>> although policy is restrictive, it may not be enough and has not been restrictive for long enough. >> we have to be as persistent as inflation is persist and. >> it is a worse outcome if you do not get inflation back to target. >> we have covered a lot of ground and you will have ground to cover. announcer: this is "bloomberg surveillance" with tom keene, jonathan arrow, and lisa abramowicz -- jonathan ferro, and lisa abramowicz. tom: jonathan ferro and lisa abramowicz on assignment this

morning. i am on assignment with katie greifeld sitting in for lisette. we will try to survive the next three hours with. quarter is where you are. sidebar, apple and tim cook. apple approaches $3 trillion. dan ives has his eyes on $4 trillion. katie: you are getting headlines about apple stepping up with for antitrust charges. the state is up to antitrust charges of streaming music such as modified. we are approaching big benches but we know apple is fighting this. tom: the real answer is in the securities market. we are up again in the data security market. yes, we will decrypt crypto with katie greifeld. bob just emailed. bob from the hampton says, "do

crypto." you will later. right now, we have to do the story of the equities market. what do we know about the semiconductor market yesterday that lisa was so focused on? katie: it is a hot topic on a geo scale. seems like the u.s. is trying to protect nvidia's market share. we will see what happens on that front but in the meantime, i has a medical force in the market -- it has been a mecca force in the market. tom: micron is up a solid two dollars on him you which really shows -- on mu which really shows what they can do. futures are up nine. dow futures are up nine. in the yield space, much higher

yields. a nice rebound. this bears nuance. we have a higher yield within 10 year at 3.75%. it reverts back to a negative two basis switches a further curved invasion on the twos-tens spread. inflation is truly at a tipping point. the real yield with a 1.258%. i am watching this tick by tick. oil is flat at $69.52. a really interesting conversation i thought as they squirmed and tried not to answer questions here. the euro right now is 19. here's katie greifeld. katie: it will be fun to see how this changes around 8:30 when we

have a dump of data. there is likely little change in the third print so expecting more of these name, below trend growth in the first quarter. we also gets an initial jobless claims. they are continuing to pick up a just slightly. the number expected is 264 versus last week. than -- then we also get home sales. then we do have more fed speak, not from howl, but from atlanta fed president rafael bostic who will be speaking. this is around 3:00 p.m.. we heard from him on the 23rd and he says he favors no more rate hikes. tom: the tension is interesting in that every fed is different. this is rafael bostic who is

generally the dust. his statistic is what everybody watches. the atlanta gdp number which michael mckee is just make it above 2% statistic. katie: there is tension and we see this in their words but then you think of the fact there were no dissents in the last meeting. then we finished the day with nike reporting after the bell. as always, the focus is on guidance. what we are going to hear about business sales in china. the stock is actually down slightly year to date. tom: futures are up nine as we start the day. what it is is nearing the end of the border and every bank and manager and chief investment officer is recalibrating. we speak with christian from deutsche bank. what is a key distinction of

your set for july? question: the resent is you cannot unfortunately repeat performance of the first few months of 2023. recalibration has to be what are the earnings or the second quarter? are we entering recession? central banks are probably doing more. but 2024 in the second half comes into the discussion. tom: if revenues are under challenged every get disinflation, i believe the price effect of revenue both comes in. can units come to the rescue on a global basis and to save the day if you get disinflation at the top line? christian: i would not say that you certainly go into distant nation already in the second half -- into disinflation

already in the second half of this year. we have sticky, core inflation. if you think of gross on the other hand, even if there is russian, maybe this is -- is recession, maybe this is not the best outlook. talk about the second half of relatively core high-end lisa but so -- high inflation but still growth. central banks need to act more. this is why we do not agree with so many pets the market priced in. katie: as you look into this second half, what do you see as the biggest risk to the market? will that come from inflation or is it an earnings story or geopolitics? christian: geopolitics, we have seen over the last weekend can change very quickly.

it will be with us for a long time. i have lots of clients saying this is a risky environment. if you look at that, we are going to a so-called "normal" environment. it has been with us for quite some time. that is one topic for sure in second half. but then there will be sticky core inflation. which companies are price makers and which are price takers? if you move away from the macro side, really looking at the company side and can earnings surprise to the upside given sticky and nation remains. katie: i want to stick with geopolitics. when you think of the risks, where do you expect them to be expressed? in equities or commodity? christian: honestly in all asset classes. first, commodities course. but there is still a lot to be

done on the physical side. it could be -- i think you can see this in the equity markets but also in the next income market. we have volatility in fixed income which is much higher than the equity market. i think there is not a asset class that can escape discussion. tom: moments ago, the new york fed president william dudley, former fed president, parachuted in. i am honored that you are here to talk about where he is on higher rate. bill dudley walks into the u.s. and says a conservative estimate for the tenure out there's more is 4.5%. what does our investment world look like if you load through or percent and take a german 10 year bloom out to 4.5 level? christian: i think that is not

priced in at this time. tom: i agree. christian: let's look at the text side which lifted the market -- the tech side which lifted the market. if you look at the 12 month forecast, you are not 4.5%. and if you get a recession, i do not think it will be a long one. i do not expect growth to shoot up. it will probably be low growth around 1.2% for the u.s. and may be lower around 0.2 -- 0.9% for the your. tom: good morning dr. el-erian. i believe he has been upfront. this goes back to a question a century ago. christian nolting, do you have a

linkage of the dudley moved to or .5% which gives first -- 4.5% or can we have the higher yield within disinflation? christian: i do not see higher yield within disinflation. yes, core inflation is sticky and that is why i am not of this nation. you see this in the headline but the core remains sticky. we need to not go back to the old, very low inflation environment. i think we are staying here for quite some time. yes, 12 months, but maybe longer, like you or five years. in my view, this leads to the fact the fed does not cut so quickly as the markets is probably pricing in. i think we will stay high for quite some time just because they do not want the error of saying, you cut and then -- we

cut and then inflation is still sticky. katie: the conversation we are having about what the that is going to the relates to how many times they will cut and how many times they will hike. so the conversation be focused at how long they will stay at terminal? christian: i think it is important to look at terminal rates so you can have a discussion on this. they really do not know in this point in time. maybe you will see this differently month. but they really want to avoid to cuts and i'm out core inflation is more -- want to avoid cutting and finding out core inflation is still sticky. they have talked about the hoarding of labor which leads again to sticky core inflation. the fed says let's maybe do a pause as the fed has done and

then another hike. and then do not be so quick with the cuts. tom: thank you so much and particularly on commenting on dudley. christian nolting from deutsche bank. it is amazing to have a day like this. you have to talk crypto with katie, that is how slow it is but then boom. there is the essay. bill dudley has been upfront on a higher rate regime and has been dead on. he takes it further today on the qe/qt debate. katie: he says this suggests a 10 year treasury note yield of 4.5%. this makes me more excited to talk to matterhorn back of morgan stanley. he says he sees this at 3.5% so

there is quite a debate. tom: bring up the quote please again. i want to go through this. to really adjust the dialogue for a thursday morning. this is bloomberg opinion. william dudley. the former president of the new york fed. "suppose the fed's short-term interest rate target, adjusted for inflation, is 1% over the next decade. inflation averages 2.5% in the bond risk premium is one percentage point. this suggests a 10 year treasury note yield of or .5% -- 4.5%." ♪ at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com

>> bringing down inflation remains one of my top things. today, inflation is less than half of what it was ago. it is caused by russia and the war in ukraine. we knew we had to do more. tom: the president of the united states testing out a phrase called "bidenomics." annmarie hordern saying yesterday the white house was trying to get ahead of the economic dialogue.

katie greifeld is in for lisa abramowicz and jonathan ferro. this label glued to my face is bed, bath & beyond. in washington, they said there was marks on joe biden's face because of sleep apnea, legitimate medical procedure. the answer is once again, and is not going away, age. not as old as the president of the united dates, gregory joins us. it is not going away. plain and simple, it is not going away. interpret please. greogry: there are a lot of things working against him area i worry about a strike in august that could last until before they worry about a government shutdown. student loan decision, maybe

today from the supreme court, will go against him. and there is the issue of age. he is in pretty good shape. donald trump is 77. what i have seen is the majority of democrats would rather he not run. tom: where does this play out through the summer? i know republicans are focused on and eight. there are 42 people on stage. there will be a debate in august. what is the timeline for democrats to get behind their incumbent president? greg: it is coming up quickly. the momentum is what i see from robert f kennedy and william erickson -- marianne williamson. they have momentum but joe biden does not. tom: what is interesting is greg valliere, with all his

statements, it feels like things are rushing forward. it feels that we are having an october 2020 conversation. katie: if you think about the november 2024 conversation and think about what the biden administration post room, these are long-term -- pushed through, these are long-term investments. it could take years for this to bear fruit. how does joe biden run on this? is it a game of reminding and ending? greg: you would think yes but if he keeps doing this, people will think he is tone deaf and does not get it, because most americans are still traumatized by inflation. gasoline is still fairly high and food prices are still high. when they hear joe biden say things are better, they do not get it.

