♪ >> i'm jon erlichman and welcome to bloomberg markets. matt: the s&p 500 has snapped a losing streak and is rising 1% at 4371. we're not quite back to the levels we saw last week. we are getting back to that. you can see the two-year yield has climbed a little as investors like goa but. 475.34 is the level there. the bloomberg dollar index is falling .2%. oil, most interestingly, is

holding down $268.24 for wti. -- to $68.24 for debbie to. you are in toronto and caught up with some executives, including the cto of at&t. jon: yeah, we did. we are watching technology stocks, this riproaring rally. among the 36,000 people who are here for more than 100 countries, you have thousands of startups, everybody is talking about ai. we see it in the market everyday. as the industry get together they are focused on it as well. let's hear more on what the chief technology officer of at&t has to say about ai. >> i actually think the rise of open source is going to be one of the more interesting things to watch over the next number of years. you will have all the different

communities around the world having access to that. whereas on the proprietary side, the excess will be more limited to the companies that own the technology. matt: jon is at the conference and we will catch up with him. ubs is preparing to cut more than half of credit suisse workforce that it bought. this starts next month as a result of that emergency takeover, the forced takeover. bankers, traders and support staff in london, new york, and in some parts of asia are expected to bear the brunt of these cuts with almost all activities at risk according to people familiar who talk to bloomberg news. let's get over to sonali basak. she has a little more details here and. we expected some cuts to come but now we are looking at half of credit suisse's workforce.

sonali: the language is important. half the workforce for the combined entity. it's about 30% of the total. 35,000 jobs, according to callings reporting across the world. this is about a significant reduction here of investment banking staff. credit suisse had a massive investment bank with the risk tolerance that was not the same as ubs. it will be interesting what they seek to do in the market. it is sensible that both in a downturn in the markets relative to a big boom cycle and the ton of overlap, then you add the nutrition that you also might get on the heels of any potential overlap there is when it comes to credit suisse and ubs staff, it's a lot of jobs about to hit the market. the way this will be done according to people familiar is three rounds of job cuts this year with the first round expected by the end of july. two more rounds planned for

september and october. certainly through october and the end of the year there will be a lot of communication with staff, plus probably a lot of conversations across wall street and global finance. matt: how will bankers have been prepared for this? we knew they would be cuts. i imagined most bankers at credit suisse have already dusted off their cv's and sent them off to headhunters. sonali: if i had to explain under the surface it certainly sounds like a flurry. you have conversations going on all over the place. if you look across wall street you do see marginal hiring. you don't see hiring at full-scale. we know a lot of other banks are also laying people off in second or third rounds at this point. there are certain parts of the businesses that will never come back in the force it had the last couple of years. credit suisse is a huge spac banker.

not that we have seen a lot of that activity and more but some of the activities we were used to in the last couple of years are not going to be the same things banks are taking on in the future. it will be a little bit of reinvention going on here as the traders and bankers look to find new jobs. matt: thanks very much. we will be back with you in a moment. i want to look quickly what's going on in terms of the markets in terms of the share prices. ubs was up just a tiny bit in credit suisse trading. the shares trade here in the u.s. as well. we will look at those shares. help 1.6%. $19.88 the level. we have seen this forced takeover and a lot of people have called it a gift to ubs, and a sense, but they were reluctant to do it at first. how does it look now?

has ubs got a deal with the government guarantees they were offered alongside the price tag for credit suisse? sonali: it looks like a deal. they were things everclear deals. the guarantees were hotly contested. there is something else to consider, the execution of the deal itself. there's a jp morgan analysis of the worry about erosion in the wealth assets. wall street analysts and investors will have a very close eye on what happens to credit suisse's business as it combines with ubs. as we see the job cuts, and like i said, attrition on top of the job cuts, there is a wonder on what client stay on board and what clients also start to move around the world as well. that will be this challenge for sergio ermotti as the plan goes along. we are seeing shares up to the point because there will be a lot of synergy. there's a ton of duplication. these were two major swiss banks a lot of similar businesses and that were fierce competitors.

