>> we don't think demand will b >> we don't think demand will be growing maybe 1,000,002 maybe barrels per day. they can fill that without even thinking about the fragile five or while china is doing. the way we look at the trends, >> we still think rates are it will be a market. somewhat too high over the long jonathan: looking for a weaker run. >> the politics lets the usb crude market, positive by 1% on exceptional, you will have higher yields and stronger wti, $90.61. dollar. >> thanks to the u.s., we are debt -- brent up by 0.9. brent crude this week through 95 weaker than u.s. consensus with growth. >> inflation is well behaved for briefly. we will have the conversation about triple digit crude, consumers. >> we see the lagged impact of prospect of that before year end in a moment. i want to touch on the bond monetary turning start the market, we had a look at 450 on fight. announcer: this is "bloomberg a 10 year and the last few surveillance" with john keane, hours. taught -- john pharaoh,, in today's session, we backed away since then, down 48. a two-year came close to 520 and think -- the last couple days. these are cycle highs of bond tom keene, jonathan ferro, lisa yields in america. in the fx market off of the back abramowicz. jonathan: i'm jonathan ferro. of that, yields up in dollar stronger. your equity market bouncing back

from its biggest one-day lawsons 10636, negative 0.2% and that march. this morning, positive by 0.2 bit -- 0.26%. could market the worst day in six months trying to bounced her cycle highs for the front-end. let's be clear about that come up by 0.25%. on the long end, those are your cash now, that is a healthy signs to buy. tom: it has been a game changer return, isn't it? tom: some of the asked about up to 48 hours, maybe take it to dinner last night, they came to dinner and said you gotta 72 hours. i have a red cup here, radio realize this goes to the real yield story, if your triple leverage on cash fund, your cost can't see it, the bloomberg red leverage goes up, you're real cup china because gloom is in the air and you see it in the yield gets in the way. so you are not making net clean yield space. frankly, foreign exchange on triple leverage cash what you becoming interesting. jonathan: treasuries down, are making a months ago. jonathan: how many dinners did yields higher, equities punished you have yesterday? we had dinner together. tom: three or four. yesterday's session. my people had to see me and i a risk of dying to response to what we've seen the bond market wandered. the past couple months. jonathan: we had dessert lisa: there's this idea higher together. tom: i'm a little slow this morning. jonathan: did you go out last borrowing costs will be problematic for corporations and night? tom: yeah. individuals and are we truly jonathan: good. reaching a breaking pouring -- one of us is making the most of it. that's good. point or is this a pause? tom: on a friday, we will get at this point, it seems there through this and get to this by has been a game changer, a the little picture in the world. in my house is almost nothing on seachange in the past week where people are looking a higher for our guest. at my coffee table in the living

longer and the applications are less benign. room, there's a 100 page plus jonathan: different implications research report from jp morgan, in different places. america, jobless claims, 18 months ago which brilliantly 200-1000. the data in europe, terrible. plays out the demand dynamics of what we don't talk enough about, this is being said about the emerging markets. joining us now is the global fed, the fed is somewhat head of energy strategy at jp mystified because of the resilience of the economy. resilience america off the back of these yields, i'm not you can morgan christyan malek. say the same thing about europe. can't say the same thing about the u.k.. tom: council people that don't do you reaffirm what you said 18 month ago about the look at the foreign-exchange mark to make a study of it because it is interesting. i don't think we can leave durability of demand and em? christyan: for sure. london until sterling prince a it's good to be here. 119. jonathan: you want to hang on on demand, we are stronger in until then? [laughter] lisa: he just wants to hang out. demand growth in medium-term tom: we may get there by early then we thought we were and the main reason is when you look at the fuels in the world, october. we are at 1.2242. particularly clean energy fuels, jonathan: we closed 10 and the second edition of the report, we show the system, consecutive weeks of euro distribution of energy will weakness against the dollar. that is a record streak of basically fail the generation of dollar strength to euro weakness. lisa: are you really elated that clean energy. you have these jobs generated well. the strike in the u.s. is and you cannot get to the exemplified by jobless claims. consumer. what happens as we end up with a it was anything but what we saw massive gap of energy in terms in the pmi's and data out of of what to fill.

