>> welcome. i am mark crumpton with first word news. the head of the international monetary fund says global inflation may be close to its high point. they spoke to bloomberg at the u.n. climate exchange summit in egypt. >> it's very possible that we now see central banks very united on fighting inflation and rightly so. if we don't succeed, it would be anger. the foundation for growth which is price stability. mark: it would also be a struggle to bring consumer price gains down to a more palatable pace. it's a day of disruption in toronto. 2200 workers went on strike

against metrolink, which runs part of the regions public transit network. at the same time, schools are in upheaval and may be closed after education support workers walked out. a top economist at goldman sachs says there is a plausible path for the u.s. to avoid recession. he says that involves a moderation in economic activity, a slowdown in wage growth, and easing of inflation, and a rebalancing of the labor market. goldman sees a 35% probability of a u.s. recession in the next year. that is well below wall street's consensus. the northeastern u.s. is hurtling towards a winter heating crisis. heating oil delivered to new york is the priciest ever. retailers in connecticut are rationing it to prevent panic buying and there are warnings of a natural gas shortage and if you add it all up, northeastern

consumers faced the highest energy bills and gave this winter. 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 mark crumpton. this is bloomberg. >> welcome to bloomberg markets. >> let's get a quick check on the price action because this is the day before you are starting to see midterms in the united states here. stock market a little bit green on the screen. perhaps wait and see when you look at the stock market, something the nasdaq in the russell 2000, momentum plays are clearly lacking. that is where you are seeing a little bit of movement but not a ton. 4.19 on the 10 year yield.

a message that the dollar is not following because on a day where you see yields higher, the dollar is weaker, down .4%. even that is not giving much of a bump to brent crude this morning, about .5%. jon: energy as a group has found some buying interest among investors on wall street. case in point, a name like occidental petroleum, a favorite of warren buffett, up about 3% on the day. in the drug sector, it has been a big mover higher on a busy deal day for that company. the shares up 14.5 percent. a mixed story in technology right now. so bring headlines within the tech sector on layoffs and obviously, reports of action coming at facebook's parent, meta, have been well received on the street. the road ahead for china and the covid zero reality, which is

obviously impacting apple. they had that statement yesterday on iphone production being impacted by that and the big stock obviously under pressure right now, off about 1%. kriti: certainly something we can see move quite a bit in the coming days. the u.s. midterm elections are clearly coming into focus, completely a potential game changer for the investment case across wall street. something the bloomberg mliv pull survey really -- poll survey really dug into. here's how some of them responded. >> after the midterms, in the next six month period of time, it tends to be the best season for equity markets. >> you don't want to take money out of the market here. >> i want to see if this rally ends here. >> people have been for the most part under invested. >> the real challenge is finding out what is the least painful way of addressing inflation right now. >> many people in a midterm

election year don't agree that we are in recession now. >> we think that there is some pain in front of us so this is more of a good time to reposition. >> there's the context. let's head out to philadelphia where one of the most closely watched u.s. senate races is taking place. kailey leinz is there. >> there is a reason why this race is so closely watched and that is because it could be crucial in deciding the ballots of the senate which of course right now is split 50-50. this is a seat held by pat toomey so it's one of the democrats best opportunities to flip a seat. the democrat trying to do that is the current lieutenant, progressive john fetterman, who is running against the republican candidate, dr. oz. this is a race that is a tossup. the bowling average is 47% for each candidate so it is

literally neck-and-neck. what is so interesting is that our men have been holding a steady lead for the duration of the campaign until just a few weeks ago so what has changed? broadly, there is what is happening on a national level with momentum building for the republicans as we have gone closer to the boat with the economy front and center but part of it has to do with what took place two weeks ago on october 25, the first and only televised debate. he is struggling from the effects of a stroke he suffered in may, days before winning the democratic primary. he had to use closed captioning technology to help with auditory processing issues, gave halting answers, and it raised a question of his fitness for office as well as transparency because his campaign has not released his full medical records. so that is a contributing factor into the tightness of this race. it's going to be too close to call and it could be that way for several days because we do not expect a final result for days after tomorrow's vote because of the mail-in ballots counting process and the sheer number of those that counties

have to contend with. kriti: that could hit pause on some of the stock market cases. let's talk about that investment case and really talk about the issues that are at play here. what could change with either candidate in control? kailey: because this cousins down to control of the senate, a lot could change when it comes to fiscal policy generally. when you have a divided government, that is not something that easily can find -- consensus cannot easily be found. in regard to issues, one of them is abortion. candidate fetterman said he would codify roe v. wade if given the opportunity while dr. oz is a little bit more restrained in his views on abortion. he said he thinks that should be a decision between women, their doctors, and local political leaders. that is an issue as well as energy policy. this is pennsylvania, the keystone state. the energy industry is the second largest contributor to

