>> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz.

jonathan: good morning for our audience worldwide. this is "bloomberg surveillance." your equity market on this and be 500 is negative -- rather positive. a downturn in global economy. the data is dreadful. tom: currencies, commodities, i am going to go to american oil. well under $80 a barrel. i go to zurich. member that breakfast suites, $120 for a bagel. euro swissie, i have strong signaling the global slowdown. jonathan: services on manufacturing, we were hoping manufacturing came up to services. anything but. services is coming down too many factory. lisa: germany in particular going back to the heart of the pandemic, raising the question of his era separate, is europe tied to china, is this a

readthrough of the china slowdown? is this where things are going elsewhere and europe is more sensitive? jonathan: take europe out of it, take china out of it, these are pretty good for jackson hole. what is the more interesting speech? chapman powell or the present -- or president lagarde? tom: i am interested to see how she do what's is it if she speaks after chairman double. hopefully we get more than seven or eight minutes out of chairman powell. the last time we did that, lisa barely had time to get back to her chair before we can go live. christine lagarde could be an important moment. this is the confusion in jackson hole. it is a confused picture. jonathan: all of that coming up. there is the price action on the s&p 500. equity futures are positive. the fx market, negative.

jordan already publishing saying this could open the door to your form of focused on the sterling to get down to 122. tom: dxy, the major currency blended pair goes up to recent highs. round that up to 1.04. the bloomberg dollar index, not so much. this is a big currency move. jonathan: the 10 year, 4.26. lisa: they are buying on the margins but how long can they keep buying? the u.s. is auctioning off $16 billion of u.s. bonds. tom, i know you shrug off these options. this time come incredibly important to gauge international and domestic demand for longer dated securities. especially with the selloff we have seen with yields going back then more than a decade.

can they meet the expectations that are very high. we are talking about a 200% again this year. and lesbian is the first fish first for public and perry debate. there are eight candidates. i'm curious to see ron desantis in front. the pressure is on him to regain his spot number two. i am curious about the others, in particular, tim scott. jonathan: here to kick things off is virginie maisonneuve. let's start with europe, is bad news bad news? virginie: we had some pmi that was weak. for germany, is the first time they shrink and eight months. i think we are seeing in europe is the impact of tight monetary policy. the transmission has been much

faster and more powerful than in the u.s. where we had a less covert support. you don't have the packages the u.s. has, $1.9 trillion. tom: you mentioned transmission, that is such a french word word we are going to transmit to jackson hole with adam of the peterson institute, his essay on china's definitive and the new foreign affairs, are we going to transmit china deflation over to the west? virginie: i think there is an element of that. chinese -- even gdp growth is around 5% which is the central case at this point. it is a weaker china we see. europe is more exposed to china than the u.s.. definitely part of the slowdown picture. generally a theme of divergence of the u.s. versus the rest of the world.

lisa: how much can you get any conviction about buying in europe at a time when there are so many questions swirling and the direct transmission mechanism of monetary policy? virginie: in the equity market, there is a price for everything. if we are at the beginning of the consolidation phase, you will see some companies that have strong exposure to some of the programs we talked about in the u.s. or the growth areas linked to technology to increase climate change investment. that will come back to more reasonable prices. it is where is your buying point and time horizon. we will continue to see some interesting opportunities but you have to be selective. lisa: you have a contrarian call when you look at china and you think it underground and it is too negative on an economy underperforming. xi jinping is clearly not if

assessing the economy in the way he had in the past. what makes you bullish on chinese assets at a time when everybody else is trying to exit as quickly as they can? virginie: what was very interesting is that since you have a capitulation, there is a consensus on china. you see the news with the $11 billion leaving. you have to remember the domestic investor is the dominant investor in the country. what happened? you are in a phase where bad news is good news. the government has a target of 5% gdp growth. until it gets to the point where it feels that growth is threatened, it is not going to put in place the packages at the time when it is trying to restructure the quality of its growth. it once more quality, more high end, more technology, more

consumer. here is the point. the consumer has a lot of savings but it is a question of competence. when you were talking about the property sector -- then you are talking about the property sector. we will see policy measures coming at the end of the month around supporting the property market with the policy for leaving and not speculation. it wants to stabilize the property market with its three euro policy. one city, one policy, every city has more flexibility. the second measure would be to activate the capital markets. we are talking about long-term evaluation of companies and funds to give confidence and even better trading options. the final area is solving the local government.

here again, there are a lot of things going on in the background with local governments. something stocks and reimbursing that, etc. a lot of things are happening. we are in such a negative mood for china with valuations where they are, it is worth a look. jonathan: do you trust the data out of china? virginie: i have looked at china for 37 years. i remember the times when the first b shares were listed. the data is what it is. it is an emerging market economy. what i have seen is definitely more data and more precision. in some cases china gives more data than the western world. if you look at the segment of unemployment for the 20 year, i am not sure we have the data for all of the countries in the

world. it is definitely a learning path. there is a lot of data. some of it is timely, some of it is less timely. you have to look at it for what it is which is an emerging economy, the second largest in the world. tom: to ian johnson's essay on what western companies should do , you have a wonderful pacific rim perspective, do you see investment by the west coming back to china? or is it over? virginie: it is a good question. china put in place recently a 24 point plan to welcome foreign investment. what i think we are going to see is a big wave of investment in areas like the middle east and you see that happening in big projects such as technology and very selectively from other parts of the world.

europe certainly is in between the u.s. and asia from that perspective. will it be at the level we have seen before? probably not. china is entering the third phase of endowment -- of development with much more geopolitics and an economy that is maturing. the economy has demographic challenges as well. tom: do you remember when dash cam to washington, it was a huge moment -- came to washington, it was a huge moment. do you believe that mr. xi will blink? virginie: i am not sure. there are a lot of political discussions taking place in the background. there is the background and the working level. i believe china is the second largest economy in the world. i think people will be surprised by the innovation china delivers

in terms of the stocks you can buy in the market over the next five years. i think in a year that we have elections, in a year where you have a lot of noise, you have to look through this. jonathan: thank you for the update on china. this belief that if they growth target is threatened, we will get a stimulus. some people think gdp is just what they tell us gdp is. tom: i am in that camp. the trend is there. when you say 5% to china gdp, do you within know what that number is? jonathan: morgan stanley thinks they want to get there. jp morgan thinks they want to get there. someone is looking for a four handled and the government is looking for something around five. tom: and we were looking at six. this is when the snow was deep at jackson snow. jonathan: china was going to reopen. tom: the winds blew in from

idaho. jonathan: is that right? we went there. tom: lisa was snowshoeing. jonathan: she was talking about china reopening. tom: we are going to be out there a day early. can you see me on the paintbrush divide? a 13 mile hike. jonathan: is that what it is called? tom: it is like the toughest hike out there. i will wear my lederhosen. you have to wear the bowtie. jonathan: is this why you have been away? tom: i have been training. i have been walking around central park. jonathan: do you use a step machine? tom: no, i just walk around the park. i don't go down 59th street. jonathan: why is that? tom: you come of the west side, negative the 110 and strawberry fields forever.

it is about time for a strawberry daiquiri. jonathan: nice. equity market and is be 500, a lift in the equity market. europe has a weak euro, threatening to break 108 down to 107 after the back of some dreadful economic data. the pmi is soft. manufacturing was not great. services coming down to the manufacturing. deutsche bank already making a call. the ecb is going to hit pause in september. that decision is a month away. christine lagarde delivering a speech in jackson hole later this week. live from new york city, good morning. ♪ it's what you keep that really matters. book your free meeting today at creativeplanning.com.

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>> today, bloomberg's life from the jackson hole international

symposium. >> what is the response mechanism? >> it is not how fast we do it, it is where we go. >> tune in for continuing coverage starting at 8:00 a.m. eastern. >> the fed finished the fastest tightening campaign in 40 years and there is uncertainty about when they are going to be able to ease inflation, uncertainty about the fed the resilience of the economy that has left of -- that has left us in a different place. jonathan: blackrock on whether things are going to break in the markets. yields we have not seen since 2007 on a 10 year, a cycle high in last week. it's time to the fx market and what happened in the moment.

