>> welcome to the bnn, bloomberg and bloomberg audiences. i am john hyland with the first word news. air defenses have been sent around moscow after drone attacks. cranes lifted them onto rooftops downtown. the same system was installed in the western suburbs near vladimir putin's official residence. in germany, a meeting of the u.s. and allies on military aid to ukraine has ended. there was no decision on whether germany will provide tanks to the ukrainians, but the new defense minister says berlin could move quickly if an agreement is reached. mayors facing an influx of

migrants from the border into their cities are imploring federal officials for more help. 175 mayors are in washington meeting with president biden today. the number of asylum-seekers crossing the u.s. border has surged. bets for a technical recession this year. those surveyed predict gdp will shrink 0.6% in the second quarter and 0.3% after that. that as consumer spending stalls, business investment declines and industrial production weakens. the odds of recession in the next year is 65%. global news 24 hours a day on air and on quicktake by bloomberg. powered by more than 2700 journalists and analysts in over 120 countries. i am john hyland. this is bloomberg.

jon: i am jon erlichman. welcome to "bloomberg markets." >> i am kriti gupta. green on the screen in the equity market. getting a breather. a lot of this being fueled by the individual movers. jon will have that in a second. s&p 500 higher by 0.9%. tech outperforming and it comes down to a handful of names. even the dow seeking pain when it comes to goldman sachs. the 10 year yield 347, and massive selloff, up8 basis points. the intraday volatility becoming the theme. what happens as we have that drumbeat to that february 1 fed meeting? i am interested to watch that. the dollar index is mostly unchanged, taking its cue from the bond market. how long before talk about $100 oil again? brent crude trading with an $87 handle. jon: let's dig deeper into that

tech story. the nasdaq 100 has allowed the usual suspects with multiple percentage gains, netflix among them. that is still the big reaction to the quarterly results last night as they continue with the management transition. up more than 6.5%. we have moved past the big bank earnings but the regional players are reporting, including the parent of silicon valley. you were talking about the goldman sachs story. we will track those headlines. "the wall street journal" reports on a probe of the consumer business. what were the safeguards like as they were ramping up in lending? goldman is under pressure right now. the reality of companies being rewarded for addressing sobering realities. job cuts. wayfair, which is up 20%, is

cutting the workforce about 10%, 1700 plus jobs. a huge winner early on during the pandemic but now feeling the crunch and the layoffs hitting the company staff. we are also watching this story on google which we have talked about all day. the parent company, alphabet, also announcing it is cutting jobs, 12,000 in what amounts to a 6% slash. the ceo saying he takes full responsibility for those layoffs but let's bring in mandeep singh. maybe we should also highlight for the audience the way in which this business works. the fact that advertising is not necessarily, or the revenue, is not something they can control unlike software companies. what they can control is their own spending or the size of the workforce.

mandeep: yes, you bring up a great point. ad pricing is all bidding and auction driven. unlike the software side of things where vendors set the prices -- and they are raising prices in line with inflation -- they do not have this luxury. the fact they are doing it ahead of earnings, what does it tell us? i think right now, the way i would interpret this, is probably they are unlikely to beat consensus numbers even though numbers have come down 10%. they are not even optimistic about a second half recovery. these companies do not do layoffs every time there is a slowdown. this, to me, is a bad sign in terms of fundamentals. the market is pricing a second-half recovery but who knows? maybe there is a longer slow down. kriti: let's talk about the share price.

on these headlines it is viewed as positive from a lot of investors, the idea of cost efficiency taking the cake. is that going to last? at what point does this become negative? mandeep: so, i think net-net it is positive even though you feel bad for people. alphabet hired almost 50,000 people over the last two years. why did the management not forecast this better in terms of topline and what kind of leverage they could see from their current employee base? in the end, it comes down to the fundamentals and your fixed cost basis going down. it will help the margin side. to me the real point to determine is where of fundamentals? they are not going to see a recovery even once we go past the cyclical downturn.