europe this morning. how do we fill that? we have to go through francis saw its biggest decline in activity going back three traditional fuels. years. that will drive more demand for you can see on the margins hydrocarbons and more demand for germany is doing marginally oil. better than expected but across-the-board it looks like a recession and in the u.s., why tom: we can spend an hour on isn't it? this. jules is an expert on energy and why's is it out weaker? why is something not broken on all of that but i will not go the back of rates of five there this morning. percentage points in the past 18 what i will say is you've got a months? tom: half of america feels like get traditional hydrocarbons from saudi arabia and such a recession. through the straits of malaga there's a lot of people struggling in america but the and up the pacific rim. answer is the unique dynamism is that model still in place? christyan: absolutely. when you think about saudi share and ability to create -- clear of dumb on growth, -- of demand growth, ultimately the industry the markets in america and that retreating in terms of does not happen in germany. investments and oil, what we jonathan: we just moved on will see is saudi share of quickly, the banking system, demand growth between 50 to 60% up of all demand growth by 2030. some banks failed. i never thought in that moment to give you perspective, the that may be cycle highs on yields would be a in our future average was 11% the last 30 but here we are six months later years. the low was four when we had looking at the two-year pushing shale at its max but a high cost 520 this week. a 10 year briefly through 450. of equity and more cash return to shale, a high cost of debt these are changes people did not and hire for longer rates and a foresee six months ago. lisa: one of our guests push to drive away from the

transition meant the industry is yesterday said it became clear no central banker or policymaker massively under invested. will let a major institution we were not a friend of these fail in some sort of systematic thesis for a long time. way. we turned bullish in 2020 but this razor question if it doesn't, then any snafu or something breaking will be that investment now is now way covered up and fixed. too late. so it does not have a material tightening on the market which jonathan: to presidential will raise the question what will it take if this is just a politics matter given crude is level we can live with, at what at the record in a moment? point we question who is going christyan: i think it does in to pay 8% mortgage? who's going to pay in every 6% the sense that you could push more for shale. on investment grade per bond 56 years ago, we were all under after paying 2% to 3% the and housing prices go up, you previous decade. tom: gloom in the shadow st. see some a barrels pulling up lots of worlds. paul's cathedral. [laughter] we have great conversations for reap what you so now, you see you to get you set up for the productivity slow. weekend. and frankly, my head is already well data showing us productivity is slowing. even if we go drill baby drill in october 2 the november fed meeting with jobs report we will have for you, i believe it is and lots of investments, even if next friday, i will guess on that. banks were to turn around and the real issue is we have to say there is more finance, the leave town because of the issue is the wells themselves, it is not magic you just throw the wells. pharaoh can't frenzy. we go to tom markley and in the that slowdown is happening in marginal costs is going up.

one thing i probably learned sun newspaper writing up the this year is we tested 70 and we storm. we have to talk about this. we will do it to the show today. bounce back. jonathan: looking a prices, 94 would you expect our economics and brent, looking at the bond market, yields wishing 5%, 520 investment in international relations audience why 47 will on the two-year and for 50 on a including espn, santi igo, she 10 year. the conversation in the bond market is what is the new lay, picked up your chitchat normal? is it the euro? with mr. leavy. jonathan: daniel leavy, what is a conversation in the longest-serving chairman in commodity market? what is the new normal for english football and the premier commodity prices given everything you told us? christyan: i think the league, can't think of the last time he has done a broadcast interview. before-and-after in terms of we we did one earlier this week is were bullish and then we took open to a state sale, open the time off and we were bearish in december and basically have gone way i think a lot of people back to bullish. sensed he has not been for a so we are being tactical. long time. i would encourage other people the before-and-after, the flow of capital into supplies and now to listen to the conversation to see what their takeaway is from him. what it was like in the last 30 they have done a lot to improve years. you had cheap money and a lot of productivity. the sustainability of the club to answer your question, what with the stadium. tom: it's fun to watch. that is doing is driving the jonathan: they are bringing in long-term price, the back end of the curve, up to 80 and north of tons of money for the stadium and maybe we are looking at the prospect of new ownership. 80. we think it is normalized to i'm not going to say that will $100. to give you a bottom-up sense, happen soon but that is. tom: i got an emaar form luke the companies themselves, taking cal at -- dividends, buybacks, debts, and

