>> these markets and the way they move, you can tell there is this physician cleansing in the market. >> we should get lower

volatility but i think we need to see the plateau before that will happen. >> i would expect they would still be looking at what's going on in markets with a little bit of trepidation. >> through the end of the year, it's probably ok but i worry about next year. >> this is bloomberg surveillance. jonathan: no idea where monday came from after being exhausted by last week, good morning, this is bloomberg surveillance on tv and radio world wide. jerome snyder is coming up shortly most ahead of the g-20, president xi and president biden wrapping up a three hour meeting. we are led to believe we will hear from the president of the united states at 8:30 a.m. eastern time and we will find out what happened over three hours. lisa: there is a hardening line

you are feeling around the world toward china and it is convenient to look at this since the economy has deteriorated so much and we are seeing companies pullback. what can be said about some sort of softening and what increase in competition not animosity between the two nations? jonathan: take a deep breath, that's governor waller yesterday. we have a ways to go. the official comment from the federal reserve coming into this year's rally. lisa: maybe he didn't like the fact that the markets rally most of the incredible in terms of the rallies and how much are they concerned that you get an undoing of the financial tightening that sets us back further. this raises the question of when the job openings lack the potency of the market. jonathan: are you suggesting this started this morning? lisa: i'm suggesting that the

more the fed tries to target a level on the s&p 500, the market will push back on that and read what they want to into the inflation data. they say we will bet on that. jonathan: this could change very quickly, december 2 is the payrolls root for an december 14, federal reserve meeting and that could change everything all over at ken. we are awaiting for the outlook for 2023. morgan stanley just said let's get it out there and here are some of the calls. morgan stanley, 3900 year ends next year. we are at 3900 now and 3900 year and next year so a flat market from now until then? in between, a volatile time. lisa: that outlook really

highlights how much more you have to bake in a risk premium for everything that potentially is so volatile because volatility itself has an impact on investing ability which is why you see morgan stanley going into high rated credit, high rated government bonds. you can get yield and how do you protect yourself with this volatility that depreciates other assets that have gotten baked up? jonathan: the price action looks like this on the s&p 500, negative by a third of 1% stop the fed has pushed back and this is what it looks like in the market, down one third of 1% and you kind of see it in the bond market. a little bit of dollar strength after monster dollar weakness last week. jerome, you have been patient. do we need to take a deep breath

and calm down? >> absolutely, governor waller's statement highlights that the debate is still ongoing at the federal reserve and as a market participant and as market participants in general, we have to wreck eyes that financial conditions will continue to evolve. whatever that means as far as monetary policy, it means we will have to find ways to absorb the volatility in your respective portfolios and yield is one way of doing that step the outlook becomes increasingly clouded as we get data points. we recognize inflation will continue to evolve and pull back slightly and we think it's move slightly lower. at the end of 2023 but it continues to be an evolutionary process and to simply think you are at a point where the

precision in the market is the end of the market is pulling the river card and drawing an inside straight. lisa: what do you make of the volatility, we heard early basis points. if people are trading so violently off of one stat and not retracing it that much, does it tell you more about what power the feds words have or does it tell you more about the lack of liquidity? >> all of the above. you have to think of markedly but at the in the context stop we have highlighted that the cost of capital is of fundamental impetus for the volatility we see in the market place meaning a higher cost of capital and risk-taking. for investors, that hasn't been rationalized fully yet so we will see systematic recalibration's of risk-taking

in this process. from that perspective, we have to be rational in terms of how financial conditions will evolve and how we can get to a point where the federal reserve will entertain supporting growth but that seems to be premature. lisa: you said this could create idiosyncratic pinch points of pain for investors. what are those points of pain? >> i think you can see it in the crypto markets because the immature markets can lead to other things. when you look at how the market continues to evolve, the points of indigestion are ones where there is not depth of conjecture -- conviction. when you look at the powell liquidity within treasury markets, is not as deep as it once was. that doesn't necessarily rang positively in terms of the death of the market liquidity -- the depth of the market liquidity.