this economy so the issue of fracking has become a big deal especially because federman has flip-flopped on his stance on issues of several years ago, he said he did not support fracking and in that debate, he says he does indeed support it so energy policy could shift depending on the outcome of this race. kriti: kailey leinz doing some real reporting in philadelphia. we thank you on the eve of this crucial election. the midterms, less than 24 hours away. let's discuss voter turnout and bring in the director of economic policy. henrietta, always a pleasure to have you on the show. we were talking about some of the issues at the heart of this particular midterm race. what is the game changer for you? >> thanks so much for having me. i'm really happy to be here. i think the game changer is something we can already factor in and speak to. we publish for our clients on a constant basis.

ohio would be a good example. they don't have a ton of data and they get massive revisions by an estate like pennsylvania, democrats have run up such an incredible lead in early voting as have so many other states shown tremendous early voting. georgia breaking records even versus 2018. we can surmise a lot of data from the early voting that we have seen so far. one of the core components that i think is most interesting is nevada. that is a race that we have long anticipated. the preeminent nevada watcher who is calling data from these early votes out of clark county, washoe county, is seeing room for democrats to hold onto that. for folks who are just trying to wait out the next 24 hours, there's a lot in the early voting data that i think is interesting. jon: no doubt. henrietta, the markets have been grappling with a lot of big economic issues. the navigation of inflation.

just in terms of the feedback you're getting from your team's research on which economic issues matter most, what generally speaking has been standing out? henrietta treyz: great question. we get a lot of questions about the disparity between the lame-duck session and next year and there is a very big difference. to get specific, the next two months will be more impactful in terms of d.c. impacting the markets then the next two years will be. if republicans win the house and/or the senate, we will be looking at stalemate and gridlock. that's not the case for the next two months. between november 16 and december 16, you have $300 billion worth of tax credits on the line including a monster research and development amortization period shifting from one year to five years, which is huge for tech and pharma companies. you have the ability to deduct depreciation and amortization from your net interest liability is which is big for gas

companies and the energy sector. you have 300 billion worth of tax policy that can or may be will not be enacted as a result of this election dressed in that month-long period between november 16 and december 16. another big one would be the pipeline permitting legislation that senator manchin, democrat of west virginia, secured an agreement on with the majority leader. it is my excitation that if the senate flips hands, in republican control, that bill likely will not pass and they will lose the willingness of democrats to cater to senator manchin and pass that bill in the last month of the year. i think those are probably the two biggest pieces. the third and final one being government funding and aid to ukraine. we know that there is a substantial defense authorization act. $900 billion roughly worth of spending, a good chunk of which goes to ukraine. the defense stocks are where a lot of our assets are focused as

well. kriti: i know you have some expertise on health care policy, specifically. my understanding is the gop would target health care policy from a hospital insurers point of view whereas democrats have been looking at drug pricing specifically at what are the onset some of those policies actually change in a gridlock result? henrietta: i think there is a lot of optimism out there. i did not share that optimism based off of the last two months, the way we saw, for instance, minority leader mcconnell respond to the permitting bill and yanking it from a government funding bill at the end of september. i don't see a lot of goodwill. more problematically, i see a lot of attention on the 2024 presidential and that means both parties are going to want to preserve any of their talking points and carry them forward into the next election cycle. unfortunately, it's not too early to start talking about 2024 and i think both parties think that they have a winning argument. the other -- on the republican

side. i think that what you are going to see is both sides dig in on their particular issues and carry those forward into 2024. we will see that on the tax front as well. kriti: henrietta treyz, veda partners director of policy. coming up, we will continue our focus on the u.s. midterm elections connected to the investment point of view. this is bloomberg. ♪

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>> this is "bloomberg markets." i am kriti gupta alongside john oakland men -- jon erlichman. as the u.s. midterm elections are expected to usher in a new era of divided government. for the stock market, that sounds like a good thing but for the economy, maybe not so much. the democrats are losing the house majority and possibly the senate as well. keeping an eye on the results across the board and country. joining us now to discuss what is at stake is clayton allen, u.s. director at eurasia group. thank you for joining us especially onset here in washington, d.c.