katie: you also wrote the biden team has done a poor job of showing strength. how do you thread that needle if you are can painting joe biden? how fine of a needle is that a threat? greg: it is difficult. i think they need to consistently say things are improving but we are working harder to make things even better. other stories will crowd this out. in particular, the irs whistleblower. you listen to their testimony and it is credible. tom: i have been wrong. i really have not looked at the dude and own debacle. the supreme court will rule on student loans and people but -- people will have to pay their student loans. greg: it is a two-part story.

the supreme court will rule probably today on joe biden story itself and the other issue is student loan interest payments resume in october rated i do not think anyone will contend that will not happen. at least on that area, there will be a headwind for the economy. some people say $70 billion on an annual basis will be taken out of the economy. tom: has had to be stood corrected the last couple days. i thought it was a sleeping july the i am wrong. there seems to be unusual fervor for a july on capitol hill to i have that correct? greg: yes. i think the whistleblower and hunter biden stuff will stay strong. the other stories that exploded in the last day or two is the fight between kevin mccarthy and

the donald trump people. kevin mccarthy said something too strong about donald trump not being a good candidate and got tremendous pushback from other republicans. katie: that is interesting to see kevin mccarthy break with the ranks. you think about donald trump space, will this move the needle at all? greg: it will move the needle enough for him to win the nomination. there is an outside chance for ron desantis or even read youngkin. the issue is do the democrats have someone who can be donald trump? right now, polls are starting to show the last few days that donald trump moved into a slight lead against joe biden. tom: greg valliere with agf investments. this today has complexity to it. yesterday, it was focus on

politics and what we should hear from president aydin. i watched the padres pirates last night and the wonderful announcement from them said they would hold the game because the air quality rating was 165 but if the air quality rating was 200, they would have canceled it in pittsburgh. for those of you worldwide, this is chicago, detroit, and cleveland. it is rolling over and then dress south, below new york city. we have not been affected yet. the images from washington this morning are stunning. katie: it looks like new york two weeks ago or so. you bring up chicago. joe biden was speaking in chicago at the old post office building. they have to plan for that. they ultimately did not cancel the -- cancel that this is

turning into an issue. tom: this is delhi, india-like. i am looking at the app on my iphone. the answer here is this time around me, it seems worse. we just have not seen it descend on new york. we are getting ratings of 180, 200 and dare i say 230. this is the midwestern united states. it has been reported 17 states. then it moves south to the atlantic and washington this morning. katie: maybe it will ruin the weekend. maybe that is the timing. tom: absolutely. for those of you on the radio, it is truly a cloud of fog and

haze across the washington monument. it is 500 feet tall and you cannot see the bottom this morning. wouldn't you think of central yesterday? katie: i thought it was interesting you have the big central banker panel. the boj was the odd one out but maybe an's of hawkishness that they could act off if they become confident of maintaining 2%. tom: with this block and academics in america, there was a change from very little english to a very articulate governor of the bank of japan. futures of 13. ♪

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tom: bloomberg surveillance on a thursday. claims in two hours. katie greifeld in for lisa abramowicz and jonathan ferro. they are on assignment. jonathan ferro is on a british assignment lisa abramowicz is on a shorter, american assignment. something ferro is touring islands. katie: good for him. [laughter] tom: katie greifeld pulled the short straw. it is yours they rated are you planning on tone? katie: that is july 4.

i will not be here. tom: so no crypto next week? a fourth of july crypto. we can do that. yields are higher. there is a reset. there is one statistic i am looking at, before the deadly bombshell -- bill dudley bombshell 15 minutes ago. 10-year yield is 3.75%. the old inflation. we are whale -- away away from that but grinding higher. that is the kind of inflation nudge including the 10-year yield coming up that bill dudley is writing about this morning. katie: in terms of grinding higher, in the worst half of the year, the s&p 500 shot higher. as we head into the second half,

you have marvin loh writing in saying "session betting has now taken centers age and will be a bigger driver of asset volatility and even inflation. we don't expect much resolution on the recession discussion over the summer so choppy range bound trading is likely." tom: he joins us in the studio. wonderful to have you here. i love your notes that katie just read. let's frame the lack of resolution here with the polarity of bill dudley with massive urgency out there on rates going higher. moments ago in ireland, mr. bostic of atlanta saying is less urgency out there. how do you color the state --

collar state strategy around those polarities? marvin: it certainly indicates -- obviously mr. dudley is no longer on the fed but this is playing out. it was constructive given where the estimates were and where the dots went by think you have the broader view amongst the committee. on the one side, if you are thinking 4.5%, you are thinking the fed will not be successful in reining in. i think the fed has been successful in saying there are things out there whether it is student loans or credit deterioration or the broad slowing of the economy. this will start to have an impact in the next six to 12 months. katie: i want to talk about the fact it was a unanimous decision but then you look at the

comments and there is a clear goal. marvin: we will get the minutes soon. i love to see what they say there. i do not buy there was notice that? i think they did a disservice by putting out that message because it feels they are managing the process. i don't know if we want the central bank to manage this process. the central bank has spent a lot of time trying to make the message unanimous. in this instance, i don't think they got done with they would have hoped from that perspective. katie: it has been remarkable how locks that some developments of banks have been. i remember the conversation at the start of this year which was maybe the ecb, fed and boe may break apart. it does not seen the dynamic will change. marvin: not yet. even though we have gotten some surprises to the downside -- i

cannot remember the last time we have said that for more than one reading. but inflation, sticky inflation, is still the main thing. we will get that divergence because we have economies with very different dynamics out of this. tom: what is the asset allocation given a messy summer with no resolution? if you have to look at six months or three years, how do you allocate? in honor of markowitz who died here this week, 60/40 or can you be more creative? marvin: we take a lot of investor readings. our indicators so there is continued defensiveness around this. there is a buildup of cash allocations are getting above longer-term averages second session return -- averages so

recession concern is still out there. we see a pullback on commodity type allocations. that is where you see quality growth and potentially getting into health, things that will want to recession. those are things we look to for guidance. tom: this is important because i get massive crosscurrents on this show on the appetite of institutions to participate. you are telling me there is a cash build up? are they under owned in apple? marvin: i cannot speak to individual companies that way. tom: yes. good morning, compliance. [laughter] marvin: but you are seeing the allocation out of riskier parts of the market. overall equity exposure has come down and caches come up. there is demand for the sovereign bond type of hedge. tom: that sounds like how you

develop the second leg of a mark. if you believe off the october low, you have to have pessimism to surprise people to second leg of the bull market. do you want to participate in equities thinking a bow marketable? marvin: i want to make my equity exposure in terms of where i see the world coming. this is a bifurcated world where we either own all of this or do not own in of it -- not own any of it. make sure your portfolio contains recession risk you either have or do not have. katie: can you talk about ai? a lot people will say that where the world is going, ai will be a big chunk of it. when you think of recession proofing, what role does big tech play? the has turned into a even asset. marvin: i thought about the

bounce seat from neighbors active of >> companies have cash and what companies can take advantage of the cash number? it is big tech. they can manage their balance sheet the way others cannot. there is discussion about whether stagflation or a slower growth environment emerges where inflation does not go back to what we had the pandemic. who can take it of that? if you are talking about higher rates from 2018 or 2019, you get paid for that cash. it becomes much more nuanced as we come out of the pandemic and come through the inflation discussion to find companies thriving in this world. katie: i am glad you are here be something i have been noodling on is comparing treasuries as the balance to their portfolio

with mega tech. in you cannot speak on the names but is apple just as good as holding a 10 year treasury? marvin: i would not say that. i have all faith in the u.s. government despite the fact of what you went through over the last couple months. there is a global demand for this type of asset. having said that, quality growth is part of a core portfolio. tom: if you are a new york guy like marvin loh, maybe this is a good time to cut in and talk based all. you are in boston. nobody wants to talk the red sox. something happened optical last night in america. in baseball. this is for our crickets audience who does not understand baseball like i do not understand cricket. there are 27 outs.

