>> demand seems to be recovering too fast for supplies to catch up. there is a case for the ecb to hike into the recession. >> we have to make some very painful decisions. >> we are calling next year, rolling recessions in the global economy. >> we are at a position when the fed can decelerate but we are not there yet. >> everyone is making it up as we go because we have not been in this position for many decades. >> "bloomberg surveillance" with

jonathan keene, lisa abramowicz. and tom keene. >> amazon taking. apple just holding up. >> what it is is this is accounting 302 on friday. this is more advanced. it is about effects -- fx. if you take out the fx adjustment, it was not all that bad. >> can you tell amazon that too because it is down 13%. >> the international is a perfect example. sales internationally were up 20% but after fx, they were slammed 5%. >> lisa, what surprise you most? the number of sales and earnings or the way the public reacted?

>> how much is just the magnitude of the moves what comes out in time when we have big in so much of where the nasdaq has been? it is not just in the earnings for this quarter. the forward-looking is gloomy, even for apple. >> for amazon, it is really gloomy. this is their worst forecast for the holiday ever. >> a declining user base. how much can you actually see this before you have to change thank to -- fang to ang and then just "ng". >> i do not agree with this. to the bundled in together. do not put meta with amazon because that is a train wreck. there is an enthusiasm if you

look out beyond legitimate gloom that this is talking about. does the fed filter into this analysis? >> are you giving the southside credit because i took a step shot last night before it changed. one sale on amazon, 55 biased, two holes. >> they are leading the way on amazon optimism but what this comes down to is strong dollar. can you imagine if president trump was president right now? he would be out there screaming about effective strong dollar. the ceo of apple + was screaming about effective strong dollar. 480 seven basis points next quarter. >> let's talk about hot inflation in europe as well. equities look like this on the s&p 500. negative on the s&p. we are down lower. down by 6/10 of 1% -- 0.6%.

just north of 4% on the 10-year yield. german inflation comes out in two hours. based on the original figure so far, that is going to be ugly. >> what i mentioned yesterday is then the data. they are incredibly data-dependent and what you did not see yesterday was a calendar structure for ecb because they do not know with the inflation numbers are going to be out one meetings, two meetings or three meetings. >> i never thought bank -- fang would trick you that much. >> i said it equipment leasing five times i went down in flames. this is hard. you have to go beneath the line data and just for the shocking list -- the shockingly strong

dollar. i believe it was apple's, if i am wrong, do not get angry, but the fx adjustment was different from nikes. >> the gloom is off the mark -- are you angry? >> the gloom is off the mark. >> it is some of them which is why it is "ng" and not fang. >>'s early last data points before the election. that is how i will cast this. u.s. employment cost index for the third quarter maybe one of the most important data aspects we see. if you see a real acceleration of ages and the cost of getting people in the door to work for you, that will make it difficult for the fed to do a work down or pivot.

we also get income spending for october at 10:00 a.m. the importance is how are people feeling ahead of the election? are they getting more gloomy because of the earnings and because you are seeing gas prices go back up vacco i hate to use this as a bellwether of whether people feel good or bad but that seems to really connect. we are getting chevron perhaps in the next half hour. how much do we see a sense of pushback with respect to buyback and what they invest in. we hear from mike wirth of chevron and scott steinfeld later on today. this comes as there is an investigation of democrats when it comes to the use of the strategic petroleum reserve. >> what do we call this

strategic midterm reserve? or is it the midterm or petroleum reserve? >> strategic political reserve is what that has become. it makes a day with bill clinton look like a walk in the park. can i point out that the bloomberg financial index, eu index, became real restrictive. >> some people thought that was very hawkish. there was a pushback after the buyback that we saw. >> i am looking at the foreign exchange and it is down ever so slightly. to your point, german inflation in less than two hours. >> tony joins us now. we are going to stick with this. walk us through what you think of these already exists morning. what do you think? >> obviously it is fx.

somehow that is a shock given with the dollar has done. the big issue here is, it is really a mess, the fed is raising rates in a historic way to a generational system based on debt to gdp. expect based on demand is weak. that is not the formula for let's go out and buy stocks because it is about to get good. >> as the fed influences these earnings, what do companies do whether it is caterpillars, plus-plus yesterday or google, plus-minus today. how do they respond to a fed that finally likes -- -- blanks? >> let us talk about the pivot. that is a good excuse for an oversold.

we had a tumultuous first half, followed by a similar rally, and the recall this fall which is what we talked about the last time i was on the show. now we are in the year and rally. this is where it is pretty much an evaluation-driven fed news. good news means bad news because it is a toughened fed. now we are in this sweet spot going into the year end. it means the fed might pivot a bit. but also -- ultimately, you go into a bad news is bad news when you have a recession. the tech stock center are all getting so smoked. it is not like they were at a 50 week high last week. they were already down. it is not like this is new.

it is just a realization of what happens with the fed shuts down a leveraged system. everybody wants to channel their interval there. you better be careful you get what you wished for. >> this is the reason why there is a push-who in are to where you see tech being published -- punished. the index and the dow outperforming because it is not necessarily market weight. as part of what we have seen. how much of this is instructive of what is to come because we are seeing people suggests that perhaps the fed will not raise rates as much. is that is or are people ignoring the earnings? >> i do not think they are ignoring the earnings but i think they are beginning to come to the real -- the realization of the earnings.

right now the industrials in the economics that benefit from oils and metals are benefiting and they are holding things up. up until a bout a week ago, the top 10 stocks, monstly feng, but the top 10 stocks in the s&p 500 accounted for -- you have to go back to the early 70 to get anywhere close to that. it is well above where i was -- what you have done is it is not like you have broke but what you have done is broken the back of top 10 which means you are going to have them drift down into lease point. we are down 24%-20 5%.

now is not the time to go screaming short. i do not think it is time to buy until we get the realization of the earnings pick sure. when it is time to buy, i think it is the equal weighted s&p 500 over the market weighted because it is such a big influence that it is now about 28% of the s&p 500. >> we have been seeing that the last few days. the outperformance. tony dwyer. monday, tuesday, wednesday, thursday on the s&p equal weight. just to see this on the bloomberg, inquired by a private tester. i have to admit that even a couple weeks ago, i never thought i would see the day and

here we are. >> you are right. he has not been prepared for this. still, -- >> in our latest reporting, musk -- elon musk is set to take the ceo position. >> he said that himself right? >> that is what he is it has come in shaken. how much is that donald trump? >> we are going to talk about that. coming up.

this is bloomberg. >> keep you up-to-date with news from around the world. with the first word, i have lisa mateo. elon musk the camp putting his amp on twitter. the world's richest person closing his 44 billion dollars takeover on the platform. he has begun firing its major execs. bloomberg's report shows he told -- he plans to do away with -- and hopes that the eurozone can stay

. recession got a boost today. germany defied expectations. >> the country's growth is 0.3%. french gross went from one half of a percent to zero. the bank of japan is standing by its ultra rates. the central bank -- 10 year

yield cast unchanged today. they predict inflation will fall below 2% just this -- it set sales during the current

>> the global economy is looking very soft at the moment. we are seeing 2% global growth. we are calling next year rolling recessions. we are going to see various countries turned down. >> how do you think the president wakes up? i feel like i should whisper the numbers in case here's them himself. 5.50 six. the estimate for .94. chevron absolutely blowing past forecasts. earnings up 9.3 $1 billion. the estimate was $8.3 billion. cash flow from operations $15.3 billion. i have seen stock this year is already up more than 50% -- 15%.

>> its profit is up 84% from the earlier period. who does that in a time and we are in a downturn? the oil majors. what is the response when they are saying please put your profits into the ground and lowering prices. how much can they really have shares in that environment? >> chevron, and little bit of a divide there. a lot of the people we talk to, folks making clear we are not in the middle. there are early innings for the energy. . they move forward in a constructive way. right now, truly excellent bloomberg intelligence. we have a one hour interview here that we are going to squeeze in. i am going to to fx.

you and i were weaned on textbooks with fx. we are clearly sitting on an fx effect of 8%. how should investors adjust to that? is it a one-off or is there dollar persistence? >> we look at a region and we see how is the country doing in that particular region. when it comes to this level of effects of fact, it has a derivative impact. people in different countries start to look at do we have the ability to buy that product? i think apple products are probably facing efforts it japan. >> yes, but if they could buy the starter. >> is amazon, which you are arguably a world expert on, do

they fix the cardboard box business by making it more powerful and raising prices in the amazon world? >> if amazon does that, it will not be a problem. the slow down in the cloud and started to make -- the cost of the cloud is going up because of high energy costs and inflation. we saw that the costs were not rising at that time. this is really bad because there is cost only side effects. >> people already brought that is are very supplies -- surprise. even with that, they are set to eradicate $100 billion off. >> i would say that even i had

built in my own expectations of a slow down with microsoft and amazon. there is just a certain standstill of certain businesses that are not operating at the same level they were. that's is what's a company like microsoft that has the globe -- growing around 15%, will only grow around 8-9% next year. >> we are watching the deflation of the tech bubble. is it almost already done? amazon has to focus more on the cloud and stripping back the hiring they have done. apple is a toss up between a luxury company and one that is stable. >> one of the things i would say is over the next three quarters, we were to expect growth as we slow down. i think we'll find out over the

next three-four quarters. the real kicker for us is the -- all the demand we are losing right now comes back very strong. the reason we are worried about this is the markets are so large. we saw the same thing during the pandemic. the growth trends actually improve after the pandemic will be follow the resurgence of economic accuracy. frankly speaking, it is just a matter of a few quarters. >> anurag rana, what of the best, of bloomberg intelligence. >> they moved $10 or 100 -- or $20. it is still up 35%-ish on the year. our constructive set is a lower price target.

