>> welcome to bloomberg markets. >> let's talk price action. you would think with all the risks, you would see soft that you are getting the opposite in the s&p 500. while off the highs of the day. this is where you are seeing some interesting action. yesterday, we got to cripple .7. for that, we were sustainably below the threshold. do we get back there in time for

the federal reserve next week? let's bring it back to the bond market. as you start to see the fed getting repriced, divergent opinions on wall street in what happens next. 10 year yield at 3.60. the question is how long does it stay there if we get a hike next week? some of the curve inversion is getting wonky. i am not sure what to make of that, but we will ask mike mckee in a moment. jon: looking forward to that. the number of storylines we are tracking in equities right now, crypto's rally is helping some of the equities tied to that sector. coinbase up 6.5%. big job cuts, sobering news out of the parents of facebook but wall street likes that. on the jobs front, complications

with labor cost for united airlines. those shares up 5%. california ruling has been helping uber and lyft. obviously, the broader story is within financial services. at this time yesterday, we were talking about big declines in first republic, comerica and schwab we have seen those stocks rally in a big way today. holding gains of more than 40%. kriti: is not to digest. it -- a lot to digest. are these moves relative to the rate hike path of the fed? traders do not want to be bond traders right now. earlier today, andrew discussed the uncertainty. >> at risk is there that there will be a financial stability issue that prevents the fed from hiking further, but the early read is it probably will not

prevent them from hiking further. if the fed does not hike next week, there will be real questions about whether the fed is also committed to price stability. jon: let's get more on all of this. wells fargo's managing director joining us as well as mike mckee. based on those comments, the balancing act is where the fed has to consider. mike: there are two things you have to keep in mind. what is it the fed is completely focused on inflation and they really believe invasion is a danger to everybody's candor of living and we need to get inflation back down. the other is they have always felt that there should be a dichotomy between financial stability and monetary policy, that they have tools that work

on both. they can do monetary policy with interest rates and they can do financial stability with rules, regulations, supervision. they think they can essentially walk and chew gum at the same time. when you have the inversion numbers that we have, it tells you the fed has more work to do, a 25 basis point hike at least would be warranted normally. a lot of it will depend in what happens with the banks between now and next wednesday it in the banks have days like today, the fed will be raising interest rates. kriti: nick, we are seeing wells fargo pricing in a 25 basis point hike. by the next five trading days, is there a game changer? nick: i have been today with the cpi. yesterday we were swinging

towards a no change coming today toward the 25 basis points. it depends on whether markets call between now and next week. we are watching very closely. maybe we will end up at the 25 basis next week. jon: as much as we have been focusing on the fact, you are also watching the ecb. what the numbers you watching unfold there? nick: that is interesting. the other focus is between 25 and 50 basis points. we are so focused on a 50 basis point increase. a couple of reasons -- one, if anything, core inflation is more persistent in europe. that will keep the ecb on the front foot. they have signaled this. for now, the significance of these u.s. financial issues, not

quite so much for the european central bankers at this point. still comfortable with a 50 basis points went from the ecb. what will they say after that? jon: come on -- kriti: some on wall street are talking about how the move from the fed and the fdic is stimulative. some are taking a different take, pressing in a 25 basis point cut next week and talking about ending quantitative tightening. how are you thinking about the qe versus qt debate? nick: somewhat stimulative but the ideas a couple of things -- quantitative easing in the purest sense. bonds have a long duration. here, we are talking about short-term lending and also the stimulative policy is coming to offset this negative effect that could come from some of these

financial strength. i do not see it as significant as quantitative easing. jon: as we wrote of his conversation, it does seem like whatever the fed ultimately does that the messaging from the central bank will be important. nick: yeah. that has been the case for some time. there has been a disconnect between jay powell, the fed and the markets. we have seen how the markets could go quickly from one end of the spectrum to the other. it will be important what powell says. they will incorporate the banking situation into their statement and do whatever powell says afterward about what they are thinking about for the future, but if we managed to get through the next 7 or 8 days without more bank blobs, you

will have a focus on what the fed does. we will all turn to the dot plot and summary of economic projections to see what they think about inflation and unemployment and work back from that country do figure out what they will do between now and then. it was just a the ago that everybody was debating the idea of the fed raising its terminal rate, perhaps significantly. they were saying it would go over 6%. how close was that to being accurate? kriti: thank you for insight on an crucial topic. coming up, we dig into credit suisse and as the urges calm after disclosures yesterday. our callings took a look through the bloomberg terminal and among u.s. lenders, $206 billion worth of unrealized losses of the securities available for sale.

comerica held the highest ratio of the banks that had more than 5 billion assets it the latest filings. stick with us. this is bloomberg. ♪

>> so far, pretty calm. material good involves yesterday, i had a client meeting which was positive. but it is early days. kriti: this is bloomberg markets. a lot to digest in the banking space. jon: absolutely. those comments from the ceo of

credit suisse about how the bank saw inflows of client funds monday after markets were polled by the collapse of silicon valley bank. we were having a conversation around health the fed navigates it interest rate goals with the collapse of silicon valley bank. for credit suisse, navigating a restructuring and the desire to bring more funds into the business also complicated. sonali: very complicated. last i looked, credit suisse traded at record lows. before the market open today, the stock had dropped in switzerland as well but got some relief when we spoke to the ceo of the bank this morning. he said it is because he is seeing some inflows and even though the outflows are still there, they are slowing. that is positive news from the ceo of credit suisse but this is the real catch.