the basic idea is there are no walks, half benches, no variables. he got 27 people out in a row. this is a rare deal. marvin: we can count -- tom: the new york yankees had a perfect game last night. marvin: that is incredible. tom: i cannot say how unusual this is. this is the 24th. it is like once every 20 years if you are lucky. katie: a heavily researched this for this show. the last one happened in 2012. i saw they were playing the 80's -- the a's. i hope that is not controversial to say. is this the case of the yankees question it or the other team

being bad? tom: it is both. but at -- but it is also no-hitter. the answer is the a's are a professional team and beat the yankees the night before. yes, they are one of the you. a perfect game right now against the atlanta braves in the texas rangers would be a different story. katie: i am just going off orem's i ended up on. tom: i am doing this because rambo is actually -- because bramo is actually good at this. jonathan ferro would be looking at the ceiling light, why are we not talking about yield? i look at this and it is the dog days of the summer. how do you stay focused on the mission of getting to the fall

and into 2024? marvin: professionals have been doing this for a wild. tom: you don't take the summer off? marvin: we do not. tom: this is the smartest observation this week. [laughter] marvin: there will be a lot to sort through. we are data dependent and are seeing individual data points that normally not move the market, move the market. we will have the choppiness and need to your out if the long-awaited recession continues to be overhyped or whether or not we are finally going to see the growth slowed down more broadly than you have. katie: the focus on every single data point. is this just summer conditions when we need something to talk about or did jerome powell set us up for this? when you think about every meeting is a live meeting.

july is. marvin: a little bit of both. after we get through july, we do not have anything timber. we are looking for data points. the difference in opinions on the fomc's as certain people will look -- fomc says certain people will look at data points one way and others will look at it another. tom: i believe we have the chart up. this chart, on radio, looks great. it is what we have seen in the inflation-adjusted deal. jonathan ferro with the wonderful ownership of the yield . this is the real yield. you go back to the doldrums of the pandemic where they absolutely crushed yield.

then up you go. you are buttressed to 1.57% -- we are buttressed to 1.57%. katie: it looks like we are range bound but if you look at the fantastic who to a full 1.5% , that christ returns. it has been hard to hedge nation. tom: real yield, bloomberg the real yield is hosted by catherine greifeld. katie: sitting right here. tom: boy am i in the right felt -- katie greifeld timeout chair. ♪ that always puts you first. (we did it) start today at godaddy.com

>> as noted in the fomc's summary of economic projections, strong majority think it is appropriate to raise interest rates two or more times this

year. tom: the chairman governor and president of the fed. the chairman commented. he is in madrid. that is a different country from central. central portugal is really lovely. very different. we will be at jackson hole. looking forward to that. there is chairman powell advocating for that. if you are joining us, futures are up 14, may be off semiconductors. generally, the news yesterday on the semiconductor frenzy was positive? katie: it was interesting. initially, we saw the likes of nvidia and amd drop. but then it came back. then earnings came in like micron. micron drove it home. tom: joining us today.

lisa abramowicz and jonathan ferro on assignment. katie greifeld. look for her on crypto. suggesting crypto is a thursday date here for katie greifeld. katie: just next week. usually it is on tuesday days. tom: you are bringing good news. green on the market. yields higher. we are watching the tenure throughout the day. oil is $69. $66 on west texas intermediate. this is a good story. thinking to the rest of our team on european banking. this is an american story about your and banking. ubs is rolling out the last of the three spanks. credit suisse is melting in some cosmic way into ubs.

they do this, with all do respect, with an american chairman, kelleher. did you see his footprint the last 24 hours echo reporting, sonali basak. our bloomberg got the most boring correspondent. [laughter] who is this guy? we do not hear from him because he is not a slick investor. sonali: not boring at all. what is interesting here is his move over to credit suisse. the chairman of credit suisse is known on wall street and morgan stanley for having one of the most loyal basis of people who have worked for heaven. that is something he has always understood. to bring tom lift morgan stanley after almost four decades to help lead the transition? the complication is not just the matter of bringing two but banks

together but making the businesses work together. something morgan stanley was able to do early on. this is something ubs and credit suisse has been trying to work forever tom: -- to work forever. tom: i mean this with immense respect. he is the libor guy and set the benchmark calculation, think mary poppins and roadways to india, the libor funding of everything out there. we. doing this and will have a new thing which only ira jersey understands. am i correct? this is the guy that led the charge on the migration. what a boring job if that is what he has to do at bs. sonali: boring but important. he was on the internal reference committee. on wall street, he was important

for the libor transition. he has such a strong fixed income background as well. postcrisis, ubs really changed. the base of fixed income at credit suisse and ubs is very different. the risk tolerance is night and day. there are difficult decisions to be made about how combined businesses will operate moving forward. katie: let's talk about what he has been tasked to do with bs -- with ubs. he will integrate credit suisse's operations in the americas. when you think of that task versus what is happening in europe, how does that compare? sonali: it is interesting. people said what is left of the bank? the reality is quite a lot. they still had a big trade operation but it was messy. of the americas as well, part of

this is the talents three cannot be denied. they are in the process of a lot of overlap. figuring out what they need to make this work for them. ubs in particular has a massive wealth management operation. there are financial wealth advisors across the u.s. and plenty for both banks. it is a large operation in the united states with a lot of arms about how they have -- of concerns about how they are bringing together the cultural differences of the bank. katie: let's talk about the timeline. they are axing a lot of the credit suisse work orders. reportedly, bs is preparing to cut over half of the credit suisse workforce and they are bringing people on. should we be expecting more headlines of who will get the job done? sonali: even in the near term,

the way ubs is operating is as the parent company to these two separate divisions. at the end of august, we will see the financial results. it is making officers to think of what that will look like. [laughter] it is complicated integration about both of these folks have seen difficult days before in banking. tom: where do you perceive ubs /credit suisse will end up in new york's? katie brings up the geography. i need to believe they will maintain zurich to some extent because of politics. they do not have the politics in new york. sonali: there is politics in banking everywhere. tom: but they don't have to talk to mayor adams. during is different. sonali: credit suisse is in the iconic madison avenue building.

you start to have bankers across the street really, just maybe 10 or so blocks away at ubs on 6th avenue. a different culture there. i wonder what will happen to the lease in the credit suisse katie greifeld and sonali basak. this is serious. hell or high water. they actually play. the guy with the blue t-shirt on looks like jerry garcia. he has to look down. if we have nothing to do, july 3, rockaway point, the sugar

bowl. what do you think? sonali: to be honest, i didn't want to write a story about his cover band by never got to it. tom: july 3 on this guy who is going to save. sonali: the last time you got me to write about the nano bar at davos, i got in trouble for it -- piano bar at davos, i gun trouble for it. tom: this is interesting. kelly here is extraordinary. sonali: the story at ubs has been a big question. i remember them saying they were afraid morgan stanley would want to buy credit suisse. he said it kept him up at night. i have covered both banks for maybe almost 10 years and kelleher would be seen having drinks at a bar which was right

behind bs. there is a close tie between these businesses. morgan stanley was the behemoth but it cannot be denied that he has tremendous experience. tom: we are into the weekend. the summer begins. how grim is it out there? sonali: the idea that ubs/credit suisse would be cutting tens of thousands of jobs at the same time as goldman and citigroup are doing multiple rounds of layoffs is written. there is little capacity to earn on new bankers. tom: great reporting. much more coming up. we do this with a market that has a lift to it. futures of 13. 44 point -- 4430 one on spx

futures. stay with us. ♪

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>> though policy is restrictive, it may not be restrictive enough. >> we may have to be persistent. it is the worst outcome, if we do not get it to target. >> we have covered a lot of ground and we still have ground to cover.

tom: on radio and television, it is thursday. jon ferro is toughing it out. lisa abramowicz is on assignment. nobody at haverford gets up before 10:00 a.m. is this the first time you have gotten up this early in years? >> i actually woke up at two --2:00. tom: i do not care how old you are surveillance now. set up and take a nap every day. i do. it is beneficial to this crazy schedule. we are thrilled that you are with us. pushing everything aside, do you

consider a different future out there? he writes a blistering essay today. debbie makes it simple. four .5% 10 year yield. averages one. add in another 2.5. and the bond risk premium is one percentage point. this suggests a 10 year treasury note yield of four .5%. how many people are ready for that? katie: a lot of the notes and conversations i am having say extended duration. excited to get into that with police. -- elise. we are going to get a lot of data, starting with first

quarter gdp. more of the same is expected to show in the first quarter. we get jobless claims picking up , all coming up at 8:30. we will hear from raphael speaking at the irish association of investment managers on the u.s. economic outlook. it will be interesting to hear his thoughts on what the fed should do. after the bell, we get nike earnings. retail has been interesting this reporting season and nike is no exception. the stock is down about 3%. tom: did you see the movie? it was outstanding.

katie: everybody is bringing up ai. kroger brought it up eight times in their earnings report. tom: we have an equity lived this morning. i'm going through the levels right now. 4430 is a shock to say the least. 15 thousand on nasdaq 100. i do not know if he had the apple been are there, but we are in a $3 trillion watch on a market cap of apple. that will be worth seeing. coming up with one hundred 90 plus dollars per shares. yields are higher. it comes back to that big inversion. the real yield, you will hear me

talk about this a lot in july. maybe they are calming down after centura and all that sterling. again on oil, it snuck up on us. we welcome all of you to the reset. i believe it is tomorrow? we are there. joining us right now, global wealth management. i love your note because it is for all the people out there, and you know who you are. what you are talking about is, you had to rebuild an equity portfolio. >> we are encouraging investors. a big reason for that is when we look at the aggregate client

data, it shows that half of our clients own less equities than they did a year ago. rather than focusing on broad, we are looking for pockets of value. you actually find that the rest is trading below. it is a forward-looking price turn. tom client this is big. you both have the same message. the people are participating. they are cautious and nervous. you have to hold people's hands. >> to some extent.

we are focused on different opportunities within the management space, but also things like allocation. we think it is going to the different than it did in the last. we are looking at complementing those exposures. really looking for value right now. we are seeing that in other areas. think international equities. our views are shifting and complementing exposure with a bond duration position. katie: i want to start with that call that you are helping investors rebuild their equity positions because coming into 20 23, this was billed as the year of the fixed income. it feels like it has turned into a game of catch up.