>> the average price faced on my screen still about 180. >> we have talked about apple saying they continue to outperform even with other piece -- other people being naysayers. with the to sales, i wonder about the issue of dollars transforming into other currencies and not having pricing power. how much is it that people in other nations are flat on their back and it is getting harder to sell? >> there is sort of a mystery. >> but also in china, we heard they try to cut prices. how do you rake out a pure fx arrangement from a lack of demand? >> there are parts of the fx

effect that are not just in the accounting of flows. we were trained 3%-4%, 4% was a big number but all of a sudden the small number is now 8%. double. the question is do you take this as a one-off or is it something perpetual? as we have to learn. >> apple dow up 0.8%. >> will elon musk follow villa -- follow villa -- >> it is for jim keenan. he wanted to have a partner.

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>> live from new york city, good morning. here is the equity future negative. 6/10 of 1% grid apple is holding on. amazon is tanking. we will talk about that in just a moment. the nasdaq is -1.1% on the nasdaq 100. the big names have been big oil. chevron's out a little bit earlier this morning to get it

posted the second highest profit ever. exxon is going one better. the highest profit in the 152 year history. it's across the board here. the stock is up by 2.3%. >> it is always been a little different as a financial institution that runs a hydrocarbon business. it was run like a switch wash -- switch -- swiss watch. but they are all being a boom here, and what i am focusing on is rent crude 9630. can you imagine these companies performing with brent crude revisiting 120. . >> what is that look like? you've talked about that a million times? >> they are picking up global demand. we don't talk enough about these companies global reach. i wonder what effect that will

have. >> the export story is a big part of the story this morning. we've talked about the politics of this. i just wonder how much they lean into the numbers over at exxon. just to say, look how much we are investing at 24 billion. that is a feature for them. for joe biden, mr. president, this is what we're doing. >> you have raised your quarterly dividend, so why are you doing that? >> $24 billion of cap acts and basically it is a rounding error for a company. there is a greater amount of earnings or amazon, procter & gamble, and tessler -- tesla combined. >> i go back to the energy story this year, and i go back to the word of jeff curry of goldman who said this is a revenge of the old economy. when you see the prospect of a investment come you think of the last decade, and they've gone

into technology companies, they have not gone into big oil. they have not invested, and it's dropped off a cliff in many places and we are seeing the consequences of that. >> underpinning this discussion, there is a feeling with one headline after another about the climate change issues facing the nation and how to come up with a planned longer-term. what alternative sources have, so how do you say, we need to invest in more witchel makes a structural impact. they make bigger profits. >> the last decade, exxon per year, 4%, it is all recent. >> it's been a big one. let's move on. as we look at the foreign exchange, we will look at the economics. with a global slowdown, we will look at the institute. thank you so much. are you as glowing as your friend nathan sheets? you give us a global gdp of sub

3% for next year #>> it will be more than that. given what is happening in china, feels like it is not going to happen, and it is a little optimistic because they are revising china down. >> what did you learn from congress with president xi jinping? what did you learn in particular, and what did you learn about hong kong? wax i think every western investor is going to have to reassess political risk because china is turned inward. they will say we care about safety, and the threats to our country. we have to worry that world is gathering around us, and so instead of having heavy policies with strengthen growth and bring back growth and productivity, they have to look at national security and national safety. that will mean a lot for western districts because anyone who goes to china now has to tell the chinese government that we will help you make your company

national champions, and unless we are doing that, we are not going to. >> you slipped into that and it was not lost on us. do you think the southside refuses to downgrade china sufficiently for political reasons? wax -- >> we have had feedback from my friends who have guns to my head now, but there is a lot of pressure for companies in china who need to have a presence because that is the nature of their global business. if you get too pessimistic about china, one of the things is going to be that they get cut out. in order to keep business models going, they have to be cheerleaders or the administration. >> how long will china remain an opportunity for the multinationals? how long can they continue to basically play by the rules as put out there by the party of congress, when they basically said, were not sure if we want you?

wax the companies that are there will stay there. the real question is where is the marginal dollar going? given what is happening, at least for the next several years until the dust settles and we get a clear direction on where it will go, it will go to korea because those are the opportunities. those are the growth zones. china has diverted away from getting growth over the nest -- last several decades. it is a highly innovative privacy for companies. it has been very clear, going forward, we have to emphasize these enterprises. that is an oxymoron to it is a smart model marginal dollar in. . >> since the party congress has ended, we have seen a 9% decline in chinese stocks traded in hong kong. it is a record client in the equity markets. following this meeting, how much do you take this as lasting.

foreign money may not be welcome. it will not return, and it has a much slower growth by -- profile over a long. of time. >> not only have liu agents gone down, for the actual number of dollars is coming up. i think that says a lot about supply and demand. the chinese have said you are not welcome unless you are helping us develop national champions. quite frankly, the desire to be in that market has gone down because xi jinping has made it clear. this markets for chinese companies. if you help us develop a chinese market for chinese companies, coming, but if you're not going to do that, if you're going to do what you are doing for the last 100 years, exploiting us, stereo -- stay out. >> people were not talking about that talk and banks and chatter, but they were talking about dollar liquidity and swap lines.

as we go into swap line updates, it is something tory about? >> keep an eye on what they do with bank liquidity around the world. we are going to see a drying up of liquidity because it has to have strong repo markets. it is a withdrawal of liquidity from the banking system, and not only with liquidity drive up here but around the world. >> is that fold over to a more accommodative monetary policy? does it challenge to become a discussion at that press conference? wax bite your tongue. the one thing they cannot afford to have anyone say is they are not credible. any kind of inflection point now, before inflation turns around is going to destroy that credibility post.

>> we have chesney martin never envisioned. the two have to dovetail together. what do you predict over the next two or three or four fed meetings is that they dovetail a balance sheet dynamic with some form of monetary theory? >> that has been spot on to say keep on that because it is not so much in the rate and speed by which they raise rates, but it is how they deal with qt. it is a huge aversion to anything starting with q, so we know it will be qe forever, but it may start to blink because if financial stability rears its head, there will be all agility and the read markets, and that is where you will see easing, and that will be caught by the markets, and we will start to lose the credibility and expectations will take off again. >> wonderful as always.

of the milken institute, and not just the fed, we are impressed. it took 38 minutes to discuss the fed, and it was you and not me or lisa. >> do we do ok? he said we were spot on. he also told you to bite your tongue. >> i know. i am trying. >> out of italy, 12.8%. cpi in italy this morning. year-over-year, the estimate, the estimate was 9.9. that is a big upside surprise. >> it's a bunch of elite stuff. i pulled out one of my ancient bowties. it's a bunch of elite stuff with fancy bowties and beards that need to be shaved, and the bottom line is that you need to know about elite idiots like us. italy is flat on its back it take us south of rome. no one goes south of rome except sicily. what is it like? they are flat on their back. >> my family is in a very tough time. it has always been it needs to get a whole lot better.

>> 12% inflation. >> is a cost-of-living crisis. this is the key difference between now, lisa, and 10 years ago. the weak spot is germany. i'm looking at the breakdown of the regional stuff, and it gets a headline and about an hour and 20 minutes. it is in great. >> it is not great. you have seen an upside surprise's with respect to gdp in germany, and a downside surprise transcends pain. this is partly because the weather has not been as bad as people thought. essentially, you don't have the same kinds of pressures. that said, how does this change, and where is the balance of power going. given some of the heat that italy has felt to be austere, do not invest in these things in previous years. ask the gdp just came out which was better than expected, we need to highlight that, and given where the cpi is, you have to imagine it will be difficult to back off any time soon. regardless of what they told us yesterday >> this is why.

people are expecting them to keep going, and if they don't, that could be a liability at the long end, really taking up rated --. >> s&p 500 getting in the habit of the premarket. down about 12%. this is bloomberg. >> keep you up-to-date with around the world. elon musk is cleaning house at twitter. he has completed his 44 billion dollar acquisition of the company, and bloomberg has learned that they got rid of the ceo and other major executives. he plans to be the chief executive for now. he also intends to do away with permanent bands on users. that includes the president trump. meanwhile, the former president shelled -- shelled out $20 million to endorse candidates. it came from 92 million in donations. it is the most of the republican party is being used for advertising in arizona, georgia,

ohio, and pennsylvania. in a new survey, economists predict that the fed will lay the groundwork or interest rates in -- to reach 5% by next march. that will trigger a united states and global recession. policymakers are raising rates by 75 basis points for a fourth consecutive meeting. in china, the premier has repeated pledges to stabilize the economy and stipulate growth at the fourth quarter. he says it is crucial to implement measures addressing the lack of effective demand and booze consumption. data show china accelerating the 3.9%. volkswagen has cut back its sales expectations for the year. europe's pagans -- biggest carmaker is on pace with last year when semiconductor shortages severely hampered output. they are still being hampered by that and logistics are challenged. global news, 24 hours a day on

air, powered by 2700 journalists and analysts and 120 countries. i'm lisa mateo. this is bloomberg.

