you mark: i'm mark crumpton with first word news. elon musk suspending journalists from twitter has spread among european politicians. lawmakers having the platform and leaving the platform and proposing future sanctions. one said the news is worrying and "there are red lines." starbucks paresis at 60 location started a three-day strike. the moon -- the move says they

aren't bargaining freely with unionized stores. it makes it the biggest work stoppage ever by the group. california is slashing the incentive that encouraged a million homeowners and businesses to install rooftop solar panels and also highlighted the state as a green energy pioneer. state regulars have voted to cut the compensation homeowners get or their systems. today in santiago, authorities battle multiple forest fires amid record heat. the country in the grips of a 14 year drought. that has prompted talk of water. u.n. climate change panel said the dry spell can be blamed on human global news 24 hours a da, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton.

this is bloomberg. >> welcome to bloomberg markets. kriti: another selloff on our hands. you are seeing $4 trillion of options expiring across the board. a lot of that happened at the opening but one trillion or 2 trillion will be happening. the s&p 500 dow 1.7% -- down that 1.7% -- down 1.7%. the 10 year yield still higher on the day. as the two year yields come

down, putting weight on the dollar but not enough. the dollar unchanged on the day. crude is where the action is, 3 million barrels is with the u.s. government is looking to get bids for in february that prices are coming down. $79 a barrel is the rent crude -- brent crude trading mark. jon: all 11 subgroups of the s&p 500 in the red at this hour. the energy stocks you are referencing on what is happening with crude, but on -- but under pressure. cautious comments on names on some groups. as interest rates go up and recessionary fears grow, this has been a big question about the quality of earnings heading into 2023. darden, the parent of olive garden with some pressures

worrying investors. technology has been hit so hard, it is interesting to see adobe has been of the top of the leaderboard after encouraging quarterly results and facebook parent meta has some cost controls at the company. it is hard to find winners on a down day. kriti: it is striking to me, the macro not driving the trade on the investor calls. macro investors have been on edge since the fed decision. >> we have clear signs that demand exceeds supply in the economy and labor markets. how high we have to get to defend -- depend on what we see in inflation. we will have to get restricted to bring inflation down to 2% and it could be higher than what we have written down. jon: let's bring in michael

mckee and the president of the economic policy institute, heidi shieholz . the federal reserve is saying no way but the market is pricing them in. what makes this time different? heidi: what makes this time different is a very good question. what we see is inflation has clearly peaked and is coming down. labor markets are strong, but clearly slowing, tons of signs of slowing. even a very mild recession would be incredibly painful, so the fact that the fed indication seem to suggest they will keep the brakes on the economy until we get to about half percentage point, within a half percentage

point within the inflation market, i don't think that is good policy. we know rates and the effects are felt with a real lag. we are seeing the signs of inflation coming down very clearly. the consequences of them overshooting, slowing the economy too much and causing a recession are just unbelievable. what they really should be doing is stopping rates and actually signaling they would stop rate hikes and signal they would be ready to reduce rates if we do actually get into a recession. jon: i would love to get your reaction to heidi's comments. talking about levels of inflation he is anticipating. it sounded like 3% or 3.5% is

what the fed could bring down 10 which would be about the target rate but the communication using numbers on the inflation front, what is your take on that? michael: the answer to the second question is the answer to the first question. the fed has raised the level at which it thinks it will see inflation at the end of 2023. some say they have raised their forecast for inflation that is not true. they think the number where it will be in 2023 in september, they moved it up to 3.5%. they don't think inflation will come down as fast perhaps heidi exit is going to. the reason it is all happening is you can see the difference the markets between what the market inc., the white line down below where inflation will be and the blue line is with the fed thinks inflation will be at the end of 2023.

this is happening because the financial conditions index and it has gotten looser and back to eleanor in june, despite the fact the fed is 300 basis points higher. they are trying to show toughness to the markets to try to get them to realize they mean what they say about getting inflation down and they are not going to cut rates at the first sign the economy is weakening. it doesn't mean they wouldn't cut rates if inflation does come down significantly and doesn't and they wouldn't pause sooner if that happened, but for right now, they are saying we are going to leave rates high and leave them up for quite some time. the last rate increased is at the moment forecast for may. the san francisco fed bank president said a short time ago 11 months after that would be realistic for keeping rates unchanged. that would put us into 2024.

jon: we are -- katie: what kind of numbers does the fed need to see -- kriti: what you expect to see that the numbers need to see? heidi: they are looking at job openings and are they coming down? they very much are. we have seen a decline in job opening since the peak in march and coming down steadily since then. we know they keep an eye on how fast their jobs are growing. we are seeing the growth of jobs slow. we are at a strong place in the market. that is around a 50 year low and job growth is relatively strong and so those things underscore

the fact that the rate increases are working. we are seeing things calm down and there is a risk they would overshoot and the pain that would cause is something that is not talked about enough. even a 1% percentage decrease in the unemployment rate withrow 1.6 million workers out of work. that exposes them to the chaos and the drop in living standards it causes. then it would cause wage growth slowing for tens of millions. the pain of a recession would be dramatically worse than the pain of the higher inflation we are seeing right now. jon: -- kriti: certainly something we are going to keep an eye on. we thank you as always. the conversation continues. stick with us. this is bloomberg. ♪

kriti: this is "bloomberg markets." wall street reacting to new proposals of the sec for new trading on the equity market. we have a special guest. sonali: we have one of the biggest market makers on the new york stock exchange, huge in retail trading. you look at the sec proposals and how they are planning to overhaul the equity markets, what works and what doesn't from your perspective? do you think this auction

