there is an extremely elevated chance of recession. >> the fed has to pray the market quiets down. >> they will watch what is happening in response to what they've already done so far. >> we have another market where the fed starts cutting interest rates. >> we have more confidence that this rally will continue into december. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. >> leifer merrick city, for our audience worldwide, good morning. this is bloomberg surveillance. on tv and radio, alongside tom

keene and lisa i am jonathan ferro. an up week on the equity market. going into this payroll report, the number we are looking for is 200 k. we are focused on jobs, but what we are focused on is the whisper number. >> was the whisper number? it is lower. >> this is weird. there is some gloom out there. seriously. there is some gloom out there today. the jobs numbers in the whisper number. 200 is a run rate. it is a 150 thing. >> this is two-year and. payroll today with a couple of weeks. december 13 and 14th. at that decision. wells fargo said to me that he thinks chairman powell took the teeth. out of the cpi report in two weeks. i wonder how important people think the payroll report is. >> every data point will matter. i just wonder how inflation moves. we had peak inflation.

we expect numbers to be weaker. how week is ok or not to take their foot off the federal in some way that is meaningful? >> it is good news and bad news. are you going with that? >> good news bad news? yes. hotter than expected, and it will be read read >> the tree in bushes being delivered. they promise. there will be a squirrel inside. >> you want to know happened last night? heat face time me and asked see my tree, he proceeded to chris -- criticize my tree for an hour. >> that's not true. >> he still going. trees are personal. >> he doesn't like the white lights. >> clearly therapy didn't work. >> let's talk about trees. >> your tree is perfect. >>-ist just a statement. it's a perfect tree.

>> this is what we go through to decorate the tree. >> it is like the military. things have an equal distribution. different color. marching music. like tchaikovsky. white bobbles and glass bubbles. mixed with -- it is good. i will share on twitter later. you can tee off at this rate. >> they came out after the third day. >> the equity market is unchanged. equity futures on the s&p 500 down. not even 1%. i gotta tell you on a two year, we are down 27 basis points on a two-year yield. >> this aversion about a single yield number is to see the vix close at 20. it's a huge deal. to me, it was the market front running this jobs report. it's like 10,000. is not a big deal.

it is 19.8, but it is 20.18. but the symbolism of going from 31 and all that gloom from weeks ago. down through 20 to me was a big deal. >> a bit more dollar weakness. lisa, 105. >> how much bad news do we need to be optimistic that the fed will not move as quickly as they previously expected? when we get that labor market report, people are having a whisper number that is softer than expected, but how much do wages come down, we have seen wages rollover a bit. again year-over-year on the last monthly reading. how do we see that continue, and at what pace isn't enough to get confidence for the fed to really not raise as long or as far? jonathan ferro will be speaking to labor secretary. very curious to hear what he has to say about the real strikes. he was involved in talks with that yesterday, but also,

dynamic between the power of employees versus employer, and as a union person, how he would like to see that proceed. we do get a host of fed speak including thomas parkin. and charlie evans. one of the last events before retiring, we now know that austin bulls be of the university of chicago will be taking over. >> thank you. what do you make of that? >> i know the professor very well. he is a former member of the milton academy debate team. i used to put this on twitter. this is an inspired and controversial choice. he comes across so kind and so convivial. you don't understand his first order shops underneath it. he is underestimating it. he has been underestimated his whole career. i thought it was inspired. i'm sure we will catch up with him. >> looking for to that. we are joint with u.s. equity

strategy. we were talking about whether good news is bad news today. where your thoughts? >> in the short-term, it could be. the story for 2022 is very much one of the fed and rates striving equity markets, and that's what you have at the year-end. you have data points with payrolls and cpi. year-end. who were looking at 2023, we think the focus will shift away from rates striving equity, and it will be far more about the real economy and the d acceleration of both. ask with earning stories, what is the earnings calculation for equity markets in the next year. in last 20 four hours, i've seen to all sorts of people say sort of an kind of like we think you do you have any confidence in the statistic? ask i don't, and i don't think anyone else does. that is a problem we will face that here. the bottom consensus is still firm. single-digit growth next year, we think it is far too