>> this is not about trying to chase a rally. it is to be the engines of long-term capital appreciation. i think this cooldown that we have seen is giving us an opportunity to reassess and move forward with cooler heads. over the course of the next 10 to 15 years, you will still be able to analyze total returns. why not now? especially when there is value to be found in the market. tom: it is a different outlook. katie: you mentioned it is not going to be the previous leaders. when you think about smaller

companies, what will be the ai moment. tom: all these kids and their aia. i have a hewlett-packard computer on my iphone. continue zeitgeist. katie: you could make a lot of --it felt like we had a reset. >> we are focused on the mid-caps space. i think we have to remember that it is not required just picking out the enablers of it but really thinking through some of the cross sector applications, establishing for the future or supply chains. you have to think about all the different types of disruption.

tom: jp morgan comes up with come if you take this out and that out, take bitcoin out and the rest. 100 12 percent of the audience does not agree with that statement. give me an example. >> a relative discount you mean? for us that is made cap. tom: that is northwestern talk. continue. >> made cap is a great example of that for us. rather than fish in this overvalued pond, look at an area . tom: you are looking at, is it generalization? >> sure.

i'm not supposed to talk about single stocks on television. but you're getting at the right idea. tom: i am going downhill so fast. why did i get out of bed? katie: you told me now is the time to talk duration. why is now the time? >> i know that they are talking hawkish the, but the fed probably only has one more interest rate hike in their pocket. assuming you get a policy rate, our models suggest it is about three point eight. not a big stretch from where we are trading today, but if they hike additionally beyond that, that is an additional 15 basis points yield on the 10 year. we do not think the entry point

is looking to crazy. our base case is one year, two-year, three years from now, those yields will be lower. we want to move into that, not only for the opportunity, but from the portfolio construction perspective. tom: this is really valuable. you do not own apple or nvidia. what are you going to do in your rebuild? we construct a portfolio and it takes courage to do that. elise, thank you so much. we have a lift to the equity markets. up point three percent. we say good morning to you. katie greifeld is in for jonathan ferro and lisa abramowicz. waking up across a large area,

it will be a difficult weekend. i have seen some shots of pittsburgh that are extraordinary. thank you for the emails. the idea here is, what is different is the fire is out west in quebec and northern ontario, coming through chicago. this morning on the east coast, it is strange because washington -- for those on radio, the imagery of the washington monument, five hundred 50 feet high, just shrouded in smoke. katie: i am going to canada next week. i am interested to see what the scene is there, but these fires are usually in the west. two or three weeks ago we had smoked a new york and everyone was surprised.

did not know how to handle it. >> actually worse than new york last time. on the edge of philadelphia, even worse this time. there is a real mystery. be careful out there, flying or if you are in one of these pockets. we greet you on a thursday. i believe michael mckee is not on this morning. he will be with us in the 8:00 hour. anticipated michael horn back of morgan stanley. this is bloomberg surveillance. ♪

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>> it did not matter, as long as you help the bottom line. jobs supply chains and key products moved overseas, like china and much of asia. tom: i saw lawrence going after biden, i'm sure there are others supporting him, but we are trying out phrases see if they

will stick and stay on the wall. one america, a proper -- prosperous america. futures are up 13. the yields are there and the real, katie, come on. the real estate market is supposed to be gloomy and terrible. i think it has been pretty good. katie: didn't he call it at the bottom? the date it support him. tom: we have more data coming up. you will still be on air. catherine with ice this morning.

again, usually what we would do is talk bidennomics. because she has appeared with a yankees jacket -- joining us now, a yankees fan, emory. i do not remember 1956, but i remember the emotion of david wells and the nature of david. that was an extraordinary effort. yesterday, we see a yankee with a perfect game. it resurrects the season. >> an incredible moment, given that he just lost his uncle a few days ago. he said he has been grieving and crying, but he felt his presence there.

you are able to pitch a perfect game. just an incredible game. unfortunately, i was sleeping because i was coming on your show. i had to make sure i was getting to bed, but watching this morning, it was spectacular. tom: let's move on. this is a president who is struggling. it is a completely normal medical condition where it is about apnea. i guess it is a serious thing. nothing to make a joke about, except it is front and center in the politics of our nation, isn't it? >> he claimed he had this over a decade ago but now he has a

device that puts indents on his face. reporters were talking about, what is wrong with the president? you could see there was some kind of machine or allergic reaction. we were the first to report he was using this device, but it brings to heart the question about the president's age. he is the oldest president in history. even among democrats, they are concerned that he is too old. he had a rough 24 hours. twice in 24 hours he confused the country of ukraine with iraq. as well, when talking to donors come he said he has a new best friend that happens to be the largest country in the world, china. but he meant indiana. even though he has been prone to gaffes, it does bring to the

surface these concerns, not just within the electorate but the democratic party, about his age. katie: those are concerns about biden the candidate as well. in a lot of ways, it was a campaign speech. when you think about bidenomics, that term has been coined and it will be a plank of his candidacy . >> the administration and campaign see the polls and it is that americans do not rate this president when it comes to the economy because of high inflation. they are trying to go out and tell their legislative wins. part of what that means is bringing jobs home. he talks about wanting to be a union president's.

what is interesting is, when the term first came about, biden said, i do not know what that is. that was his joke to union workers. now, what the administration is trying to do is define it on their own terms. katie: who are they trying to sell that message to? is this trying to sway some swing voters? >> it is aimed at middle america, the swing voters and the independent. also, it is more of a messaging tool across america. he is trying to get into people's homes and explain the act. something that is working against the administration is,

it feels like ages ago that this was passed. roads and bridges, things the electorate can actually see being done, some of those projects will not get finished well into 2026 or 2027. they will not be able to see the impact, and that is why they are out, trying to tout this. there is criticism during the obama years that president obama did not go out and tout obamacare. they are trying to go out and explain some of these economic wins. tom: when does janet yellen go to china? >> it is not yet confirmed. they say they have nothing officially to confirm yet.

i'm just thinking about my vacation. early july. next week is early july, so at some point, starting next week, she will be headed to china. tom: thank you for the brief. a really interesting discussion. katie greifeld, to me it is the comments on fiscal realities. not the navelgazing of july 26 or as deep as november 1, but you get one percent plus 2.5%, plus the premium. i'm going to say this is a bombshell essay and nobody is prepared for this.

katie: the highest we got was four point three percent in october 2022. i have to back out of my chart. those are some pretty lofty levels and there is a lot of daylight between where we are now. >> you wonder, what does the bloomberg aggregate return index do? does it breached the recent lows? we are not prepared for that. stay with us. futures are up. good morning. ♪

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tom: katie greifeld is going to do stocks. a lived to the nasdaq market. we saw yields higher. you know, it was a good discussion. katie greifeld is in for lisa abramowicz and jonathan farrow. when do i go on assignment? katie: i feel like you travel a lot.

tom: it should have been a four hour discussion. you expand it out and really test them and question them. katie: it seems that the message is that these central banks are not done with the inflation fight. again, you think about what we heard and it seems like higher meets are on the way. tom: we will have to see. it leads to a bombshell. the model would upset the cart for all of them, especially the bank of japan. >> we will see if the bank of japan backs away from that ultra easy stand, but it has not happened yet.

tom: we will have to see. we will have individual stocks and what is interesting is individual stocks are different than morning individual stocks. katie: i am used to breaking earnings after the bell. earnings season never ends. let's talk about riot aid shares up. they boosted the revenue guidance for the full year. 20 2.6 billion to 20 $3 billion. they had seen 21.7 billion, so raising that and revenue also. they did report after the bell yesterday and you can see the momentum carrying through today. this after giving an upbeat forecast. a nice lift.