higher cash balances, being more defensive and running portfolios that have longer holdings are the same element of thinking about construction in this uncertainty. jonathan: have you ever been this busy? >> we've been really busy and i think is the confluence of rates and risk-taking most we are restructuring portfolios more than in 30 years. it's what it means to the overall economic environment stop the intersection of these factors is also the geopolitical risks. jonathan: is this just a moment in time where this is something we have to live with for a number of years and whether the fed funds rate is the old world? >> one thing we can count on is that higher rates are here for some time and it impacts growth which will remain and

inflationary expectations over 2% in the immediate term. the construct has changed and what we think about that in a portfolio, we think about are nominal and real yield. we have to put that in the context of what that means for all asset classes. a more defensive posture is warranted. we forecast a slight recession that is more prolonged in nature. these are factors that seem pretty rational given the lack of visibility but that doesn't necessarily mean investors should sit there complacent to opportunities that present themselves and actively position their portfolios around the various risks. you can see that is looking through the glass and finding those opportunities and it has to require patience. jonathan: we spoke to your colleague and good friend and that prolonged point is a key

feature of your outlook which stands out. what do you see that makes you judge this downturn will be more prolonged than some people think. you are net saying short, you are saying prolonged. the inflationary outlook will continue to probably be more prolonged. last week's data point brings into focus slightly more velocity to the downside but in reality, we will see certain factors and elements in inflation remain for longer. that probably portends there is a longer time of lack of growth of some turbulence within that secular landscape step when you look at the positive earners, that's where we sometimes scratch our heads and they require differentiation and steering away from idiosyncratic risks and that's where we are playing the more defensive side. jonathan: i'm not sure what

consensus is for next year but there is consensus around short and shallow. that's not what you hear from the team at pimco. lisa: does that have a more pernicious effect than deep and short and that something that people have to reconsider? jonathan: that's a huge factor for next year, brand-new world. you can stop hiking interest rates but if you get a recession and you're not cutting, i would characterize that as tightening. if you keep fed funds at 4.5%, isn't that still tightening? lisa: have we seen a stealth transit story baked into the market? jonathan: for sure. lisa: you will get that return to what we experience in the past and perhaps other people saying maybe not. jonathan: the bias is deep. lisa: that's been for how many

decades. jonathan: good to see you. it's better than waking up this time on the east coast instead of the west coast. live from new york, coming up, hopefully the president of the united states in a scheduled news conference at 8:30 a.m. news conference with the chinese president. from new york, this is bloomberg. lisa: keeping you up-to-date with news from around the world with the first word -- president biden and the chains present have wrapped up their first in person meeting that took place on the sidelines of the group of 20 in bali, indonesia. >> you assumed the presidency and we have maintained an indication on media conferences, phone calls and letters. but none of them can really

substitute for face to face exchanges. lisa: president biden is expected to hold a press conference within the hour and we will bring that to you live. opec has reduced its forecast for global oil demand again as the cartel implements production cutbacks designed to keep markets and balance. their latest report says weaker economic backdrop and china's anti-covid measures are among the reasons demand is dropping. in turkey, 30 say kurdish military groups were behind a deadly bomb attack in istanbul. the explosion killed at least six people and wounded 81. the suspect has been captured and identified her as a serious national. the amazon founder plans to give away a majority of his fortune during his lifetime. he told cnn he will devote the money to fighting climate change and supporting people who can unify humanity. he is worth 123.9 billion

dollars making him the fourth richest person in the world. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo this is , bloomberg. ♪

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think this is ultimately >> we do think this is an -- a bear market rally and we could see and overshoot,. jonathan: morgan stanley, fantastic to catch up with him this friday, live from new york, good morning with equity softer slightly on the s&p 500 most the road ahead for mike stanley, 3900 year ends next year and we will dig into that later.

