months ago. we have a fleet of 100 vehicles dedicated for those poc's and the purpose of those poc's's to build a business model that makes sense for us. we do not want to be capex heavy. we want to supply the self-driving vehicle and our partners will do the service themselves and could be using our software. but they have the expertise, the financial know-how of how to manage fleets of vehicles. it is not an area we want to be active in. ed: what recession risks are you hearing from the automotive industry?

your tech is already deployed in these markets around the world. amnon: the vehicle production reached its peak in 2017 and then it went down. we took all of the conservative projections going forward and even within those conservative projections, the penetration of driving assistance is growing all the time. in 2017 it was 20%, last year it was 50%. our market share is growing. we see continued growth going forward. ed: our thanks to mobileye ceo amnon shashua. stock trading 28% above the ipo price. jon: thank you. that was ed ludlow with mobileye ceo amnon shashua. it has been a challenge in the market for tech stocks today. we will dive deeper into the earnings story as this session rose along. this is bloomberg.

♪

>> hoping the fair market will be over in the first quarter. this is subject to revision. if the market starts to trade-off again in the s&p breaks down and blows through on the downside, we will be bearish again. kriti: this is "bloomberg markets." i am kriti gupta alongside jon erlichman. that was mike wilson speaking earlier, known as an uber bear. let's bring in just minton -- jess minton. we still have a few more tech earnings to get through. jess: after the bell we will

hear from facebook and then we have amazon and apple after the bell tomorrow. if you look at meta and amazon, they have missed on revenue in the past four quarters. this is whenever they start reporting on the back of the ones from microsoft and alphabet yesterday. microsoft posted its weakest quarterly sales growth in five years. and then you see alphabet's side and it reported three straight quarters of disappointing eps per share. if you look more broadly at technology today and what is happening, a lot of it has to do with chipmakers. if you look at the philadelphia semiconductor, down 40% this year. that is putting it on track for the worst annual decline since the 2008 financial crisis. i was looking at a strategist and he thinks the philadelphia

semiconductor industry things it could be close to a bottom. but he wants to see another one or two more rounds of earnings estimates cuts. when you're looking broadly at technology chipmakers are weighing on that sector. kriti: technology and nvidia has the dual role. takes its cue from texas instruments but also that major heavyweight. thank you as always. always a pleasure to have her on. she is also deputy tl of our stoxx coverage. major promotion. she is bright for sure. you are still seeing red on the screen. not just from the tech earnings but boeing is dragging the market down. as long as you see earnings reactions move lower and lower, boeing bringing down the market. the s&p 500 down 3/10 of 1%. the nasdaq down 1.5%. that pain isolated in the tech space. the 10 year yield around 401. the bond market bid is still

coming in strong. the dollar index is weaker by 9/10 of 1% and brent crude treating with -- trading with a $95 handle. for jon erlichman, i am creating kriti gupta. this is bloomberg. ♪

announcer: 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 the close with two hours left in the trading day. tech taking a tumble but resilience elsewhere. romaine: resilience is a mixed bag. you talk about why tech is taking a tumble. earnings yesterday out of microsoft a