pmi's on the services side, sub 50 in many places. 4.2 627 is where the 10 year yield is. the euro is weaker and the sterling is weaker. tom: the global slowdown we have, you see it in the real yield. the 10 year u.s. real yield comes in, it is lower, not as inflation next. 1.19%, a demonstrative move. jonathan: it was 2% earlier this week. that is the line in the sand for you. tom: for a lot of people it is above the line in the sand. we exploded above that with convexity, with acceleration, and now we come back a little bit. jonathan: are we sufficiently -- restrictive? tom: we are more restrictive than we were the last time yankees won. jonathan: nine games losing

streak. the longest since 1982. tom: thank you for your worry about douglas cass, he is medicated. jonathan: i think he is alive and well. tom: he lives right down from the famous orioles picture and i think palmer had to give him a hug. jonathan: is this is an over? tom: for the yankees? other than mr. judge, i think everyone is at risk there. we will go to new hampshire, the drama in milwaukee. greg valliere joins us. the stereotype is the polarity of the nation and the party. let's cut to the wisconsin chase. wisconsin was won by biden by under 1%. trump won it four years earlier by 0.77%. how does this debate for the into those thank you states that

the difference in november of next year -- those states that make the difference of november next year? greg: i will get my espresso machine out, it will be a late night. i think it is time for new faces. one of the stories tomorrow will be the emergence of tim scott, the african-american senator from south carolina. there are a couple of other people that might do well. it is the beginnings of a sign that the country will look at fresh faces. tom: where is the debris of george bush senior, someone who worked in office decades and decades, centrist republican? is that chris christie? greg: chris christie is a centrist but he is also pugnacious. i think he will be the hitman to go after donald trump. adam blaine trump for not showing up. he is ahead by 40 points -- i

don't blame trump for not showing up. he is ahead by 40 points. he will be a subject. i will focus on other issues that will be interesting tonight. aid to ukraine, the budget deficit, there are issues where the party is divided. lisa: that is one reason why people want to hear the issues which have gotten drowned out. you said you want to see fresh faces. a lot of people are looking for that at a time when ron desantis is having to prove himself in a new way. what does he have to do to reclaim his spot as number two and get some growth in his campaign promise? greg: he cannot afford another misstep. to a certain extent, he has an advantage and that is that expectations are low. i think people are not expecting him to show much. he might exceed those expectations. lisa: you mentioned aid to

ukraine, what is the popular feeling within the republican party? is their consensus that these candidates will try to reflect and is it different from the general population consensus? greg: for the base in the party, the feeling is we spent enough on ukraine for a war that has not been won. there is also a division on social security and how you deal with the budget deficit. chris christie has been outspoken saying we need social media -- saying we need reform. will he say that tonight? i am not sure. tom: i am not up to speed on this, what is the primary process -- what does the primary process look like? is it different than what we grew up with? is there something new this year? greg: i don't think so. signing deadlines come late fall, by thanksgiving. a lot of states will have their

deadlines which will focus on the governor of virginia. i think there is a chance glenn youngkin late in the sign-up period will decide if it is just trump and nobody else -- glenn youngkin is worth about $500 million and i would not put it out of the question him running at the last second. tom: who else has money? president trump has money. mr. pence is struggling. which of the candidates tonight on the stage has money? greg: not a lot of them have a glenn youngkin money. earlier in the year, governor desantis raised a decent amount of money but the surprise fundraiser has been tim scott. i think tim scott is going to be the surprise. jonathan: thank you, as always. looking ahead to that debate later. round one of a brutal battle into 2024. tom: you can talk to greg about

this because he is a new hampshire boy. different for our international audience, there is a cadence we are hardwired to come a process of this over all of this month to november of next year. all of these states are jockeying to change this, to get power and be first. likely i will caucus. should we go to the iowa caucus? jonathan: we should have gone to the state fair. lisa: i am so on board for that. jonathan: we missed the state fair. lisa: i know you are being -- jonathan: i would be happy to go. lisa: they are awesome. tom: what is the high point of the fargo state fair? lisa: everything about it. tom: i have never milked a cap. lisa: i have built a cow -- milked a cow. jonathan: i have never milked a cow. maybe as a kid when you go to those farm tours. tom: where we go to jackson

hole, they have less of contests -- they have lasso contests. jonathan: do they have cows in jackson hole? tom: you go up oilman 191 and the bison -- you go up wyoming 191 and the bison are in the field. you turn left at the lodge and you are. -- you are there. [laughter] if you miss a return -- if you miss your turn, there is transitory wyoming. jonathan: charles schwab is going to join us next. equities on the s&p 500 are positive, 0.5%. the data out of europe, dreadful. absolutely dreadful. deutsche bank talking up a pause

of the ecb in september. they still have an inflation problem. amazing to see the difference in what is happening in europe, in china compared to the end is states. -- in the united states. the slowdown that never was. tom: it goes across equities, bonds, currencies, commodities. what am i focused on? swiss franc. it would be a huge deal. jonathan: that is what you are focused on? tom: swissie. jonathan: from new york city, good morning. ♪ if you're trying to get a view of the

whole organizational financial health and you're trying to do that through multiple systems, that makes it very, very cumbersome. ♪ it's not just tech, it's not just people. it's how they work together to provide that experience to the customer. as a finance organization that is what you want to do. ♪

jonathan: equities with a little bit of a lift. good morning. elevated by .4% on the nasdaq 100. up by 0.55%. another day of losses, five days out of six we are down on the s&p 500. let's see what today brings. in the bond market, two year, 10 year, 30 year, the two getting coachable about 5%. down about five basis points. the two-year, very close to a

cycle hi. tom: comfortable nails it. i am getting used to it. spreads come in. is there a dynamic to corporate spreads? lisa: recently there is softness but tight has been the story for a long time. tom: price up, yields down. people want to buy 7% coupons? jonathan: spreads are consistent. tom: okay. jonathan: because treasuries have moved. tom: it is not my world. jonathan: yields are up on six basis points on the 10 year, 4.26. that is the bond market. let's look at two currency pairs. data out of europe is not great. out of the u.k., not much better. cable breaking down by 0.8%. 1.2631.

a set of data from the pmi's that could start the conversation of a euro at 1.05 as a great spreads would already imply. the stronger conviction from us is that it will see pound-sterling headed towards 1.22. tom: dxy mugshot over the last 48 hours, 10 -- 1.03. moonshot. that is a serious move. jonathan: the dollar is stronger. europe gathering pace with services, pmi's coming in worse than expected. services coming in below the estimate, dropping below the growth market, 50 for the first time since late last year. in germany, 47.3 onset versus -- on services. we are talking about numbers we have not seen much of outside the pandemic. lisa: and raises questions about

the recovery in europe, particularly how germany is going to define itself in a recovery that is not becoming a recovery with services coming toward manufacturing. something virginia said -- virginie maisonneuve said is how much is this mechanism is more direct than in the u.s. and how much is this with the u.s. can expect down the line versus something tied to china, tied to the restructure in europe. jonathan: there is a chart on my screen that has been doing its rounds on twitter, and shout out to robert here for putting that one out there, the effective rate on our standard mortgages. not with people have been charged when they go to get a new mortgage, what people have been paying. we know yields are near levels they haven't been since 2007. we know mortgage rates are pushing 8%. this is what people are actually paying, the effective rate on our standing mortgages, 3.6%.

levels we were at i think december 2020. 3.6%. tom: 30 year bankrate, 7.61%. substitute your belief in what inflation is and there is your real rate. you are underwater day one. jonathan: people are not selling their homes. lisa: falling off a cliff. tom: i am house shopping in jackson hole. four bedroom. look at the real estate in jackson hole. i guess it is because of the taxes. everybody wants to be out there. jonathan: that number is why people cannot buy and why people are not selling. that is why this market is frozen. the ticker on bloomberg -- worth tracking. xi jinping skipping a business

form he was expected to deliver a speech on chinese economy and its support for emerging markets. the no-show as china's economy struggles with falling prices and a struggling property market. a no-show as the economy is not performing so well. tom: i am going to be careful to not editorialize. a study in international relations is coming out of lord o'neill. the old bricks, the modern bricks, you take which side they stand on end is the age-old tension of china and india. who is presidency speaking -- president she speaking to? jonathan: not speaking at all. the other story, nvidia reporting earnings after the company soaring you to date the backup optimism over ai,

including last quarter that came in started than expected. the guidance heard about the world. lisa: how much is this nvidia specific? either upside surprise or profound disappointment. how much is this really what has driven the entire tech sector rally? in that sound like hyperbole but the magnificent seven, the incredible rally really was hinged from nvidia's upside surprise. it is not as if ai was created this year. artificial intelligence is not new. look at the potential for profitability. if it's a point on revenues, does that key off the opposite reaction? tom: i am going to gap this into two worlds. my brother is really good at this. there is budget ai in gpd -- a legit ai in gpt.

he says it is revolutionary. there is another group he calls mitigated hype. i'm guessing that nvidia -- i cannot even pronounce it. they are in the dead serious camp and straddling games and all that, the hype cap. jonathan: that stock is up 200% on the day -- you today -- two other percent year to date -- 200% year-to-date. tom: it will probably be there. jonathan: i has still never been. it is the one premier league letter the stadium i have never been to. tom: you walk in and they are playing adele. she is a fan. it is fancy. it doesn't feel like what is your tv -- what i see on tv

where you grew up where it was tougher. i like the ted lasso once. jonathan: richmond? tom: they got relegated. jonathan: was that a spoiler? tom: know, richmond is playing qbr next weekend. jonathan: i still have not watched the series. tom: the british don't like the show. i heard it is lost in translation. luanne joins us to save the show. this is an important conversation. how gloomy is it in the land of equities? liz ann: we started to face problems in june, the magnuson seven -- magnificent seven dominated all.

it was this double whammy of concentration which often happens in cap weighted indexes. initially, we started to see some improvement at the beginning of the pullback we saw of the cap spectrum into the mega have -- mega cap names. now we see this deterioration across the board and more has to be worked out there even on a day like yesterday. it did not look great. these pullbacks have steps. the first step, you start the relief rally and then you continue. i don't know if it will be in correction territory. tom: to review, from 2021, the peak of the market is down 8%. the recent pullback has been a creature, down 4%. you have got to be kidding me.