some of this will help keep a handle on costs and gain scale for ubs, so long as they can execute this and not lose too many key people along the way and key clients. matt: thanks very much, sonali basak, talking about this breaking news. ubs is going to cut more than half of the credit suisse workforce. our sources tell us starting next month as a result of that emergency takeover. we are near the end of june. this is coming pretty fast and furious. let's get over to alison williams who joins the our bank coverage of bloomberg intelligence. you run the covers globally so you are on top of the story and have been even before it started developing. was this cost-cutting expected? where are we looking for more than half of credit suisse's staff to drop because of overlap? alison: certainly, that is a big

number. there are a few questions. the great bird reporting said there's a memo. -- bloomberg reporting said there's a memo. there is talk about how big the cut will be. 30% is a lot. the questions are, how much of the headcount relates to business? credit suisse had sold assets to apollo. they had moved back to a significant chunk of business we expect the headcount would be reduced and there is not going to be lost revenue associated with it. looking at the other businesses, that's really the question. is the headcount following businesses they have already lost? from a market share perspective or signs of further

reductions in revenue to come? matt: how many bankers have left credit suisse already. surely they recognized the overlap. many of them had no their counterparts at ubs and already, as i was talking about with sonali basak, dusted off the resumes and sent them to headhunters. what kind of brain drain have we already seen at this bank? alison: i might even say those resumes probably did not have a lot of dust on them given what has happened in the credit suisse over the past few years. that is what we have been hearing anecdotally. we have seen a lot of great reporting on this. there has already been in exodus. we have heard on the wealth side of things competitors are aggressive in terms of recruiting some of the business and a lot of the talk of the overlap and there may be a

source saying this. it's a tough environment. the other thing we are seeing across the industry investment coming down. that headcount is not an indicator as much is catching up to the significant decline in banking revenues last year. down 50%. this year there were hopes we get a rebound. we are seeing things studying at pre-pandemic levels. really soft levels. really soft start of the year across those businesses. we are seeing the headcount broadly. that is also playing into some of the cuts we are seeing here. matt: i wonder what the market is like right now, allison, per bankers looking for a job out there. for those who already work or for those who will have to find one next month. is it saturated? alison: i think it is probably a very tough market.

because, as i said, we have seen the revenue outlook come down dramatically. 2021 was the record year. things were cut in half last year. things are studying to levels we saw before the pandemic. one of the lower -- one of the weakest years we have had in the last decade. it is tough and selective in those markets. by contrast, we are seeing signs of life in adjacent industries. we are seeing headlines around some of the payouts at hedge funds pretty significant. we will see some of the wall street talent find its way over to that side of the business. matt: thanks very much. allison williams. she runs our banks covers globally for bloomberg intelligence. great to get time with you. i will go over now to zurich to

talk more about this story. i will reset it for viewers joining us now. ubs is repairing to cut more than half the credit suisse workforce starting next month. that is on the job cuts are expected to happen. marion hollister meyer wrote this story. she joins us now on the phone. what do we know in terms of the numbers? the grand total of employees at ubs now combined with credit suisse is about 120,000, and some 45,000 come from credit suisse. marion: that's correct. we are looking at 120,000 combined workforce with 45,000 from credit suisse. they had lost a number of bankers since the merger announcement in march. overall, we were expecting big numbers. as we have learned, we are looking at about 30% of that total headcount, which equates to 35,000 people.

the bulk of that coming from credit suisse staff, the inherited staff. matt: thank you for checking in. i want to touch base again with you and with zurich as quickly as we can but i want to get over to tom metcalf. he's joining to talk about the story and weigh in on this story. ubs cutting half the credit suisse workforce. we did expect cuts of about 30,000. i think those were the estimates. we now know from people internally they want to cut about 35,000. a little bit more. tom metcalf joins us to talk about what this means for the bank and what it means for the industry. let's start with sergio ermotti, the chief executive officer who has been brought back to ubs. he's making deep cost cuts to save $6 billion. tom: fantastic reporting from