but china remains an issue. a significant headwind comes. i did want to end on jp morgan. not too much of a lift there, but we did get the annual stress test. 23 past and jp morgan is moving higher as a result. tom: well, this is twisted and different but it is a different corporate credit note. we could narrow on consumer stocks and retail. this goes to the heart of the mystery of the next six months of the year. bond animals do this differently. the acuity of your note is superb. we had inflation so that they

could raise prices, and the whole risk out there is what is the price movement or elasticity that we had going to see? are you optimistic that they can hold prices? >> good morning to you both. thank you for having me. the short answer is no. i would not say i am pessimistic, but i'm not convinced the optimism should be there to maintain a increase that they have taken. consumers are pressured. have nondiscretionary bills that they have to pay and purchases that they have to make, but they are able to trade down and lower-priced brands and the brands that have taken additional price increases or stressed their price increases

too much, volumes are coming down. >> 81 to 76 on general mills because they are facing these challenges. is that the new theme this year, that we are going to cvo challenges? >> yes. it general mills is a great example. they have taken close to 20%. this was to offset inflation and commodity pressure. tom: have you seen the cost of cinnamon toast crunch? >> is five dollars to six years. he had katie i think i, one. i usually go for the rice

crispies. let's talk about retail, these consumer related credits. everyone has been getting pushed out, but when you look at past cycles, what is the typical behavior of some of those names? >> that is been typical. retail, those credits took a big hit last year as the recession started. now it has been pushed out, so it has been tough to be a credit investor because you have this allegedly looming recession six to 12 months from now, but you have spreads tightening as well. it has been a challenging dynamic to make sure that you

are being compensated and investing in retailers, knowing that perhaps we will be in a recession and perhaps the comps will be pressured more. maybe the employment rate increases, a whole bunch of factors. it is tough right now for retailers, hard to choose where there will be winners. >> you have been watching that grind lower for at least a year here. when you focus on and the risks that are priced income is it safe to say that a recession is not priced in? >> i do not something i watch closely and pay attention to is student loans.

those payments are restarting. granted, the government and in an --administration could finagle some things to push out the payments or reduce the impact, but there is going to be a massive discretionary spending headwind come september. some are estimated where consumers are going to have to spend. that is a real headwind that is coming. tom: we welcome all of you on radio and television. we have further year that two-year dramatically higher. and futures are up. this conversation right now is really important. the reason is important is, if

you do not listen, you will lose money like i have lost, two, three, four, five times. you make fun of it did not study for those the --study like you did. they know the bond people are always out front. is it your experience --e-work at goldman and other shops. should equity people follow on research to get out front? >> yes, but i will also caveat it and say we have different objectives. my upside is limited. broadly speaking, i'm trying to protect the downside and make sure that, i am getting payback.

my equity counterparts, in theory, there upside is limited. they see the world as a little bit of a nicer place. i am a little bit pessimistic, glass half empty on a regular basis. tom: franklin bolton is making up saying, she nailed that, but it is the truth. katie: i love the different psychologies of the different markets. you are more worried about protecting for the downside. i want to quickly get your thoughts on this looming maturity will come a specifically in high-yield. when you take that into sectors that you focus on, how much of a risk is that? >> the maturity wall really is

not until between 2025 to 2028. that is when things get challenging. for the structures, those, from what i have seen recently, those face a little bit more of a challenge, not only with the maturity wall but in regards to interest rates rising and potentially --that business is not supporter -- supportive of what they had in place previously. again, i am ok. i am comfortable with the maturity wall that they have coming up. we do need to get through this cycle, but in theory, two to three years from now, hopefully these companies can come to market at reasonable rates, get refinanced and we will see what happens then. tom: what does that do to the

core bonds that people are comfortable with right now? >> that is a tough question because it makes government look more attractive than it does now. short-term, spreads are going to widen, but it is even asking yourself, do i want 5% to 6% in a secure piece of paper? is it worth it? maybe not at that point, if you're getting 6% or seven percent. tom: thank you so much. she is with franklin templeton. up 3/10 of a percent. we say good morning to all of you on radio and television. katie greifeld is in.

what started out as a quiet morning is not so much. i do not even know what the consensus view is on something as basic as a 10 year yield. i said this yesterday. i have no idea what earnings are going to look like. help me with oil. my head is spinning over the polarities that we are's being versus what bill dudley published. katie: i think that the bond market is the most interesting. you have big expectations for where we go. the equity market, maybe we take back some of the enormous rally that we have, but the debate among the fence curious, that is where it is playing out and that is what i am watching.

tom: we will revisit the 10 year yield. i get a fancy technical study that, back when it was normal, some grizzled pros have said maybe that is too high, but we are still distant. katie: it feels a far way a way. tom: futures are up. 13 point 52 on the mystery of the american economy. this is bloomberg. good morning. ♪

>> we have raised our policy made by five percentage point. we see the effects of our policy tightening on-demand and

sensitive sectors of the economy, especially housing and investment. it will take time for the full effects to be realized, especially on inflation. >> the chairman of the federal reserve system. the newly minted bank of japan. that was a joy to hear governor yi ueda speaking. it was always difficult because the english was really not there at four is. katie greifeld is in. katie, it was a real joy to have that first listen to the newly minted governor of the bank of japan. >> a hint of hawkishness. i mean, maybe he is the person

who is finally going to lead japan out of those extraordinary policies. tom: it would be a generational change. i will not spend a lot of time on this, but the basic idea is, it is a tough sell to say that japan matters. it is unoriginal experiment right now. katie: oil is not doing much. we had been following the situation in russia. we do not know how the drama will play out in the coming days, weeks and months. but the russian leader made opec stronger than ever. remove him and the rest of the cartel would have a problem.

tom: his acclaimed book was out a few years ago. so much of the geopolitics is wrapped around whether commodities as a whole, even gold. the head of the research has been wonderful about the eclectic nature of commodities. i have to go to copper as the litmus test for the system. what is the call on copper? >> there is a reason. it is the flagship, the bellwether for where the economy is going. if you look at the price today, it has been less than spectacular. historically tight stocks. it just did not happen. growth has been anemic.

the spike in stimulus is not likely to grow as much as we were originally hope -- originally hoping. it was maybe a little bit higher, but not too much. tom: do we have a better understanding of commodity inventories? or is it a mystery? >> there is insight, for sure, but we have to take the data with a pinch of salt. for supply and demand, and trade data, i think you can work out how much time is left. that is despite extrapolation. we think that they are ok because the mystic real estate and industrial projects --they

have been underperforming quite substantially compared to expectations. i think that is the issue. i think they do not have enough. we have to wait to see the stimulus. if they come and they can see some growth and recovery, that would definitely be something that will help, but right now, my hopes are not up terribly high. katie: it is called dr. copper for a reason. it is typically seen as a proxy for growth, but is that still the message to take or is it more technical in nature? >> i think it is actually still valid because it is very symptomatic about what is going on in the rest of the world. we have a lot of flags

suggesting pmi numbers are coming down. these are all data points that fueled the copper market. they are symptomatic of the broader economy. it has not been as strong as expected, despite interest rates going up. that is the biggest fear, if interest rates stay high then demand is going to suffer. none of this bodes well for copper demand. it is reflecting the broader economy. katie: broadening out, i want to get your thoughts on what happened this past week. use a your reaction than you did in oil. as we track these geopolitical tensions, what is the market watch? >> number one, we do not know

exactly what the situation will be. there are clearly some concerns they. an alternative is something that the market is not quite ready for. i think that will be throwing out all sorts of things. oil is strategically important for russia. wheat, russia has a massive crop. they will need that as well. tom: one final question. i want you to sit on this and spend some time on it. the bombshell first half was tepid economic growth to 2028. we have had a disastrous commodity cycle, some would call it broad, lengthy, structural

inflation. we have been searching for a super cycle. we had a leg up and then a pullback. given the ims call, can you give me any optimism on a blended commodity index right now? >> i think what you are going to do is look for commodity that has fundamentals for individual markets that will give you pockets of optimism. some of the soft commodities will mean that supply risk is high for the likes of sugar, cocoa or cotton. it does not bode well for commodities, particularly if demand starts waning. having said that, i think, if

you look at prices, they have come up quite a bit, but they are substantially elevated from where they were pre-covid. quite a bit higher. historically low levels of stocks. it is not a catastrophe, but markets are not as well supplied were comfortable as they were years ago. as a result, we are not going to be entirely immune. whether the bench is low or fairly tight, we are not able to cope with a big supply shock. tom: yesterday --i'm so glad that you brought up wheat. something that russia takes great pride in, and their manufacturing of wheat.

it is really extraordinary. this is a more recent chart showing the price coming down, but if you go 20 years or so, but a spike. we have really given him back. katie: it is a fascinating chart. we have all had to learn about some is enteric markets over the years. when it comes to russia, it is expected to be the biggest wheat exporter this season and next. really important impacts that could have. tom: this is an important conversation after the essay per bloomberg opinion. coming up, matthew from morgan stanley.