you and i remember when a correction was a correction. in mathematics a bear market or is it still in place? or are we in a new world? liz ann: we have gone now almost 600 days without hitting a new cycle hi. that is a pretty extended period of time. that suggests this is more likely a rally in a bear market. we have all been surprised so many times with the unique nature of this cycle. we still have the dip buyers. those phases are also when you see a lot of attention go down the quality spectrum. you get the meme stocks and nonprofitable areas. that is the segment of the market i think you want to fade. you want to continue to gain into the quality trade and be

mindful of formal down the -- mindful of fomo down the quality spectrum. lisa: one area that has seen interest in light of this question around where we are in the cycle is consumer discretionary. i wonder if you think cap people -- if you think that people have gotten over their skis with optimism. i am one of those that questions if it is going to run out but macy's ceo said credit card to liquidity is ticking up and is seeing consumers more restraint when it comes to spending. do you think that will come to the fore more? i -- liz ann: i do and you have to peel back parts of the onion from reports to look at unit sales, consumers moving more toward generic type brands as opposed to higher and brands

that higher end brands. -- higher end brands. you also have to be careful about -- latency -- delinquency has been focused in lower income and subprime, but you are seeing it creep into the quality segments on the delinquency side. i still think it is the labor market that is most important to ongoing consumption remaining somewhat healthy. even more so probably dendy savings store -- even more so probably than the savings story. if we see more cracks in the labor market, i think the consumer could shutdown the spigots quickly. tom: what kind of craft -- jonathan: what kind of cracks are we seeing in the labor market? liz ann: they have come down in this market that might be labor hoarding. you have seen weakness in

temporary employment, multiple job holders. you have had some bouts of an increase of unemployment claims. we have seen some of the commentary from the recruiting companies withdrawing guidance. i think you are going to start to see it on the job openings layoff announcement side of things. there are still cracks but they are wider than they were. jonathan: it is just happening really slowly. thank you for the update. liz ann sonders of charles schwab. the excuses we have heard from retail, walmart and target talking about resuming payments later on this year. macy's, sales are down. delinquencies, theft at dick's sporting goods. that stock hammered. people are walking out of the

store with goods. tom: it speaks to what we will see in milwaukee tonight. there is part of america that is booming. jackson hole is the end to this this of dix goods -- of dick's sporting goods. jonathan: i wonder if chairman powell comes up and it is federal reserve. -- comes up and the federal reserve. they have been playing to that. tom: i thought what greg said about ukraine was fascinating. do they sit on ukraine? jonathan: all of that is coming this evening. are people who think this report is more important than jackson hole and chairman powell. on nvidia, next. ♪

>> what is really important is less what we are going to hear from nvidia, less from chair

powell, less what we hear overnight. obviously we had some moves from china and more of the price action in response to all of these things. jonathan: you have the data, you can learn something from that. and then you have the way the market responds to the information. you can learn more from that. tom: it is gospel 101. i am going to dovetail the call on inflation into julian emanuel's call. the way to do it, we make jokes about it, we cannot just look at the stock market. you cannot look at fx, jordan rochester you're a 107 handle. you have to look at equities, bonds, currencies, commodities. you have to look at nvidia. jonathan: i want to squeeze this in, another retailer carving his 2020 three forecast and causing the diffident. footlocker getting absolutely

hammered, down by 15%. this after we heard from the exporting goods. -- from dick's sporting goods. nike on and nine days losing streak. just in line with the yankees. tom: have you ever been in one? you go in with the children and they lightly wallet instantly. you don't go into a foot wallet. jonathan: are they buying air force one's? tom: they are trying to. jonathan: i have not been into a full log recently. are still wearing those river readers is in there -- those referee jerseys in there? tom: probably. jonathan: the disappointment in retail and the warnings we are seeing from these big players. lisa: is it just consolidation of the strongest and largest or is this something broader indicating some kind of

weakness? just to give you any idea of the forecast, one dollar -- $1.50 to $2.25 and immaterial downside to shift. take a look at how things are weakening again. is this just do to footlocker and on land sales or is this something broader? tom: can you help me with how you invest in a company that makes four cents on a dollar? if kroger gets bananas wrong, they lose money. it is such a tough -- retail is a tough business. four cents on a dollar. jonathan: full locker size softening in the month of july. the stock is negative by 17% off the back of ugly numbers from dick's sporting goods. nike on the record losing one. tom: you want to make four cents on the dollar or do you want to make 10 times that? how about $.45 or $.46 on the

dollar net income? nvidia does better than good. he has been wonderful with us on tech this morning and he joins us. how will nvidia move the market? you don't do buy wholesale, you don't do the guesstimate of what is going to happen. is it at 4:00 today? lisa: 4:20. tom: we are going to be stuck in bloomberg on our phone, what should we look for to come out on the financial headlines. >> the guidance. last quarter they raised guidance by 64%. the buy side bogey is higher than the guidance of the race -- the guidance they raise. what you are expecting is another bead and race by at least 20%. that is our view. when you look at the confluence of factors that have helped

them, easing of supply chains, china pulled forward because there is in export ban, that is what is driving the huge run-up in the data center revenue growth. it could proceed quickly by 100% this quarter. jonathan: we have had it on of earnings. can you get a read on nvidia ahead of time on the earnings we have already had his nvidia a read on everything else? mandeep: nvidia plays into this trend that everyone please going to be with us at least for the next five to 10 years and even beyond. that is where it is different from the crypto uptick. at that time, nvidia was the only player because everyone believed it was initial market. now everyone is buying into generated ai and putting dollars into it. they're spending $1 billion in capex to buy these chips.

they could develop their own. that is a risk. they were are up against a large internet and cloud company when it is to competition. lisa: what about national security concerns at a time when people are gaining this out as the next big thing? does it matter which areas of the world are buying nvidia chips most? where they see the growth but they could come into focus politically. mandeep: think about how these chips are being consumed. they are been consumed on the cloud and on the internet. cloud and internet service everyone. the physical location of the data center serves everyone. it could be baidu or tencent board meta -- or a meta or an amazon. that is where this chip is being used. lisa: saudi arabia made a massive investment and is trying to expand into artificial intelligence. i know there have been issues

with china. i am wondering how this plays into nvidia as they expand globally a -- they expand globally, concerns of how this technology will be used and where the chips are going. mandeep: the export restrictions have been on deleting note chips. they have their latest chip, they came up with a lighter version not based on the leading edge. that is what they are selling and it is markets to avoid the restrictions. ultimately, everybody is looking to buy these because that is how you develop your large models or do inferencing. with nvidia, they have the technology. they just have to figure out how to work through export restrictions. tom: you are talking about paint drying. you are scheduled to be at the battery insurance seminar in dallas. that sounds fun. i want you to take nvidia and

extrapolate it to microsoft and the texas instruments of the silicon substrates of the world. can you do that one is it discrete to nvidia? mandeep: microsoft said they are going to see a 1% to 2% point lived from a high-growth -- from ai growth use. google said they could to something similar. aws has not called out any growth lift because they are bigger. it does come down to how the cloud guys make that available. tom: the cloud guys are working a two day workweek. jonathan: i hope this time we actually work less but i fear he won't. thank you. let's get these two names on the screen. full locker, nike. full locker cutting their outlook, a new range on

earnings-per-share, 1.30 to 1.50. the stock is down 24%. weakness in the month of july. inventories are much higher. stores being closed. it sounds brutal. this is the kind of move we saw yesterday on the exporting goods. the 1990 losing streak could become 10. we are down by 2.4%. tom: i am going to go to this phrase come on the channel. -- omni channel. full locker i perceive in stores and malls. are we buying all of their sneakers off of the internet where footlocker is cut up versus other providers? jonathan: possibly. nike right now, they have them in china, too. tom: can you see me in a pair of air jordan's? jonathan: i could see that working. what are you working now, product -- prada?

thanks for interrupting what would be any otherwise serious conversation about retail. tom: retail is getting hammered. lisa: there is a question about discretionary spending. whether the biggest players get beaten out in a high rate environment where whether this is something proper that speaks to a consumer. i keep going back to the macy's cfo said, the speed in increase of added debt in differs quarter was faster than planned. concerns about ability spend, there are specific stories, there is also something else. jonathan: what we have heard from these retailers is inconsistent with what we see. liz ann, a wonderful job. the headline is 1.5% and payroll is decent. the guide from some of these retailers is not that consistent. tom: mandeep singh -- mandeep singh is wearing -- mandeep is

wearing the rogers proclaimed. jonathan: how much are they? tom: $300 .3 under dollars -- like $300. ♪

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>> how high goodreads go before it becomes -- how high could great scope before in becomes

self-limiting. >> we could have a very interesting trend environment. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. we >> this is bloomberg surveillance. jonathan: retail is not having a good time. good morning for our audience worldwide. this is bloomberg surveillance alongside. you will hear from nvidia. footlocker, down by 25%. tom: when you saw -- this is not about luxury.

this is about america in a certain a part of america flat on the back. that is the tension you will hear at jackson hole. this middle part of america that feels like they are in recession. jonathan: you mentioned macy's in the delinquencies that they flagged. student loan replacements -- repayments, they were flagging that as well. lisa: some people might say these are each specific stories that are using share to others. that said, clearly the buck is starting to stop. if it company is weaker they are going to get weeded out faster. this is what happens when a era of free money happens.

tom: when i invented that phrase i did not think about 5% to year --two year. i do not think about moments ago in mortgage headline comes across the bloomberg of 7.6%. that is how you get to a zombie roll up. jonathan: home purchase applications drop to the lowest since 1995. the 30 year fixed mortgage rate jumps to 7.6%. the effective rate is much lower. lisa: have we seen the effect of monetary policy and higher yields if no one is paying them and believes doing everything in their power to pay them. this is the question i want to

hear from jay powell and jackson hole where there is this of victory -- feeling of victory. tom: the charts give pause. what bloomberg economics is doing, look at the charts. so many charts are just rolling over. jonathan: let's look at the charts right now. futures rolling over. future slightly higher. the euro. the data, dreadful. you weaker. --euro weaker. lisa: people are expecting the ecb to be on hold.