let's start with what is at stake here. we had henrietta treyz join us. she was talking about some of the issues in energy policy but it feels like there's a lot of corporate investigations that may be at stake as well. walk us through your take. >> thank you so much for having me. i would like to reiterate something henrietta said which is you are probably going to see more happen in the next two months than the next two years and one of the results of that is very little room for new legislation in the next two years. a republican house majority is going to use its authority to haul by the bending -- how -- biden administered haul biden administration reps in. and the general slate of economic policy issues. jon: what do you think that means for -- i'm sorry to interrupt. for a market that gets caught up in this idea of these midterm elections coming in a cycle of the market when you tend to see outperformance and the idea of

gridlock being something that is well-received? what are some of the nuances to be watching? clayton: the biggest thing to watch is you are likely to see very little actually change when it comes to u.s. energy policy. the white house is still going to be the locus of control for regulatory activity, executive actions, and the like. what you are likely to see congress do is use the platform to emphasize to the schism of the administration. for investors, look at this as a period of somewhat stable progression of regulatory action, somewhat stable moves in terms of, you know, not many big new bills that are going to change drastic parts of the u.s. energy economy and the way the inflation adduction act is. it's a time for investors to look at this as may be something that's a little bit more predictable in terms of what happens. kriti: what does that mean for spending priorities? you know the market hasn't pricing in certain no-brainers, things like energy stocks, aerospace and defense stocks

have been outperforming the market more than ev stocks which have been underperforming the market with this idea that the gop is going to potentially take over the house. in that scenario, are those fiscal spending assumptions correct? clayton: they likely are. what you are seeing -- you are seeing a shift in the republican party away from sort of absolute fiscal austerity. you are seeing an increased focus on wanting to increase fence spending and an increasingly populist republican majority is open to keeping domestic spending high as well so i would agree with some of the predictions that people have made about defense stocks being an absolutely no-brainer. energy stocks with oil prices on the increase in set to remain high next year, a republican majority trying to push back on epa regulations and efforts to curtail drilling. you are likely to see those as a good winter as well. jon: helpful context on the very sectors to be watching. thank you so much for your time and we will be watching closely.

clayton allen, u.s. director at the eurasia group with his perspective on the midterms. in canada, rogers getting its day in court as it fights for its proposed takeover of administration company. we will have the latest details, next. this is bloomberg. ♪

jon: this is "bloomberg markets ." time now for today's for what it's worth. two is our number, between two major cable nominees in this country, we have been seeing a major deal that's trying to come together. rogers communication's has a deal on the table to acquire chakra medications what their lawyers face -- shaw communications. derek is the managing editor for bloomberg and canada and has been covering this latest development and it seems like

lawyers representing shaw communications have been the most vocal so far. what can you tell us? >> this case is really overreach. this whole thing revolves around the wireless business where rogers wants to take over shaw but rogers is already the dominant number one player in the wireless business in canada so the competition commissioner and the government have already said you cannot get any more powerful than wireless. cable tv is a separate story, but they made a deal to sell the wireless assets to a third-party but they are getting sued by canada's antitrust commissioner for who wants to block -- who wants to block the whole thing. it is a battle about is the solution to the problem of too much power for rogers, is that solution enough? kriti: i believe there was a long, drawnout saga within rogers as well.

what does the family think about this? derek: the family a year ago was battling against each other where everett rogers, the chairman of the company, was fighting his sisters and his mother all about control of the board and who should be the ceo, who can take this shaw deal over the finish line. for the past several months, that has gone quiet. it seems as though all sides of the family, they may not like each other too much at the moment, have decided to stay a bit quiet about their own battles while they try to get through this difficult regulatory hurdle in ottawa. the stakes are really huge. $20 billion canadian. this is one of the largest corporate deals canada has ever seen and it's potentially the union of the business empires of two of the richest families in the country. jon: the question is a reminder of how long this has been playing out and how much longer could it play out from here? derek: these guys announced this

in march last year. they thought they could get it done by summer of this year and we have obviously blown way past that. the companies really want to close it by the end of the year because rogers is on the hook for hundreds of millions of dollars in additional payments to its bondholders if it goes past the end of 2022 but they are hoping that at the very least, they can get it closed by january and we expect the court will rule somewhere in december where the middle of january. kriti: derek decloet derek decloet managing, -- derek decloet, managing editor. a fascinating whirlwind. let's look at these markers because once again, stateside, it is about this midterm election and the cpa data we have on wednesday as well so wednesday morning will be a lot to digest. the s&p 500 about .4%. the bond market only up about three basis points higher on the 10 year yield. we are circling 4.19. the dollar weaker by .4%.

we will see if that sticks more markets coverage ahead. right here in washington, d.c. this is bloomberg. , ♪

mark: ukraine's president,, volodymyr zelenskyy, once iran to be punished for helping russia. he said if it was not for iran supplying weapons to russia, "we would be closer to peace now." both ukraine and the u.s. say that russia is using iranian drones in the war. the united nations unveiled a plan today to install early warning systems around the world within five years, to mitigate the human impact of extreme weather disasters, like the recent floods in pakistan. the u.n. secretary-general spoke at a summit in egypt on the state of the climate progress. >> pakistan