>> welcome to bloomberg markets. >> let's get a quick check of the markets today. there is a lot. we are down on the s&p five -- s&p 500. fixed income treasuries are even more exciting. the 10 year yield is over 4%.

the bloomberg u.s. dollar index because of the attractiveness of the yield is up. the dollar continues to strengthen. oil down $.41 per barrel. >> even though there was reasonably upbeat stockpile news tied to the energy trade, then you have outlooks concerning investors at least there is an analyst view that the guidance picture for exxon is not all that rosie. worries about the cover price weighing on names like freeport-mcmoran. on the technology front, everyone has been talking about mark zuckerberg launching threads. right now whether it's meta-or

tesla, we are seeing red within the technology group as the market is reassessing its view on technology stocks in the face of the economic data today. >> do you have a threads account now? jon: i'm going to give it a thread or two. matt: i'm looking at the adp numbers because that has eclipsed threads as the story of the day. massive gains in jobs. 497,000. for the most part, we saw almost all groups rise. financial services, information services, no. leisure with more than half the gains. services a huge jump in terms of the adp numbers. this is what has driven the markets down. jon: when people are trying to figure out data points like this

where is the recession, we had a conversation about that very issue earlier today with a noted economist. here's more on what he had to say. guest: people: for recession have been frustrated like where is it already. in countries we have seen the legged impact of the fiscal stimulus coming out of covid, but it is subsiding. in the u.s., the last vestiges of the stimulus is coming to an end right now. matt: who knew that fiscal stimulus could be so stimulative? our guest is a chief economist at adp. this is a number that shock everybody. it's the jobs market really the strong?

are there some anomalies in the reading? guest: it's incredibly strong. this number is based on 26 million workers in the private sector. the caveat is it's incredibly fragmented. when you put down the numbers, what you saw was consumer facing industries led. i could also add to that 60% of the hiring was done by small firms, firms with less than 50 employees. the ones that don't show up in the s&p 500 index, that's where we are seeing the job gains. the larger firms have largely retreated from hiring. small firms are picking up the slack. small firms are driving the labor market right now. matt: that's bad news for the

stock market because that could push the fed to raise rates higher. the higher rates had any impact on the smaller firms? aren't they concerned about 5.5% fed funds rate? guest: higher interest rates affect borrowing costs on main street from small mom-and-pop's consumers. b2b businesses are not faring very well. those jobs are not returning or rebounding, it's really those people to people jobs health care, education, retail. people still want to travel, those jobs -- jon: one of the things it constantly heard is the jobs

market while robust is a lagging indicator and getting back to the market trying to interpret were interest rates go from here , people are wondering where the inflation picture is going to look like. david rosenberg feels like inflation is what we should worry about as opposed to inflation. what are you seeing when you look at the inflation picture right now? parts i think of wages as the bridge between the labor market and the inflation picture. wage acceleration is coming down despite the tremendous job growth in the consumer facing service sector jobs, everyone of the sectors i named saw deceleration. that's good news for people who are concerned about inflation, the wage price spiral. it's not looking like that is materializing. the cost of more job grains is not higher inflation. if you look at our numbers based on millions of workers across the country. we are not seeing a recession in

the labor market. also not stoke up in inflation. jon: as the job market stays robust, if you are trying to determine what consumer spending will look like in six months, we had comments about people ending up with more money because of pent up saving or during the pandemic, how do you try to pin the picture of what that will look like forward? guest: it looks just us like the jobs are chasing the consumer. as the consumer has become more cautious especially with big-ticket items, you have seen a slump. but the consumer is not cautious enough that they want to delay travel. leisure hospitality, those industries are still hiring.

if the consumer stops or slows their spending and services, i would expect the hiring in the sectors to soften. we are looking at this as late cycle search in which several industries had a great month but it may not indicate what we will see in the second half of the year especially if consumer spending softens. >> you mentioned the smaller firms have done the bulk of the hiring. we've seen the bigger firms that were doing the layoffs. did those peek at the beginning of the year? the big tech companies that were laying off thousands? is that finished for right now? guest: when we look at the layoff numbers, we have seen upticks and pullbacks. the private sector and government sector indicators of layoffs still very low. large firms intensify their

hiring late 21 early 22 then act off and of 22 and that's when you see the headlines on the announcements. we are still seeing softness in hiring for large firms. i don't know if layoffs are over, we still have another earnings season to get to than more after that. but what i can tell you is the surge in large from hiring -- large firm hiring has opened the door. small firms can finally grow their businesses. jon: adp stealing the headlines on this thursday. we have a job treating to get through as we wrap up week. anything else as we had to tomorrow? guest: i will look at tomorrow's number interested as well.

timmy it's great to see multiple reads because it is a very complex market. the more data we have that is robust and carefully considered, the better. matt: great to have you on on a day like today when the market is so fixated on the adp report. treasury yields spiked to levels last seen in 2007 based on the jobs data. our chief correspondent of global markets joins us now to explain. i guess the idea is that the market expects the fed to continue raising rates and if you will get a higher coupon next time, why hold on this paper now? >> exactly. today's data like your guest from 80 pete was talking about, it wasn't just adp which is a

blowout number. the data today pointed to strong economy jobs market holding in. the bond market took off. we are back to levels before the banking crisis in early march. i think the market has got religion although we have not fully priced in another hike. rates are just taking off. kind of like the gravitational pull today is higher. maybe tomorrow if we get anything near expected or below some of this may come off but we have to see. it's a big number. jon: it often feels like you have two parallel conversations. an economy that might look resilient but a lot of people said raising rates into an inverted yield curve, history tells us that leads to recessionary realities whether it's over the course of a day or a series of months or a year.