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>> we understand that inflation is too high. the president gets it. he is working to get gas prices down, so as a result, they've been coming down for three weeks or so. that is partially due to the war in ukraine, and we need to keep oil on the market. >> that's the council of economic advisers you up to speed on the price action. good morning. equities are down. yields are much higher. trying to reclaim a full handle. just for you, tk. it is 99.37. germany is one hour 12 months

away, looking for a punchy number. >> let's go over the data checks. often, we go to three digits are or digits. each thing, there is a convention. a way to do it right. we do it with global wall street we had we are screaming about that. >> is a team effort. >> surveillance trying to get to for digits. we do the dow jones industrial average, but did you know that the dow was trailing when year out of correction stages at nine point expert down -- ask percent down. geometric is my all-time favorite. >> to ship -- stripped out the muscle of big tech. >> next week, we cover the wilshire 5000. we have the only one who understands the wilshire 5000. she will give us a brief on oil. ellen, exxon with a total return

of 4% per year has compared to the moonshot of the last 24 months. does someone like you, and academic, do you assume big oil can sustain the moonshot? wax -- >> we are seeing a cycle that is always evident in oil, and commodities, but oil in particular, things are down, and now they are way up. the big question is whether the typical cycle we see is big investments in cap ask when oil companies profits are high, and i'm not sure we are going to see that. that could be a big problem. >> when things are good they go off into the tundra and waste billions of dollars on a project that never pays off. are those days over? wax those days are over. everyone seems to have learned their lesson from that. but are we going to see more than 20 or 20 or billion dollars

in cap investment this year? >> that is one of the companies that actually is increasing production in the permian. they are doing a lot of work in guiana. they have made great discoveries there. they have the potential i think, with a mindset to really go and do more investment, but if we don't see more coming from them, in perspective, their profits are equal to what they are spending and cap ask for the year. that is not enough. in today's environment, the price environment, what we are seeing in terms of global production, we need massive amounts of investment now so that we actually have oil and gas in the future. >> we were talking about the political liability, and there is one for exxon, which is raising the dividend do $.91 and really read wording blockbuster earnings. how much blowback from the white house? who has the upper hand?

exxon could come back and say they need lower prices for consumers. >> that is a good question. there is a back-and-forth going here. i would definitely expect to see the white house come out guns blazing, with a midterm election coming up, and they would blast these oil companies for what they are doing with their profits and for the prices that consumers are paying at the pump. but that doesn't mean they're going to actually do anything to intentionally harm these companies. what is going on now is we gotten lawsuits in a number of states, more than i think two dozen across the country. they are trying to basically get oil companies, exxon, chevron, conocophillips and others, to pay for infrastructure damage from climate change events. the question is, are these also going to get thrown out, or are they going to go forward and

potentially be major drains on these companies funds? this is something the white house could potentially influence and say hey, all back. i don't think they are. >> the question is about the transition for the more dominant presence of clean energy. there is a 10 year window, and some of these oil majors are investing heavily in this. then it will be less cloud, less of a concern. how far away are we? how significant will this be changing in terms of the sources of energy in a decade? >> were further away than we think we are. we are thinking this based on these companies and their investments. if you look at the investments they are making, particularly the american and european once, they invest more in your renewables than americans, and as consequence, their profits are like 13% lower than the american companies. but a lot of these investments aren't real. look at chevron.

they were a bit down because of the refining margins, but their sales or products were actually up. they acquired a renewable sales company. their sales are up but the profits are still lower. is it worthwhile? are these noble or synthetic fuels profitable? that is the question these companies have to ask themselves as they go forward in this environment? wax you moved on to quickly from that point. can we sit on that for just one more? the idea that the older energy companies not making big renewable shifts are doing better this year than those that have. >> that just tells us that oil and gas, legacy oil sources, they are still absolutely vital to our society. to the way that we function, to the modern life. they are going to continue to be. that is not like, just because people of decide they want to ban the sale of internal combustion cars in 2030, that

means that we are all suddenly going to have a magical renewable source of fuel and transportation. that is just not lightly to happen. i think it is more likely that we will see a slow transition unless there is a major breakthrough in technology. oil and gas will be important. >> thank you. i feel like many people got slapped in the face by reality. the reality of a war in europe, the reality of politicians, political relationships breaking down, whether it is saudi and the united states, or russian the rest of the world. >> ellen captures that brilliantly in her book on saudi arabia. the social aspect is emerging markets and developing economies. they are energy intensive and energy hungry, and they have been using energy as a tool to catch up to the developing world.

did i do ok there? i could leave right there. bucks i'm going to give you a data point in the morning. this comes from kevin crowley. it is 40 years of consecutive increases. 40 years. >> i've always underplayed this. remember the building on madison avenue was the bank of new york. they've had increases since pretty i haven't been in. i wouldn't shopping there. but thank you. i lost my train of thought. >> lisa is saying that she swear she saw you in a bow tie later this week. >> i shut that off. >> when they open in shanghai, desperate >> how busy are they? >> they are busy. >> this is bloomberg, apparently.

as for supply to catch up, and into the recession. >> we are calling next year recessions in the global economy, we are getting closer to the flame where the fed can decelerate its basic hikes.

were not their area. everyone here is making it up as they go because they really would not want to be in this position for so many decades. >> tom keene, jonathan ferro, lisa abramowicz. >> with our audience worldwide, this is bloomberg surveillance with jonathan keene, and lisa brown was. >> may be the one main constructive story with exxon and chevron is well, but you are right. what it means is that you cannot take this as an industry group had the idea of big tech, i do not i. mehta is dramatically different than abell. >> microsoft is down hard. lisa is down 12.6% in the market. we are talking about how the performance of the shares in the

aftermarket are probably more interesting than the actual earnings. what i find fascinating on bloomberg intelligence is coming out and saying you've already downgraded expectations substantially, and they are still distant in. in real time, there is a forward look. that is due to international. that is how much they are discussed with the idea of the weakness around the globe, and the united states problem, calling for action. >> lisa is dead on. this is an international story. ask we will get cpi later. looking forward to that. germany is not looking for that. anne-marie is joining us this morning. the politics of these oil earnings this morning, and that is a big deal. >> this is basically a linchpin for the administration. >> are we going to allocate

capital. were going after profit and windfall. do we have windfall profits? >> what can we actually do, other than align them? >> what can we do. >> they can tell us how many weeks we've gone. >> i have weird habits. what can i say? >> you are crushing it. to your point, you have a message here from exxon to the white house, and it reads as follows did the investments we've made enabled us to increase production to address the needs of consumers. that is from the ceo. i don't think they will read that out loud. >> the profits are so big. the investments are not that big. alan was saying it is a rounding error for them. how much can this play into the hands of the white house at a time when they are raising the dividend area >> this is important. with a blistering note of what everyone notices now, the

democratic panic, with simple phrases, even new york and what is going to be the exxon debate, the chevron debate, if you have a substantial republican house. dare i say a republican senate. what does that mean for gop politics, adjusting to 2024. how does that into oil. ask you can throw in the fed debate as well. >> the senate democrats, coming out and asking the federal reserve to pause interest rate hikes. >> this is more impressive red this is direct. >> they took a more reserved stance, desperate >> chairman powell is a child in the scenario. for the senates at least it >> is always a battle, it has to do with stan fischer's ultra

accommodative form of neutrality. when heavy lifting begins in november, i'm sorry. as bank of japan meetings, november 2, they are going to work both days,. >> that would be nice. i promise to be here as well. >> i'm so your to -- please to hear that. we will get some fed speak after that. what we are looking forward to is the last slew of data before that meeting, but also before the election. the last data that will make a huge difference. u.s. employment cost index. how much we see the pace of wage hikes declining versus the opposite. there is signs of tightness of labor. we also get personal income for the month of september. i am curious how much people are spending on borrowed money.

that might be part of the reason why people continue to spend at the university of michigan. for the month of october, how much is continuing to directly correlate with prices. they typically, when gasoline prices go up, the survey goes down. how much does that affect election. you get an ongoing turn of earnings, with chevron and exxon earlier this morning. later this morning, you get to hear from scott chatfield, the ceo of natural resources. as we've been talking about, the political ramifications, what is the blowback going to be in a time when people are worried about how high gas prices are. they are worried about the winter. then you see these companies making bank. >> that's a great lineup. i'm sure guy johnson will crush that a little later. 10 a.m. eastern time. >> you will hear from the oil majors, but they are going to spend it with the optimism of a change political landscape.

they've got to slot that in. right now, with the dynamics they will see. >> the administration has things they will have to say. >> we have a chief research strategist. we have had a massive year. can you walk me through what is working this year, and what hasn't worked this week. >> that's a good question. the first part of the year, the narrative was inflation. we were seeing signals and commodities, can -- turn signal since the first time since 1994. later in the air, it has changed. there is a draft between this recession fear and the relative strength of the dollar. the dollar trade is probably the biggest movers since the summer. the short bond trade continues to be the focus of many of the technical communities. those of us who follow momentum signals. >> in the weekend, everyone is going to read on turtle trading. john henry, and alpha simplex. you are up 40%, plus is here.

