>> welcome to our bloomberg audiences with the first word, i'm john hyland. authorities will take sam bankman-fried to the u.s. to face a range of criminal charges related to the collapse of ftx crypto exchange. the co-founder signed a set of exhibition papers in the bahamas and is taking a noncommercial aircraft, escorted by fbi agent. a u.s. house committee will publicly release donald trump's tax returns from 2015 to 2020. it cap three year saga initiated by democrats to obtain a release the former president's financial documents. richard neal says the documents

will be out in a few days. >> after a long process, and this was not about being punitive or malicious. john: it comes in the waning days of the house democratic majority and follows referral for criminal prosecution by house panel. the taliban has barred women from attending universities and is enforcing the order at gunpoint in some places. the minister for higher education announced the order suspending girls education until further notice, saying it is not an afghan tradition but part of western culture brought to the country during the presence of u.s. forces. the state department says it will hold the taliban accountable for the move. francis bracing for a christmas of travel disruption after the state on railway operator was forced to cancel one and three high-speed trains due to strikes. air france's carrier also faces possible strikes in the coming two weeks, although the airline pledged to take all clients to their destinations nonetheless.

global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am john hyland. this is bloomberg. ♪ john: welcome to bloomberg markets. kriti: green on the screen for the equity markets. a lot of stories drive the macro action today. s&p 500 up 1.4%. it is not just the stock market. the bond market is as well. almost unchanged. underneath the surface, intraday volatility about five or six basis point in either direction. keep an eye on how the bond market chooses to close off the year. the volatility in the bond market, the dollar does follow.

not by a massive margin but that tick by tick move matters. the dollar index stronger by just .1%. the crude markets really flying high alongside the equity market. brent crude trading at an $82 handle. john: it feels like you get there were dark and find generally speaking some green in the s&p 500. the earnings stories overnight that have fueled part of the rally have been some of the bigger gainers. nike shares of close to 14% after crowdpleasing numbers. the company showing signs of working through some excess inventory. we have seen a lift in names like footlocker and under armour on that news today. fedex up close to 5%. that had to do with cost controls tied to the bottom line. we have carnival moving higher on encouraging bottom-line improvements coupled with comments on bookings looking ahead.

one name that is in the green but by list is tesla. it's been some time in the red. we talked about the challenges this quarter. right now tesla shares so far this quarter off 47%. kriti: we know ev makers dependent on the chips sector that brings us to the next door. micron reporting earnings after the bell. we expect revenue to fall from the industry oversupply and we meant. shares up by about 1%. a little optimism baked into the market. joining us is paula from bloomberg intelligence. walk us through what you are looking for in the earnings report today. paula: my expectations are low for this quarter. i think most are. we had the cfo at an industry conference, with bearish statements -- combat with bearish statements even after guidance was lowered on the last

call. i think all eyes are on the future outlook. what the commentary is, how the end markets are doing, whether they are cutting again -- cap ex again. is it going to be the same as what they said last quarter? ie, do they expect an inflation point quarter? jon: to your point about spending plans, especially in this environment we are now seeing so many companies navigate, what would you estimate on the capex front? paula: i think they will bring capex down a little bit. probably slash it from the $8 billion already. that's concerning for me. samsung is not doing anything. their growth will be up a little bit. sk hynix are reducing their cap backs a little bit -- capex a little bit.

they are delaying equipment. micron is actually reducing their wafer output by 20%. these guys are little supply constrained already. i'm concerned if they cut too much when the market does turn up they may not have the same advantage of the upside that their peers do. jon: helpful context as we await the micron picture. much appreciated. micron possibly getting ready to cut down on their spending. in canada, we have a lot of canadians who are getting less with what they spend. possibly bracing for another rate hike as stubbornly high inflation was evidenced again in the latest data out today for the month of november. let's bring in erik hertzberg. he covers the canadian economy for the bloomberg news team. he's based in ottawa. even after a year of hawkish moves by a central bank like the one here in canada, the inflation issue is still front

and center. erik: even though we got goods inflation coming down, it is still going through services and upside surprises on things like food even though we are getting relief at places like the pump. anyone getting something for christmas for the holidays in terms of food, they are seeing higher prices. food rising in november at the fastest pace since february. there is no real slow down on that side. in terms of what we are looking at going forward, the bank of canada seeing the core inflation measures that underline pressure of sticking -- the stickiness of the economy. start about 5%. that is something the bank will be watching moving forward. kriti: let's stick to that. how do you tackle something like that when prices and wages as well all expected to be sticky? when you see inflation coming down on things like services and rent, etc., what does that mean for the canadian consumer going