where does the demand come from? how much demand really perhaps at the tone in markets. after the bill in nvidia earnings everybody is looking can they deliver a upside surprise, which can keep this going. at 9 p.m. it launches. the first debate among the republican party. clear focus on issues we have not been talking about as much as maybe some people would like in terms of ukraine. tom: lisa just killed that. you both.

lisa, you can get up and do the 6:00 a.m. and then do the 6:00 p.m. as well. lisa: that is so sweet. jonathan: chief investment strategist over at eye capital. should we be worried about the spending? >> they are to prioritize services food and drinking places and not so much prioritizing retail and furnishing. if that is part of what we are seeing in the retail earnings. that is the undertone. i cannot be worried about the state of the consumer because when i look at the unemployment rate they are still low. wage growth is still running at 4.4%. i can't be worried about the overall state of the consumer.

i think some of these are idiosyncratic stories. i love that chairman powell will not save the day. thank you for bringing jackson hole rationale in here. inflation data, will it shock as with the disinflation? anastasia: the core pc number, which continues to show the disinflation numbers. the one print i am worried about is the cpi print, which is september 13. i worry about that because we have got food prices that are creeping higher. energy prices that are creeping higher. i worry that the headline numbers are going to start rising more than 2% per month. the big deal about that, if you have the speed of .2 percent of increases or more, we might start to seek year-over-year

headlines continue to rise. maybe in the core disinflation continues but the headline may point the other way. tom: which raises the question from this lady wall street journal. >> i think that will be the buzz at jackson hole. i do not know what will be in the speeches. are you concerned they will declare victory before they have the data to understand where we are in the cycle? lisa: i do not think this is the moment to declare victory. inflation is declining and we have economic growth. we have 5.5 interest rates and close to 6% gdp. that is not a soft landing economy. that is an accelerating economy. i think they have to take a hard look to see how restrictive are they actually being. lisa: where are you in terms of leaning into risks?

we hear liz saunders saying how she is on the margin. starting early next year, review follow? . anastasia: i do think you will buy that. the fed at this moment of time may actually not yet be restrictive, especially if they have to rethink about the neutral rate, which is neither restricting the economy or accommodating. we have the economy that might just keep going. that is the cyclical side of it. artificial intelligence is one of the a far reaching opportunities. you have stocks that are down 1520% from their recent peaks. i want to buy those. tom: you mentioned 6% gdp.

5.76%. to me that is a complete fiction. the unemployment rate at the time was 14%. america is not feeling the near 6% gdp economy. not even close. the way you make money or not, lose money in this market -- the companies that do not rely on leverage. what kind of companies do not use leverage? anastasia: you go back to tech companies who have not heavily relied on leverage and private markets. growth equity strategies and venture strategies that investing in things like artificial intelligence. they do not borrow heavily to do it. they are not leveraged by companies. tom: nvidia, crushing debt.

1.7% debt in nvidia. jonathan: anastasia of eye capital. stock is down by 18%. when a company turns around and says we do not stand to remain cash flow. tom: this is what is known as a loser. with great respect for the people who are there, i feel l sorry for the sales side. talk about a zombie. i do not know what to do with it. jonathan: i feel sorry for the sell side. tom: do you know how many politics. we have a peloton in one room.

another peloton in another room. another common thing we have with the three peloton so we have is they are all gathering dust. jonathan: i would suggest this is one of them. lisa: how many idiosyncratic ic before it becomes a trend? is this something that is broader. people pulling back in certain corners. peloton is its own story. what was it? mr. big? sex and the city. jonathan: you are bringing that up again? lisa: it marked the downfall. jonathan: isn't that like to and a half years ago? lisa: have you seen it since

then? jonathan: peloton or sex and the city? lisa: peloton. i know you watch sex and the city. tom: claudia just put off on twitter, a photo at jackson hole. that is the one with the spiderweb. do you live under the bed -- look under the bed for snakes? jonathan: futures rolling over just about positive by 0.1%. joining us a little later, lisa shalit. that conversation is 20 minutes away. tom: that is going to be interesting to see. when we invented this, that is what you want. we have 30 minutes of

encyclopedic knowledge. jonathan: very cool. tom: very cool. lisa: from peloton, their new expansion plan is to partner with college campuses. their looking to in-state peloton bikes in college campuses. tom: it will be a better world. jonathan: remember some investment banks giving away peloton. you are using that as a walker? is that what you are doing a moment ago? tom: yeah.

it is like soulcycle. jonathan: you are so distracting. jonathan: from new york, this is bloomberg. the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

>> chair powell at jackson hole is going to be -- the policy rate is going to rest on high plateau. he has got markets about where he wants.

the main message he will want to send is it rates will be around current levels for a lot longer than you think. jonathan: higher for longer. a message from vince reinhardt. you were grunting as i was reading. tom: i am trying to figure out the yankees. they lost nine in a row i am upset. jonathan: equity is positive by 0.1% on the s&p. tk, your team year for 2568. tom: what is the data point that matters to you? jonathan: dollar strength. tom: 103.91. it is at a tipping point this morning. pay attention into that into jackson hole.

she nailed debate in high school. she took it further in college. now debates in balance of power. >> i think it is going to be interesting to see how these individuals really try to define themselves away from the incumbent. they are fighting on the stage. iodine much so what they think about trump. we pretty much have a good idea of how they will deflect or technique comes to the president. when it comes to foreign policies, what you see is that voters are craving to hear about what these candidates have played terms of their plans for the economy, most notably inflation. we really want to see who is going to come out. when you think about past

debates, it is those moments you cannot prepare for, when somebody stumbles. when there is a bit of bickering or a modern-day version of a brawl on stage who in the next morning is going to pop and get all of the limelight that limelight that someone can potentially get thursday morning is really going to be overshadowed within those 24 hours. formal president said he will turn himself in fulton county georgia -- fulton county, georgia. tom: we just showed a bar chart showing president trump out in front of everybody else. desantis has a massively in front of everyone else. -- massive lead in front of everyone else. is he going to come out tonight and give is a desantis nomics

plan. when you look at the track record for this individual, formal president bush when it comes to the debate stage. something we have learned from the desantis camp from our colleagues, he has been doing this for a month. he has been preparing for this moment and be center stage because he is leaving the polls. with donald trump not they are, desantis camp is expecting him of these attacks to happen on them. he needs to differentiate himself not just from the formal president, given the fact he is going to be the leader in the polls, only physical present on the stage. you can expect them to go after the culture wars in corporate america. he will go after inflation.

i think you're going to see all of these candidates across the board go after biden when it comes to inflation. lisa: how much is the audience going to be the primary voters and how much is going to be the general election voters? annmarie: of course you have a primary. to get to the primary these individuals are going to have to show they are far right as they can be right up against the former president to get the primary vote. if they are the ones that become the nominee, then we really need to start to move more moderate, especially when it comes to issues when they ask about social security or medicare or abortion. these are issues where they're going to want to make sure that they can pick off these independence in a general election. that will not happen yet. you are going to see them really geared towards those primary voters, those caucus voters.

those are the ones they need to win right now. lisa: the only way to bring the deficit and to check is to do something about social security. either by increasing the revenues or cutting benefits. have a hard any of the candidates addressed in a comprehensive way head-on of what to do with those expenses? annmarie: they are likely going to be asked. about this this evening. . this is what individuals want to hear about. close individuals in america, those voters who are older, they want to see a comprehensive plan . we have heard from some candidates who say -- mike pence has talked about this, governor desantis has talked about this has said they want social security to be solid. there needs to be a plan going forward. they want to make sure those are older need to be protected. tom: when you spend the night you go to the room? are you allowed to go to the

spin room? annmarie: i believe is the first time that fox is opening up the spin room to other journalists to other outlets. you can expect the spin room to be mopped. tom: what happens in the spin room? the spin room of labor politics. what happens in the spin room? annmarie: they get their surrogates out there and it is their cheerleaders to say this is why our candidates did the best and try to defuse any issues that happened on stage. i do nothing people remember what the circuit said in the spin room. tom: this is insane. jonathan: the spin room? tom: the spin room. the whole process. it was jfk and richard nixon. tom: should we do a spin room

out of here? jonathan: sounds like you want to go. tom: oh, god no. jonathan: i have got to think annmarie. one thing to watch right now, footlocker getting hammered. the stock is down by 31%. they are about to cut their outlook. inventories are out. demand softened in july. mikey on a nine day losing street. their stock is negative by 3.4%. i want to draw a comparison to footlocker and take sporting goods. lisa: they mentioned theft in addition to everything else. i wonder if the physical stores that some of these companies operate are becoming liabilities

in ways that they are struggling to get their hands around, especially because they do not have a clear of a business model or one that was that strong beforehand. there's a social issue here that is compelling to me. jonathan: i will be shocked if this does not come up on the debate stage. i will be so surprised if they do not talk about the theft that is taken place in some of the stores. tom: i have been to a number of our pharmaceutical emporiums. people are going to think i am a old fart. please. you go in a drug store today and i do not know about where you live across america. i cry when i see these plastic things with a little keeping in it -- key thing in it. jonathan: are you telling us you have been off because you have been using cvs key rings?