you are using trend based studies. explain to our audience what you didn't do to generate a return larger than the triple leveraged cash fund. >> trend strategies are about following what the market is doing and not what it should do. that is where we are in a good position, because frankly, the market doesn't know what it is or should do, giving the new macro environment we are in. in that sense, it has been difficult to make a call. something that most investors have never lived to that. with a different macro environment, most of us have sort of been used to it and here's a correlation. today is a perfect example. today we have stocks down, bound -- bonds down, and the dollar up again. that is a strange cross asset theme, but it is a prevailing theme. >> can you find any kind of

theme when it comes to the optimism of stocks from this idea that the fed will back away, and the pessimism of tech universe after some of these earnings? >> that is a good question. earnings coming in are just another data point that people have to absorb to try and understand this narrative and when we look at what is happening now, duration exposure is something that a lot of tech investors are thinking about, but also, we are seeing a divergence across sectors and economies and across the world. even though we are seeing key macro themes, these changes are really getting winners and in this environment. it is making it a very interesting environment to be a tactical trader, or for people looking for deviations from the mean. it is not just stock values going up, which means that there is an opportunity for those who are a little more tax go. ask -- >> you are tremendous is

here. do you think anyone has walked into schwab somewhere, on main street? they've asked for triple leverage? >> do you think they've ever done that? >> i've got a book in treatment on this. >> have always wondered. >> yes. triple leverage is a little different. it is a white paper put out a few years ago. the leverage pivot point. because of the marketing goose we get, we go to three to one. what really makes it worthwhile is the triple leverage where i can get 82 and 20 split, versus a normal money market. >> you need to retire this year? >> we don't think this year. we need to see rates come in and the fed blink before i can talk about that. >> can i do a public service? >> this is made up anyone looking for this bond, please use your time wisely. ask this is running across the

bottom of the screen. you have to do that, periodically. >> a small print. please disregard. >> the international fund, were looking at that, but i can't get between two and 20 if i go internationally. next in all seriousness, i'm trying to get out of this. futures are down by .7% on the s&p. a big turnaround. what you will notice is that yields are lower by 15 basis points. they are higher bites 15 basis is. i don't think the bond market volatility will settle down in a material way. >> i would completely agree. he goes to a point about gdp. they came in higher than expected. this basically gives more of a pass to the ecb to keep hiking rates, and it shows that things are not cooperating as much as they would like. >> they did a fabulous note yesterday, tearing apart the optimist gdp number of america. >> a being pessimistic?

>> you sound less constructive. >> that export basis, chris logan, on the park yesterday. >> do you want to the president's words on this? >> please. >> with the third quarter gdp, we have further evidence that it is continuing to power forward. >> there we are. >> somewhat different than when we are saying the futures are down. this is bloomberg. >> keeping you up-to-date with news from around the world. with first word, i am lisa mateo. elon musk has begun to stamp on twitter. the richest person in the world closed a 44 billion dollars takeover of the platform. it has begun firing it major executives. he plans to assume the role of ceo and do away with bands on users. that category includes president trump. there is hope that the euro zone stave off the recession. germany defied expectations by

reporting another quarter of economic growth it the gross domestic product grew by .3% in the third quarter. in france and spain, to 2/10 of 1%, spain gdp rose a worse than expected. big earnings for oil. exxon mobil posted its highest profit in 100 two year history. natural gas demand surge. exxon is on track to receive $500 billion. it is a similar story at chevron. again, it is soaring. natural gas prices are stemming from russia's war against ukraine. amazon has shocked wall street by predicting the slowest holiday quarter growth in the company's history. it says that sales will rise just to 28 percent. shares were down by a double-digit percentage, in

premarket trading. global news, 24 hours a day, on air and on quick take, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo, this is bloomberg.

>> making chips in america will help lower the cost. it will make a washing machine.

there will be a new cell phone. it will help compete with the rest of the world, and he is low concern about that. we'll talk about that in a moment. tom keene, jonathan ferro, and lisa abramowicz. you hate happy friday. >> i hated for a number of reasons, but let me tell you this. you go in on saturday, and you do more on saturday from 8:00 until 11:00 the you do for the rest of the week. >> with a trading floor, don't walk in. >> i say happy friday, and he says what is good about it. what is good about it. >> happy monday. this does my head in. i hate that. monday start 7:00 p.m.. >> tried to. much earlier.

anyway, futures are down. with the s&p, we got a push back for another democratic senator. this time, john hickenlooper did he said this of colorado. high inflation necessitates that the fed is doing too much too quickly. i write towards the federal reserve the pause, and i seriously consider the negative consequences of raising interest rates and we have hickenlooper sanders, warren, and sharon brand. >> it is a movable feast, two weeks before election. with a brief from washington, we are going to go to some of the statistics you see on food and inflation. food inflation is something like 11 2%. the average, back to world war i is 3% per year. is anything else matter? >> a lot of other things matter. food inflation is one of them, and how much people pay in rent.

it is the one thing that actually, the white house wants you to know. those prices are down, even though they say that if you look at the market dynamics, it should be three dollars and $.20 across the average, but the heart of the matter is, consumer prices across the board are going up. this is why the polls, especially in the final weeks going into the election, they are tightening. even before we started the program, places like oregon and the governors race, there is a potential republican win, and this has to do with not just the economy but the candidate taking aim on homelessness. that would be a huge defeat for democrats. we haven't seen a republican governor since the 80's. >> we staggered through the talk shows on face the nation with bloomberg radio, and the

afternoon. what is the plan for next week? >> at first, the democrats wanted to make this midterm election about roe v. wade really, about abortion rights. they are realizing they need to talk about the economy. the argument is that you cannot leave it up to the republicans in terms of making the next fee years, and what that would mean for the economy. they are trying to tout the legislation they have done, the inflation reduction act and the heart infrastructure act where they work with republicans. for republicans, the message has not changed. inflation is at a 40 year high, and they say that the cities are more dangerous and people are upset regarding crime. in some cities, homelessness. that message is not changed. you have seen democrats -- we've

in between. they haven't really been able to deal with earnings. >> leadership has changed. big oil companies. >> we heard from the president yesterday, going after shell. their profits, as well as their dividend. why are they giving back to shareholders? they should be giving to consumers. they bring down pump prices. when the president sees exxon earnings, it beats profits, and it has dividends. 40 years consistent dividend. that is something that democrats are really going to rally again. >> did you see her financial allowances? they actually knew that. >> really? >> in london. >> she covered it back in vienna. she dabbles. she has what she's talking about. here he on.

>> it is not just senator murphy. you have heard from senator murphy on twitter talking about the fact of looking at these profits, and publicans getting pounded that it's these guys who are by and large not the ones who love oil companies. he is saying these are companies that will be influencing the republican party. >> no one better to talk about it then you. thank you. down in d.c.. i imagine a comment from this white house a little later this morning. x having money at this moment because there are so many messages as she was laying out. both the socialist and the economic issues, and they are front and center in a time where an increasing number of senators are pointing a finger at the fed had at them crimping growth and seeing concern start to be more in the forefront, but i am

wondering what the cohesive message is when americans cannot afford the basic staples, even as the upper crust continues to buy. >> exactly. that seems to be happening within two weeks. >> the emotion is there, but i will just go back to basic stuff. food inflation of 11.2%. whatever the numbers is, that's above 10%. let's make a food inflation. when did we see that, and how long did it process. most people have never seen this. >> everyone is blaming democrats. if republicans work in power, they would blame the republicans. they can keep pointing the fingers, and it will be their turn, and they have their situation. short-term, back-and-forth. where do you get a meeting of the minds where people can actually say you have some serious problems, but it doesn't pay to the elect. >> it doesn't play that way. >> but the fact is, since the

beginning of the country, the act is always just like it is now. a massive polarization. is britain any different? >> not really. both sides blame each other. what is the solution if you get a divided government? >> it may do a favor. it will be two years, and know what will happen. >> it will come through, because the growth will be hampered. >> that sort of the success of it read futures are down. >> one about it? >> is not off the radar. >> it sounds erratic. >> it erratic. >> is a happy friday. >> what do you call friday?

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>> will talk about the excessive fossil fuel and the failure big tech this week. in the equity market, from where we were last friday, and where we are this morning, 2/10 of

30's, with the end of the yield curve, we had a little look at that. >> unchanged on the session grid with 30 mins away. cpi germany. cpi out of france. upside supplies. upside surprise. maybe a little bit softer and spain, but germany, the heart of the mess, germany has a big one in about 30 minutes. >> we saw that from italy. the answer is i don't need to know the number. i'll need to know the double digit, that's where we are. next double digit cpi. it will roll over. ecb will have to hide a lot more. look at at that in about 30 mins. just below parity.

good morning, lisa. >> today, were looking at a differential between fossil fuels and big tech read john seems to know that as well, and he knows exactly how were going to frame it, but this is the story of the morning. we are taught about it at chevron just came into one of their biggest profits ever, but these have been crushing it, all year. exxon is the standout. a record profit. a profit that is expected to be bigger than a lot of major companies, combined this year. it is really standing out. shares are up 2.1 percent because shares are up more than 50% year to date there increasing dividends as mentioned. for the 40th consecutive year, it is natural coming up, but 2%. the ceo speaking on bloomberg, later. it is shocking to see the numbers that are already high on expectations, being blown out of the water. it is the opposite story and big tech read we heard from amazon and apple. apple hung in there, and apple did not. 12% shares, with more than 33%.

it's not all gloom and doom. the one stallworth highlighted the foreign-exchange pressures, with tesla. this is the last day it will be appear, so we had to highlighted it is being delisted after the purchase of twitter. twitter shares are being delisted. tesla shares are not being just listed. as he comes out, as elon musk comes out and tries to take the home of twitter. >> thank you. we appreciate it. your conversation in the weekend, on fixed income, we're joined now.