worldwide on radio and television, good morning. ♪

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>> although policy is restrictive it may not be restrictive enough. it has not been restrictive for long enough. >> we have to be as insistent as

inflation is persistent. >> it's a worse outcome if we don't get it >> back to target. >>i wouldn't take it moving consecutive meetings of the table at all. >> we still have ground to cover. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. we for 30 minutes away. it's been a challenging number from the 200,000 level up to 260-ish or whatever. what are we going to see here with mike mckee? we do it with the backdrop of good equity markets. futures up. it's been a solid week for the technology area. it's so great, jon ferro is on assignment. bramo got the bug, she's on assignment. i said i know you don't get up until 10 a.m. please give it a shot.

joining is not katie greifeld. you love the 6:00 a.m. you are on. katie: the secret is you just don't sleep. you roll right in. tom: we have an intern from heather for over here right down the secret is you don't sleep. katie: just a awake. you are looking at a little bit of a selloff in the bond market. nothing to get too excited about. the two-year of five basis point. continuing the deepening of the inversion. we are below 100 basis points. tom: off of center yesterday, there was -- nobody took a swing at anybody. we have dxy with a little bit of recovery. you are at 10937. sterling for the 127 level.

slightly weekend. again, in the equity markets there is a lot going on one of them is we are on the 3 trillion march for apple computer. it nudges up a little bit each and every day. katie, that sets us up for something we mentioned this morning. june 30, tomorrow, and july 14 we kick it off with big banks and all that. this is going to be earnings season mystery. no clue. katie: yeah, it's going to be interesting. you are seeing some of the gloom may become out of profit expectations. the narrative so far is corporate earnings aren't as bad as expected. you're seeing the resilience there and how much that ties back to the resilient consumer we keep talking about. tom: we see it in that are economic data. out of spain, the united kingdom. and the backdrop is christine

lagarde talking about yesterday elevated inflation. i really want to emphasize the 6.8% statistic for germany. it gives pause. that is some of this persistent stickiness we earth seeing. it's a theme a lot of people have been pondering into q3 of this year. one of them is mr. horn bock of morgan stanley. katie: global head of microstrategy great to have you on the show. joining on a morning where we have a blistering column from will dudley the former new york fed president now bloomberg opinion columnist writing that when you add up all the forces that he sees in the economy right now he ends up with a 4.5% treasury yields. you wrote a few weeks ago that you expect 10-year treasury yield's to end of the year at 3.5%.

so a lot of distance between the two numbers. walk us through what you see that's going to push the tenure down to that level. >> things, katie for having me on the show. let's start with fiscal policy for one. i think mr. dudley is correct in that fiscal policy had been playing a pretty supportive role for economic activity in the united states. just over the past 12 months the federal government budget deficit totaled $2 trillion which is a 100% increase from the 12 months before that. over the past year or so the economy has been supported by a fairly sizable fiscal deficit. when we look at the projections that are coming out of the congressional budget office and we incorporate that into our forecasting we actually see that the rate of change of fiscal support is going to decelerate

meaningfully over the next 12 months or so. so by the time we get to the middle of 2024 we are actually going to have a fairly large decline in the deficit to the tune of about 25% on a year-over-year basis. we do think that fiscal policy has been supportive of activity, probably keeping inflation elevated. but, you know, over the next 12 months we think it fades very quickly. katie: it's interesting to hear you say that. the narrative is what we saw from the fiscal side really put us in the situation we are in now. since like you're making the argument that it's going to turn into a tailwind of sorts for the fed. >> certainly with respect to bringing inflation down. our economists have core pce ending this year at 3.4% which

is 50 basis points below the fed's just-released economic projection for inflation. we do think that inflation will decelerate more meaningfully than the fed is expecting and i think one of the key contributing factors there is the fading away of fiscal support. tom: we are going to digress here right now. this is germane and for going to begin a third quarter conversation with him. if you are a young turk at morgan stanley, the honor of being in tokyo with robert allen feldman is unmeasurable. he was a huge supporter over the years with true expertise on japan culture, japan finance, and if your matt hornbach it's pretty cool. you guys own tokyo with dr. feldman and with your time there as well. let us get to the wisdom of

what's it mean for americans if i get yen back up to 150. if i get week yen, what is the so what for our listeners and viewers? >> i think one of the first things i need to do is change in tight into a bowtie which is, of course, your dress of choice as well as robbie feldman's dress of choice. i need to do that to start the conversation. given that we don't have time, the take away for our listeners here is that japan is a wonderful holiday destination. it makes traveling to the country extraordinarily affordable. it also does, i think, probably irksome policymakers in the country of japan. we certainly have to be on the lookout for any kind of verbal or physical interaction,

intervention into the currency market. tom: if we get, they are in an experiment. we saw that yesterday. there's going to be an enlightening -- aligning of the experiment. continuous functions of over days, weeks, months. do you and robbie and morgan japan suggest that we need to be aware that the failure of why cc could lead to ruined stabilities? >> ycc is an ongoing program that probably lasts bit longer. from our perspective, the key detriment to ycc was when it came to the market functioning of the jgb market. but the good news here is that functioning in that market has improved and i think policymakers recognize that.

tom: this is important, folks. they've tried to impute inflation into the mix. if we finally get ycc to turn and get some form of dynamics i don't understand and if we have a combination of chinese exported disinflation, should we be shocked by an agent disinflationary tendency of the next 12 months? >> i don't think we should be surprised at that, tom. i do think at the end of the day capitalism is going to try to find a way of reducing costs. if that's moving some production to the country of japan which we've already seen in certain sectors of the global economy then we should expect that to improve pricing power. for consumers as they get alternative sources of production for goods and services. tom: on a macro basis, argue

optimistic on equities? you know, in january you and i didn't can you be optimistic of acquisition of equities here forward? >> i think we can be relatively optimistic. when you're talking about japan which is where we begin the conversation, equities look attractive to us as well so when you're talking about capital being exported out of japan let's say to the united states and see that's a bit more difficult of a move especially with dollar-yen approaching 150. that's something people will have to think long and hard about because equities in japan look attractive as well. tom: thank you so much. katie greifeld i really can't say enough about this. every firm set up franchises along the way.

they set up literally ownership of the study of japan for western wall street. it runs over to all these tensions. my problem with it is americans are like ok so what? other than i want to go to look at the beautiful town of the emperor, what's the so what here? as the pros tell us it's huge. katie: the so what is huge and it's hard to ignore japan when you look at the yen, just the depreciation we've seen their. whether we get to 150 again, it's a great question. just looking again at what we've seen it looks likely. tom: s&p 500 up 3/10 of a percent. we say good morning to all of you. catherine greifeld in for lisa abramowicz. nobody tells me anything. i think jon ferro is a august

sighting. please is the only one i know that enjoys portage inc. with a canoe on her back. she puts on bug spray. she uses bottles of it because of the deer flies. katie: i get it. tom: that's what she's doing. feels so lonely. katie: i'm thrilled to be here. but where are you going, tom? when are you on assignment? tom: i'm on camp tuition. we'll have to see where that goes. we've got some plans worked out here. part of the family is going to the philippines. part of the family is hanging out doing camp. remember for all of you on radio and television, do you remember when camp was 139 dollars and $35 got you through the week? katie: i was going to say,

inflation. i imagine the number has gone up a bit. tom: tony is the one that got me he was way out front. he had three kids at one point in hockey camp. all three different hockey camps. that's the summer plan for surveillance here. a lot going on. really can't emphasize enough how interesting the markets are. lisa abramowicz particularly dedicated to bring you the best of the earnings season. we will begin that joy. futures of 12. stay with us, claims in 12 minutes. this is bloomberg. ♪

>> the yen being influenced. so we'll see. we monitor the situation very carefully. tom: governor bank of japan governor i should say. it was a joy to hear him with a solid education to see all the work that he's done including work at the massachusetts institute of technology and to see he is so articulate. the mystery of japan. very successful effort there.