ahead of the g20 on the sidelines, we just had a meeting between president xi and president biden and we are getting out read out from the u.s. side and i imagine we will get the china side effects later. the two leaders spoke candidly about their prospective priorities across a range of issues and president biden explained the united states will continue to compete vigorously by invested resources at home and aligning with allies and partners around the world. lisa: so what they said earlier, they want competition but they don't want any conflict. they reiterated that message and they talked about climate change and macro economic stability. there has been some pushback so how does this play into a world where fossil fuels are not real -- reprioritize. jonathan: president biden raise concerns about p.r.c. position, tibet and hong kong and human rights specifically any laid out

that are one china policy is not changed in the united states opposes any changes to the status quo by either side in the world has an entrance and the maintenance of peace and stability. we will build on this later. guy johnson has a fantastic guest. good morning to you. guy: good morning, in some ways, this is related, i am here in berlin with the ceo of airbus who is also the president of the french aerospace association. he is here for a meet and greet between the german and french aerospace communities. talking to people outside this thing, there is a question about france and germany on whether or not they are on the same page and whether they are getting along and i hear this being asked in a number of different

places and i think this will tie into china. good morning in the states and good afternoon here in berlin. let's talk about air france and german -- are france and germany on the same page because sometimes it doesn't feel like it? >> in europe, we are faced by millie any challenges on the energy side and on differences where we have large dimensions and france and germany come from different places. e ifferent priorities and the stakes are not the same so we know it's not easy to find a way forward but it's never been so important to find those solutions together. that's one of the reasons we are here and we have a lot of cooperation in europe with german projects. most of them are very successful. new ones are being for paired

and recently engaged and we want to make this successful. the way to cooperate on projects is having joint stakes together. this visit in berlin today is in that -- against that backdrop of a lot of challenges in europe but we are finding solutions to gather and its probably more important in europe. guy: what about the subject of china? we have also had a trip by the german chancellor to jerk -- to china. he took a number of industrial leaders with them and he's trying to be constructive when it comes to china and many in europe are questioning that. airbus got big orders out of that trip so where does airbus stand on this relationship with china? >> we are working closely with china on different fronts stop we are not involved in defense

but we have a long-lasting and very successful cooperation. we are buying from china and manufacturing in china and we have the successful 1820 family and we are stirring up the markets. we have a market share in china that is roughly 20% -- 50% in the chinese market is 20% of the world and we have a market share of 50% in china. we want to keep this position but we are not naive. we see the way the world is evolving and the challenges between china and the west, europe and the u.s. the way we look at it is it took 50 years to be the high level that we have today between the chinese in the western economies. this will not be changed

overnight. i'm not sure we want to change that deep cooperation on the industrial side. we need to make sure we are less exposed to the risk of a political nature. we see the tensions are rising. let's try to navigate and speak openly with their chinese partners and their chinese customers. we are in a different situation on the covid side. we are looking forward to a future where airbus and helicopters will supply chinese industry. guy: you have a 700 delivery target by year end. you have a ways to go to meet that target and you climbed mountains before, will you do it this time? is the risk that this year you will not make that number? how confident are you you can make that number? >> we have maintained guidance

of 700 a couple of weeks ago with our third-quarter results because we think we can get there. it's an interesting challenge. we are working against the backdrop of a very difficult environment. the supply chains are challenged by the disruptions we see around us but we are working to that goal and i hope we will be able to do the same as before covid. we have the hope that they will reach this 700 mark. the guidance is around 700. guy: the ceo of airbus, interesting to hear what he had to say about his approach and his tactics and his strategy when it comes to china. jonathan: fantastic work as always.

we keep talking about what a difficult environment is for a market strategist and difficult for a corporate executive. looking ahead not just one year but decades in some places and that's tough. lisa: especially for an airline industry that has been transformed by what we saw during the pandemic. every aspect of it intersects. jonathan: we have been tracking the meeting between president biden and president xi and it lasted three hours in a wrapped up and we have the read out from the u.s. side we will bring us some headlines in a moment and shortly, we should hear from the president of the united states himself, scheduled to speak at about four minutes time. live from new york, this is bloomberg. ♪