what are you hearing from everyone you hearing from everyone you're talking to? guest: it's interesting because i was listening to one the other day who said the yield curve isn't rogan. an inversion is flagging a recession. i agree that it's not impossible that we are going to get to know downturn but it may be mild. this inversion has lasted for a long time and very extreme. by 2024 we might get a slow down, but a lot of people are saying the curve is not broken so you can't ignore the inverted curve. matt: if the yield curve tells us there's going to be a recession, then it's pretty useless. if it's this inverted, does that mean we will have a mild

recession? guest: the research originally done on the curb inversion showing an economic downturn, it didn't get to a bad one or good one or not. i don't think it's that granular. to be fair, a lot of economists at the start of the year were saying recession was around the corner. they were wrong. how can the curve not invert if people keep pricing and more fat hikes? you price up the short rates, the two-year is over 5%. if you keep pricing and more hikes, inflation is sticky but it hasn't taken off so the long and has anchored while at jeff's higher recently, it's the map of the slope. i think we can't blow this away. we will write the epilogue later.

for now, let's see. is 2024 too late? probably not. jon: thank you very much. time for a quick rate. when we return, finding investment opportunities in the world of ai. this is bloomberg. ♪ the first time you connected your godaddy website and your store was also the first time you realized...

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matt: time for our stock of the hour. it is digital bridge. it is lower amid broader selloff but it has gained 30% year to date. that's partly tied to investor excitement surrounding artificial intelligence. the company includes things like data centers, cell towers, and fiber networks. about half of that is exposed to the ai craze. the ceo joins us now. great to have you in the studio. my main question when i look at this and i see the potential is why is the gain only 33% year-to-date? nvidia is up 186% on the chips they sell, but those chips go into computers in your data

centers before they can be used by anybody. why not the big blowup that nvidia has had? >> we are pleased with the progress we made. we are at the forefront of the ai infrastructure building the next-generation networks and as you can imagine, building infrastructure is not easy. ai infrastructure is equally hard. as our leasing pipelines have grown over the last 12 months fueled by ai and public and private cloud, that manifests itself in executed leases, built data centers, cash flow. where we are in that cycle is

investing $7.8 billion in new capex going into ai infrastructure and cloud and other forms of digital infrastructure like 5g networks. we are pleased with the results this year but the cash flow conversion happens next year across the 40 companies we own and operate. it is an exciting moment in time. jon: i've heard you talk about something that i think we have to hear from other people which is when you need all of this compute power, how will we power the ai revolution? what are some things you are already thinking about on that front? guest: it's a tectonic shift in terms of what's happening at the data center level. the chips themselves have been transformed. you were talking about nvidia, it's an important part but these chips are processing at unbelievable speeds. it's a three x increase in power

consumption at the server level. then take to the fact that ai historically has been in training mode and now we are about to go into a mode where application start thinking for themselves. these data models that had billions of parameters are now talking in parameters of trillions. this is a marketplace where the sands of change are shifting between her toes. we will have to go build this networks in ways we have never thought of largely because of the power consumption but also the proliferation of data. ai is trained in the cloud, but it is proliferated through the edge. not only having access to public cloud data centers and private data centers is important but what we're doing today is building edge infrastructure. moving data to the perimeter of the network. you have to think about the ai revolution from a data proliferation standpoint.

it happens in the public and private cloud but also at the edge. we build companies that build that infrastructure. most importantly as we put applications out to the enterprise, you have to be able to move that data to the edge of the network and that's where edge data centers come into play. we've never been busier and we are excited. matt: are you constrained as a public company because i imagine as private company, the premium would be a lot higher. guest: we are a public company as an alternative asset manager, but it's unique about the structure is it is asset light. digital bridge is an asset light model where we have private runs underneath the public company. we are raising capital at an incredible clip. we are deploying a lot of that into capex with cloud service

provider customers signing 15 your contracts. where we form capital is our private funds group. jon: great to have you here talking about public and private networks and the edge where they bring the ai capacity write to you. right at the outskirts of toronto i imagine or maybe inside. jon: speaking of canada, still lantus just got subsidized for a new battery plant in ontario. more next, this is bloomberg. ♪

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jon: time now for for what it's

worth. $11 billion u.s. is how much subsidy funding the canadian government will provide to stellantis for an ev battery plant after canada already committed huge incident is to volkswagen for a similar facility. this is due in part to a parallel pitch being made in the u.s. following the passage of the inflation reduction act. matt: this is i guess their answer to the inflation reduction act an incredible amount of stimulus for these corporations. stellantis $15 million canadian. volkswagen $13 billion canadian. they are making a big push with these financings and it will help bring i hope incredibly high horsepower and allowed ev's to the streets of both of our nations.

jon: certainly that is the hope, the more companies that hear about these subsidies that's another road we will have to watch. this is bloomberg. ♪ how can you sleep on such a firm setting? gab, mine is almost the same as yours. almost is just another word for not as good as mine. the queen sleep number 360 c2 smart bed is now only $899. plus, free home delivery when you add an adjustable base. shop now only at sleep number.

>> a data dependent and and a fed dependent market, live from studio to a bloomberg world headquarters in york. i'm romaine bostick and kicking you off to the close. financial markets here royal on thursday evening. fresh signs of economic resiliency. ahead, fresh fuel with higher interest rates that may actually be here to stay. we are watching the bigger -- biggest intraday move and the biggest point rise on the vixen about the worst of the s&p 500.