u.s. rates strategy on the capital markets. on the u.s. minnesota, it is a financial shock when you look at the quality of the fed. minneapolis fed, we have eight ways to go. with eight trust market, while blinds, twice now in the last number of weeks. swap lines worldwide in the litmus paper. this is fra ois. we are talking about happy friday and all the stuff. happy fra ois. what does this signal that it is through the roof? >> i think the biggest issue at this moment is a dollar shortage, globally. we are seeing the run-up in rates, domestically, and run-up in rates in europe. not only policy rates, but also overall yields it as a result, we are seeing, in terms of the dollar, and unprecedented run on

scarcity, and that becomes problematic when we think about europe, japan. it is a big story. >> there is a limit that the central bank has. if there is a dollar shortage, doesn't limit the choices? >> is a result of the choices that jerome powell has made, and we run up against the natural limits, and as monetary policy goes deeper into restrictive spaces, each incremental hike is going to be more difficult to justify. let's face it. the fed has been leading this push higher and global rates, and as a result, the dollar has followed suit. >> how do you talk about the shortage of dollars that physically, a lot of nations need physical cash. how does that pressure the fed to open up lines akin to what we saw in 2020, and the uncomfortable reality of trying to tighten policy well also loosening it in some capacity. >> is interesting because there are a number of different ways in which monetary policy in

terms of tightening is running up against the key constraints. another good observation in that regard is the potential for treasury department to buy back in the long end of the curve. it seems, ostensibly like qe. it is a market unction move that there is no question that as a result of how tight policy has become and how high rates are. >> you think we will be doing quantitative tightening next year in the united states? >> selling outside of the natural runoff at this point seems as though it should be on the table. if nothing else, it is certainly in mortgage space, however, that means that we are going to have to see a continued upside surprise in the inflation data as well as a shift signaling from the fed. >> what is the concern from the market, considering that it is climbing above 2001.

with a record pace, with increases. with a broader weakness. >> from the fed's perspective, they are struggling with the fact that maturities in the mortgage market are not heaping up with the 35 billion dollar cap. if they did decide to sell mortgages outright to the market, the implication might intuitively be an increase in the mortgage and treasuries spread, but there is a very strong argument to be made that that is largely priced in, and if it were to come to fruition, it might see a compression, and at the end of the day, mortgage rates are going to be are more a function in 10 and 30 year yields, and the general direction of the overall economy. that's what is your vision russian mark warner claimed earning note. i will call it extremely dense. extremely. it takes forever to read the two

pages. it is so smart. how far out can you look, right now. can you get to q1? >> in this current environment, i think that what we struggle with in trying to forecast outcomes is the fed struggling. >> not only as monetary policy with a lag, with data collection, it is flying blind. it is going to impact the real economy. they have over tightened at some point. the problem is how low labor force participation is, the unemployment numbers look great. they are continuing to hike rates, but or example, yesterday with the gdp report, the final sales with the metric processes

are looking at it as it should be. that is problematic. it shows it is at a stall speed for growth. exit is a stall speed for growth, that leads to the freedom of the fed. do you anticipate a shock to all of the under tree out there, and maybe not even in the november meeting, but the december meeting. >> we are 75 for the next three meetings, and i think that is a consensus. the one way i would say that we might differ a bit is we are on board with a soft pivot language, and it's going 75, but it will be spun somewhat dovish lead because it leads to a downshift, and it is a step down. >> is a step down. >> you sound like an anchor on bloomberg surveillance. x that is a happy friday. >> happy friday. >> i don't know what he thinks of that. thank you.

>> just brilliant. >> bank of america. >> 243. rate hikes. thus high 22, it is basically one rate hike every single trading day. going go on to say that it is part of analysis. it is now pivoting from inflation to recession. with the boe and the rba, if you're to call it that, their quote, it is a bear hug rates -- risk asset. the recession shock is a new high-end credit spread and a new low in equities. mike wilson, from morgan stanley, they basically took the same time. that is when the market might be ending. >> how much does the earning capitulation see a bit of it. the nation that it is not all linkedin. there's going to be further pain that they express.

the visibility isn't there. someone wrote into us, and i'm curious. how do we dress for the halloween show #>> how do we do this? >> do we do teachers? >>. halloween stores? chairman powell and government baby? we can work that out. that might work out. >> i work with that, and i said is that ok? a beautiful great hair thing. >> keep digging. >> i went as harry kane. >> it is just trick-or-treating with an afterthought. >> a swap line. >> my son is going as a will be question. there you go. >> that's what he's doing. >> is too big. >> don't do this.

>> that would lujan scare the hell out of it. steve forbes looking at this. from new york city, for audience worldwide, tv and radio, this is bloomberg surveillance. >> keep you up-to-date with news from around the world. first word. elon musk is cleaning house at twitter. he has completed his $44 billion acquisition of the company, and he has gotten rid of the ceo and other major negatives. muska plans to be twitter's chief ceo for now. he plans to do away with permanent bands on users, which includes president trump. in a new survey, the economist predict that the fed will lay the groundwork for interest rates to reach 5% by next march. we expect that is likely to trigger a u.s. and global recession. next week, policymakers raise

rates by 75 basis points. that is for a fourth consecutive meeting. a new danger posed by climate change. that is according to janet yellen. you could -- she spoke with the eu sustainable summit today. >> last year, the financial stability oversight council or f sock for the first time is an emerging threat to financial stability in the united states. agencies have already taken steps to start incorporating climate renewal and financial risks. >> they also said the war in ukraine is highlighting the risk of dependence on fossil fuels. jeff bezos could see $44 billion a raise from the fortune. if shares continue to fall, the loss would be the largest in order. that is the billionaires index. if it holds, that will be $111

billion. nearly half of the 214 peak in july 2021. >> powered by eight 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg.

>> i think there is ample evidence that there is lower inflation in the pipeline. it is not in the pipeline figures, it is not prepared at length for what is barely over the neutral policy rate estimates, and inflation at a headline level is still high. >> that is the pushback from jean. it is price action for you on this friday morning as we close out the trading week we had we are looking for a week of gains, but what a volatile one we have had. underneath these big tech players in the s&p, 4/10 of the s&p 500. if you're looking for a move on amazon, it is still lower on the

stock in the premarket app. we are holding on. yields are higher on a 10 year, trying to reclaim the old and. we will get to that briefly. just short of four, right now. >> it is amazing to see the push and pull, and how much things are fluctuating. can we find some real stability in rate volatility? >> i don't think you can. if you can't price the risk-free asset, how do you price risk right now? >> the headline is that it is back. gravity is back, and everyone is adjusting to that. it is going to be fascinating after the shock of earnings good and bad. how corporations are to cost control. that is the easy path. >> i said in the previous act, it is so strange to see twitter, and the line that says acquired. it is a closer deal. here's the headline from elon musk. he will dig into claims of

shadow bands. he is responding to a complaint on twitter behavior. they want to hit the ground running over at twitter. >> i am here is about the personnel. we have seen the ceo lee. we have seen a number of chief executives leaves had -- leave. we see other talents stay given the rumors of 75% cuts? he pushed back, but how do you stay at a company with such turmoil. >> it is fascinating to see what this guy does for this company. ask it is. it is original to say the least. also, fascinating to see the election of the united states. we will see in two weeks before that, another rather large election, and of course, in brazil, it is massively polarizing. we are joined this morning by shary. the distinction of an october 30 election -- what will you study in the coming two days? >> we are watching the poll

numbers very closely because of course, we have seen a massive underestimation of bolsonaro's performance when we see the first round of elections earlier this month, so the key question is in a country where you cannot rely on pollsters, what do you watch? >> they are trying to account for no-shows. there are abstention rates when they are high. but it comes from low income voters, and it is more likely not to show it. we are now seeing, when it comes to the other latest numbers, it is actually widening to 53%, which is higher from last week, and really interesting because this week, the momentum is fading. >> is the public engage? we have a massive turnout in the united states for a midterm election, and we all know the history. the presidential election. how much are the people of brazil engaged? >> there is a depolarization here in brazil.

we first talk about latin american politics, we are not talking about right and left. it is of course defining elections in a lot of countries, but it is about pushing against the establishment in away. we have seen that engagement quite low in the fourth round. one of the lowest voter turnout. 20% of the lowest since the 1980's. by now, everything is getting heated. we have seen violence in the last week, and one of those allies getting into a gun battle with police. there is a lot of interest on the ground. you mentioned it is more antiestablishment than normal party lines. this kind of way, and we are seeing this around the world, including in the u.s., and elsewhere. how much do you see this stemming or being exacerbated by the economic place that we are all in, and brazil as well. in a place where we are unfairly penalized by inflation. they are not able to keep pace. how much is the undercurrent part of the polarization for

antiestablishment, and trying to keep the status quo a bit more? >> it is an interesting few months because as we were coming to this election, not surprisingly, he tried to ramp up spending and really extend the welfare packages to it income voters, and lowered the support to the camp. on the other site, they have really emphasize the economic disparity during the two terms in office. since 2003, the caveat was it was a commodities boom, and it is an undercurrent of a silver lining in brazil. remember, the central bank has been aggressively tightened, preemptively tightened. they are holding rates steady, so what does this mean? a good economic mix for brazil, where you have a higher rate. you have commodities exporting industries, and that can really withstand a higher yield, globally. >> thank you. wonderful reporting.

on the ground in brazil. to her point, i hate it when the fed is frontloading, and i am using their language. this was not frontloading from the fed. as was catch up from the fed. the front loaders, the people who went first, brazil was one of the first one in point between one. >> they experienced pain as a result. we are seeing social unrest as a result of the policies, but more importantly, the backdrop. what she is talking about is important because it highlights a wave of populist that is exacerbated by the current emotion we are in. how does it affect politics in the physical and tying and the monetary hand tying in people getting angry. these elections will matter. >> have you seen the rates? asked 14%. it's a big number. >> the number is doing better than many others because there were early ones like they said, but i defer to mr. sasse so on this, but i am sorry. the brazilian paper or the

dollar paper in brazil, those numbers are unsustainable. they are just no way. ask the dollar issue is a big one. we talked about that on a different topic. the dollar issue worldwide. the number one thing is what you talk about right now. inflation is lower, but also, inflation is a part of that feature. >> less pressure could help them. at the same time, is really the tension with peter scheer. he expects the dollar to be the pivot point for the fed. the pain outside will become unsustainable, and the pressure will be quite significant, and i wonder, not only on economic level of headwinds for the companies here, but also on a political one, given the other nations are going to see uprisings in the face of this pain. >> japan did nothing. do you think they could hold on. for the next several months. >> a lot of it depends on the dollar.