into next year? erik: there's is a double whammy affect. you're not only facing the higher prices of goods and services, but some interest rate hikes themselves are getting into areas like mortgage interest rate costs and rents moving forward. as we move into the next year, the canadian economy is expected to slow. most analysts are expecting a technical recession at the beginning of next year. that should bring the economy, economic growth and momentum to slow down. that should pull off inflationary pressures. moving into next year we are not sure we will see inflationary pressures start to slow with the stickiness in the core measures. the bank of canada may have to raise rates again at its january 25 meeting. jon: can you walk us through where the market position was before this inflation data today and what the buzz is now in terms of the next central bank meeting? erik: importantly, the bank of

canada and the previous few weeks had set up this scenario where it is likely the bank can pause. the next move will either be a small adjustment up or a pause. before going into this morning's data we were looking at just under a coin flip in terms of what markets were expecting in terms of whether or not they would be another 25 basis point hike. following the release of the data, the odds went up towards 60%. inflation in canada is one of those important things to watch. the bank of canada highlighted the core inflation measures. if he remains sticky, expect another 25 basis points in january. kriti: erik hertzberg all over everything going on in canada. we thank you as always. we will stick with that story. coming up on the show, we will talk to two portfolio managers who have gotten the bond call right. just 1% of investors made money this year.

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kriti: this is "bloomberg markets." of the 198 bond funds in the u.s. that actively manage $1 billion in assets, only two have posted positive returns this year. joining us are those two. the bond fund managers that avoided those heavy losses and got the bond call right. scott solomon over at t. rowe price associates, and bill eigin and head of return and optimistic fixed income at j.p. morgan asset management. massive titles for the both of you.

scott, pricing fed cuts are putting a cap on yields. that's a consensus story. chairman powell said the risk of overdoing it is as dangerous as under doing it precisely because they have that tool. why do you think he will not use it? scott: for him the most important thing is labor and signs of labor declining. for powell to want to cut rates he will want to see really deflation and state of -- instead of disinflation. deflation, he will not want to cut rates. he is aware of what will happen -- what happened in the 1970's. the worst thing is inflation bottoming at 2.5% in the market gets excited about potential cuts, then you have inflation picking back up to around 4% or 5%. inflation hard to eliminate. he really wants to make sure that is done and make sure his

legacy is intact. jon: bill, i will bring you into the conversation. one of the unique things about you is your awareness of the story on main street and wall street. having an athletic facility as a side business gives you some insight on some of those inflationary realities right now. what are you seeing on that front? bill: it is pretty fascinating. my dad told me at some point you have to pay the price for the things you have done. i think the fed is going through that process now after 10 plus years of easy money and zero rates and blowing the balance sheet of the $9 trillion. owning a small business is helpful, especially one with multiple revenue sources like a restaurant, athletic field rentals, a gym, leases, etc. last year at this time the cost pressures started to pick up. most importantly, which was brought about the previous

speaker, labor has a big hand in this. with the low participation rate, huge entitlements, you have to pay people a lot just to come to work. the turnover at the restaurant and the gym is unbelievable. we have to keep raising wages and benefits to keep up. a lot of pricing power now lies not only with the producers and manufacturers, which ones they have it it is difficult to give up, but with potential employees. kriti: bill, i want to put some numbers on that. if we are seeing inflationary pressures come down a little bit what does that mean for yield? how high can they go on the front end, the backend? bill: front end yields are attractive. you're getting close to 5% to keep your money liquid ending cash. the consensus seems to be you want to extend duration. why would the fed in tightening mode and inflation over 7%,

which we seem to be celebrating, what i buy a 10-year treasury at 3.5% and take eight years of duration risk and i can get 5% on cash? the only way it works is that the fed stops tightening very soon and goes into easing mode. i don't think after the mistakes they have made in the past -- they let the inflation gorilla out of the cage. right now there is not enough bananas to get it back in the cage because people have pricing power since they -- that they have not had since the 1970's. it is not going back down to 2% anytime soon. jon: scott, in terms of your positioning to 2023, what is top of mind? scott: bill is right. there is a huge risk to owning 10-year treasuries at 3.5%. we see declining data. i can see a scenario where 10-year yields get down with the two handle and end up with

a five handle later this year. that would be a tough experience for investors and speaks to wanting to control your risk on for the duration cycle. i think investors have forgotten what it's like to invest with inverted yield curve. for so long everyone was used too the roll down you get on the treasuries. that does not exist anymore. those are two things that come to mind from me. the third point is europe is really tricky. i think it is on its way to having sustainability crisis. we could see german yields yielding more than the u.s. at some point this year. kriti: scott, you said as we could see of five handle on some of those yields it feels like there's the idea it needs to hit the terminal repriced in. 5.1%, 5.2%. if we see that, what happens next? an immediate retracement? scott: i would not say immediate