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jonathan: a three-hour meeting between president biden and president president xi wrapping up inbali and looking forward to hearing the present and we had a reading from the white house about what the two leaders spoke about and the bulk of the tension is around the global

issues and that has to do with the readout. hopefully we will get the china side of things later. president biden raised concerns about p.r.c. practices and human rights. he laid out in detail on taiwan that are one china policy is not change in the united states opposes any unilateral changes to the status quo by either side in the world has an interest in the maintenance and peace and stability. he went on to say that he raised u.s. objections to the prc coercive an increasingly aggressive actions toward taiwan which undermine peace and stability across the taiwan strait and the broader region and jeopardizes global prosperity. president raised ongoing concerns about china's non-market economic practices. toward the end, he talks about russia a little bit and the risk of nuclear war and ultimately he exchanged views on and raise the brutal war against you rain and

russia's irresponsible threats of nuclear use. the two presidents re-every their agreement -- reiterated their agreement that a nuclear war should never be fought. the two leaders agreed that the secretary of state will visit china to follow up on these discussions. lisa: there is a tension underpinning these comments. is it possible to have no physical conflict that percolates into something that risks global peace? also, can it pull back from practices biden calls nonmarket economic to her -- nonmarket economic practices? is there an inconsistency to this goal. will it get exposed by the chinese side in terms of how they respond? jonathan: whose rules are we going to play by? if you can't get market access in china, should chinese firms

have the same access to the united states? lisa: can you withdraw from china if you are a u.s. business? this causes businesses to withdraw from china without it percolating into a broader conflict? what is the con -- was the consequence of the u.s. not following chinese rules and china not following u.s. rules? jonathan: what about the europeans? there is tension between those countries on either side. lisa: for that matter if you are apple or the big corporations that do business in china. olaf scholz took the side of the u.s. encouraging businesses to pull back from pivotal businesses as far as doing business with china. jonathan: we will bring you the news conference when it happens. we are down a little bit on the s&p 500. down by 10 basis points on the s&p 500.

the governor while are pushing back a little bit earlier. a bit of dollar strength down in australia but monster dollar weakness last week. crude is down a little more than 1% stop that she feet, must charged with following some of the feds week, what is you make of the latest comments by the fed governor? >> i think we will see more. the fed has agreed to do more measured rate hikes but as they closing on a terminal rate, we still think terminal rate, the peak is higher than just a few months ago. they will stick to that language for quite some time. when we see the pce index because of the we're medical cost deceleration, the pci indexes a day before the fed meets in december, that will

show a little hotter core cpi. they will continue to raise rates but at a 50% basis point base instead of 75. the fed does not like to see financial rate -- financial market conditions easy when they are looking to tighten this is undoing much of the forward guidance that the fed has worked so hard to establish. jonathan: it feels like the summer rally on the. we saw the s&p move from 380 to 460. do you expect something similar in the december meeting? >> we did have six participants at that meeting that had 5% as the high end of that range.

i would expect to see those participants to move above 5% and we could see the sep move slightly above 5%. our expectation is that the high-end of the range is 5.25% in the middle of the target range. we already had six participants at the meeting in september looking to go higher than what the sep was telling us. lisa: you mentioned medical costs but there was a strange confluence of numbers in the latest cpi report so if you back out the health care component, what does cpi look like? >> the cpi, the underlying inflation numbers look like they are beginning to pay it is the good news and i am much more optimistic we will see a disorderly or welcome deceleration and shelter costs

into year more quickly than the federal reserve expect. that said, this is a number that is too hot for the fed and not low enough for the fed to feel the war is over. i think that is that the fed deals they have to go higher on rates to cool inflation and it is still too hot of an inflation rate them to stop inking about the pain that might accompany it which is a rise in the unemployment rate. lisa: we were just talking to jerome snyder about how this could be a prolonged downturn. do you adhere to the view that perhaps the worst case scenario of a severe downturn seems taken off the table more but that it could be a long time before we see meaningful growth at levels like the past decade? >> i think every recession is different our expectations are for a moderate recession of a couple of quarters without a robust

rebound in the second half of next year. then it will gain momentum at the end of 2024. as a prolonged period of weakness, we will be talking about a high end unemployment rate inching close to 6% which is low for a recession. there are many reasons for that the least of which is not the easing of the -- the aging of the population and those will hold the participation rate down and the overall unemployment rate down. this is a different kind of recession, hitting housing and some spill over into consumer spending and investments will be had at unevenly. we got the ramp up of electric battery pans going on, we got subsidies for chip plants, those are ramping up more quickly than infrastructure spending bill which was passed sooner and that will not hit until well into