marion. this is what ermotti has been signaling. $6 billion in salary cuts alone. where most of that is coming from, as you might expect, from credit suisse. it shows they have enterra did this bank but in certain areas they are really looking to keep that pretty lean. particularly the investment bank at credit suisse that is likely to bear the brunt of any cuts. matt: what is the mood on the ground in zurich? i'm sure it has been pretty dark even since before this takeover was forced by the swiss government. does this make it even worse? marion: this does make it worse. it's been a long waiting game for a lot of employees. it has been months of them looking for new jobs and trying to see where they would even fit in at ubs. try to suss out who their

competitors are and competing for. it's been a long waiting game. now that the numbers are out, we published them, it will cause more distress within the bank. they will be waiting to see whether they are on matt: matt: the reduction list. absolutely. in terms of other jobs, what else is there? if you're looking for a job in banking and you have been let go or left credit suisse, you have left ubs, there is nowhere to go but someplace outside of switzerland? marion: for investment banking a lot of the key rainmakers, the one at ubs would have wanted to retain have been poached by competitors in the last couple of months. we saw santander building up, deutsche bank took a few, barclays. that is not that many -- the rest of the people that are there are looking at places throughout the history. a lot of banks are doing job

cuts right now. is not an easy environment. on the wealth side is a different story. everybody from citi and jp morgan are interested in building of their wealth businesses. they might be looking to post talent. you have local private banks that are expanding and what to potentially take on the wealth bankers. that's an area ubs will not be necessarily cutting first. they are focusing on the markets, the traders, the support staff of those teams, and then they will eventually move on to other parts of the businesses. corporate functions where there is much more overlap. matt: marion broke this ubs news. tom, what is your take on the market for bankers? anyone tuning and now -- in now who is planning on leaving or will be let go, as it looks like 35,000 will be from credit suisse starting next month, they will want to know what is the market.

how saturated is it? where can their resumes be sent? do they need to look for a different industry? tom: sitting in london where you can expect a lot of these cuts to be made over at canary wharf it comes down to the areas. in some cases it is not a good fit for ubs. that is just a tough market to go into. it is definitely a buyers market. you have thousands more people on the streets looking for jobs. whether they can fill those roles, particularly in the deal making space for the top performers absolutely are high in demand. different more rank-and-file, we have seen cuts in other banks. goldman, morgan stanley cut thousands of jobs. difficult times in that space. that is the irony. the ones where there is lots of demand is probably the areas where ubs is trying to keep its people. matt: thanks very much, tom metcalf, about this news.

let's get back to marion. she broke the story and put it out. sorry. sorry, marion has dropped the line. ubs is preparing to cut more than half of its credit suisse workforce starting next month according to sources. ubs in total has 120,000 employees. the credit suisse portion of the bank since the force takeover has about 45,000. sources inside the bank tell us 35,000 of those jobs could go starting next month. let's take a quick look at what's going on in markets right now. we have had a rally that continues. ubs shares are rising. these of the u.s. adr's. they trade mainly in zurich. if you look at the broader market, the s&p has gone back in the rally mode. now up 1.1% at 4376.

not at the big 4400 we topped last week but we snapped a two-day losing streak. nasdaq is claiming as tech stocks bring us back. fixed income, we do see investors selling bonds to some extent and yields rising pretty much no matter where you look across the curve. two-yeartwo-year there is the. -- there is the two-year. if you look at the 10-year, 376. let's bring in marilyn watson over at blackrock to talk about this market. it is still all about the fed really. it is still all about the debate. are they done raising rates? are they going to raise one more time in july? my think about twice again as the dot plot signified? what do you think? marilyn: good afternoon.

in the bond market is a lot about central banks. not just the fed but the fed in particular as we look to july. the market is pricing in another 25 basis point hike in july. from there we saw the fed's own projections were actually increased by 50 basis points total by the end of the year. i do think is very data-dependent when you look at the economy. it remains resilient. we have strong data in the housing market today. we have had further strong confidence as well. the labor market remains robust. we will see initial claims coming up on thursday. we will see the inflation coming out on friday. we do have two big key data points coming out before the fed meeting in july in terms of the payrolls report and the inflation report. there's a lot of information to come, a lot of data to be seen.