by governor. kathy greifeld -- katie greifeld in for lisa. we thought it was morning -- boring until dudley came out at interest rates i have no idea what that does to the emerging markets other than price down and yelled up in some form. if we get a deadly outcome but i'm certain 4.5% yields don't matter to the absolute brutality of so-called frontier economies. i haven't talked about this in a number of weeks. right now damian sassower with the chief interior economy strategist from bloomberg attala gents. why is one country in an emerging market and another is in emerging -- frontier economy? >> i think it comes down to the common framework which has been

rallied against. it seems to be working. it seems like were going to get a workout for a country by the name of zambia. there's been some sort of agreement in terms of burden sharing. here is club members like the u.s. and western europe and actually happens and when he -- money flows to zambia helps rework their debt ghana, ethiopia, a slew of other countries or have taken from china and the u.s.. they now have maybe a blueprint for the way they can have fair economies. tom: if i need to get only in washington just mentioned zambia and everybody walks away from you. nobody wants to talk about. >> it's been a source of fluid and grains. tom: what is this, wild kingdom? the bottom line is this stuff is

serious. the imf has us in their crosshairs. they don't want to talk about it because of the delicacies of the bipolar structure of western institutions in china. i learned at the meetings in the spring they are not on the same page. are they going to be on the same page by america's by october? >> i hope so. it seems like this is going to happen. i've heard more people bullish about it but i really think what we have to do is take a step back and what is this mean for the countries in the future? they have all compressed meaning flee. katie, if you look at turkey for example obviously there's idiosyncratic factors. only a month ago after the elections were all the way back out. we are getting to these points here where like, wow, you have to get to the current environment. he very well may be although i mean look i get it. you're going to see a bit for

duration and a bit for ig credit. katie: let's talk about that because i'm looking at your recent research. em local bonds offer the best start since 2019. not the record start that we saw in the nasdaq 100. but not bad. talk to us about what's going to continue that. >> it's a little different than em credit. local currency denominated with interesting the local currency market you point out is the fact bill dudley is wrong. you see the economies coming down in curves inverting. these economies are not as strong as the united states. they are going to recession. chile is going into recession. if growth is slowing in the long answer coming down, duration is working. it means buying the long end of the companies and buying rates and collecting carrying coupon is working in visa companies. as long as the dollar holds up all the bonds which is a big what if does the em look it

should continue to perform well. katie: talk us through that what if. obviously the dollar hasn't exactly lived up to the doomsday because i was reading coming into 2023. when you think about what that means for local bonds versus equity what are you looking at? >> you never want to fight the dollar. emerging market analysts it has basically put themselves out of business betting against the dollar. if you can manage within this global environment where is the vix now below 14. tom: 13.4. >> it benefits these high carry risky currencies. which by the way our overvalued right now. but i mean you just can't ignore the fact that you carry so well in a country that's yielding 12, 13, 14% relative to 14. tom: so you're saying right now you've got constrictive em financial system. you're going to tell people is

he do at bloomberg intelligence everyday how to affect a trade. but the archewell is i can't make money in em unless i have weak dollar. i have resilient dollar. maybe not uber strong dollar. call the weak dollar on this? >> you don't funds in dollars. you funds in other currencies that have your meals -- yields. that's what you see, so 70 -- 725 or something because people are funding in that currency. it's got negative carry. these are things you don't normally see. you take with the market gives you. tom: pro to peer damien when he does jargon just ignore them. i'm not going to explain what a forward strip is. i had to blush there for a moment. let's talk some baseball. wasn't that fun? >> i have to agree i wish i was

awake to see it but i missed most of it. not even the open is anymore. he's got 300 -- >> i do this with aaa ball. the red sox look like aaa ball. >> bowman 50 before they ripped off a seven-game win streak. tom: we have to explain that with a no-hitter which is there could be pitches and that by the sixth inning nobody is talking to the guy in the dugout. can you imagine the yankees dugout when the picture is sitting there and all the players in the field are sitting in the dugout and it's a perfect game? i can't fathom. >> cohen wells, you mentioned it. there have been 24 perfect gives in the history of major league baseball and the yankees have four of them. that's an unbelievable thing.

i might be going down to the dominican republic in september. this week is -- i will be done i think of going to be going down there my visit to central bank there. they are a real economy you have to pay attention to. tom: what is the backbone of the dominican republic economy? >> they got the money for haiti. tom: western, there's tourism i get that. good morning to some of our guests that have us on down there. down there for ada, it benefits the economy in some way and then you get in em pickup. >> they got a pickup because of all the funds that have gone into haiti and the rebuilding of the country. the dominican and haiti are -- katie: i'm learning a lot. that was artful going from the

yankees into the specifics of this. tom: are you focused on formula one? >> it's for stop and roll. there's nothing interesting. i think everyone is doing this to distrust us. can't compete with rebel anymore. tom: we had daniel ricardo on the other day and he may come back. that would be very -- >> ryan reynolds i'm a big ryan reynolds fan. tom: this is very good. why don't you stay here will continue. damian sassower. jon ferro, come back as soon as you can. claims.

tom: "bloomberg surveillance" i want to get the sin before claims because it's too important. good morning to you on radio and television. sonali basak has been out front on the challenges of the competitive race of the rankings on wall street. bloomberg reports goldman sachs is lost -- has lost the ranking for the first time since 2018. jp morgan taking the trophy. sonali is alluded to these challenges. one issue besides a slowdown the proclivities of 2023.

but the very tangible idea that miga deals have been less. you're going to see much more on this through the morning. bloomberg reports, goldman sachs loses their top ranking for the first time in five years. so important for global wall street audience. we got michael mckee who's had an extra 42 seconds to digest. >> every second of that we don't have the claims numbers. they are slow coming out from the department of morning. we have the revised gdp numbers and they are stronger. which is interesting development for the federal reserve. tom: this markets. >> gdp up to 2% in the first quarter from 1.3%. personal consumption, americans are spending money. katie are you spending money? 4.2%, up from initially

reported. 3.8%. it looks like we are seeing some real strength in the economy in the first quarter that would have led into the second quarter and we had seen strength in the second quarter. everyone has remarked about that. the fact that maybe it keeps the fed going. the only thing i can tell you is , here we go, jobless claims what you think happened, tom? jobless claims on the week. 230 9000, that the decrease of 26,000 from the previous week. so an amazingly strong initial jobless claims number and much target numbers gdp. tom: i want you to jump into the data because it's a shock here. it's going to give dana peterson time to massage this important data. there is a jump condition off the optimism of the third look

at first quarter gdp. the good news on claims as well, michael, give us color on that. futures of 12, now up 15. dow up 140 but it is the bond market where we see an adjustment. i think central would've been a little different yesterday with this data. the 10 year yield on a solid, nine basis points. two year yield huge, unleavened basis points. i don't believe we are off the record on an intraday basis. on radio all you need to know is we blow through 103 basis points. this is a two year yield, 1.03 percentage points higher than the 10-year gilts and critically, katie greifeld, i see the 10 year real yield burst out to 1.6%. it signifies the inflation

persistency that maybe we see in big third quarter of gdp. katie: it's interesting to see the reaction in equity futures. s&p 500 up about 4/10 of 1% premarket. near levels where it was before. with the bond market move, the big reaction that may be received a little bit more reaction in equities. tom: before we get to dana peterson, eiko mickey and a you have much more on this. mike: i'm trying to see where the change was. it might have been in trade and into tories -- inventories. smaller than last report by about half. 3.5 billion from 6.9. net experts also go down. it's hard to see exactly where other than consumer spending. we saw a big change here. government consumption was lower in this report. business spending was lower in this report.

residential didn't subtract as much, but it really did strengthen the consumer that is keeping this economy going. we can say claims continuing fall as well. of course 239 for the weekly number. continuing claims, tongue, those of the people who are getting benefits on a regular basis. they haven't just filed for the first time. so fewer people are getting benefits and fewer people are filing. you know, you're going to have a few -- i can see the incoming email almost any minute now. tom: will said. there's going to the a few other optimists. they've been dead on on that. futures up 15. a solid 13 basis points 4.84

percent so this gives us food for tomorrow. rolling into summer tomorrow with a quiet friday. we have been in line to wait for dana peterson with the market moves as well. when you see a report like this with consumption that is buoyant with the surprises in housing, do you have to shift your fed guess? dana: our guess is that there would be one more interest rate hike. maybe we are looking at two or more. especially if inflation doesn't cool off. and the larva market remains robust. the problem here is good news is fatness for the fed. katie: good news is fatness for the fed and you can see the pricing reflected in the two year yield. spiking on the back. let's talk about initial jobless claims. that's been sort of the mystery of this economy is the

resilience of the labor market. when you think about the long path back to the 2% target, do we need to see weakness there? is that any scenario where maybe things remain rosy on the jobs front but we see inflation continue to come down? dana: on the jobs front when we asked ceo's what are you doing about labor markets, at least a third are still hiring. 46% are saying we are not doing anything. they are not letting people go because they think that if there is a soft spot for a recession is going to be short, it's going to be shallow. they're just holding on to their workers because they spent so much time and effort and money attracting labor and trying to keep them. katie: what does that mean for wages? the impulse to ford labor, to hang onto the work orders for employers having to raise wages? dana: in the same survey they

say yes. we expect to have to continue to raise wages. most said between three and 5%. the fact that they are even talking about raising wages is pretty critical and certainly that spells down into consumer prices which the fed is desperately trying to lower. tom: the conference port has such a heritage with the measurement of the town of business. what is your reporting now? the granularity of the conference board on the mood of business america? dana: we talked to ceos and cfos. it's really mixed. it depends on their industry. some are saying things are bad. they need to right size the labor markets. then we have others that are in consumer services saying now it's awesome it's really great so i really think it depends on the industry. tom: totally agree.