optimistic. we talk about macro expectations of where topline line revenue for come in, we think that is a source of risk, but really, the problem is risk and margins. it is a difficult model, and we don't think anyone should have any confidence in where they see the margins coming, but we think the rest of the downside and the risk of material. >> everyone says this, but who is buying? >> we've seen a lot of money put to work over the last two months, and it's from a collection of sources. when you see 80 billion futures for the last couple of months, half of that is headphones -- hedge funds covering. we figure $25 billion to work just over last month, and we have seen discretionary money being put back into work. it is an inflow of more than 60 billion, that's getting on a hundred 75 billion injected into the equity market over the last two months, but i think a lot of

that is squaring positions into urine. it is a reduction in this bearishness that we've seen this year. less than it is expectations from a more persistent or elongated bull market. >> what will be the trigger for capitulation that you expect. that usually marks the end of a bear market? i think the nicest we've done is look back at all of the crashes and bear markets of the last hundred years. we have seen that there has been a common thread that they do tend to end with capitulations. it is associated with a sense of panic. a rebasing of expectations, and aggressively cutting or cason volatilities. we haven't really seen that. it has been an environment where we have more grind than equity in an explosive move. we were talking about the vix at the 20 level. as indicative of much more benign environment. i don't see analysts lashing forecast. >> exactly. we're looking at an earnings

season for the middle of january. it will have a growth outlook, and the margins. >> the same question as mike wilson from morgan stanley. are we going to miss underestimate earnings because we miss underestimate nominal gdp. is that the risk that we misjudge the top line? i don't think so. i think the top line is driven by nominal rather than real growth. it is well understood. i think more uncertainty lies in the margin forecast that it could be resilient next year or in an environment where we see a real slowdown in terms of growth in this kind of policy tightening that has already been reflected by a compression valuation but hasn't had the real economy. that will come without margin pressure. that is a test. let us focus on top line or what is the outlook for margins. how deep could they be. that is what drives us.

>> just wrap things up, euro stoxx 50 has such a monster rally since the end of september. 20 percent. which one have you got work confidence in? >> out of the frying pan into the fire. i think neither is the answer for us. we are looking for an answer. the rally we have seen in europe has been absolutely massive, given the difficult economic backdrop. you look to the u.s. is a relative safe haven with a valuation there. we're not bottom fishing in the even market. great to catch up as always. going into the weekend, and a payroll friday. european equities out of massive run. that is down to china and the reopening story. this crossed the bloomberg. they will not take place due to covid-19. now, the 2023 calendar, if it is not taking place, can you read between the lines? you extrapolate that out? >> i don't know.

i thought von miller was great, the other conversations we've had on china. but i'm going back to ed bastian on the show. 18 months ago, he said international china, forget about 2023. he was dead on. are we on the 24 now? i we starting to gaze into what we do in hong kong. shane do is important for a lot of businesses. >> before even make it to 23. ongoing difficulties are presented by the covid-19 situation. that doesn't speak to the enthusiasm and confidence that people have around this reopening story and china. >> this confirms what everyone is saying. that there is a reopening story and china. that hasn't been borne out by fax. it speaks to that story on the other site. international events say they have no conviction of what that policy will be, and that is not currently available. >> very different america with a state dinner. >> we were there.

i'm not sure. >> i went to the list. mr. colbert was there. senators. gather senators. they should do this more often. >> we should do more of this. >> we should take coverage. >> escher your ultimate conclusion. >> it is always a conclusion. he's wearing a mask. >> voting. like the gala risk. >> q tell us who dressed you? >> a couple of minutes time. this is bloomberg. >> keeping you up-to-date with first word. i am lisa mateo. we are waiting as the u.s. jobs are providing any clues of the federal reserve and its next move. the job market is starting to cool off, but the report may

fall short of a turning point. fed officials are seeking that to be back inflation. the median estimate says the economy created 200,000 jobs in november. the pentagon reportedly is considering a major expansion for ukraine's armed forces. according to the washington post, the plan has been discussed for weeks by a defense secretary. also other top military officials. it could lead to thousands of ukrainian troops to be trained by u.s. forces at a base in germany. economists say the top leaders are unlikely to signal a more pragmatic reports towards covid controls in an upcoming meeting. they are also expected put more focus on boosting economic growth. the politburo usually means in early december to set rid allies for economic allies. they've been signaling a decisive shift away from the covid zero policy. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 20 700 journalists and analysts in more than 120 countries.

