>> we welcome our bloomberg audience. i'm john hyland. xi jinping met with chancellor olaf scholz today in beijing. he used the occasion to send a message to vladimir putin. he opposes the use of nuclear force in europe. those were his most direct remarks yet on the need to keep russia's war in ukraine from escalating. u.s. employers added more jobs and expected last month. payrolls rose 261,000 in october following an upwardly revised 315,000 gain in september. that underscores the strength of the labor market despite the aggressive efforts to cool it down. the unappointed raised at 3.7% has process of predation -- as participation declined. donald trump's team is looking

at november 14 for the launch of his presidential campaign. an announcement would be followed by a multi-day series of political events. last night, the former president sent the strongest signal yet he plans to run again at a rally in iowa. he said he will "every probably make another bid for the white house." oprah winfrey has thrown her endorsement to democrat john fetterman and the pennsylvania u.s. senate race. he's trying to win a tight contest against men at all was -- mehmet oz, the celebrity doctor whose rise to fame began as a guest on winfrey's talkshow. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am john hyland. this is bloomberg. ♪

>> welcome to bloomberg markets. kriti: interesting day when we're looking at a job support that has the stock market rallying. we had four days of declines until the buildup of the job support. i wonder how much this has to do with the fed pricing. the 5% terminal rate that perhaps still had more to go. perhaps the market is already ahead of it and that 5% terminal rate is exactly where it should be. really reinforcing the idea if in fact those expectations stall, d creates a case for the stock market. one fundamental narrative for stocks for the rally you have seen. earlier in the session it is flat on the day but the tug-of-war is something to be watching for. a lot of villa to liddy in the bond market -- volatility in the bond market. up about one basis point. a lot of this will be a reaction to the jobs report they came in hot, hot, hot. the bigger move is in the

dollar. down about 1.4%. having the weakest day since march of 2020. how much pain that is in the fx markets, especially you are long on the dollar. does that create a case for an overcrowded trade in that particular currency? we have to look at brent crude. marching closer to the $100 level. $98 handle. up about 4% on the day. john: your macro comments highlight some of the stocks, specific movers in the s&p 500. materials are the best performers. gold on the move with the u.s. dollar weakness. financials to the upside, as are some individual stocks as we roll through earnings season. getting a sense on how each company is navigating the headwinds. always a good lesson. in the case of starbucks, up about 7.5%. the pricing power for people interesting and buying their products, their drinks or food products, they seem to be doing ok on that front.

expedia has been a well-received story on the street. shares up about 4.5%. bookings could have been stronger but there's a take away that some hurricane activity slowed down the short-term story. they are seeing a relatively upbeat travel picture. how many times have we talked about weakening trends? we are seeing that from warner bros. discovery. shares 14% right now. -- off 14% right now. monster beverage trading around record highs. up about 6%, margin strength. that's been a strong performer over the long-term. kriti: certainly something we are going to keep our eye on. let's bring it back to the u.s. side of the equation. the macro story. bloomberg spoke with marty walsh after some pushback about how the government plans to keep unemployment down and lower inflation at the same time. here is what he had to say. >> i am not an economist. that has to be very clear. when you think about where we

are at this moment in time, what i will do as secretary of labor is make sure americans have opportunities to get good paying jobs, whether it is workforce development, apprentice programs, working with states and cities. that is my responsibility right now. john: let's dive into the numbers with economics and policy correspondent mike mckee and dana peterson, chief economist for the conference board. michael, we got a job support today you had a much stronger than inspected job support and continues to come look at the central bank story for the bank of canada. in terms of the fed's role after this job support today, what is the general take away on the street? michael: it does not matter a lot. there is something for everyone in this report. the good news is the -- for the fed, the unappointed rate went up to 3.7%.

they know it is supposed to go up. to have it start to move is good, although we don't know whether that will continue. the bad news is the strong job creation, 261,000 and the big revision to last month. the problem here is that the fed does not know looking backwards which of those narratives is going to prevail going forward. we have another employment report and three inflation reports by the time you get to the next fed meeting. i don't think this will mean a lot to the markets. let's talk next thursday will beget the cpi. -- when we get the cpi. kriti: i want to ask about unionization when you are hearing from railway workers about rail strike, when you are hearing from starbucks, from twitter employees. unionization my becoming more to the forefront. we were speaking to marty walsh