this notice of material weakness, especially at a banking from where you are full of cfa's and it is difficult to see material weakness. not only did the stock drop but you also have a credit default widening out very materially here. that has gone up very consistently over the last couple of weeks. they have surpassed the highs of november and december. that meme stock rally fueled fear around credit suisse. now the problems are credit suisse's own. minutes ago, a popular cds trader treated that these are critical levels. does not necessarily mean the bank is in dire straits, but you are concerned about the way things are trading and the trajectory ahead and the fact that it might take longer than

expected to get through this turnaround with all of these troubles, not just in the banking system but in credit suisse's own reporting and ability to bring money into the bank. jon: thank you for that story. breaking news -- apple, bloomberg is learning, is delaying bonuses for some divisions, expanding a cost-cutting effort and adjoining their peers in trying to streamline operations that is according to people with knowledge of the situation. the shift is set to reduce the frequency of honest is for a portion of apple's workforce. the plant has not been announced publicly, but we do have ed ludlow to help us make sense of the development. we already learned today about meta-with more job cuts. so more sobering news out of silicon valley. ed: in apple's case, some

divisions were awarded bonuses. what our sources are saying is that those portions will be delayed and reviewed. there is also a key piece of reporting which is that the company is freezing hiring and leaving positions open when employees depart, which is a strategy meta has implemented in the past. but not to the level in apple's case that we saw meta announced this morning. kriti: where the two. -- squared the two. for meta, to a lot of reports are coming out last week. apple as well. is this idea of tech efficiency not over yet? we have heard from a lot of the big players? ed: meta is cutting 10,000 jobs and describing the 5000 open positions it had.

a week ago, we reported that this was happening. 10,000 was a big number, bigger then we have been led to believe, but what is so fascinating is if you read the statement from mark zuckerberg from this morning, it is a long list of economic headwinds. he cites higher rates, the impact of regulation on slowing down growth. and so what i was hearing at meta is that there was concern around the workforce. when morale is low, meta would have to go deeper in the economy did not improve. what we are seeing is that the economy has not improved. jon: to that point, the fact that apple now seems to be draining the camp of companies -- joining the camp of companies that is watching costs closely, does that send a broader message? ed: it does.

apple pirate more judiciously during the pandemic, fewer people. the way you higher -- measure that is additional units of revenue per employee. meta comes at the bottom of the pile. they hired but did not add to the top line. apple grew its top line but was conservative in adding new numbers. if apple is still cost-cutting, that is a big signal about the health of this economy. kriti: ed ludlow in san francisco. coming up, insight on the collapse of svp and what happens next. this time, all of you sarkozy -- olivier sarkozy. this is bloomberg. ♪

>> i think we have got to recognize this was the second largest bank failure in u.s. history followed by the third largest when signature bank was taken over. the combination of those things inside a couple of days is a check to the system. it will take -- a shock to the system. it will take time to settle out. jon: you were just listening to walter todd of greenwood capital on the collapse of the silicon valley bank. bloomberg news has learned apollo, blackstone and kkr are expressing interest in buying loans held by svp. over sarkozy joins us. he is currently the founder and managing partner of further global and has more than $2 million in assets under management. let's start with the 74 billion

dollars loan book out of svb. a lot are saying that is an attractive by, coveted. what do you make it? olivier: loan books are evaluations of individual assets and what they would be worth. there is nothing you are acquiring. also, different pools of capital will be interested. i would expect the book probably traits at a reasonable discount given the change in rates and the speed at which those rates have changed, but i would expect a deep market for them. kriti: trying to get your hands on it? olivier: that is not something that we do. my growing concerns are operating companies is a -- as opposed to assets.

we let others jon: fight over that. jon:i would assume anybody interested would have to be thinking about where we go from here. what would you say about the road ahead? olivier: for us, this is the time of extreme caution. you have a quick blurb there of a cio saying we have just had the second and third largest failure in u.s. banking history. we have had the steepest rate rise in history proceeding that -- preceding that. for those of us that live in financial services, none of this is a surprise. i would be surprised as to how long it took for the games to get, but in our view, this would be very much the beginning, not the end of what is likely to be a continuing troubled environment. jon: there are comparisons of

different regulatory jurisdictions at a time like this. i am in canada. a lot of people compare the canadian regulatory regime to that in the u.s. for those trying to figure out what happens on the regulatory side, what is your view? olivier: you have got a fundamental issue that needs to be fixed. i believe the way the banking system has been structured thanks back to 1933 when the fdic was first put in place, first deposit insurance in 1934. by 1980, 100,000 dollars was insured. then it became $250,000 in the weight of the -- weight of the great financial crisis. the fact is that 20 $50,000 is

inadequate. if you do nothing more than index the 1980 level of hundred thousand dollars to inflation, that cap should be closer to 400,000 than 250,000 dollars, but that does not take into account the changes we have had with the speed at which information, real or fake, travels and the speed at which depositors can move balances from one institution to another. the regulatory environment, this is not a criticism about something that should be expected, has not kept up with the times. regulation has a tendency to be reactionary implementation of rules. we need to catch up on the regulation side. that is likely to mean a significant increase in my view

and deposit insurance. that will happen whether regulators do it proactively or whether the market forces that outcome. kriti: talking about regulation but let's talk about crypto as well. a lot of folks have said the exposure of signature bank to crypto has led in part to its collapse. svb a similar story. your thoughts on whether crypto is worth having that exposure? olivier: i personally am a crypto skeptic. i believe that as regulation gets around to dealing with cryptocurrency, it will likely be banned. there is no way for government to not have the power to tax it population. without that power, it has no power and, therefore, in my

view, i would be in the warren buffett camp. i would not buy on the crypto in the world for $25. kriti: we thank you as always. more markets coverage ahead. stick with us. this is bloomberg. ♪

romaine: the big rebound coming off the big selloff we saw over the last few days. the question is, whether it is going to stick. kicking you off to the close. scarlett: there are airlines that a russian collided with a u.s. drone. romaine: certainly off the best levels. her upper percent on the day was