i'm lisa mateo. this is bloomberg. the voyager gazed in wonder. it was a time machine. (whispering) hello hello anybody there? ♪♪

sam! hey little brother! the time machine worked. make this december one to remember. ♪♪ energy demands are rising. and the effects are being felt everywhere. that's why at chevron, we're increasing production in the permian basin by 15%. and we're projected to reach 1 million barrels of oil per day by 2025. all while staying on track to reduce our carbon emissions intensity in the area. because it's only human to tackle the challenges of today to help ensure a brighter tomorrow.

>> i'm prepared to speak with mr. putin. if in fact, there is an interest in him deciding he is looking for a way to end the war. he hasn't done that yet. if that is the case, consultation with french and nato friends and i will be happy to sit down in see what he has in mind. >> alongside a french leader, and payroll of about two hours away. state of play in the equity market looks like this. on the weekend session, ready plan. about 10%. 10 year yield is lower on the week. two-year yield is down by 27 basis points. a phenomenal move lower. we'll get to that. euro-dollar at 105 35. we've got to talk about this briefly. the president of the united states said this in 2021 on labor day. he said he intended to be the most pro-union president leading

the most prounion administration in american history. if you don't support the right to strike, and you make that claim, -- this is steeped in history. basically, they have read asked 1877, 1946 after world war ii, and a. of my youth were the same thing happened and there is a tradition of government intervention with rails, and we had it much like in previous strikes where where the real laborers and union members don't agree with their union management. they voted with the house and they stepped up for union management, not the rank-and-file. >> what leverage did they have? >> i don't know the answer to that. >> what does this mean for negotiations in the administration. >> i don't know. this is a job stay interview,

and the former mayor of boston started out with indoor union management, and i'm going to guess the jobs don't matter with the secretary. >> he is a lot to say about this. >> absolutely. i am looking forward to it. >> the reunion representative of the state dinner, and we will get too serious stuff, and i love the theme here. what you've got going. good news, bad news. i don't know what it was, but she was there. oscar de la renta and emery horton, and pierre last night -- what was it like? was it a success? >> would misses kennedy have been happy? >> i was not at the dinner. i was not at the dinner, but i've read the reports out of it and spoke to the people inside. it does seem like it was a success. it was on the heels of a very

friendly press conference, which i did attend. between emmanuel macron and president biden. we are going into this trip, and we gave an interview with the broadcaster. it really came out with a fiery punchy inflation reduction act, and what he would call an unfair advantage for american companies, and it seems like they walked a lot of that act. the tone was brought down at that conference. it does look like they work together, and it was a romance. >> i can see that. it's the same thing. very importantly, it is a rail strike. in the last 24 hours, the body language has been labor lost. two rail workers lose? >> we should note that the majority of these ranking fire -- file members voted for that tentative agreement that they should broker in september.

this came up. it clearly was annoyed because the question was, to the president, are you saying members of labor unions do not need paid sick leave? he said he'd negotiated deal no one else could negotiate. his point was that he's been working every day since he can the administration and he campaigned on paid sick leave for not just the labor unions but for all americans, and he made a quip that is quite embarrassing for him to even have to be fighting for this and talking about this in front of european leaders where this is obviously just the way things are in your you get paid sick leave and maternity leave it at this moment, we knew this would be tricky for the president because he wants to be the most prolabor leader. many would say he has been in modern times, but he had to look out for the entire economy and force congress to act ranch >> let's bring these two -- when