we will continue with dana for a few more minutes. i thought it would be a sleepy thursday. a stunning reassessment of the strength of the american economy off gdp. good morning to the optimists out there. also claims coming in as katie greifeld mentioned as well. futures up 12, still up nicely. nasdaq of three tens of a percent but the bond market has been extraordinary. dana peterson, the first six month of the year have been wrong, wrong, wrong for so many. it's been extraordinarily difficult. is that because of the pandemic? it's a jumble of economics and dynamics. to use a cliché, this is original territory. >> we have two things going on

at the same time. the water benefit from the pandemic for you have strong desire to spend on services after a lot of pent-up demand. and you have labor shortages. that's new in the sense in the factory you have baby boomers with experience leaving that's leaving employers short. so between strong demand for services and limited desire to let people go we are seeing consumer confidence and certainly consumer spending remained buoyant. tom: jobs day, july 7, what do you see? dana: it's possible we will still see job additions. they really wanted vacancies to shrink and the unemployment rate is probably still going to remain pretty low. tom: it's going to remain pretty viable come on, he's getting nothing done here. what's the attraction for the fed to meet the theory they are

praying and hoping for? with the path on that, dana,? . >> what needs to happen is consumers need to feel like they might lose their jobs. you have discussed them into thinking they might become unemployed and that will cause them to pull back. also the excess savings we've been talking about in aggregate we think that's going to run out in the fall of this year. once that happens into consumers really believe something bad is happening -- is going to happen which are indicators keep saying , then that will help slow the economy and thereby inflation. tom: dana peterson on the conference board. i need to do a data check here. futures where they were. but a persistent bid to the market this morning. the yield space is a jumble. the two year yield moves a huge, china or misses the operative word. 12 basis points.

think about a 5% to year yield. 10 year yield 3.79% even a three year bond giving a lift. katie greifeld, to me the mortgage rate question is important. 30 year mortgage, which is it to? katie: you have to imagine it has begin vocations for the housing market which we now is also rebounded and you think about what the fed is trying to do here. 30 year mortgage might accomplish some of that. tom: i'll let you do that for us. oil, 69.30. we said good morning to all of you on break radio and bloomberg television. catherine garfield -- catherine greifeld and yes i have had like 14 emails. we have been bickering -- bitcoin free.

the promise to talk crypto we will do that in our next section with crypto up 500 big point today. i love saying that. did you ever own does? katie: i did. tom: mike, save me. mike did you ever own does? >> i did not. tom: i'm looking at nominal gdp of two plus four mi off? is it a 6%? mike: bill dudley saw pressure with this column on his opinion. he's warning against a 4.5% fed funds rate. interesting thing about gdp normally we don't pay as much attention to the third revision. but the real movement seems to have been in services spending

by consumers. services spending up 3.2%. originally reported as 2.3. tomorrow we get the may numbers. we have seen retail come in stronger than expected. that will get a lot of attention if we have maintained services spending at a high level up until may. that will affect people's views. tom: i think i heard a phone ring out there. i think it's mr. bostic who wants to talk to mike mckee. for his preassessment there. i thought it was a boring thursday, i'm wrong. good morning.

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going to get billionaires to pay a little bit at least the minimum tax. tom: mr. wyden --biden preaching to the ones that want to go get them. go get them on crypto as well. i'll a lot on that recently all sorts of news on these names that are strange to me. binance, coinbase and a few others. chairman of the securities exchange commission has been most active and the world turns on its head. bitcoin to a 31,000 print recently because lo and behold to the rescue, global wall street. katie greifeld in for lisa abramowicz. she hasn't been up that 10:00 a.m. for like 14 years. you going to come back tomorrow? katie: i think that's the plan. you get a lot done by the morning. tom: let's talk crypto here.

very seriously were you surprised that lawrence think wants to market crypto? katie: not necessarily surprise they want to get in the game but surprise that they would file for a spot bitcoin etf. that was the shocker there that they would try for that structure because the sec has denied it and denied it. tom: i don't need an etf on bitcoin if i can just buy bitcoin. katie: a lot of people don't want to go through the haggle of setting up the digital wallet. tom: it's like gold powder you can buy it. should not he has a bar of gold. katie: i think we all should but talking specifically about blackrock that was shocking. they would just sort of test the waters at this juncture and that's why you see the big reaction and it's been a huge boon for coinbase.

coinbase is up 100% year to date. tom: right. two we have bloomberg reporting on the response of chairman gensler to select, not just mr. think but a select number of big firms? >> not specifically we haven't heard from gary gensler specifically to the bitcoin, the spot bitcoin filing by blackrock. we know grayscale and the sec are engaged in a lawsuit right now. grace will try to convert their trust into a spot bitcoin etf. they were denied and sued the sec as a result. tom: were they denied to the same reason like rock be denied? katie: basically the sec's reasons for denying the application has been they are worried about market manipulation. they are worried about fraud and was different about the blackrock filing is it it has the surveillance during

agreement between the exchange the etf retrade on such as nasdaq and the crypto exchange. tom: in the united states? katie: yes. tom: where does the government come into surveillance this as well? katie: in the exchange. that should satisfy that market manipulation concern. we will see if that actually works out. the fun thing about the filings is that the clock is ticking now. the sec has to let them lunch or deny them. we will get an answer for blackrock the absolute latest is about next february. tom: grady greifeld on crypto. two days after that they will get a significant update on the market bitcoin. mike emails and says no i never owned doge. what we are in need of right now

is a victory lap. you can do that with sonali basak who nailed in the last 40 hours i would say the challenges goldman sachs doing which is the number one thing. we need to be number one. i've always said sonali basak that the biggest problem on wall street is when somebody is number six and some guy starts pounding the table, we got to get to number three, three quarters, four quarters out. how is the table pounding going at goldman sachs? sonali: i would set this up by saying they have lagged behind jp morgan for the first half of this year after we've seen the that goldman has taken according to bloomberg cleat tables really widened the last couple of years they came out for the full year and not even by a small margin. they had really widened cap from then to j.p. morgan. they were bringing in in a tough

market more than a billion dollars in just advisory fees alone. now saying j.p. morgan for the first half of the year has jumped ahead for the first time in five years for just the first half. remember just shows you how hot the competition is. if you facts about j.p. morgan's shares right now they have about 120 deals relative to gold and's 98. this is not the year of humongous deals but pfizer the $42 billion deal it was not involving either of them. in fact it involved a few boutiques. and boutiques have also been jumping up the league tables as well. the boutique banks have been hiring away very significantly from the likes of goldman. tammy kiley who was a very senior tech banker goldman hired from morgan stanley not that long ago. tom: this is the issue right now

is all of a sudden whether it's trying to save lives are let's not mince words. coming out of the debacle these boutiques have the upper hand right now. sonali: not even just the debacle they have the upper hand because capital markets point broadly they are just seeking that private equity deals are just coming back. the biden administration is clamping down on deals left and right which is stopping future dill announcements because people are concerned about the uncertainty. even if you were to see the markets are more. katie: put this into context for us. we are talking about the boutique's getting a foothold. when you think about the big he met where is that gap? how big is the gap between the number three, the number six? sonali: it's quite large. we don't call it an oligopoly

per se but you do have 20%, most of the share between the top three advisors. i have to say that's interesting. morgan stanley right now is behind bank of america. it's halfway through the year but bank of america has not been number three for a very long time. you are seeing a lot of differences here in the competitive landscape as we look to the second half of the year. tom: what's montag do about this? you know, i'll let you decide if this is montag's wheelhouse but the new tone, the new rigor tone is that tangible this morning? sonali: it's interesting. the competition story has been happening for some time. goldman is still cutting jobs. they are cutting about 120 five managing directors as well. the market is tough. that's a signal that it's not jumping right back.

what are they really going to fight to bring on board in the next six months because again even if you like out of 125 people that doesn't mean you're not looking for the a list and still trying to bring them on board. tom: sonali basak, thank you so much. i make jokes about it but she was like three days ahead on this story. bloomberg reporting today that goldman sachs and occasional root statement number two ranking here. i'm pleased to report in this is reported from our print news division in london and new york with catherine garfield -- catherine greifeld will attend tomorrow. katie: i will be here tomorrow and monday. tom: drafted you crypto again? katie: just the lipservice. tom: the peak was 60 something

thousand. people are going like equities were part of the pandemic, it will recover. katie: the thing about this market is it has these really hard-core believers we call them bitcoin maxis, maximalist. we can do this for the next two days this is going to be a lot of fun. tom: bitcoin maxis. sonali did you ever own doge? sonali: i didn't think we were allowed to own anything. katie: that is a pretty perfect thing for a financial reporter, don't you think? tom: let's do a gold quote. gold down $19, 1903 and ounce. we need to say thank you for our team greifeld made it through this torture.

interesting news out there. stay with us, this is bloomberg. ♪ i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies. i don't want you to move. take the first step to see i'm gonna miss you so much.

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>> from new york city for our viewers worldwide, i am matt miller jonathan ferro. futures higher as we are an hour and a half away from the open. the countdown starts right now. >> everything you need to get set for the start of u.s. trading, this is bloomberg the open with jonathan ferro. ♪ matt: coming up, u.s. economic data surprising to the upside