windfall tax in this country and he said at the end of the in europe, you need at least $80 interview, i was shocked -- i will not go to the arsenal pots to be able to invest in marginal game i was so upset with mr. leavy, where he said we are here new oil. that is a fact. to entertain people. so that is very supportive for i was thunderstruck by that statement. jonathan: he wants to win but the $80. the question we have today, why with style. 100? when you look at opec, the next in that conversation. for years, the only ones to fill let's turn to the price action, that, fill the gap and supplies thanks for the wonderful feedback for the conversation. opec. equities in the s&p 500 positive by 0.23% on the s&p, yields historically, spare capacity between five to 10% of total capacity in the world, that is a lower, down a basis point but here we are. risk premium which i have not use that term and the long while 447 -- 4.473. for oil will briefly drive $20 lisa: today we get lisa cook above 80 to 100. lisa: when you talk about opec speaking at 8:50 a.m. eastern being the swing factor, we have heard a lot saudi arabia and what they produce will determine time and then other fed presidents speaking at 1:00 whether thing stayed a hundred, a.m.. whether they stay 90, or thing stay below. so you can get the insight and translations you want of how do you reject that? long this economy can last with do think that is a simplistic rates where they are. nine for the 5 a.m. have gotten way of looking at it in the near term and they have less control mis from europe, from france, that people give them credit? from germany. christyan: it's a question that

we get them from s&p manufacturing services and do they have control or do they not have control. manufacturing for the united states that comes at 9:45 a.m. ultimately, they play their and 10:00 a.m., this will be cards well and have done a fantastic job of managing the really important, how long are volatility of oil. the strikes going to go on in if they are taking share of detroit. demand growth, they have a duty to make sure they are plea facebook autoworkers are having a facebook live in stabilizing price. detroit -- facebook live people talk about any absolute price and i think what they're trying to do is make sure it event in detroit. they will talk baby, talk about stays within range poached by definition means if we see a what has been offered and the cold winter or hurricane and ask. it is really unclear. prices spiked quickly, they will jonathan: the deadline is midday be managing the upside just the today but the facebook live is way they are managing the at 4:00? downside. lisa: exactly. i said this morning, put your signaling before the final. seatbelt on, it will be a jonathan: what to watch a little volatile super cycle, it will not be a straight line and therefore in some ways the bit ladle. jonathan stubbs with us bullish factor to the in equities is saudi control that around the table. range sewed this is way too jonathan, good morning to you. higher for longer, let's go one step further, is this the new normal or dare i say the old high-octane for me. lisa: so that is the reason why normal? can we live with rates where they are? you think it is 100 and not 110? that is where they will cap it. >> we've gone back to spreads. but what about russia and the fact they banned exports of you take u.s. credit against gasoline and things of that nature? are there other areas that could equity spreads, we've just come

back to the reef financial crisis level. go against what we see from saudi? christyan: i think we are in you've missed out of 10 to 15 years in between if you are demand discovery. everyone has to view what prices has damond -- has demand, we sleeping. we are back to that. can we live with this? look at analysis and it's not it is a big transition for that expensive. individuals, corporate's, before-and-after is higher governments who have had free rates. we have higher rates and money and access to free money therefore what is the real for over a decade. i think the transition will be normalized price of the market challenging and to digest higher demand the market can climb a ties to? we don't know. rates for longer will take time we think 110 to one under 20 is and present many headwinds and fine and at the price of we saw we need to find some tailwinds massive demand disruption we are to counter that and they are not wrong, that is the point where i quite so easy to see right now. suspect saudi and russia will tom: what is a tale that pushes have to manage the downside once against to a real yield, 10 year again. jonathan: so the messages buckle real yield? up? christyan: buckle up. how to .11%. we are very long and very i don't have a good print yet this morning but the basic idea bullish but be very tactical is there have to be these things when you get position here. jonathan: let us something. , these institutional forces tom: it is. that push against the new real the people we talk to have different views. mr. morris from citigroup and yield reality. what are they? >> we need liquidity, fiscal, from j.p. morgan, different. corporate profits. you have to respect the density