these two stories. french leader is unhappy. within the act, you can get tax credits on domestically made ev's. the french leader would like those tax credits to apply to ev's made in europe. can you walk me through the current start of this, and where is congress on this as well? how are they responding to complaints from the europeans. congress passed legislation. how difficult would it be when republicans take the house next year, for congress to go back and write legislation so that the europeans would have the same advantage as americans. what officials constantly say is that there's just not enough investment in this space. , so do something that companies would benefit on your home turf. at the moment, the president has said yes and the press conference, and he doesn't want to leave folks behind to are not cooperating with the united states like in france or

germany. but at the same time, he said there are tweaks going forward. there is a task force. mccrone in the press conference said they want to synchronize and have their teams cooperate and look for investments, but at the end of the day, it remains to be seen how this would actually work. there is legislation, and i do not see that being rewritten. thank you. wonderful to catch up with the. i don't think anyone wants to go through that. the complaints from the europeans are just going to keep coming through. >> how do they come to some conclusion on some of these issues like china or other types of dealing with russia. you are right. i don't think people will want to do that. how do you muddle through that? they are trying to come up with practical responses, even if they come against ideals. hundred eight to that. >> can i switch gears? >> do you ever asked permission? usually you just do it. >> i'm trying to be more sensitive and vulnerable. can i switch gears.

cracks of course. >> blackstone. this is not a small issue. >> this is not a credit suite. blackstone was seated in the ft yesterday. they are giving substantial returns of 9% read with bloomberg, we move the story forward, and basically, asian investors in their real estate pond want to take their money out for whatever reason, and then buttress up against those limits. this is a stock down a percent. it is not a small issue. >> you know the issue? summer of 2007. it was bnp. >> vince writer brought the sub. is liquidity out there. 2027. that's not a small issue. >> will bring some life into that issue. thank you for asking. that's the new thing. that's- [announcer] imagine having fuller, thicker,

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>> the payroll report. we are two minutes away. 200 k. we are looking at the november report. is the median estimate. it is pretty wide. equity futures look like this on the s&p 500. slightly negative for the morning. down .1%. announced -- nasdaq is down.

a week of the s&p headed for a second weekly game. the yield is down on the week by more than 20 basis points. you can thank jay powell for that. we are down three or four. a full 1912 on a two-year yield. chairman powell sounds very different to that chairman powell we saw a little more than a month ago. >> did we learn anything from the fed speak because yesterday -- do we want the good news? it starts tomorrow. >> that's a benefit to the chairman. no fence begotten today. >> were all together for december 14. >> they've got a semifinal. what do you think? >> you get 50. >> i've got covid. >> twice in a month. >> you get 50%. this decision we are watching. >> did you watch yesterday? what did you think of that. >> the online.

>> i don't think fifa share pictures as to why they made the decisions they made it >> ok. >> they've got the technology. >> they didn't show to the audience. >> i don't think they demonstrated sufficiently for the audience, and there was one camera view made it sound like the ball across the line. >> michael dart is like why am i on the show? >> >> it is his birthday, this is a gift being on the show. >> it is eight payroll get. >> it is such a supporter of what we've done through the years, and rumor is he is getting a third dog, we will see that on twitter. thank you for joining us. today on jobs day. i want to do in take on the chicago fed. it is tossing around a lot of latin. we are out front of whatever the decision is, and a post for you have to wait, and that is a traditional mode of any central bank rated we go through the fed

process and link to the jobs report. link to the inflation report before the fed meeting, and is it delusional to think the fed can get out front and make a guesstimate, or are they simply waiting for the data. >> i think they are data dependent, continuing to look at data closely, but they can get out in front by looking forward. what i mean by that is we are starting to see signs of incipient labor market weakness in an array of overlooking indicators. for example, the average on force -- first time jobless claims is moving up again, and it is well off the lows of the year. if we hold at current levels by next spring, we have a recession signal out of that data. the conference board release some confidence numbers, and within that index, there is a measure of households that say jobs are plentiful, with leading