2024. jonathan: if the democrats hold onto the house, will that change your outlook? >> i think the biggest change is the risk of the debt ceiling and what that would mean at a time when the fed is still raising rates. we already had the debacle of 2011 and the debt ceiling debate back then. to take that off the table is good news. whether means more stimulus if we had a downturn, i think we are limited in fiscal space. i'm not sure it means more stimulus out there. i don't think they will have an easy path to any kind of changes in policy which is unfortunate. we need to make some major decisions on policy that i think need to be bipartisan in scope and i don't see that no matter

what the outcome is either way. jonathan: fantastic as always to catch up with you. we talked about the readout from the white house on the meeting between biden and president xi. this is the minister of foreign affairs on twitter -- the two sides should respect each other and coexist in peace and work together to ensure the china-u.s. relations move on the right course without losing direction and speed. she goes on to say that china does not seek to change the international order or interfere in the internal affairs of the united states and has no intention to challenge or displace the u.s. china-u.s. interaction should be defined by dialogue and win-win cooperation, not confrontation and zero-sum conference -- competition. lisa: it sounds very collegiate but there is a question of how much the interest of both of these nations can come into some

court of cohesiveness at a time when you seen a real pulling back. there is no clarity on what china's policies are for international business. jonathan: president xi pointed out that countries need to tackle unprecedented challenges and sees unprecedented opportunities. this is the larger context with which we should view u.s.-china relationships. it is almost president biden time at the grand hyatt in bali so 10 or 11 minutes behind. it's just around the corner. lisa: what do they want to signal? how does president biden angle this as a win even though it seems they've expressed the things they are concerned about stop do we get to -- do we get the sense they have come to any agreements? jonathan: we will find out

shortly. looking forward of what still to come. equity futures are down a quarter of 1% and the present of you'd the united states from ba just around the corner. li lisa: keeping you up-to-date from news from around the world, president biden and chinese president xi called for reduced tensions between the world's two largest economies. they met for about three hours on the sidelines of the group of 27 in bali, indonesia. >> as leaders of our two nations, we share a responsibility in my view to show that china and the united states can manage our differences, prevent competition from becoming a conflict and find ways to work together on urgent global issues that require our mutual cooperation. lisa: secretary of state antony

blinken will visit china to follow up on the talks. in ukraine, the president visited the newly liberated city of kherson which was the first major city occupied by russia when it wants the invasion five months ago and the counter and fed sieve just in the counteroffensive for spec u.s. troops. they say the still away to go before the fed stops raising interest rates. governor wallace of the rates will stay higher as they get closer to the fed target. policymakers could lower the size of the rate hikes to 50 basis point the month meeting. and a shooting at the university of virginia in charlottesville left three people dead and two wounded. it took place in a parking garage on campus and police are searching for a man who is described as armed and dangerous. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm lisa mateo this is , bloomberg. ♪ >> it looks like there is improper activity in crypto. you are using investor funds for other means which is really where things get dangerous. . lisa: that was the director of financial security. he was with us early this morning and part through the fallout of ftx, the collapse of a company that had billions of

dollars in market value to zero overnight. if job owning was what the federal governor was trying to do, it signaled a decline. yields are climbing a little bit ahead of a big discussion with lloyd brainard this morning. the dollar is reasserting a little bit of strength after huge bout of weakening heading into the end of the week. it's the biggest two days of weakening going back to 2008. as we wait for comments from president biden after the readout from his meeting with president xi parsing through the wreckage of the past couple of decades. particular over the past couple of years in terms of the money flooding into more speculative investments.