that could happen with these companies. not every company is going to come back the same way they came back after the pandemic. that is the real driver for the stock prices. jon: you made an interesting point. we are less than two weeks away from alphabet's quarterly results and we will see how this move factors into the messaging. but with so many tech companies getting ready to report at a time when we heard layoff a nine announcements from microsoft, amazon and more, would you not be surprised to see this continue? mandeep: i think the messaging is bad. when it comes to layoffs it hurts your employee morale, it is really terrible for retention and why would any company do it if they do not have to? granted, this is a good time to optimize your cost structure and streamline things. but for a company of alphabet's

size or microsoft's size who is doing very well, the market likes the business models. why would they have to do this? i think they sort of anticipate this downturn probably lasts more than two quarters, which is what the market is pricing in. kriti: something we will be keeping an eye on. mandeep singh, thank you as always. let's go from the tech space to the crypto space, which i think falls under tech to some extent. genesis digging itself out of debt after filing for chapter 11 bankruptcy. the latest digital asset platform to enter crisis mode following the down full of ftx. should ali bencic is here to -- sonali basak is here to break things down. walk through what this means for the lender. sonali: you say tech, i say finance. [laughter] genesis global capital is the

lending unit within genesis global trading. this is the lending business that is filing bankruptcy. what we do not know -- and this is the bad news -- there is $.5 billion among the top creditors owed money. we are not sure how much agreement there is on the path forward and how they get their money back. among the creditors -- we have known this for a while -- gemini has been an acrimonious split. fighting between the two groups, gemini and genesis global, for many months as well as the sec cases against both. they are the number one creditor with that being their claim. the customer base is more than 340,000 people. this will be closely watched by the people who want their money back. my twitter has been blowing up

on how this bankruptcy will go through and how much money they will get back at the end of the day. jon: you were talking about this a couple of days ago. let's go through some of the scenarios. it is hard to predict at this point but i guess what happens with those customers depends on what happens with the business or assets. sonali: they do. one thing that had been giving people some sense of ease was this idea that the intercompany loans made between digital currency group and genesis would be counted as the way they look at the entire balance sheet going into bankruptcy. this is an entity of an entity of a larger entity. this is a complicated structure. digital currency groups founder, barry silbert, work at one of the top advisory groups when it comes to restructuring. customers are concerned. some of the creditor groups are people who have money in

different ways and being represented by different creditor groups. there was a proposal running around before about $.70 on the dollar, which you will lose money. but it could have been much worse with the things that have been going on in crypto. i would keep an eye on it because things always have the possibility to get worse. jon: we will stick with the financial realm. kriti: we got news, the worst performer on the dow is goldman sachs. walk us through the issues goldman is dealing with when it comes to the federal reserve. sonali: let's bring you through a couple of months of details. back in september the fed was facing scrutiny -- goldman sachs was facing scrutiny from the fed about its consumer banking operation. today we have "the wall street journal" reporting this is a probe that has to deal with appropriate safeguards. this is the question of proper monitoring and control according

to "the wall street journal." i think things tend to not resolve quickly and it is unclear what the outcome will be. so, the compliance functions are what is coming under question at goldman sachs, as well as audit and legal. goldman reported earnings earlier this week. we had not known about the details that the fed was looking for. keep an eye on it in terms of future fines or things that could be associated with this probe. kriti: last question. we go once again broader. there were reports from deutsche bank, i believe, talking about cuts of 40% when it comes to bonuses. this is the theme across wall street. in your newsletter that is published with businessweek, walk us through the highlight of businessweek. sonali: read it. [laughter] the bonus question.

bonuses are dropping. the news that deutsche bank is the idea that bonuses are falling 40%, but you do have discrepancies. that is 40% for dealmakers, a unit that had job cuts. you also have considerations for higher bonuses for the traders. deutsche bank in the wake of restructuring, they are trying to fight hard and winning on a lot of levels. it is a rates business around the world. there are headwinds that they are able to overcome that other trading desks are seeing. they want to pay their traders for it. we were talking about jamie dimon and his pay package. we are seeing the highest levels of the banks see sticky pay and in the coming days we will see more results for this other bank ceo's. kriti: something we will keep an eye on. sonali basak all over it.

we thank you as always. check out her newsletter. coming up, we get insight on what is ahead for fed policy in the economy and how it is translating to the market. win thin at brown brothers harriman & co will join us next. this is bloomberg. ♪