indicators that are rolling over. the quit rate is coming down, i'll be had from high levels. we are getting more data that suggests the labor market is losing steam, but that is the intent of the bed. this is what they want, and this is what they will get. >> this is -- what is the history of seeing and predicting a recession over the last 12 months? i suggest many have been off the market, it with gloom. can we get in front of a recession, or do we have to wait for an ber to telus it is here? >> and ber -- they will confirm, but they are not in the business of making forecasts. it will already be obvious that it is going on by the time they make the call it this year was confusing because we got to down quarters, and many people thought that meant there was a recession, but it came out and said that is not how we do it. so we had a strong growth. we had falling unemployment in the summer, so those things have

never been associated with an actual recession. we were thinking about 2023, where you have unemployment rising, starting to rise, and that is a totally different animal. there is a lot of talk about recession now, but that doesn't mean it won't happen. i think the risk is actually quite elevated. the team has done a great job of covering the inversion going on this year, and recently, it has rotted pretty dramatically. even now, the fed measure of the near term forward spread is pretty significant and inverted. that is probably the best forward-looking signal of an impending recession we have. the problem is that if we look back at history, the lag very significantly, so there will be no way to time precisely or when all of our clients ask for the exact death and duration and when it starts, and i wish i could do that, but it is really

guesswork. >> you inspect inflation to go down. do you believe in transitory, or is this a different nature of a decline should mark >> i think headline inflation is going to come off the boil pretty rapidly as we move into the middle of next year. unfortunately for transitory, i don't think it will bail them out, so that phrase was used back in 2020 12 mean that inflation was nonmonetary and it would probably only last a few months, when in fact, the inflation was a result of the fed going into a hyper accommodative monetary stance, and initially, it is dilatory and starting to reverse course, so inflation intensifies and broadens, but i think the fed is talking about a yield curve, and you could argue they are in a somewhat restrictive stance, but growth will slow, inflation will

roll over with a lag, and that is where we are. it will not bail out the transitory team, but this new argument, with steam -- team structural, that will determine it. >> branding does not work. but nice try. i will give this tea because it is your birthday. the fed is already restrictive, but that is not consensus. you are not seeing that in terms of the market. the fed backs away or it doesn't raise rates as much. you get a rip roaring rally with assets. is that concern you or seem consistence with the path of the economy and inflation? >> that is a good question. the fed is worried about the so-called financial conditions you loosening up. it signals a step down, with interest rates holding back, and equities moving up. it is not necessarily what they want but i think the fed is putting itself in a box.

it is simply going to be responding to equity market moves. that is what happens with inflation expectations, and as we look at the curve, at the 10 year horizon, we are in the two 30's. those are based on the cpi, not the pce deflator, and it runs 2250 basis points higher on average. you could argue those are mandated consistent levels, so the fed is stepping down, we are starting to reverse course, with policy, and inflation expectations, and that rises materially. the fed should pay attention to that. we are in response, but it can't just be a stockmarket story, in my opinion. >> if we look at 1/5 of the labor force, that we see at 830 today, and the two reports, are we aggregated? can you look at the holistic view of the labor economy, or how did this pandemic make us so fragmented and polarized that it

is a different labor model ahead? can we aggregate? or not? >> i think we can aggregate. obviously, we have a lot of distortion in the labor market. from the pandemic, it does look like we've had some early retirement which may not be coming back, but this labor market has for all practical purposes fully recovered, and it is very tight, but it is losing steam at the margin. i would just say to our viewers, watch the unemployment rate. it is coincident to slight lag, but it is the best variable that will tell us when a recession is ongoing, and it will not predict a recession, meeting the yield curve and other measures for that, but if the unemployment rate levitates half a percentage point or more from earlier levels, then that is basically going to be 4% or a little bit more. that would be a strong sign that

the u.s. economy is either on the cusp of a recession, or a few months into a downturn. it has never happened in history, and it came up in a discussion earlier today on bloomberg, as to whether the unemployment rate could rise a point and a half and stop. it could never happen in postwar history. anytime we go up from earlier levels, we continue to rise in a recessionary fashion, and in the smallest increase, post recession troth to recession peak or pre-recession troth to post recession peak, that is 200 20 basis points. the median is over 300 basis points. a mini recession is possible, but you really are arguing against a historical track record. >> happy birthday. >> thinking. >> thank you. michael donovan. we want to go to the session highs on switch trading. the highs are a. coming off the back of a losing