mechanism instead of payment for order flow will be something that does actually improve the way trades are handled? >> it is a good question and complex question. a series of proposals, very involved and intricate that deal with the stock market, coming after the event when they said they wanted to look at equity market structure. there is a lot that goes into these proposals, trade increments and best execution and disclosure requirements and auction requirements. right now, retail investors have a good experience in the u.s. markets. orders a rugged from the retail firms to market makers and -- orders are taken from the retail firms to market makers and i think the question you ask is

the right one and everyone is looking at this new unproven auction idea and wondering if this is actually going to solve the problem. sonali: is this something that would hurt your business at the end of the day? some are saying the sec is attacking will sailing. joseph: we have the largest u.s. rocket maker and trade virtually every asset class in every country. we will be fine. this is a relatively small part of our business but we care deeply about the retail trading experience in the u.s. and want to make sure any changes that go in make things move forward and not backward. we don't want to go to a world where we make the changes where we reinstitute commissions and other things that are bad for investors. sonali: when -- kriti: when we

are talking about the rise of retail traders, it has been a one-way trajectory since the 1990's. if the rules start to clampdown on retail participation, to what extent will it hurt liquidity? joseph: that is one of the things that we have highlighted and others will highlight and is one of differentiation in the u.s. markets versus other markets. the force of retail investing and liquidity in markets is unparalleled for retail investors and approaches 20% on some days of volume and equities. it is over 20% of options volume on a daily basis. it is one of the things that separates us from markets and part of why we want to make sure we don't unintentionally harm that in the process of trying to make stated improvements. jon: you mentioned you have a large business and you will be fine regardless of how things play out, but is there a

possibility depending on how things play out that you would change your business model as a result? joseph: i think that is right and exactly what i meant by my statement. we will evolve with whatever market structure changes happen. we have a area robust business and we care deeply about making sure our public markets are strong and robust and we have partnerships with the global exchanges. if volume shifts one way or the other, we are very good at evolving argot structure change and evolving our business and model -- evolving market structure change and evolve in our business and model. the retail business in particular and the place retail has in the u.s. markets is something we think is very important, something we care about and want to preserve. sonali: you are here at the meme

stock frenzy and how much it accounted for the market, 25% of volumes at that time. how has that changed now from equities and options? joseph: it is interesting, because we did start tracking this closely around the mean events. retail around the zero commission time grew too low teen percentages and jumped to well over 20% of the course of the pandemic, and has settled down into the high teen range. it is clearly a lot more of the market than it was before we got into the pandemic. mean -- meme stock events is a part and it is amazing to see. the market structure that serves retail didn't happen accidentally. it was in investing millions of

dollars into it to bring it where it was today and why we want to make sure everything that was invested and built over the years doesn't get taken apart. kriti: some of the speculative bids, ipo's and meme stocks drove the market in 2021. are those here to stay? joseph: we have always seen periods of speculative excess and i am sure we will see another version of two lips at some point down the line -- of tulips down the line. where we would like the commentary is go is making sure we identified problems we are trying to fix and not proposing solutions because someone has a view of where the market should look. we want to make sure we are looking at what the problem is and what is the suggested solution and will it address the problem and not just willy-nilly design preferences people have

about what the market should look like a where it should trade. jon: thanks very much for dropping by today joseph mecane. ,we will take a quick break. coming up, the world finals are happening with argentina facing france. we will look at the big game and the impact on the economy. this is bloomberg. ♪ it's hard to run a business on your own. with shopify, you have everything you need to

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jon: this is "bloomberg markets." i am with kriti gupta who is excited about our final segment, the world cup final this weekend with argentina facing france. joining us is simone foxman, who has been covering in extensive detail and doing an incredible job. i would imagine the excitement is gathering as we ready -- get

ready for the weekend. simone: there are a lot of argentine fans here. are way more people and qatar than there normally are. there have been hundreds of thousands more people in the country than there typically are and they were out and about, on the streets, wearing their team gear. it was very exciting. kriti: $300 billion in marketing costs when it comes to this world cup this time around. talk about the role of having the world cup be in qatar and what has made for the rest of the world. simone: when you think about it from qatar's perspective, they spent the money not just to throw a massive sporting event but to develop their country and build a metro system that didn't exist and build a new city, to expand the airport dramatically. by those standards, it showed to the world they can do this.

they very much feel they have succeeded. what has been interesting for me to see over the past couple of days is how much the arab world, the african communities have come out and supported, especially morocco. i felt this was a world cup for the broader world beyond europe and latin america and the typical bastions of football and soccer. it has made it feel that the first world cup in the middle east has truly brought the rest of the world into the game. kriti: a crucial point, how far morocco has come and the global support has been crucial for an african nation, especially as the fifa world cup was hosted in qatar. a really fun assignment. i'm very jealous of her. she will have all the details. you said it. i am a massive soccer fan and i

am wearing blue in support of the french. i will give you some stats. jon: of course you have stats. kriti: i have been ready all morning to have this conversation. morocco, if they get to third place on saturday will be the first african nation to go this far. if argentina wins, the first time in 40 years they get the world cup. if france wins, they are the titleholders and this will be a back-to-back win for france. they haven't seen that in 60 years since brazil did it back in the 1960's. how is that for history? jon: i love the history point. here is another one, the home of mary donna who passed away -- maradona who passed away, they bring people locally into the house for games and speaks to the excitement we are seeing in argentina.

but i know your allegiance lies elsewhere this weekend. kriti: it does. i am having to go with france. thank you for indulging me. stick with us for more markets coverage. this is bloomberg. ♪

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>> now keeping you up-to-date with news from around the world. here is the first word. i am mark crumpton. brittney griner says she is glad she is home and plans to send the holidays -- spend the holidays with her families. and she says she will play basketball next season. there are two photos of her on boarding the plane and embracing her wife. it is unclear when she will be released from the hospital in san antonio. worker death and injuries rose to the highest year --