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jonathan: equities just about positive. the s&p up 0.1% up on the s&p. the nasdaq up similar. some earnings out there, we will

talk about that in a second. let slice of the yield curve. 30 year down five basis points. if you have been away for summer and you're just coming back, a reset. a two-year in or around 5%. tom: the 10 year real yield 1.9% down from that shocking to percent level. -- 2% level. i think it will be part of the debate out there. the new rate regime, the new rate regime going right over to the debate front and center. jonathan: if you'd asked me about a month ago i would talk about the tension we have made on inflation. if he ask me now with the main

events would be in a couple of days, what is happening in china and what is happening in europe. sterling, the euro weaker against the stronger dollar. negative three quarters of 1%. a weaker data across europe. tom: dxy, one of 3.17. jonathan: here's the name we want to talk about, footlocker . the stock also weighing on nike. footlocker is down by 32% in early trading. lisa: $15 and $.86. people are not fully full of conviction.

in its time people are dropping online with respect to the real estate footprints. there are a lot of questions weird are these idiosyncratic stories? does it suggest something broader about weakening consumer appetites on lower income levels ? that is something i think we will have two push through. mikey is connected to china. all of the -- nike is connected to china. nike connected to the global slowdown you have mentioned. jonathan: the ecb is going to hit pause in september. the headline reading further into contraction territory for the last month. lower with higher rates hitting demand. in germany, i think what might get your attention is what is happening in manufacturing.

manufacturing in europe is now coming up to services. tom: i believe it is a friday or saturday speech. i mean what does she do, she has got to rewrite it. i mean, the entire ecb takes off six weeks. that is the way they do it. are they in st. tropez or whatever rewriting the script? tom: i can't wait to see if -- seizing on friday? ups, the workers approving the $30 billion labor deal. roughly 86% of employees voted yes. i want to hear who said no. the five-year agreement will go into effect after a local florida affiliate. big deal over at ups.

big deal over american airlines as well. let's see if that changes. tom: i guess they are trying to move forward there. based on what i seen on twitter, it is a challenge to say the least. would like to focus 30 minutes on a theme. the em and the market dynamics. speak to someone, including the frontier in the economy of europe. jonathan: get to see you. what -- good to see you. what a change. without this year would be good. how important do you think the global slowdown is going to be in jackson hole? >> not too important. the theme of the conference is not the short term. the structural changes in the

economy. as far as powell speech goes, the fed could pat it's self on the back. the economy looks robust in certain quarters but i do not think it is time for him to do that. there are too many hawks that are nudging him toward, at least sounding he could should be pockets from a medium or long-term -- hawkish from a medium and long-term perspective. there are things like climate change, the globalization, high debt in emerging markets. those are all things that sound inflationary, at least two of them feel like negative supply shocks. i do not think you will be inclined to say much about the short-term and the outlook of the fed funds rate.

it is going to be difficult to get to that last mile of inflation declined from 3% to 3%. new not expect rates to be cut. -- do not expect rates to be cut. tom: i look at our start as a full running economy. in europe, whether it is -- or something new, can there be a european heart start? can you do -- heart start question -- hard start? thierry: you can to a large extent, the manufacturing slowdown in europe is four dance with the chinese slowdown -- is coincidence with the chinese slowdown. we know those economies are

connected to the export economy in europe. china and europe are coincidence. the service of slowdown we are seeing, the focus has been too much on rates. it has not been enough on what the ecb has done on liquidity. if you look at credit creation coming, it has flatlined. that is the reason europe is seeing this slope in services. lisa: related to the ecb policy, not necessarily what is going on with china. thierry: do not look at rights. that does not tell you what is going to happen with the european economy.

look at bank credit. they are down year on year in real terms. it is the credit economy that people do not focus enough on. if they focus on that flatlining they would have predicted the slowdown. lisa: is the european economy different from the u.s. economy in terms of the lending structure in there is no analog to be drawn in how they are affecting the economy and how they will trickle out and effect the u.s. economy? thierry: there is a important difference. the european economy is overly dependent on the banking system for the extension of credit. they do not have the right lending in europe. everyone who wants a long has to find his or her weight to a bank. -- way to a bank. you will find that credit is

contracting. loan officers in the u.s. is much more -- to extend loans. that is the similarity. the u.s. does not have to depend on its banks. there are other source of lending to support a startup economy. we do not have that in europe. credit contracts in europe you feel the effect on aggregate demand much more different than the u.s. the u.s. will catch up. tom: there is time for a surveillance audible. years ago, you published and the rest of the clan on latin america and the world would stop. argentina, do we care or is it just a problem child of our lifetimes? thierry: i do not care. it is the problem child of our lifetimes.

it has some commodity exports. it is not terrible that they may have a president who is going to adopt policies in the final analysis. when you have a situation that has been working more than four decades. i would be much more scared of something else. tom: what should the imf do? let things simmer for a while. then make a decision. jonathan: good to see you. thierry wiseman. . message of the morning, maybe of the week. the best rate of 2023 was the pair trade -- trade of the 2023

was the pair trade. what do you make of that, tom? they are taking shots, they are not taking walks. that is really good. tom: that would be footlocker. jonathan: what do you mean? tom: oh. yeah. i tried that. it didn't work. jonathan: now. . if you have got to explain the joke. tom: someone said were cowboy stuff at western jackson hole. jonathan: what does jackson hole

got to do with this? tom: people are wishing that they were going to jackson hole. jonathan: no, i do not wish that. tom: 42 degrees friday morning. jonathan: yeah, i check that out. lisa: i saw a couple of potentials. jonathan: welcome, to the weather forecast. increase right positive by 0.16%. coming up, stephen, chief economist. tom: really important conversation. he is exquisite of the dynamics of the court gdp function. he is somebody they will really listen to at the fed. what they think about the dynamics of the system. doing all of the different

interest rates and the geometry. that will be fun. jonathan: we are expecting a speech. the economy is in a little bit of a tough spot. lisa: here's a comment about that no-show. will they come in with the policy support if they are more concerned about other considerations? one of the -- of the market. response. . jonathan: eight lost of faith from the international investor -- a lost of faith from the international investor. equities just about positive stateside.

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>> i think the two-year is back at 5%. i do not think we are quite yet of 4.3%. i still think the market is ignoring a lot of the interest rate. jonathan: a big difference. two tom, that is medication. we are positive 0.1% on the s&p. yields are lower. there are so much going on.

footlocker absolutely hammered in the premarket. negative by 32% in early trading. they cut their outlook. tom: they cut their outlook, it is also the way of doing business. i think lisa is dead on. this is much more than sell side to check. chit chat. lisa: is this going to be the weakest players getting punched out of the water at a time of higher rates? is there something broader? is there something that is going to be a more persistent trend? who has gone to a footlocker anytime anyway? these are going to be the questions that people ask. jonathan: i am not sure how often you and i go to footlocker. lisa: with my kids who want to

get air force, jordan's and all of that. they are often sold out. it is not even good customer service. jonathan: we did airlines yesterday. on the plane i think they are fantastic. lisa: people are just awful. they are basically forced to lump together. have you seen this? we talked about this yesterday. everyone rushes to get on so they can get their overhead suitcases. all of a sudden, everyone is pushing and shoving. tom: i have a pilot tone it is not funny. the pilots are not amused by all of the luggage going on. i do not know. jonathan: why is the customer service on the plane decent. at the gate they are rude to you.

tom: zurich is great. jonathan: you think they are polite in switzerland? tom: yeah. damien our agent just looked at me and he said, can you get to damien. jonathan: tsa pre-check line. everyone has got it now. tom: i just got it a few months ago. it is fantastic. jonathan: they are getting clearer now. tom: i do. jonathan: another good review for the company today. tom: i put my eyes into the thing. i will be using it today. damian sassower with us right

now. damien, i want you to talk to the fancy people you will talk to at jackson hole. what -- is it sophisticated markets to the international relations and international economics crew? damien: my honest answer is we are moving into a multi-world, were countries are being forced to take sides between the china and u.s. that is the big question. why do even care? it is all of our christine lagarde after the pmi figures. bruce called at last week. he said he is going to have three pages or less. jonathan: we will build on that.

damien: i can tell you what investors are doing weird look, that is really kind of where i see the market going. i am a em guy. i is to trade those contracts. -- used to trade those contracts. lisa: there is a question around how high it is and what that is due to the economy. we were just speaking to terry wiseman about this idea. one hand it is coming from china, one hand it is coming from higher rates and not transmitting into the economy. you put those two things together, doesn't it pressure the e.m. complex that has been priced in but not to the degree that it should? damian: i do not know if i agree with that. if you look at interest rates,

euro and the u.s. is trading at 105. there is weakness. if china is not managing the currency you will probably see it at 740. at the end of the day, you are right. a stronger dollar. i said that you guys on monday and i generally believe it. from a emerging markets and eight foreign -- eight foreign policy perspective. emerging-market local debt on a net basis has seen 50 billion removed from it since 2014. look, foreigners are posing only 4% of the market. the positioning is so light. his china zeroing in on portfolios? tom: the investment i did in

the 97 year bond. now enjoying a price of five. total bombshell. where is the opportunity right now? damian: it is not just austria, it is -- has a century bond. you know, it has got to be treasuries. i think real yields in the u.s. are sufficiently compensated for the risk you are taking, which means not that much in this environment of uncertainty. i love treasuries here. you take what the markets give you. i think the dollar has the wind at its back right now. forget about that.

let's talk about emerging markets. i care. the reason i care, this is the imf, multilateral finance institution for emerging markets. they can support some of their biggest constituents. it is a real problem for all of these countries out there. we have had elections. we have a runoff in guatemala. these are all important talking points we have to focus on. jonathan: why should the imf be concern on what is happening in argentina? damian: $10 billion. tom: whose money is that? damian: it is a long answer. a lot of it is the u.s. it is japan, everybody is kind of behind the imf. it is not just one party.

china's bilateral institutions who basically have different agendas. i think that is how a lot of financial in my neck of the woods is priced. tom: the yankees, even back to my youth have never been like this. the great jim palmer should come in. are they going to blow up the yankees this year? damian: theo epstein. we need to bring theo epstein down to the bronx. exactly. we got to drawback all of that. we need to start over. aaron boom is unnoticed. it has a hard box.

nox. jonathan: damien, good to see you. tom, i can confirm that clear is a public company if you would like to explain. tom: i am a member of clear. i love it. i love clear. i use them. i stare at the thing. jonathan: this is not investment advice. this is not investment advice.