>> i think this scenario is going to be a soft landing and when we would all want to see. there is possibilities for that. there is a lot of money sitting in the checking accounts of households. kriti: this is "bloomberg markets." i mk goop to alongside jon erlichman -- i am k goop to

alongside jon erlichman -- kriti gupta alongside jon erlichman. exclusive interview with esther george. let's talk about the direction of monetary policy and what it can mean for the economy. win thin at brown brothers and harriman & co joins us. a lot of the core is circling down to that 25 basis point hike. what extent is that going to show up in the dollar? win: they are intrinsically tied to the fed outlook. since then we have got solid lower numbers that has eased expectations of fed tightening but taken a toll on the dollar.

the pendulum has swung too far. the market is pricing in easing second half of this year which i find pretty hard to square with what we are seeing in the labor market and inflation. i expect the fed sentiment to swing back toward the dollar. but we could be under pressure for a while until we get more data on inflation and clarify the fed outlook. jon: does that become doubly so in this narrow window where fed officials cannot speak until we get that interest rate decision? win: that's right. the fed quiet period starts at midnight tonight. the fed is left guessing for the next 2.5 weeks. if the market is serving a doveish trend, it will go right

up until february 1. the fed has to be frustrated with what the market has been hearing. the fed is speaking but the market is not listening. weakening financial conditions index off the u.s., we are now as loose as they were in may 2022. despite 425 basis points of tightening, we are back where we were at the beginning of the cycle. i think the fed will push back. the market is not listening. the market is fighting the fed. you can fight the fed over the short term but in the long term, the fed wins out. this is to be continued. kriti: it is that time of the segment where i have to ask you a yawn where the question. i have got to ask about the debt ceiling. [laughter] this time feels different because of the gridlock we are seeing in washington. will the markets actually

realize this is a discount that we are not really paying attention to when it comes to the debt ceiling? is this something that we have to panic about right now? or is this a summer 2023 issue? win: that is the thing. when is the time to push the panic button? we know from the treasury secretary that they are taking extraordinary measures. it is the same song and dance we have seen so many times in our lifetime. the last time it came to this much of a head was 2011 when the tea party had just come in and really flexed their muscles. we saw quite a bit of market impact. we have the dollar selling off. equities were selling off. really risk off impulses from this looming debt ceiling over the summer of 2011. we could see a repeat and things might be worse. i think congress might be more dysfunctional, more partisan now

than 2011. we saw between five and 20 lawmakers on the republican side held kevin mccarthy hostage. yes, it will come time to push the panic button, but the markets have a short attention span. from what treasury secretary yellen has said there are enough extraordinary measures to get us through the summer. when do we start panicking? let's get to q2 and see what the landscape is. this is something that we need to pay attention to, but at this point it is too far ahead. the good news is republican leader mcconnell is saying the u.s. will not default. period. he is one of the grown-ups in the room and the markets are hoping he guides this process through. both sides have dug in an we could see bad headlines before we eventually reach a deal. jon: helpful roadmapping.

win thin of brown brothers harriman & co. the market, broadly speaking, we have seen session highs with the nasdaq 100 up more than 2%. we talked about the desire to get back into tech. we will take a quick break and when we come back, french president macron facing the biggest protest of his time in office over his controversial pension reform. the latest on that story. this is bloomberg. ♪ ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

jon: this is "bloomberg markets ." i am jon erlichman with kriti gupta. the number today is 64. french president macron will raise the proposed retirement age from 62 to 64, which has sparked protest.

given broad public opposition labor unions are calling for more disruption. it is going to be interesting to see how this plays out. kriti: this is important for our global audience. you have to think about the labor conditions in france. it is illegal to work past 5:00 or 6:00 p.m. this retirement number is not working well with them. jon: bloomberg spoke with the french finance minister to talk more about this. >> everybody can understand there are some oppositions. we are democratic. we recognize the rights of everyone to oppose the reform. but we also strongly believe that this reform is a necessity for france. we will stick to that reform even if, of course, there will be debate in the parliament and the framework of the debate within the parliament. there may be improvements of the reform. kriti: that was the french finance minister.

the markets here are green on the screen. the s&p 500 up 1.2%. the nasdaq and russell are outperforming. more markets coverage ahead. for jon erlichman, i am kriti gupta. this is bloomberg.

romaine: maybe it was all priced in already. big rebound up 1% off three days of declines. kicking off to the close. romaine bostick alongside katie greifeld. katie: we are down even with the optimism but the two-year treasury yield is rising a couple of basis points. romaine: interesting to see the price action. you have a drag coming out of real estate, retail and financials. and then we talk about the thi