from your perspective, the ftx saga, how much does that represent something bigger you are seeing happening throughout wall street where executives are starting to see things wash of morecambes lately? onali: venture capitalists were flowing money into companies and you would think that kind of behavior would and the last couple of years after risa major hiccups in the venture capital world but that is not been the case. crypto has not operated as a standalone industry away from the traditional capital markets. ontario teachers were among the types investors that were invested in this firm. lisa: there is a question of how much this is an outcome of negative rates and how much this is fraud. a bloomberg banking regulation reporter is in the bahamas and i would let just like to get your

take on how much of this was fraud. was it more and affair is than simply money that went after an investment that went bad? >> that's something that the bahamas security commission and the police are investigating. they have not yet made a determination about whether there was crime or what they have concluded. we learned that some are being probe by investigators. they have to complete their investigation first and they will make a recommendation to the office of the public prosecutor to determine whether there was a crime. lisa: thank you so much, reporting from the bahamas. to your point about the institutional money that is going to crypto assets, how much have we already seen some of the

losses taken down versus the ones yet to be realized and the selling that will have to occur that needs to meet certain margins? sonalil: we will have to see the extent of the contagion. there were hundreds of firms invested that were tied -- tied to other investors. they won't be able to get their money back and will face their own financial troubles and we have to think about the other companies from the broader industry damage or feeling the pain like crypto. calm and the revelation of $400 million mistakenly sent through that net and the lack of confidence. it's very unclear how widespread the contagion is. it's important to think about whether the ftx debacle would have been revealed of the contagion had already started this year. is this just the beginning of a story that will more broadly unravel? lisa: you are starting to see

the lights go on at the nightclub and you see what is left at the party. do we have a sense there are other aspects of the banking industry that is starting to feel more stress, less transparent areas? sonali: if you think about the pension fund, leverage that is hidden outside the banking system, this impacts investors at the end of the day and banks have taken a lot of losses in the last couple of years. this is something we are talking about now but there were serious repo market issues in the last couple of years a leverage has been issued for years now yet it's only now when we see williams of dollars worth of customer funds at stake that people are waking up to pay attention. lisa: devon ryan said this is not necessarily a banking collapse and they are major capitalized but there a question as to how much consumer credit

they can extend to businesses. they have trading desks devoted to crypto. how much are you seeing that already? sonali: what's hard about watching banks take hundreds of millions of dollars in losses is the point you are making. every dollar tied up or lost in a risky bet tied to a corporation or a fund in this instance that is not using it productively is it dollar that's not going into the american economy. it's not going into a large corporation that make needed step i think we are only seeing the beginning. they say the crypto contagion is a direct -- a direct result of tighter financial conditions and it's something we have not seen in many years. lisa: you speak to a lot of senior executives of ross wall street in different walks of the business. how much are you hearing about private equity and private debt?

sonali: i did a panel a couple of weeks ago in miami with two private equity investors and the public investor said why are we paying you guys when we have not seen the markdowns yet? i think that's a tough question because as long as the public marks don't keep going down, they are able to mark down lightly and they're able to stave off pain as long as the markets stay relatively safe stuff we don't know yet how deep the markdowns go when will there be a bigger demand to mark those marks closer to the public markets? that's an open question. lisa: do you have a sense of how big the write could potentially be given how much we have seen public market selloff relative to the public markets? sonali: you have seen marks that are in the low single digits, nothing to crazy at least for

the biggest firms but where they are seeing markups is indirect lending and private credit. i think that's a direct response showing you that things may not be so good and you can charge more when it comes to taking on more credit stop that's the story that's being shown in the numbers. lisa: thank you so much. an important conversation to have when people look for another shoe to drop. looking towards the less traded assets that have yet to be fully repriced, we are waiting for president biden to begin his press conference that was supposed to start at 8:30 a.m. and is yet to start but we are seeing people assembling. anne-marie has been there to cover their proceedings and we got a read out from the u.s. side as well as the chinese side. it seems like nobody wants war but maybe that's where the agreement ends. is there any crossover in terms of the readouts that is newsworthy?