>> i do not think the fed is done. >> inflation, the uncertainty

about the fed that left us in a different place. >> everyone would rather wait to see if something will come to fruition and that's what you are >> seeing this week. > the consumer has money. the consumer has jobs. >> there's a lot of money that will be sucked out of the system and i think it's going on right now. >> this is bloomberg surveillance with jonathan ferro, tom keene and lisa abramowicz. tom: on radio and television from new york this morning we prepare for chairman powell's speech in jackson hole. i just think we have to do a data check in the per capita income in jackson hole. 318,297 dollars is the per person per body income. sort of like the surveillance

team. 69% of income comes from investments. this is a fantasyland we are flying out to. jonathan: things are good if you have a lot of money. we can talk abut a couple of names. footlocker this morning, stock getting hammered. some warnings from macy's about the lincoln sees. last week student loan repayments will restart later on at apparently according to walmart and target that's going to hurt. this friday for chairman powell is about the tension between the progress they've made on inflation but the fact the mission is not complete because at the moment this economy has been more resilient than they thought it would be. it's the tension between those two things. tom: to me the heart of the matter and i think he's been good about the social aspect of the dialogue. we are going to happy land, the absolute ground of the wealthy

in america and we have to look at the retail numbers. half of america is flat on its back with 5% gdp statistic. lisa: i take your point which is why it stood out that the former st. louis fed president said this. i think it's turning out the fed's policy has been very successful and that will be the buzz jackson hole. he says he doesn't think it will necessarily be reflected in speeches but that will be the scuttlebutt. is it too soon. this is what everyone keeps talking about. how long and variable. superlong or supershort. whatever you want to say it is clear that rates are not transmitting to the u.s. economy as quickly as people previously thought. tom: i've got in my briefcase my book of the summer. it's on where we will settle out. what will we hear about the new

2.0%. jonathan: a high neutral rate. the former new york fed president poured some cold water over that and i think for chairman powell to come out and maybe separate himself from the new york fed president would be a pretty big ask. let's wait and see if anything on that. in the last 24 hours to some extent where we were a year ago much bigger attention on president lagarde of the ecb this coming friday. off the back of a weaker china. let's take the u.s. economy out of it. take it out of it, just focus on china. china at the moment not great. europe, sub 50 pmi basically in contraction. inflation still a problem. tom: i'm going to go where you were two years ago. the euro on a 1.07 handle.

jonathan: potentially 1.05. he seems to have more confidence in a weaker pound story. he's looking for 1.22. the dollar stronger here. we are down five basis points. equities just about positive by 0.2%. tom: lisa to take over for james gorman i think could work. the chief investment officer at morgan stanley wealth management joins us right now. your worst nightmare, no question about that. tell me what you are hearing from morgan stanley investors? i do not want to know about the research department or what banking is doing, what are you hearing from your customers? >> this is really interesting. our clients have been quite frankly pretty willing to watch

the side show of markets this year and take advantage of what for many of them are the best fixed income yields in 10 to 15 years. with so many things and so many crosscurrents that quite frankly do not hew to traditional recent models of how fed tightening works, a lot of this is you -- has been viewed from our clients on the sidelines. tom: the real yield is up at a level which most adults we talked to said it would never get to. you change your portfolio allocation with a 10 year real yield touching 2%. lisa s.: our advice has certainly been to do that. we believe real yields at these

levels make fixed income attractive and the stock market is still not fully processing the reality the real rates at these levels, if they persist and prove not to be a momentary dislocation of liquidity and markets. if they are truly emblematic, potentially higher or a fed that is exceedingly patient. that has major implications for the valuation of long-duration growth stocks and this is one of the conversations we are having with folks. it is finance 101 reminding them the discount rates matter when you are thinking about the cash flows even of the magnificent seven. lisa: there is one thing to talk about clipping coupons at a time when growth is decelerating.

we are looking at the forecast from the fed. it is re-accelerating. there are all sorts of things it's not accounting for. still there has been this incredible growth goes against the normal thought that there will be a slowdown as a result of these high yields. how do you explain that to clients and say this cannot last , look beneath the hood. what are you pointing to to show it is not sustainable? lisa s.: i think we are trying to talk a lot about the extent to which this has been a combination of balance sheet resilience combined with excess savings across the private sector both for corporate and for households. really just doing the math and saying at a certain point that excess savings that was delivered to the household sector at the peak of covid

which approximated $2 trillion is now down by our best guesses to something around 375 billion is left. not saying that that is nothing, but it is a trading and you put that together with some of the other factors here, whether it is higher oil prices, the demands of student loan payments, etc. and the consumer will start to face headwinds in our humble opinion. on the other of the ledger for corporate's, certainly the sum of the refi wall on some of this corporate debt we believe will start to show itself in 2024 and you will start to get some of these cracks in the credit market alerting people to the cost of capital and maybe the capital spending boone we have

seen begins to slow a bit as the interest rate sensitivity does finally kick in over the next 12 months. lisa: how frustrated have you been that the thesis hasn't really played out this year? lisa s.: extraordinarily so. i think we tend to model things in two dimensions. one, our economic models and secondly our economic models and secondly are market models. what's been pretty extraordinary is both types of models are failing in the current environment. the macroeconomic models, things like indices of leading economic indicators, some of the manufacturing pmi oriented data that historically has pointed to material deterioration in corporate profits has not really played out on the market side, things like the real rate which

typically is inversely correlated with stock prices has just not had the advocacy. we've seen price-earnings multiples really expand in the face of rising real rates. that is not a typical correlation. this has been an extraordinary year if you tend to be pretty data and framework driven in your recommendations as our team historically has been. now that does not excuse trying to do the homework for what we missed and as we tried to talk about, we really miss the extent to which the interest rate insensitivity would persist. and the extent to which household balance sheets and corporate balance sheets have thus far been immunized. spending patterns have been immunized from these higher interest rates. jonathan: you are not alone,

rest assured. thank you for the update. the update from morgan stanley investment management. one persons complacency, another person's resilience. tom: i think anastasia nailed it, you have to look at the three accounting statements rather and the key attribute given leases discussion is leverage. that's the first. i don't know if you knew this, a terminal function weighted average cost of capital. you want to own things now with a lot of debt, hollywood and entertainment as one example. jonathan: the great refinancing that never was but might be next year. the s&p 500 positive here by 0.2%. coming up, looking ahead to chairman powell in jackson hole wyoming. after the close we will have

numbers from nvidia looking ahead to all of that. alongside david leibovitz of jp morgan. we will ask that question at the very top of the hour. complacency or resilience? lisa: two sides of the same coin. it was looks at a soft landing when it is about to turn into a hard landing. that's what we've been hearing from jp morgan earlier this week. at a certain point what data are we tracking? at a certain level, are they going to try to declare victory in jackson hole? even in just the margins. or will they really say hold on a second there is something going on here? take a look at foot locker, will they be paying attention to that? jonathan: relative to last year they are in a much better place and they deserve to feel better about the situation. whether they declare victory is

a stretch. tom: there is a humility to jackson hole. there are some serious academics going on there. debate gets heated. mckee is in the meeting and won't let me in. i try to sneak in one year and did not get in. lisa: because you are in a bear suit? jonathan: why did william go nuts. tom: they really get going on this. to me it's like where do they set. jonathan: a little promo. tom: i'm going fishing. jonathan: let's get a video of that. ♪

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>> our expert team speaks with fed president and other economic leaders.