if it starts to weaken or plateau, you get a reprieve. >> it would be amazing if you can hang on to the yield curve it this volatility. >> you bring it up, but i don't want to get matthey here on a friday, but the bottom line is that you do a 30 year study of yen dynamics. the answer is, with inflation dynamics, and japan, three times out of four, they brought it up to 3% inflation. boom. every time. he comes back down. >> did you blend both things? ask did you like what i did and how far i went? >> you can do that life. that is a great note. it is a great title for a note. you should publish it. you should publish that study. cpi japan. equity futures are down. this is bloomberg.

just look around. this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it and now a lot more people can. so let's go. the digital age is waiting.

but the ecb does have to remind itself, remind markets that its

primary eat those is to control inflation. >> we don't think this will reach restrictive territory before the start of 2023. >> the global economy is looking very soft. >> inflation is going to be staying sticky and hard. >> there is lower inflation in the pipeline, but it is not in the headline figures yet. >> this is "bloomberg surveillance." tom: good morning, everyone. we welcome you on a friday on radio, on television. we welcome you to double-digit inflation. not food inflation. jonathan ferro, germany joins italy. jonathan: 11 handle for cpi, germany. 11.6%. we have a big turn of events in this bond market. yields are lower today, excel off. in germany, the two year, up 17

basis points. tom: my problem is really smart people are undershooting the trend everywhere. you wonder if that is going to be in the united states as well. jonathan: we keep talking about peak inflation. is it still in our future in europe? inflation number is getting worse. had this conversation yesterday about the ecb having some kind of step m. let's talk about how difficult it is for this european central bank. cpi germany with an 11 handle, and pmi is in the 40's. that is the central bank's dilemma. what on earth do you do with interest rates? lisa: especially at a time when you did not get the worst case scenario. you have not seen those stockpiles of natural gas come down as much as they had feared. and still inflation is coming in harder than people expected. you wonder, tom, how this is going to play out, considering that the ecb is going to

crackdown. tom: bringing it over to the united states, two days, halloween, i'm going as a swap line. the manufacturing survey is 50.0, and a 49 handle there. jonathan: we will see if we get that downturn in america. you saw subtle hints of that yesterday. many people did. tom: ok, i take the point. chris is outstanding on this, a really fragile gdp report. this morning bringing in over to earnings, forget about twitter, there is good earnings out there, but everyone focused on big tech dealing with inflation. dealing with the dynamics of dollar. jonathan: they are focused on big tech because that is where the weighting is. the s&p 500, looking elsewhere, energy crushing it through the year, and today great numbers. tom: what did we hear from president biden? does the administration get out

front in full election panic? lisa: they probably will. they need to get their investments up, that it is not as messy as it could be. given that we have two weeks until the election, and it is not clear what they can do. tom: debbie constant here with us in a moment. -- david constant hearing with us in a moment. jonathan: did you just say exxon as if it is a bad name? [laughter] tom: bad exxon. jonathan: is that what the president is going to do? sit. tom: set. lisa: just stop it. tom: they are going to get crushed in washington because they promise to tell the truth and they are going to go project by project -- jonathan: get to kostin before he runs away. futures are down by about .5%.

the bond market, yields are higher by about one basis point. tom: david, can you explain to me how your world has changed from when i studied 3% fx adjustment on -- on equities, and all of a sudden we are doing a percent and the cfo of apple said near 10% yesterday? how does your world change with strong dollar? david: the way the world changes from a fundamental point in the united states is that 70% of the revenues of u.s. companies are generated domestically. therefore the sensitivity of companies from a corporate point of view is largely going to be focused in the technology sector. from that point of view the translation back is really going to be focused in certain areas and posted broadly across the market. we know sales of health care companies, utilities and telecom companies, largely domestic in

nature, and therefore less sensitive and widely perceived. it is a concern, and a focus on global monthly -- on global multinationals, tech in particular. jonathan: meta spent $45 billion on buybacks last year. meta yesterday closed with a 97 handle. what on earth is going to happen with corporate buybacks? walk astutely i know you and the team at goldman do so much work on this. the importance of buybacks as a feature of demand in this equity market. david: critical point is the fact that over the last 10 years every year the single biggest source of demand for u.s. shares has been corporate repurchases. so, this year they will be up around 5% versus a year ago, and our forecast next year is they will probably decline by about 10%. so, 10% less buybacks in 2023

then this year. that is assuming a soft landing. if you had a recession scenario that is probably down 40%. that is a significant development in terms of the confidence ceos have and the outlook for business activity in the coming year. that does drive some of their decisions on their capital spending. i have spoken to some boards this week as they think about their uses of cash in the coming 12 months. the importance of capital spending versus research and development dollars. how do they think about merger and acquisition spending? buybacks has been the default use of cash for companies, and that is likely to be receding. that has been the single biggest support function for equity prices in the last 10 years. lisa: just to underline this point, how much do you expect this to pullback in terms of how much stocks can gain, simply because this massive buyer will not be there? david: it is a big issue.

the idea of pension funds as counter-cyclical buyers would be one source of demand, partially offsetting, pulling back on the buybacks. but it is tough to basically replace that when we are looking at company spending around $3.1 trillion. that is the cash spending of s&p 500 companies. this year, probably flat and terms of overall spending for next year. and corporate buybacks, roughly $1 trillion this year. that is going to be closer to $900 billion next year. there is not another source of demand for shares that is going to replace the bid from the corporate side. lisa: one thing gordon -- one thing goldman sachs has been out in front on is you do not think there has been full earnings capitulation going forward.

one of the downgrades to outlook you would like to see, to see the bottom? david: it's not that i would like to see them. what do we expect to happen? the point you made is an excellent one. keep the following numbers in mind. coming into the first quarter the expectation was 5% earnings growth. it came in plus 12. the set up for the current quarter was basically plus three. expectation year-over-year growth. they are somewhere between 1% and 2%. it is a negative surprise relative to expectations. what has happened looking forward, in the fourth quarter expectations at this time before the earnings season began was 7%. now it is looking at 5%. the idea of cuts by -- death by a thousand cuts, that is what is happening as you look into the fourth quarter, and calendar 2023. our expectations are 3% earnings

growth, so basically a modest growth, nominal dollars help sales, higher inflation bad for margins, so you have a very modest level of profits. that is assuming a soft landing. basically, the economy continues to grow. on the other hand if you have a recession, which more and more of the portfolio managers with which i speak have that view, a sickly you would have earnings down 11%. that is your starting point. currently expectations in next year is probably 7%. think in terms of the magnitude of diminution in terms of the cuts. coming from 7% down to as low as -11%. that historically has been the case coming into recession. sort of the six months ahead of recession the earnings get cut by 10%. a lot of focus has been the impact of higher dollar, the impact of higher inflation, what does this do, can companies

support their margins? the source of the negative surprises this quarter has been weaker margins than was anticipated. jonathan: david kostin at goldman. one of the best. enjoy the weekend. tk, what a week. we have been talking about the outperformance of small caps this week. the s&p -- the equal weight s&p up every day. tom: i'm as guilty of this as anyone. we are fixated on 20's, now 30% of market cap. caterpillar. it is one of the two -- one of the two major cap accounting companies you use. nobody brings it up. jonathan: if you strip out the muscle, the market cap waiting on the s&p 500, those tech players, that has not been bleeding. lisa: this is the post-poll between the people not expecting the fed to raise rates as much. tom: we should do a photo for halloween.

this is a number of years ago from a gentleman who works at the cleveland fed. he did this to his three sons. jonathan: what is it? tom: he dressed his three sons up as me for halloween. that is terrifying. that is abuse. jonathan: i bet they got a lot of candy that way, tom. lisa: they look happy. jonathan: are you saying that is a bad impression of tom because they look happy? [laughter] tom: so much love. jonathan: this is bloomberg. tom: good morning, cleveland. ♪ >> keeping you up-to-date with news from around the world, i'm lisa mateo. elon musk has begun putting his stamp on twitter. the world's richest person close to stake or -- take over of the platform and has begun firing major executives.

ask plans to assume the role of ceo. he also plans to do away with permanent bans on users, a category that includes trump. both like and has cut back sales expectations for the year. europe's biggest carmaker now sees deliveries on par with last year. bw is still being hampered by the ability of chips and logistics remain a challenge. >> we are living in challenging times, with numerous global crises, and this is -- and the supply chain issue is one. what we have shown during the last months was our financial robustness, that we will be prepared for the future. lisa m.: meanwhile, vw says it is struggling to keep up with demand for electric vehicles. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