retracement because the experience the market will have is lower in the public is nervous about finder ration. we will probably hang out there for a little bit. when you head into recession that's when you see it steepening of the yield curve. jon: we appreciate you hanging out with us today, scott. helpful context on the road ahead. scott solomon of t. rowe price associates. bill eigin, much appreciated. we will take a quick break. ukraine's president vladimir zaleski touches down in united states, leaving his country for the first time since the war began. we have the details next. this is bloomberg. ♪

jon: this is "bloomberg markets ."

time for today's for what it's worth. the amount of additional aid to ukraine u.s. president joe biden is said to announced in just a few moments as the ukrainian president touches down in washington. it is the first time since the russian invasion began back in february that volodymyr zelenskyy has set foot outside his country. he will address congress and meet with u.s. security officials during the visit. let's get more perspective in bringing and report during it was at the -- annmarie hordern. we touched on the broader figure but what can you tell us about the aid coming toward ukraine? annmarie: it's an incredibly busy day. volodymyr zelenskyy is the first time he has left ukraine since russia's invasion on february 24. he's just on the block from where standing at blair house. in about 10 minutes, he will motorcade to the south lawn and he will meet the president and

they will have a bilateral in the oval office. they will have more bilaterals before he will talk to the press in a joint press conference over at congress. what we expect the admin's ration to announce as part of that a will be something ukrainians have been asking for. this is the patriot defense missile system. we are waiting on details. we know that ukrainians will be the ones trained on it and operated and trained outside ukraine. this is something zelenskyy has been asking for, especially since over the last few weeks we have seen an absolute barrage of missiles and drones, notably from iran, on ukraini -- on ukraine. access to heat, energy, clean water, and all of this before critical winter months take hold. kriti: you mentioned the patriot missiles in the training. is this a one and done round of aid or is there more coming? annmarie: there is more coming.

as zelenskyy is here in the u.s. and talking to president biden about the latest, the president will be announcing negotiating a spending package which also includes 80 ukraine -- 82 ukraine. the -- aid to ukraine. what resident zelenskyy will -- president zelenskyy will implore congress for is he wants to make sure he gets this point across. this is his moment to get the point across to some republicans who said we should start to push the brakes on some of the funding we are sending to ukraine. if we send funding, it needs more oversight. this is not the veteran republicans like senate minority leader mitch mcconnell. it is not just duty but also just makes sense for u.s. policy to send money to ukraine. the next speaker the house has said -- poised to be the next speaker, kevin mccarthy said they will be no blank check for ukraine. this will be zelenskyy's to make

sure the aid continues. jon: briefly for we let you go, we heard with the kremlin said in response to this trip. i imagine there will be some questions on the decision to make this trip in the first place. annmarie: certainly. volodymyr zelenskyy has not left ukraine. it is a war zone he is leaving. i'm sure this has irked the kremlin very much. this is a moment where president biden is going to talk about this strong alliance and the united states continues to back ukraine, along with its other european allies. kriti: annmarie hordern joining us from outside the white house, we thank you for breaking down a critical and historic moment over in d.c. we will bring you coverage at about 430 p.m. eastern today when president biden hosting press conference with president zelenskyy. jon, it is not just historic in d.c. this is our last show of the year together.

i very publicly want to say thank you to you. two years ago in covid you gave them ever shot on your -- you gave me my first shot. little did i know we would be anchoring a show together. it's been a pleasure to work with you so thank you. jon: very nice of you to say. it warms my heart during the holiday season. it is great to see your continue to rise at bloomberg as well. it's a pleasure to work with you. just building off of that update, think of this incredible year we have been talking through the geopolitical realities, inflationary realities, -- happy holidays to you as well and our entire team at bloomberg. kriti: a big shout out to our team. kate harley has driven the train on this one. john, our technical director and a slew of people who made the show possible, we think he was always and wish you a happy new year and holiday season. for now, markets are still in

the green. more markets coverage ahead with kailey leinz and sonali basak. this is bloomberg. ♪

john: keeping you up-to-date with news around the world, john heilemann. xi jinping told dmitry medvedev that his country would like to see talks on ukraine. beijing trying to improve ties with europe. the state broadcaster reporting xi he told the former president his admin straight and has been promoting peace and talks. china has avoided criticizing russia over the wharton you. months after shanghai endured a brutal lockdown to stop the spread of covid, the virus is starting to make its way through the city's 25 million population. hospitals are struggling to