>> what is the response mechanism. >> it's not how fast we do it it's where we go. >> coverage starts wednesday, august 23 with a special edition of bloomberg surveillance live from jackson hole. bloomberg, your global business authority. >> it is a weaker china. of course europe is more exposed to china than the u.s.. definitely part of the slowdown picture and i would say generally a theme of divergence of the u.s. versus the rest of the world. what we are seeing is the impact of tight monetary policy, the transmission has been much faster than the u.s.. tom: virginie at allianz, she was really quite good about the synthesis of china north and

down south to australia on the pacific rim and the confusion right now that we see there. here at 8:17 a.m. we are looking at really ugly retail in america , looking at some difficult european numbers. on watch for 1.07 euro. weaker euro today. we also have our eyes on india which was a nonstory until x number of days ago when a russian space probe crashed on the moon. do not know much about that but what we know is india would like to go. a textbook image of what you see in the control room as we are 20 minutes away from that. lisa will bring us coverage on this. lisa: we are all looking forward to that. tom: looking forward to this, some wonderful history here because they look to the far side of the moon.

why don't you bring henrietta in because she is an expert on the far side. lisa: director of economic policy research. we've been talking about the debate that happens at 9:00 p.m. eastern of the republican primary candidates but there is a larger question at the time were we are talking about a question of the rearranging of the global sphere. from all of the rhetoric we've heard, really criticizing china by the u.s. about the lack of transparency, is there a clear message from the u.s. administration on exactly what they want this relationship to look like? >> i think the message is getting starker and while the biden administration is doing its best to have these cabinet level secretary going over to china to maintain there is a dialogue, preventing a trade war from escalating to something

more aggressive you are starting to see the republican presidential candidates enter the fray more aggressively. it has to be said former president trump yesterday having that bombshell report in the news that he is reconsidering and plans to re-propose what was a 2016 idea of a border adjustment tax that effectively says anything coming in from china gets taxed with a 10%, 20% rate. big box retailer sort of go ballistic when this gets proposed. it is a $1 trillion revenue raiser that when we deal with tax reform in 2025 will have to come up. the biden administration's approach to china is already being influenced and will be wrapped into the republican presidential candidates plans which is to be very aggressive towards china and the rest of the world.

it's not just facing china but any nation that does trade with the u.s.. lisa: building on this idea the parting line -- party line is to be aggressive as you can. we are expecting to hear that from the candidates tonight. what's the distinction between candidates? is it harder -- hard and harder in terms of the lines they want to draw? what are the contours to draw distinctions from other candidates? henrietta: on the trade front there's nowhere to go but more aggressive. the mastic on shoring, imposition of tariffs. anti-china sentiment in the u.s. is at its highest we've ever documented. the only groups from the sort of traditional republican platform choose to believe in something called free-trade now called fair trade which apparently requires tariffs to even out the playing field the republican candidate see, there's really no limit to how aggressive you can get on china and i would not

want to be the republican candidate saying maybe trade with china is a good idea. tom: i don't have this as a direct news but i think it is anecdote with imagery that in some form, five drones took out five major jets of russia overnight. that brings an immediacy to this war in ukraine. whatever the news may end up being. how do they address a war in ukraine which i would suggest is not -- has not engage the american audience. -- has not engaged the american audience. henrietta: there are some candidates, not really candidates, but some republicans in mostly the u.s. senate. mitch mcconnell is the most preeminent of their who are strong advocates for continuing aid to ukraine.

they will take the white house 10 billion dollars supplemental emergency request and probably plus it up to 15 or so. then you have the presidential candidates who are pretty split. ramaswamy probably the leading candidate along with president trump questioning whether this is a situation we need to be engaged in at all, we are more worried about federal spending, let's strip this out of the supplemental request. tom: i made a joke about the far side of the capital as we wait for india coverage as they attempt to land a craft on the moon. let's try to land a craft in congress. is this debate about the economy stupid or about culture stupid in america? henrietta: it is really unbelievable. then majority leader mitch mcconnell gave republicans the biggest christmas present i've

-- i could have ever imagined. trillions of dollars in tax cuts that expire the year after the next president is elected. this should exclusively be about tax policy. you cannot even see the christmas present because donald trump and abortion are blocking out the entire tree, let alone that present. in an alternate universe, republicans are talking about tax policy and economic policy which would be a boon going into an inflationary environment. instead we are talking about abortion because it is on every docket particularly across the south, next in virginia. lisa: it raises a question about what the gravity will be after today and how much it will pull away from the shrug of the shoulders and the suggestion president biden wilkie -- will get reelected.

a time when donations are flagging and enthusiasm is as well. henrietta: all you need to do is look at the turnout we've seen in ohio and kansas and we will see i suspect in virginia in november and in ohio. the voters are flocking to the polls when it actually counts. people will say the economy is the number one issue but they go to pull the lever and say all vote for this guy based on his position on abortion. that's what you are seeing and that has staying power. tom: please watch the debates because me and damian sassower watching the jets. thank you so much. eli lilly of indiana can explain the pharmaceutical expert. years before that the cash founders of washington university, this is one of america's venerable names in

pharmaceuticals 15 years ago where this company blew up with opioids. one of the 47 spinoffs from tyco declares a second bankruptcy this morning. i do not know the particulars on this other than to say it's one of the great venerable names of pharmaceutical science in america buried within all of the debate and litigation of opioids. lisa: paying their final payment to the opioid trust in the process. tom: coming up, michael mckee. this is bloomberg. ♪

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tom: "bloomberg surveillance." we will get it right. we are on our way to jackson hole in a number of hours. jonathan preparing for the 9:00 hour. we have so much going on. steve and join us. this is a critical review of the american economy. we are going to see wonder boy break -- waking up at the pioneer grill. michael mckee leading our coverage. and we also have a landing of a spacecraft in india right now. if we the image, please, of mr.

modi here, i believe we'll talk. there is a count up clock as they descend. what is amazing is, this is to the south, where we did not go with apollo 11. lisa: we put it well earlier, that we would not be talking about this as much if the russian lunar landing a couple of days ago not pan out. they crashed, and this one is slated to be the very first to land here. what is interesting to me is this comes at a time where india is ascendant and throwing around its heft as an independent player. you see that taking place with this question of, are for them to be displaying this kind of space-related exploration highlights for preeminence in a new way. tom: we learned this from a

ranger-like spacecraft the crashed into the bottom of the moon. we are trying to land on the far side of the moon. for those of us in error you to come this was a huge deal. this goes back to october of 1959 which is frankly, two years after sputnik and may be more amazing than sputnik. the soviets were on the far side of the moon, and we weren't. and that resounded through american aerospace science. lisa: and pink floyd is on the dark side of the moon. there is the question over whether refined water and the fight over that. tom: this is what you get with chicago aerospace, we are quoting pink floyd. creating history right now, jackson hole, michael mckee

leading a coverage of jackson hole is well fed as well. he greets us in the chill of jackson hole. michael, i want to go to that moment that we will all see where powell, and course, lagarde speaking as well, what are they going to be thinking about? what is the common ground of four central bankers as the kansas city fed meets degree -- to greet? >> the first as they are going to look at these mountains behind me and say wow, it is real. it is so beautiful. then they are going to think about what we can do to keep inflation down in the three countries that have nation problems. while all of that does seem to be happening as the central bankers would like it to, they can't really explain all the reasons why.

so this conference may be able to provide some grounding for the central banks as they try to figure out what the moves in the coming years are going to be. tom: i like the niceties of this for the kansas city fed. for the international audience, can you explain the transfer of power in kansas city? the baby puppy pivot, and now we have schmidt of kansas city. tell me about schmidt of kansas city. >> well, he started as the tradition of the kansas city fed seems to be, as a bank examiner at the fdic. worked his way up in banking, ran a couple of the banks, the ceo of mutual of omaha. and then ended up running a family bank in dallas. so he's got a banking background. same as esther george and her

predecessor. as for his monetary policy, we have no idea at this point. tom: michael mckee from the teens. we go to india and i believe a successful landing of their spacecraft, searching for water at the bottom of the moon. very, very distant from the sea of tranquility. 50, 50 plus years ago. moments ago, waving the indian flag, a proud moment for indian science. lisa: this really pushes forward exploration as the hunt for water in space is important. i can't help you with 50 years ago. i can tell you that this is going to be interesting going forward. help me out there, this exploration. you think is just going to know? tom: putting me in my place.

what is the common ground? i'm talking about common ground of four central bankers. what is the common ground of the brilliant research? what did you both agree on? >> the answer is very simple, that there is a dynamic trade-off going on between the global political forces and the global disinflationary forces vs the cyclical local forces that the individual countries are experiencing. and in that this battle being reflected in the yield curve. everyone says ok, eventually the fed is going to be successful, so how hard to be have to push? the front-end of the curve, it is all about domestic six go inflation. -- cyclical inflation.

people keep on expecting the curve to shift back to a more normal position and the reality is that is probably just not going to happen. tom: i'm talking on camera with smart people, i'm talking off-camera with all the officials that don't want to talk to me on camera. are they working out of the textbooks used in school or are they making enough at jackson hole? >> they should be working out of the textbooks. they should be going back to the older textbooks because the reality is we want from covid that it was the right brand of economics and we've gotten a response be affected from the stimulus, and therefore a lot of the new discussion should be put to the wayside. one of the things that worries me the most is this idea, as inflation comes down, real rates go up. and therefore the tightening gets greater. the reality is corporate ceos do not make decisions on after-the-fact interest rates.

they make decisions on what they expect nominal interest rates to be, and that nominal interest rate assumes the function for real returns and inflation expectation and if the nominal interest rates are rising, that is a bigger problem than looking back to say real rates were higher. lisa: let's raise a question about the soft landing narrative that seems to be the consensus on wall street. this has become a commonplace idea even though it has been elusive historically. are you seeing material cracks that challenge the idea that people are ignoring? >> not right now, but the reality is that any recessionary tendency will wind up being a hard landing. there are differences between crashes and recessions. this is going to have to be an inflation recession. that is the result. that is not necessarily a soft landing. a soft landing is this vague concept, and inflation comes back in that direction as well.

that's not going to happen with a labor market as tight as we have today. it's going to be a lot harder than it was to go from nine to four. lisa: talking this moment about footlocker, dick's sporting goods, some retailers that have struggled in the past and are now seeing that come to a four. is this something broader about consumer spending? from your view, not to go into the companies themselves, but what do you think it is? >> there's a lot idiosyncratic risk. the nature of the covid restructuring and the rebalancing, the re-acceleration really has papered over a lot of problems for a long time. they all have to come home to roost. if it is not a credit crunch, we kind of need that in this environment. tom: you are claimed.