i think at this point the u.s. economy overall does look to be incredibly resilient in light of the very aggressive hiking we have seen from the fed. matt: you are the head of global fundamental fixed income strategy. are there other markets you think are more interesting right now in the u.s.? -- than the u.s.? marilyn: there are interesting markets will be the globally. the eurozone is interesting given how hawkish the ecb are. the eurozone economy does remain on relatively good footing. inflation is not coming down as much as they would like. they have increased their own forecasts for core inflation, which is tricky. we have some lackluster data for the pmi's. the eurozone is interesting. would you like some of the dispersion we have seen in the corporate bond space where we see a lot of differences now

between different bond issuers in terms of the price and performance. on an active basis we realized there are a lot of value traits. we like brazil, mexico, where we think now the central banks who are on the front foot in terms of trying to fight inflation and now looks like they will probably start cutting at some point soon. around the globe is a lot more opportunities and we are seeing a lot of differentiated markets and dispersion. if you can be noble and active now is a really great time to be in the bond market. matt: thanks very much, marilyn watson, joining us from blackrock to talk about fixed income. lesson into equities and to our stock of the hour. the hartford is a national leader in property and casualty insurance. it's expecting a busy hurricane season as noaa critics and

above normal storm season. the company is leveraging ai to help customers recover. let's bring in chris swift, chairman and ceo of the insurance group the hartford. also joining us is sonali basak to talk with him. welcome to the program and thanks very much for joining us. let me start by asking about ai. i am less surprised to see about the use of ai and other industries. i continually learn about the new ways they can help us. how will that help you at the hartford? chris: it is great to be with you. thank you for inviting on the program. we think ai can be a game changer in a number of aspects of our business. i would point out we have been using machine learning ai or orientated processes strictly in claims and certain aspects of underwriting. think of imagery and pictures.

we have trained machines to read pictures of buildings, structures, roofs. this will be the next phase of machines ultimately helping augment our human talent to be more timely and more accurate in everything we do. matt: there -- sonali: you also have a lot of questions in the market about the weather itself and climate. when you are looking at this season how are you preparing for it? is it better or worse than what you have seen in the past? chris: our preparation begins with our agency customers when we underwrite a policy for the next year. we take an opportunity to look at risk profiles, whether it is roofs, windows, building codes. try to offer advice to our customers through our valued agents and brokers on what people can do to mitigate risk. in other words, lower the risk

of damage. from there we really turn it over to where storms are going to form and where their tracks are. we have sophisticated tools and technology that will overlay a projected storm path with all of our houses and homes, our policies enforced, so then we can send out additional communications to agents and brokers, along with our customers directly of cautionary things they can and should do. lastly it is the recovery phase . when there is damage there is displacement. we have our catastrophe van, a 60-foot vehicle on premise to act as a remote claim office, dispense cash of people need it, food, water. as i have always said, we are in the business of paying claims. people give us money to respond

during these times and we take the response ability seriously. we want to get people back to normal as quick as possible. matt: chris, in terms of the hurricane season, but coming hurricane season that noaa critics it will be worse and anticipated, how does that affect your business at the hartford? chris: matt, predictions sometimes do not come true. noaa is projecting slightly above historical 10-year averages for formation and severity. it always depends on where the storm will hit. part of where it hits we have to deal with windshear. we are in an el niño year right now which means more formation. the counterbalance is -- matt: i have to jump it because of the computer and the heartbreak.

chris swift from the hartford. thank you also to sonali basak for joining us on set. this is bloomberg. ♪ back in the day, sneaker drops meant getting online to wait in line. now with xfinity mobile... ...we get the fastest mobile service and can get the freshest kicks asap.

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romaine: welcome to "bloomberg markets: the close." we knew the combination of ubs and credit suisse was going to result in job loss. now we are worried about the job loss magnitude. ubs will absorb about half of the workforce from credit suisse from that bank's emergency takeover. marion halftermeyer is our reporter on the ground over there in europe, joining us by phone here. when we talk about half the workforce of credit suisse, put that into perspective. how many jobs are we talking about? marion: we are