about the railroad strike. i want to play some sound and give you a taste of what he had to say. >> if we don't get to an agreement, congress will have to take action. that is by design and in the railway act. the president has the authority to put together an emergency board, which he did. they came back with recommendations. the unions have to ratify. if they don't ratify -- we have two not ratified -- congress is the last stop to take action. kriti: in that context of a rail strike, what does that do to the jobs picture? you have higher wages. is that something that can change the labor market permanently? dana: certainly we are hearing more about the unions being developed and formed. most people are individual bargainers when it comes to their wages and salaries. we are seeing people express

their opinions with their feet. when we looked at the jobs data this week, we are still pretty elevated and you have a lot of job openings indicating people still feel confident leaving their old jobs to look for higher wages. between the quits, that is driving up wages. probably more than the unionization we are starting to see. i think that certainly when you are looking at this, even chair powell said he will be looking at how many people or how many jobs are still open in terms of vacancies as a measure for how strong the labor market is. john: mike, do we have a sense on what that labor picture might start to look like in a week where it feels like we are increasingly hearing about not always layoffs but certainly layoff announcements? particularly in the tax sector and hiring freezes increasingly announced. michael: that's an interesting

distinction. we seem to be getting more companies announcing hiring freezes then necessarily layoffs. a lot of companies spent the last two years just really trying to find workers. they may be slower to let them go and it may take longer for the job creation number to fall. particularly in certain areas of services where they had a hard time getting anybody to come back to do the jobs. we should start to see the unappointed rate go up as the economy slows. we should start to see wage gains start to fall on a year-over-year basis as the economy slows. down the road the next couple of months, if that happens, the fed can look around and say maybe we are getting where we want to be. if we get a rebound or something like that, they will be forced to do more. kriti: let's bring this back to the federal reserve. we have a fed swaps market pricing and 5.25 even the

chairman powell said higher and higher and higher is where they are headed. it's a market that has not necessarily changed its tune. does that mean the 5% terminal rate is on point for what the federal reserve is going to target? dana: what we do know is that the fed is going to be raising that terminal rate from what we saw back in september. it will probably be 5% and potentially north of that. the fact that markets are pricing that in makes sense. the key thing is that the fed is trying to let everyone know it's a missed attempt at inflation. if that means interest rates must go higher, they do. markets should not be focused on when the fed is going to stop and when it's going to peek but the fact that as long as inflation continues to disappoint the fed feels it must raise interest rates. i think markets are beginning to price that in a little bit. we saw the selloff the other day in reaction to that commentary.

i think that's the important message the fed wants to send. the fed will not back off and allow inflation to re-accelerate. john: mike, does that mean all eyes are starting to turn towards the cpi print next week? michael: i think that happened at 8:31 this morning after the jobs never came out. cpi has been first and foremost for investors in the last year or so because the fed made it so. they turned their focus of the inflation dilemma and bringing that down. yes, the cpi on thursday and after that at the of the month we will get the pce numbers, the one the fed follows. those will be very determinative in what the fed things they need to do in as far as how heidi -- as far as they need to go. after those data points we may know more. kriti: anything could happen

between now and december 14. mike mckee and dana peterson, thank you for your time and insight. coming up, the effect on the dollar. his weakest day going back to march of 2020. we look at the latest on the currency market from win thin at brown brothers harriman. this is bloomberg. ♪

kriti: this is bloomberg markets. the u.s. dollar coming under some extreme pressure following the u.s. jobs report. joining us for his take is win thin at brown brothers harriman. thank you was always for joining us and for your time. clear seeing the weakest move in the dollar going all the way back to march of 2020. can you expand the logic behind that price action? win: in a word, no. it is one of those days where price action does not make any sense when you have the fundamentals. you have been talking about we had a great jobs report, a hawkish fed, and that's the recipe for a stronger dollar, higher bond yields. we got the initial response but we had a complete 180.

it is one of those days where i have to say i will pack it in for the weekend. let's reassess on monday. the fundamental drivers remain dollar positive. it could be a positioning story, what have you. the underlying fundamentals still support a stronger dollar. john: i guess if we look at the dollar charts since september you see more that choppy trading action. in the way that the conversation around where the fed goes from here, even the flows in the equity market, are we at a different point after such a strong year of performance versus many other currencies, including the canadian dollar? in terms of the volatility increasing this fall? win: undoubtedly it has increased. in the past volatility has been

driven by central bank policy and communication. i will take the other side for the past couple of months, since the august jackson hole symposium. the fed has been on point. they have been speaking with one voice, saying we are going higher for longer, etc. the market keeps trying to find a top for the tightening cycle. markets keep searching for some sort of sign of positive pivot. that is what is driving this. trying to find an inflection point that i don't think is there yet. mr. powell is quite clear. the markets will continue to search for this golden nugget. we will continue to have volatility until year-end and probably next year. the underlying signal is higher for longer. i know a lot of people are trying to call a top to the dollar. if you don't like the dollar, where are you going to go?