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bikes the big issue here is -- and it is really a mess -- the

fed is raising rates in a historical way, into a general relational he--- into a generationally-leveraged system. that is not the formula for, wow, let's go out and buy stocks because it is about to get good. jonathan: love catching up with tony, -- tony. looking at the s&p 500, futures down by about .5%. the performance of the new economy versus the old economy. amazon is down by more than 13%. chevron is up by a little more than 2%. tom: those are the trends. can we go to dwyer they are, who was phenomenal in staying in the market until there is a recession. he has amended his tone as we get there. jonathan: because he believes it is coming. in the gdp yesterday, the headline might have looked ok, but beneath the surface there were concerns. tom: i love these people who

have the courage to be in the market through the thick and thin of this. right now i don't have the curse to be on twitter. i'm waiting for elon to tweak me. jonathan: what are you worried about? tom: i want a follow. jonathan: you want elon musk to follow you? tom: yeah, now that he is ceo. ed ludlow with us now on elon musk and twitter. i want to go to a financial aspect before we get to the cultural moment. this is an eight-times of sales, there is rumors of 200 million dollars-plus to the executives exiting as well. frame for our audience how much -- how absurd eight times sales is. ed: he is overpaying for this company. this is a $44 billion deal. there are investors on the equity side. servicing that debt is a concern and there is great reporting on the bloomberg about this. it is a 54% premium of where twitter was valued at the beginning of the year and they

are going to have to spend 200 million dollars on severance, and then the equity for the c-suite which walked out of the building last night, and they are not coming back. this is a stock that trailed the s&p 500 and nasdaq 100 every year since it went public. so, musk kind of realizes he is buying this with risk, but look at what he said yesterday. he put out that public statement saying, i realize advertising is the core of this business. tom: who does he bring in to replace these bodies going out the door? ed: according to sources he brings in himself. tom: oh, come on. ed: yeah, he appoints himself as chief executive officer in the interim. i reported yesterday he brought a small army of tesla engineering talent into the building off of market street. he buddy -- buddied them up, set

them down and made them wade through the code that powers the platform so he can understand how the code works. this is the level of micromanagement that musk has at tesla and spacex. this is not surprising. this is what happens every day across his companies. he takes control, and the names working behind the scenes at spacex, they are unknown because they don't have public-facing profiles, and musk takes not just the public-facing responsibilities, it also micromanages on the product side. lisa: i've been informed i'm going to go as tom keene for halloween, so i have to ask questions and do the tom keene impression. so, unfair question, does this mean for tesla that elon musk is going to be spending so much time trying to reconfigure something, and it does not seem like there is this synergy between the two? ed: throughout the week the market, tesla retail investors,

tesla fans were bracing for elon musk to sell more tesla stock to fund the deal. there is an element of the key man risk. that elon musk is distracted. i think when the news came out from bloomberg that musk would install himself as a ceo i heard from a lot of people that are concerned, because they want him to focus on tesla, which faces supply chain challenges, and also has to be strategic about how it is pricing its vehicles in the face of a global slowdown. he is micromanaging the future of spacex and his group picture goals of getting mankind to mars. there is a lot of concern that he cannot do it all. but also that he is not able to accept, according to sources, his own limitations. he does not necessarily have the skill set to run a social media company. so there are questions about who he would bring in. i'm hearing from sources actually want jack dorsey to come back. the reason they do is that he

has a good relationship with elon musk, but jack dorsey in the meantime can glue together the fractions within that building. remember, this is a company that has 7500 employees. it is not even that many in terms of tech stocks. that is what i'm hearing on the ground. lisa: what is regulatory oversight at a time when this is the billboard that so many people use to their news? ed: i think we have already heard from the markets commissioner in europe, who says in our market we control how twitter flies. in other words, he sent out a name that whatever happens on a policy standpoint, it has to operate within the laws of the jurisdictions in which users use it. musk has said on the free-speech issue he wants to support free speech and allow the widest range of voices possible. but he has also been clear that if you say something, it has to be legal within the jurisdiction

you are operating in. we expect that to be a conversation not just in europe, but globally. and there is the backward-looking. the regulators look at how this deal come about, how musk first disclosed his stake and how we got to this point? how the sites communicated with one another? there is reporting that the fec and fdc are looking at these points. jonathan: they're going to be busy, potentially. there is the tweet from elon musk, let the good times roll over at twitter. lisa: let the good times roll. what did he say, free beer? what kind of leader he will be is unclear. but free-speech means will once again be in the forefront as he talks about removing some of the bans on people like donald trump. where do the moderators go? tom: eight times sales, but you wonder why some enormous company did not buy this up as a research project. jonathan: you said it, price,

right? who wants to put that price up? elon musk eventually, did not want to pay that price, but he has had to. i have heard people say elon musk has had success where there are engineering problems, and this is not an engineering problem. i think that forgets he is a marketing machine. that is kind of what you need at twitter. lisa: although there is the sort of technical issue of algorithms that could potentially weed out some of the bots and other issues that people face on twitter. jonathan: it's funny, i just never thought this deal would close. lisa: nobody did. jonathan: the financing, the debt. lisa: the shares were up. tom: did -- can he see my dms? lisa: you had better be careful. tom: boy, am i in trouble. ♪

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jonathan: that is not nice, lisa. that is technically bullying. futures down by 7 -- .7%. it is not nice, is it? why does she talk to us like that during the break? futures are down .7% on the s&p. futures are up on the 10 year.

lisa: look at those data. [laughter] jonathan: let's get to the eci. the fed talks about the employment cost index, 1.2%, in line with the previous read, one .3%. let's look at personal income. personal income is .4%. personal spending, .6%. that is punchy. the pce deflator year-over-year, 6.2%. survey, 6.2% -- 6.3%. lisa: this actually is on the margins good, right? this is coming in at a lower pace. eci coming in line is impressive considering city was considered -- city was expecting 1.3%. you're not necessarily hearing about the acceleration. jonathan: hard to get a read on how the market is reacting to

this in the bond market because we are seeing yields kick higher in europe. treasury yields stand up six basis points on a two-year. looking at the italian move, up 20 basis points. similar moves in germany. inflation out of germany this morning with an 11 handle. tom: and the duration of it. none of this transitory stuff i'm not hearing anything transitory out of the country's over there. we'll touch on that in a moment. i want to point out, you look at everything here and i have some dollar strength. i wonder, where is the dollar week from now? jonathan: and going into the fed decision next week. that has come quick, hasn't it? tom: yes, and i had a look at the data they will get. the inflation data earlier in the week. they get a ton of data. jonathan: payrolls on friday, then november 10 we get cpi again. tom: 10:00 a.m., the michigan

statistics. michigan statistics are of value if you are weighted to the midwest, as lindsey piegza is with stifel nicolaus. she joins us in studio today, which is an honor. it is the midwest economy like compared to people on the east coast working in three zip codes? what do we get wrong in our focus on manhattan? lindsey: i think we are missing the compounding level of pain we are seeing across the country. we are seeing small businesses, consumers under pressure as a result of rising costs. we are seeing businesses struggle to stay afloat. they are seeing rising parts costs. it is a difficult environment, and sometimes we focus on the microcosm of these major cities that may be faring better, but the rest of the country is under an extreme amount of pain. tom: we are going to get piegza in trouble with her legal

counsel now. there is an election in a few weeks. i mention food inflation of 11.2%. does that sustain? lindsey: i think right now the risk to inflation in the u.s. is certainly to the upside. the idea we are going to see this welcome downward trajectory as the fed has predicted tom: what are taxes on double-digit food inflation? lindsey: caring into 2023 this could absolutely be a 2020 event as well. we are continuing to see these contagion effects in the agriculture market, in the energy sector. this is going to make it difficult for the fed to get inflation back down to their 2% target. member, even when we look at the bloomberg estimates of costs the past several years, the market is consistently underestimating the level of inflation. by anywhere from 50% 50 to 150 basis points. this is an ongoing theme. lisa: some people would argue we

are underestimating how quickly it could come down and we are seeing things like used cars, housing prices start to stabilize or come down. we are starting to see this feeling that perhaps we are not going to get that acceleration in some of the main components driving this. do you say to them, that perhaps they are missing the forest for the trees with respect to price pressures coming from wages and other areas? lindsey: we are seeing demand destruction in some areas, which will translate into slower cost pressures in some sectors. when we are talking about an unemployment rate at a five-decade low, contributing to that upward pressure on wages, coupled with the idea it is not just demand-side inflation, it is also supply-side, and they're the fed has little control over these factors. lisa: consumers are still spending. we saw that gdp print yesterday and that surprised to the upside. how much is this being driven by borrowed money? by credit cards?

we are seeing debt on credit cards climb to the highest levels they have been at since 2019. this is a perilous time to be accelerating leverage, no? lindsey: consumers are still spending, but it is clearly that second derivative decline, inning a slower pace of still positive expenditures. we are talking about sub-2% consumption levels. that is far from impressive. you're also seen temporary factors support the consumer. we did see lower prices at the pump over the past couple of months. we have seen consumers turn to credit cards. while i am not advocating consumers take on debt, we have quite a bit of wiggle room for consumers to expand their balance sheet. we are starting from a relatively healthy standpoint when we look at debt relative to disposable income. that is that a multi-decade low. we have additional room to continue to supplement these lower levels of spending for another month, two, maybe longer. at which point many are optimistic it will be additional

fiscal stimulus to help those in a position of unemployment or hardship. jonathan: next week, november 2, wednesday -- i can't believe it is next week -- federal reserve meeting. given everything you have said and given the dreams of this step down i keep hearing about, how does he navigate that conversation given everything you have said? lindsey: i think he says at some point it will be appropriate to slow the rate of increases and assess the earlier impact of policy decisions. we are not at that point, but at some point that will be appropriate. that will give the committee wiggle room to continue at an aggressive pace. we expect the fed to maintain this aggressive pace into the end of the year and even revise higher their forecast for rates and inflation. it also gives them wiggle room on the others that should inflation rise to the downside, they could look at a more benign 50 basis point increase. tom: you had the honor of robert

gordon economics at northwestern. that book he wrote a number of years ago on the collapse of economic growth in america was gloomy. is he onto something here, or can technology save the american economy? lindsey: it is going to be a question about productivity. addictive it has been languishing for the better part of the past decade at .5%. we look at the growth prospects of the u.s. economy, i think the long run potential is below 2% probably around 1.8 percent. without that influx of productivity, without that i think it is a more dismal long-term potential for the u.s. economy. still positive, but not robust. jonathan: fantastic to catch up with you. and cpa said there on the look ahead to november 2. november, next week? tom: what are you going as for halloween? jonathan: i thought we were mixing it up.