streak. francine lacqua is catching up with the chairman a little earlier. at the -- the chairman told the lender that there have been withdrawals basically stopping. so the outflow has stopped rated >> 13 days down the role -- road. i have trouble with the 7% move. . maybe it is from walking over from the actual published number, but the answer is bouncing a little bit, and there is a grim level near the diluted of when they don't go out and >> how could we have seen this to believe it in november? >> lesko directly there. when i speak to clients, i know they are going to be influenced. on one hand, he has to call the markets. on the other, the specificity of this is not proven in the data coming out. that is another story he will have to face off with. it is more concrete as to why shares are responding.

>> they are up 7%. coming up, the ceo first strategies on capital partners. looking forward to the conversation. this is payroll friday. here is the estimate. from new york, this is bloomberg. >> keep you up-to-date with around the world with your first word. i am lisa mateo. there is a military operation ukraine. they will meet with russian president if only indicated they are looking to end the war. in south africa, the leaders of the ruling -- ruling party are meeting today on the fate of a serial person. he is considering resigning after he may have finally the

constitution. they have investigated and alleged failure to report a robbery at the farm. in the wake of ftx collapse, they say that the regulators have enough power to oversee cryptocurrencies. they say there is a crackdown as needed, so banks know where they stand. >> of a business is legal, then tell them not to have dealings with them. it is hard. i am unaware that any of these entities doing business with u.s. banks were illegal. i think it is hard. it is a very controversial way to shut this down. >> u.s. authorities have ramped up their investigation of ftx, they are asking those who use exchange for information. global news, 21st today, on air and on global -- bloomberg quicktake powered by journalists and analysts in more than 120 countries. i'm lisa mateo.

this is bloomberg. this is bloomberg.

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♪♪ energy demands are rising. and the effects are being felt everywhere. that's why at chevron, we're increasing production in the permian basin by 15%. and we're projected to reach 1 million barrels

of oil per day by 2025. all while staying on track to reduce our carbon emissions intensity in the area. because it's only human to tackle the challenges of today to help ensure a brighter tomorrow. >> until i see our actions actually have some impact that we have dealt with lowering the rate of inflation, i think my expectation would be that we would have a slightly higher rate, then i have anticipated in september. >> more fed speak still to come from barkin, and then it's done. there is a quiet. that begins tomorrow, and we are not happy going into that decision. before we go into the 14th, we have a payroll report from waiter this morning, and a cpi

on december 13. all of that with equity futures down a little more than .1%. the yield is unchanged on a classic kind of feel of the number. we've got a euro-dollar going nowhere, and crude going nowhere. . a lot of interest in maria tadeo. we can report that she is being monitored in brussels and is improving. we have seen that. >> is good to know. what happened -- she semi-message last night and told me they lost deliberately so they could get a weaker half of the draw. >> they sandbagged it? >> that's the official start. she lost liberally. >> she's improving, we are thrilled to see it monitored as we speak, but what you need to know, and we let john bring this up, is during commercial break, and i wish you could see us talking and all of that, and show them are great supporters of bloomberg every day, but it

is one nonstop world cup talk, continuing a world cup discussion. we are joined now by a hugely qualifying equity market, but i get up with diana about the path england has from senegal to france and beyond. >> they've got spain now. >> they have the toughest path of anyone? they to get past france and spain, and if those teams progress, it could be brazil or argentina, but i have no idea. diana has no idea. i don't know -- there are strategies that occur because of these proper introductions because you deserve one. can you walk us through these markets, because i hear from a lot of people who expect earnings weakness to punish equities in q1. you are on the same side of things with those guys? >> it deserves consideration, given the rally we've had in the last two months. i would say markets are better positioned for the weaker data

that we have from a couple of months ago. i think the shots we've seen as a result may be speak to the positioning that is extended, while the u.s. data has been slowing down. it is not slowing down fast enough. i think it justifies the bearishness we had in the extreme. that is going forward. i think it might be somewhat more challenging. from the u.s. perspective, we have seen signs that there is an element of consumption that is trying to slow down somewhat in the u.s.. additionally, i think given where we are from a valuation perspective, it is a less attractive market to be owning if the concerns are on earnings slowing down more aggressively into next year. >> i don't understand this. everyone who comes on says it will be ok for a couple more weeks. then we will see earnings-per-share, and everyone will sell, and it will be terrible. this is a forecasting instrument. is a forward-looking estimate.