the study of art start and where we are. the one phrase that permeates, this is the humility of blanchard's work, his other factors. there's things out there that we don't know. what are the other factors that make this a mystery? >> the real issue is when you look at balance sheets which we don't do a lot of. we don't look at balance sheets to try to assess where we are. we look at things like financial stress measures. they are fiscally created at of indices that we see published in markets. when you look at them on a macro level, balance sheets are extraordinarily healthy. this is why when you look at silicon valley, you can back away from that. lisa:lisa: what is an inflationary recession? >> the difference between an

inflation recession and credit recession is basically, the interest rate increases flow the economy to bring down inflation. in a credit crunch, the inverted curve causes a credit crunch that causes recession. send a federal reserve has to slow the economy. you can't get the economy to slow and get inflation to come down to target unless you are going to create an excess in the labor market. that is what they have to accomplish. you can only do that by having gdp contract. that is a recession. the reality of the credit crunch causes the recession. that is what 1990 was, that is what to thousand was, that is what 2007 was. covid was a massive corporate balance sheet problem and household balance sheet problem and that is why the required subsidy loves of interest rate. tom: we have a correction, and it is a subtle correction because there is loads of headlines out about the restructuring and bankruptcy of

melon crude. -- mallinckroot. to be clear, they have not filed for bankruptcy, they have a scheduled filing for bankruptcy in the coming days. lisa: we are clarifying some of the filing from the legal settlements. tom: some confusion over my inept coverage of the landing of the indian spacecraft to the south of the moon, it is not like ranger where it crashes in, this is a landing like a lunar module for apollo. the idea is to have a rover which i believe is 60 pounds. i guess it goes down the ramp like a disney movie. it goes down a ramp and out on the surface to look for water. lisa: i love science fiction. tom: this is not fiction. lisa: i know, it is so cool. and water is where life is, although i imagine there's other explanations. tom: do a data check.

up 1/10 of 1%. lisa: i like bill nighy the science guy. you can get going. tom: i've got my bill nye bowtie. it is a walk-in closet. there is my bill ny -- he gave it to me. lisa: you have a walk in bowtie closet? tom: i have a walk-in bowtie closet. out in jackson hole, there's three big hooks that hold about 100 of the bowties and one of them says gifts. i got one from constant, but not rashida, i don't know what that is about. and then there is in the middle .how do you choose , lisa: you have a big deal? tom: you choose at 3:00 a.m.

in the dark, you just pick one. this is "i need tenure" bowtie. lisa: so this is the end. this is sort of the question. are we seeing people not buying bowties as much? tom: something fancy like that, it is about this huge bifurcation in society that will be the theme of jackson hole. michael mckee setting up for complete coverage. they are halfway up the call right now. lisa: that looks beautiful. and cold.

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♪ lisa: can't seem to hold onto the gains at the session grows older.

we do see the s&p features dip just a touch as we assess whether the slowdown -- actually, now they are up 8/10 of 1%. looking at the question around how much we can gain resilience and yields where they are. yields trying to go lower and coming back at the session goes on. yesterday, we did see initially a bit of a bid into treasuries and it completely faded by the end of the day. i wonder if that is the gravitational force right now. tom: but are we jackson hole dependent or are we nvidia dependent? i would suggest right now is more important. lisa: right now the expectation is for jay powell to say absolutely nothing and nvidia has projections which is the reason why. i do think it's important to look at the site -- at some of the single names right now, the retail names that we've been talking about throughout the morning. we've been talking about footlocker, taking a disproportionate men of airtime. but the fact that they cut

earnings and expectations for earnings so significantly after already seeing deteriorating business outlook really has gotten people concerned. those shares have lost about one third of their value so far in premarket trading. it is a massive move, and we are talking about adjusted eps expectations for the full year of 130 to 150. significantly coming in. sales coming in, talking about theft. we've heard this from a number of retailers including dick's sporting goods. is it something bigger? tom: citigroup, really wonderful. i hope i'm pronouncing that right. with abercrombie & fitch, killing it. against everybody else. a blowout quarter. lisa: we are going to get there. that is the reason people are wondering if this idiosyncratic or not? nike also poised. tom: are you all retail today? lisa: all retail.

you pointed to abercrombie & fitch. they are soaring after boosting full-year outlook. and they did it just some of the hollister brain, their teenage brand, i would say. some people might buy it who aren't teens, but there is this brand that they have reset and they are trying to take actions to recalibrate, maybe did have some lucky periods earlier. how much can we draw conclusions at a time where, you said this, the gravity is coming to earth. the winners are going to win, the losers are going to lose. tom: mike isn't lined up outside trying to get something that he saw in some fashion magazine. your kids are lined up outside of abercrombie & fitch. you've got to refinance the house to get out of abercrombie & fitch. it's expensive. lisa: i don't know because my kids aren't lined up outside abercrombie & fitch but i will say you have different price points.

it's not exactly luxury, it's just that the winners can still win. why it is so difficult to come up with a narrative in this market, you still are seeing discretionary spending for certain exam not for others. >> toward jackson hole, everything today is an angle on jackson hole. david of dartmouth college and the bank of england. blanchflower got halfway up the mountain and couldn't get down. had to do a rescue effort. someone with knowledge of this, someone who has never been up the famed dartmouth ski way. legendary. this is what you do in the dartmouth bubble, you go skiing in the winter. dartmouth, it was like religion. you had to have a certain beverage of choice and go out to the ski way. you never really did it, but this used to be religion, right? >> exactly. i bucked the trend by being

there for four winters and never once going on the ski slopes. tom: that would be smart, your parents and up at the dartmouth lodge while you are in the hospital with a broken leg. let's talk about the broken leg of the american economy right now. retail shows a green consumer. what do you say in washington? >> i'm thinking and along in particular. she is still looking for end of 2020 three, early 2024 recession. we are seeing the incipient signs of some distress, potentially. i think the one thing to look at is the gdp now, which is at five day percent. the next version is coming out tomorrow ahead of jackson hole. it will be interesting to see whether, with the upside surprises we are getting in the economic indicators, whether or not we start to rolloff. tom:tom: how important is it to

you that we have seen bond selloff into the close? this idea that you have people are interested in buying the dip, but by the end of the day, they are like no, we are done. is that important to you? >> the question is the fundamentals vs. the technicals. my group, he has a post out today saying that we are short across the curve at every single maturity both in the u.s. and in europe. what that says is the technical factors are moving us toward a higher rate. and so we have a short squeeze that is going on right now. so that is the technical of today. but the trend is higher. not only because of that positioning, but because the u.s. is outperforming relative to other countries. lisa: given it is also august and a lot of people are just at the beach, how focused are you on the 20 year auction today, which is coming at a time where there are these sort of news

cycle highs for yields? >> the 20 trade very differently than a lot of the others, because it's not as much liquidity in that. it will be interesting to see what the uptake is, because what we saw i believe a week ago is that the 30, there wasn't as much demand, and that sort of set in motion this bid higher in yields. it will be very interesting to see what happens with that particular auction. tom: how do you filter the core debate of whether this jargon is start into the markets? there is not a linkage or a one-to-one relationship, but how do you synthesize jackson hole mumbo-jumbo into the real world? >> bill dudley had a good piece out. the way i'm thinking about it is in terms of the september sep. when we had the summer of economic projections, we've

already seen the tendency going up. maybe we see even more movement. they've been at 2.5%. if they go beyond that with the mandate at 2%, that is telling you they see it moving higher than 0.5%. they are going to be telling us it is now 0.7%. tom: play basketball recently? it is a threat to society. aisleways can hurt and we have breaking news. well, what you mentioned, there's eight people on stage tonight? lisa: there may now just be seven. tom: this is dana bash over at cnn leading the coverage. the north dakota governor taken to a milwaukee emergency room after suffering an injury while playing a game of pickup basketball with his staff. it is unclear whether he will attend tonight. lisa: we will be reporting more about that. he was a longshot candidate, it wasn't as though he was one of

the front runners, but still an important voice at a time when there are many who are looking for some new voices to come in that have been overshadowed by some of the other development over the past couple of months. tom: and this guy is special. i don't know anything about his politics, i'll be honest. but governor burgum is a name from my youth. you talk about this stereo over nvidia right now. there was a somewhat people hysteria over great plains software. and this is the guy, folks, who said you don't have to be in boston, you don't have to be in san francisco, we can get this done from the great plains. he made more money than god. he's got to be the youngkin of virginia where he could literally write the ticket himself, maybe he could loan some money out to some of the others. but the bottom line is doug bergen is what everyone is dreaming of.

steve case leading the way on this, doing innovation and technology outside of four zip codes in california. lisa: i lived in fargo, north dakota. they got a big microsoft campus at the time. he did have to put up some of some pocketbook to get people to donate enough to actually be on the ticket because he doesn't necessarily have that common name appeal. that said, he does represent another time and place in this whole race. tom: yeah, we will have continuing coverage of that. annmarie hordern and joe mathieu tonight on balance of power. an incredible day, about 60 minutes to get the jackson hole. lisa, what do you look for a jackson hole? lisa: whether they actually feel confident that a soft landing is not a pipe dream, that this is actually a base case in a real way. tom: for my mother, chipped beef on toast.

lisa: you are going to eat it for your mother? tom: i'm going to have it two or three times. only reason i'm going.

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>> good morning, good morning. equities holding no one here. 0.1%. the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading, this is bloomberg, "the open," with jonathan ferro. jonathan: live from new york, market signage ahead of key results from the vi