anne-marie: one of the most important parts of the white house readout is that the leaders say they agreed to antony blinken visiting china to continue the discussions which shows this was a frank and candid discussion but that will continue so it looks like this is a follow-up to this meeting that they want to maintain these relationships between washington and beijing. as we wait for the president to arrive, many members of his staff just walked in so potentially the press conference may be underway soon. we know the president and president xi spoke for about three hours and describe it as a candid conversation with a number of topics being discussed, climate change, debt sustainability insurability and the president raise concerns about china's practices about human rights broadly but what's

going on in shenyang and taiwan. this would be the most critical for china in this readout says they maintained that the u.s. policy has not changed. lisa: based on your conversations, who do you think has the upper hand in terms of leverage at a time when the u.s. wants to see more decoupling with china in certain key industries. on the chinese side, they are still the factory to the world despite many companies making noise about on shoring or near shoring? anne-marie: companies are making noise of bout that but the united states and what they are doing is a concern for allies in asia and europe. one thing is the sweeping curbs on semiconductor technology that china needs to advance its military and the biden administration is not gotten the full go-ahead from their allies

on this. in europe, there is a big concern and growing dissatisfaction with the biden administration when it comes to the inflation reduction act and what that means for subsidies for u.s. companies. they seem to be working on having a working group to max it out so these are the type of issues that the u.s. is trying to gain an upper hand on china but definitely looking more so domestically as well as the president in cambodia with the treasury secretary, they are trying to diversify the supply chain and something you hear from countries is what they learned from russia is that you cannot be the line on one country for one commodity or supply chain consumer good

because that clearly does not work. lisa: we heard that from olaf scholz. they want to see german businesses move away from china. is there anything we will learn today that could give some sort of insight into the muscle the u.s. or germany will put behind that message? they can say that but companies are going in the opposite direction. anne-marie: they continue to embarq on likes sweeping up the curbs. if you are u.s. company and there's u.s. technology in your chip, you cannot send it to china. the big issue now for germany in terms of the economy is relying on china. if you're a company that has an ounce of u.s. technology in your chips, washington has signaled that you cannot send that to china. these companies are in the crosshairs and that was probably

part of the discussion which has probably hurt china and we should note another big part of this discussion is what is going on with north korea. on the heels of this meeting, the resident set them of the leaders of japan and south korea . the message was that either china rains in north korea or you can expect a bigger military presence in the region. lisa: i'm wondering if that will be the big takeaway. how does the united states signal they will take a hard-line on some of these regions whether it's north korea or taiwan. they want to bring taiwan under mainland china so how much does that create a conflict of the u.s. is building up a military presence in the region?

henry: this is china's biggest concern and has to do with the fact that the president on at least four occasions, most recently set timber, he was asked will the u.s. and military troops in president biden said if there was [indiscernible] it's something they -- the president wasn't willing to do with ukraine but he is willing to do it with taiwan. one thing to watch out for when the president takes the stage hopefully momentarily is he is going to sound more hawkish on taiwan or will he? or will he stick to the script of his readout which is the u.s. is not changed its policy? lisa: thank you so much and we

will look for your insight after the press conference and we are awaiting that which should begin momentarily. president biden is set to give remarks after is nearly the our meeting with jeezy thing talking about a host of issues having to do with taiwan and north korea and russia and trade as well as making sure the two nations to not lock horns. in markets, we are seeing a little bit of softness after last week's incredible rally. we saw the yields rising with the price down on bonds and trying to retrace some of what we saw in the last two days of last week for the bond market after chris waller's comments over the weekend. the cpi report should not affect that. we will give you insight around the press conference from president biden, the first meeting between the united states and china, the leaders of

that nation in person since the coronavirus pandemic. from new york, this is bloomberg surveillance. ♪ >> good morning. still recovering from last week. equity features still -1%. >> everything you need to get set for the start of u.s. trading, this is a bloomberg the open, with jonathan ferro. jonathan: we begin with the big issue. president biden r