people were trading should be looking for. if everyone is seeing the same thing, why is it not be reflected? >> 100%. you can usually call the direction of the timing, but it is very rare that you have people getting the timing of the direction right, and while there is a lot of concern around earnings, justifiably so, while everyone is talking about this, in my experience, we seldom play out timing wise, so there is a chance this ends up one of the motor frustrating bear market rallies, because it doesn't pay out. we may not necessarily see the kind of price action in the markets that they are discussing. i might take longer to play out. >> i'm watching the 10 year yield, and this has been the one consensus trade that done well. i'm looking at yields that are 3.5%. from the recent be, as recently as a couple weeks ago, i'm trying to understand how much further this can go if everyone

is on the same side of the trade, and equities are not buying into the same story. >> that is the disconnect we have right now. we have this ingressive inversion, and that is playing out as we see on the 10-year. it is aggressively off the highest, so we are heading into a recession. typically that tends to happen between 18 to 24 months of hoeven version. what we are really seeing is if you go by what the market is telling us these recessions are more of a second half of next year trade. rather than a first half, and i think the equity market are hoping that between now and then, you will get a fed pivot, not slowing down the height, but actually, the fed stopping the hike now, and we might see the economy slow down faster than we've anticipated. if indeed, the plays out, it will be with ease. it is unlikely, but it is much more poised for a pivot than the bond market.

>> if we get inflation sustaining at a certain given level, which gives us some form of nominal gdp, cannot save revenue growth? revenue persistency and cash flow persistency? >> i think it could help. he could help. but ultimately, if you have high inflation, data supporting nominal growth. for the labor market is trying to show signs of weakness. i think markets will react to that because at the end of the day, it is really the consumer that is keeping the economy ticking along. there are balance sheets that are much more resilient they have been, but covid did help to an extent. in terms of getting companies to think about refinancing, and getting the weaker balance sheets that have been in the market. but if you stop the labor weakness, which is dated today that is quite keen, i think that could be much more meaningful and impactful for a sentiment. >> what is the most important number today?

it is the headline number or wages? wax without a doubt, i would say wages. the headline number has been noisy. if you have recalled last month, it is higher than expected. people are trying to grapple with what was coming through that data. there were some inconsistencies in components, but i think that earnings are probably what the markets will be watching for. for signs we are starting to see some ease labor markets and the labor market inflationary pressures are not becoming entrenched, and that is something they have seen a big vocus on, so you don't want to see a second round spiral. >> it has been too long. don't leave it's a long neck sent. the capital partners. wonderful to catch up as always. fantastic lineup. coming up in five miss time, and then after that, morgan stanley. we will up around 730 eastern time. >> did you see jp morgan at 150, published the survey?

>> sure. >> there are group of people south of that at 180. >> they joined the full range. >> the full range hike. >> highest height. low 60's. >> >> ok. >> ok. >> i'm with diana. i'm looking at dynamics. this is been great on labor per dissipation, but i'm in the camp of labor participation as a fiction because of demographics and social policies. we don't have a clue about labor participation. >> but if it doesn't change, that means people are coming back, and that is the best case scenario for the fed. >> it is a disincentive to on retire and work with pharaoh. >> what are you suggesting. >> therapy is not working. >> i don't know. >> don't talk to me like that.

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>> there is an extremely elevated chance of recession. >> you have to pray that the liber market quite down. it is gradual. you have to watch what is happening in response to what they've already done so far. >> for the next market, that is when the fed cuts interest rates. >> we have more confidence the rally will continue into december. ask this is bloomberg surveillance with tom keene jonathan ferro and lisa abramowicz.