we were going to put chairman powell's name in hat. governor bailey -- no, you don't get to choose. you pick a name from a hat. i'm sure your local spirit halloween will stop those outfits. [laughter] lisa: i'm sure. tom: lindsey piegza with michael for rowley at j.p. morgan these are stunning run rates for the american economy. nobody is set out for a sub-2% run rate. jonathan: lindsey mentioned some of the estimates out there, 5% for 2022, 3.4% for 2023, and 2020 for the estimate is 2.3%. look at cpi, 4.1 percent for 2023, 20 24, 2 .5%. that is the consensus view for the glide path for the next couple of years. jonathan: i'm wondering -- lisa: i'm wondering what diane swonk would call that. jonathan: the word is fanciful. lisa: how do we get there that quickly given some of the

pressures? the theme of the morning about the old economy versus the new economy, and the old economy waging revenge on the new economy of tact. that is not going away. much is that going to be a persistent pressure? jonathan: if you had sent to me 12 months ago we would still have covid zero in china i would not have guessed we could have this sustainable rally we have had in the commodity market. of course ukraine has been a big problem. i get it. the fact we have had this massive commodity boom without china, can you imagine how much worse things would be if we did not have covid zero in china? lisa: we started this by saying how bad i am this, who is good at it? being able to predict any of this stuff? jonathan: thank you for protecting me. that is part of what is underpinning the volatility. jonathan: the cycle has moved quickly, and i think any funny -- any kind of forecast next year, tom, the size of the asterisk next to that, every

single annual outlook, has got to be huge. tom: i have a fond memory of the certitude of three-year forecasts of economists. two years, gone. one year, maybe. jonathan: two weeks? tom: i'm going to go back to the ecb headlines yesterday. they come out in a stream, 40, 50 that time, and none of them were timestamps. jonathan: what they want is to leave forward guidance in the past. what they want is meeting by meeting optionality. the problem they have is inflation is still running away. is that the time to open the door to 2-way risk to be introduced back into the market? if you offer me one way risk and say keep hiking, if you turn to two-way risk, that does not keep nimble. i'm thinking, you sound more dovish. that is what has taken place over the past month. lisa: until we get the cpi report after the election, and perhaps the two-way risk comes more heavily weighted one side.

jonathan: we are at the mercy of that. this was fun, guys. thank you. tom: you are leaving? jonathan: as i always do, for the next show. hugh hendry has made the trip over from -- over to new york city. the founder and former cio of eclectica. from new york, this is bloomberg. ♪ lisa m.: keep you up-to-date with news from around the world, i'm lisa mateo. elon musk is cleaning house at twitter. he has completed his acquisition of the company, and bloomberg has learned he has gotten rid of the ceo and other major executives. muska plans to be twitter's chief executive. plans to do away with permanent hands-on users, a category that includes former president trump. in a survey economists predict the economy will keep laying the groundwork for interest rates to reach 5% next month.

they expect that to trigger a global recession. next week economists see policymakers raising rates by 75 basis points for a fourth consecutive meeting. rishi sunak is taking no option off the table as he tries to plug a $41 billion budget shortfall. that includes windfall taxes on banks. we ask the ceo of not less group about that. >> the u.k. banking sector is already very well-taxed. pay two taxes. a bank levy that is already in place. we do contribute. we are more taxed than other sectors in the financial sector globally. but it is clearly something the government may look at. lisa m.: the announcement on taxes is like the -- is likely to come in the autumn statement surging income failed to impress investors. the first nine months of the year, partly due to the exchange rate effects.

porsche did raise its full-year guidance. that suggests the current quarter may be more challenging. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

>> there is a lot of pressure for companies in china, companies like jp morgan, financials who need to have a presence because that is the nature of their global business. if they start to get pessimistic about china and of the things that is going to happen is they are going to start adding cutouts. in order to keep their business models going they have to be cheerleaders for the administration. tom: william lee of the milliken institute, absolutely brilliant on the changes in china coming off the party congress a week ago. always good to speak to the gentleman. this is a joy.

he is out of the poly seip program at williams college. he did something with an internet company called america online. and he was supposed to lead the cushy life. steve case chose not to do that. more than anyone i know in technology he has gone out and said, from sea to shining sea, how do we do tact? -- how do we do tact -- tech? it is a terse book. i cannot say enough about it. steve case joins us now on what is going on in pittsburgh, what is going on in detroit. you begin the book with detroit, michigan. i get nashville, i get fargo. why is detroit the rise of the west? steve: the whole book is around dozens of cities, but i start off with detroit because it is an amazing story. 100 years ago detroit was the silicon valley of its time.

everybody wanted to be part of the car revolution. it was going game busters for several decades. the net lost about half its population. the year before we came the city of detroit went bankrupt. it was the top city, then it was struggling, how it is fighting. we went back to a company called stockx. none of those companies existed 10 years ago. both of those have 1000 employees and are creating possibility. that is the story across the country, to tell the stories of these entrepreneurial companies. the work of new companies. tom: is big tech helping in investment in sioux falls? steve: there have been more of a backlash against big tech. that had been -- frankly in this economy you have seen big companies cut back on some initiatives that work.

that creates an opening for entrepreneurs. i believe this next five or 10 years could be great. we need to focus on entrepreneurs everywhere, not just a few places. for the last decade 75% of venture capital has gone to three states. the other 47 states are fighting over 25%. the whole idea is to back those entrepreneurs. they are going to be successful investments, as well as having a powerful impact in terms of creating jobs and economic vitality in these communities, any of which have felt left behind by this wave of innovation. lisa: what about the next couple of years? there was ample venture capital available over the last five years. one for less is available. there is not the same kind of free money being thrown in terms of ipos, and a lot less acceptance to tech ideas. what do you think that will do to the pace of development? steve: it might make it more difficult in silicon valley, but

it will likely help with the rise of the rest. it has always been more difficult for entrepreneurs in rising cities to get venture capital. the entrepreneurs have in more scrappy, more capital-efficient. this change in the market where some of the high flyers are seeing a reset, we are not seeing the same reset in the rise of the rest cities. if we continue to make sure venture capital is everywhere, one great statistic is over the last decade 1400 regional venture capital firms have started in these rise of the rest cities. that bodes well for this next chapter. lisa: i can't let you go without having some comment on twitter going private and elon musk being at the helm of this. what is your view bama how entrepreneurs changes as it becomes the mouthpiece, particularly in a private way, the mouthpiece for individuals and politicians alike. steve: i'm a big fan of twitter.

i certainly think elon is one of the most creative entrepreneurs we have seen in this era. i think he does have some challenges, like the dog that caught the car and it is a bit, now what? i know he wants to make some moves on making it more of a town square, but he will need to be careful in terms of making sure he does not trigger more regulation. so, the first day of a new day for twitter. i hope it goes well. tom: what should big tech do with a 10 year strategic plan? the massive cash buildup, selected companies with massive share buyback? it seems they do not have the imagination of what to do with the profit. where should they be 10 years from now? steve: obviously some of these companies have had enormous success over the last decade, as you have said. it gives them flexibility, but the market is saying you need to invest in things like the metaverse, you need to do it in

a balanced way. i think you will see more of that, more pressure around companies in terms of their investment strategies. that creates an opportunity for entrepreneurs who can be disruptive. it has been hard to disrupt big tech in the last decade. it make it easier. tom: there is the fall of selected places, the struggles of chicago and san francisco. lisa: as you get this diversification of sources of entrepreneurship, san francisco very much in focus. this just crossing, paul pelosi, husband of nancy pelosi, was assaulted early today following a break-in at the couple's san francisco home. do you think that san francisco can recover from the accidents, the work from home trends, some of the feeling that it might be on the downtrend? steve: san francisco is a great city. it will still be the leader of the pack. we are not predicting the decline of silicon valley. just the rise of other cities.

i do think you are starting to see a dispersion of talent. the people that felt they had to be in silicon valley now have flexibility. enter capitalist only investing in, silicon valley are investing in them other places. that is why i wrote this book. two inspired investors -- to inspire investors. tom: bloomberg surveillance is about this nation, not just about new york city, and maybe san francisco, and some other things. nobody has done more coast-to-coast than steve case on expansion of this nation and innovation in technology. 240 pages, the rise of the rest, steve case with an update on his work of the last decade. steve case, thank you. lisa, we have to talk here about this. this goes back to lindsey piegza in chicago, talking about the exodus of chicago recently. as another shock out of san

francisco. lisa: how much does this speak to some of the main voter issues, which is crime, the quality of life, and how much can this become a theme? you see republicans trying to be out front on this. how do democrats get the upper hand is interesting timing, especially now that we have fewer than two weeks to the election, tom. tom: the perfect timing to have steve case on with us as he talks about burgeoning cities. we have a burgeoning market. the vix, a good week from that 30 level coming in 27.1. the yields, up 12 basis points. 4% on the 10 year. 4.04 percent. this is bloomberg. good morning. ♪

>> live from new york city this morning. good morning. -0.4% on the s&p 500. "bloomberg: the open" starts right now. announcer: everything you need to get started. this is "bloomberg: the