you have to pick another side of this trade. look at eurozone. it is heading into recession. the bank of england admitted the u.k. is going into a two-year recession. japan is ok but are scared of yield curve control because of weakness. there is no obvious alternative to the dollar. the dollar story itself is quite solid. it is full speed ahead. we will get a lot of choppiness but you have to buckle your seatbelts. kriti: the concept of no alternative when it comes to the dollar is interesting. a lot of people would say it's a crowded long trade. it feels like in today's equity market trade a lot of the early gains centered around the idea the fed expectations for their terminal rate is going to stall out at 5%. yesterday the idea was is it even more than 5%. if indeed the market is correctly priced for how far the fed is going to go, does that

make the bayer case for the dollar even bigger? --bear case for the dollar bigger? win: when you get to the terminal rate, where do you go from there? look at the swaps market. the markets are still pricing and easing cycle next year. that is completely ludicrous. the fed has been clear they are not going to cut rates anytime soon. this is not the fed of 2019 where we had that midcycle correction when equities got nervous. the fed is in this all the way. and easing cycle is a 2024 story if we are lucky. that is the missing piece. trying to call the top and the rates and trying to call the start of the easing cycle, it's a lot of wishful thinking. we have not even gotten to the recession yet. we have not seen a slowdown.

we don't have that it will get in the u.s. it's just wishful thinking. i need more to go on than that as an analyst. john: win, are you thinking about what this strong dollar means for the inflationary picture in other markets? i come back to the fact that in canada we have seen a week loo --weak loony against the greenback. often times it is seen as an additional complication for the canadian economy, the fact you have this strong dollar and arguably canada importing inflation from the united states. win: absolutely. if you look at the fed commentary, they say strong dollar can be an issue. we are setting policy for the u.s. we are cognizant of our spillover effects but when push comes to shove we are looking at the u.s. economy which is running hot, inflation running hot.

geely thing that would change the fed's mind is if there was some sort of financial crisis triggered by a strong dollar. i don't think we are anywhere near that. strong dollar is a problem for other countries, this specially frontier markets, emerging markets that have trouble servicing debt. in terms of the financial crisis that would make them blink, we are not anywhere near that. john: good to have you as always. lost a watch in the currency market and the u.s. dollar trade. win thin joining us. coming up, and attempt to encourage reinvestment by public corporations. justin trudeau's government is taking steps to level the playing field. more details our next. this is bloomberg. ♪ ♪

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john: this is bloomberg markets. time for today's for what it's worth. 2%. that is the tax the trudeau government unveiled yesterday on stock buybacks, a way to get companies to invest in their business instead of buying back stock. it is double the tax president biden unveiled in the inflation reduction act. businesses were not quite enthused. some investors think companies will end up buying back more stock in advance of the change. this was an opportunity for the government to talk about fiscal discipline because government spending is a concern with inflation staying high. you don't want to look as if you are at odds with the central bank. it became a wrinkle we were

watching unfold as a government unveiled its economic update yesterday. kriti: it is coming at a time when we talk about jobs and jobs in the tech space that are leaving the workforce. a lot of the reaction is coming from a lot of these mega-cap tech companies and other companies with so much cash on the balance sheets. you ask analysts. what are they going to do with that? the answer tends to be there waiting to deploy it at buybacks when you see enough of a fair level. it is interesting the corporate take on the side of the country is perhaps almost similar but may be waiting for a lower level to hop in. john: that's a good point. it's a complicated time. we are talking about both sides of the border with reasonably encouraging jobs reports. yet it creates a level of distress. it's a reminder that interest rates are going up and the economies are cooling. kriti: perhaps that is some part of the sentiment that is driving something going on in the stock market. s&p 500 still flat on the day. underperformance and the nasdaq.

more markets coverage ahead. this is bloomberg. ♪

john: it is the first word. hi john highland. marty walsh says he's communicating with railway companies and unions daily after two groups rejected a last-minute freight rail agreement. that was the one the biden ministries and help. he spoke from washington with jon ferro. >> i'm not an economist. that has to be clear. when you think about where we are at this moment in time, what i'm going to do as my job is make sure americans have opportunities to get good paying jobs, whether it is workforce developments, apprentice programs, working with states and cities across america. john: sixns