one of the three, all of the of the granularity rather that these people study something three. liquidity, to get a liquidity where we go brent is 92 and that support for equities, we monitor just does not get it done. it is way more granular. dollar liquidity around the jonathan: about to do that right world. there only three ways of getting now, brent is $94. that and one is a weak dollar, [laughter] christyan malek, thank you. christyan malek of jp morgan. dollar shock negative, that's on the dynamics of triple digit not really happening. the second is having a liquidity crude call worldwide. some big calls in the mix there surge out of a major economic lock, u.s./china/europe. that could shake things up. not just for what happens in you need system risk for that and that is not in the cards america, not just the politics imminently or you need a global of the next 12 months but domestically and in the u.k. and recession so liquidity channel, europe. big oil importers. this challenge, fiscal is seeing some off what you need a delta lisa: we never have a crystal fiscal surge from here. not can happen. ball. it is never easy. then you talk about profits and that is also a challenging the number of different factors discussion. tom: your claim for partitioning are shocking. we have no idea even where demand destruction picks in -- kicks in. on a sector basis and i would everyone has a different place. we don't know how much iraq and suggest -- it is too much theory for a friday but the answer is there will be haves and iran can produce. these are question marks hovering around different have-nots in the newer, higher, assumptions. real yield environment. jonathan: dan morris will can you invest in the haves and ignore the have-nots crushed i weigh-in on this we'll catch up

really yields or do you have to with dan in a moment. eckley market posited by 0.2% on walk away from the market in entirety? the s&p. yields lower, just by single >> we've been taking a more basis point but we are about to end the week close to 450 on a cautious approach over the last 10 year. couple months. ♪ we push energy heavily because it has balance strength, macro, and we are in the mindset in terms of the haves and have-nots, the pricing gap in the u.s. between the haves and have-nots, you measure this by looking at the interval range, that gap is as high today as it was at the peak in 2000. so the market is already pricing back today and that is at historic highs. so to buy that haven't have not trade today it has already been priced in. we would rather lean on valuation and we see tech super extensive, u.s. defensive super cheap, softening of growth, and we are inclined to lean into that by taking some out of tech and putting some into the cheaper parts of the market. lisa: which is something jim beyonca was talking about

overnight saying it has been led by the magnificent seven, everything else tumble long and short order. u.s. equities look stretched, expensive, and these are your words. how much of a selloff come -- soft, particularly in big tech to use need to see? >> thick tech has added trillions of dollars this year, bigger than an entire index. we see phenomenal's of narratives in the u.s. market. take the stocks away and u.s. has done the same thing since europe and the u.k., nothing has happened in equities extra pan that has been out fire -- on fire on the strong stocks. if we are not confined strong energy for the leadership, it becomes a struggle. this is why we are leaning on these valuation gaps is why defenses in the u.s. look interesting right now to us. that is how we start allocating. jonathan: can we make an equity call off the back of fx call dynamics for the moment?

>> 100%. the big dollar call post-gypsy was the dollar was strong. what that meant was it took away nominal growth from the rest of the world so global growth had us a 10 year period where we had a growth deficit post gypsy partly because of the dollar in that period. equity growth outperforms the dollar is critical here. the dollar has been strong the last few months but over the next two to three years, a strong or weak currency. i think we are seeing a changing balance of risk in the u.s., political risk is higher than it was over the last 15 years, economic risk, fiscal position and look at the banking sector as well, some fragility is there. i think it is harder to make a case for a strong dollar unless europe or china goes into this assistant slump. also hard base case. there is some medium-term support but it is tricky.

jonathan: so on the ftse, what would you say back to them? >> u.k.'s an interesting market because the macros not great but the market is trading 10 times. it has valuation protection, balance sheets are strong. the big valuation, trade or gap in the u.k., is between the 250 and 100. the two 50's are sitting historical valuation levels relative to 100. the 250 is supercheap and lacks liquidity, lacks liquidity because there is no macro confidence. into next year as macro includes, liquidity come back, mid-caps look interesting. jonathan: thank you. jonathan stubbs on the equity market. not just european ackley market ♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. but worldwide, the u.s. as well. available now in siding colors, styles and textures. curated by joanna gaines. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, styles and textures. i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. equity futures this morning if and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, you are tuning in, equities but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works. >> is still think rates are somewhat too high. trying to bounce by 0.2%. >> as long as the politics lets we are coming off the biggest the usb exceptional you will loss going back to march. have high yields and the remember the banking crisis? stronger dollar. >> we are weaker than consensus. six months ago, yields lower by a basis point, backing away from >> what we are seeing is the the cycle highs in the last one for hours.

447 -- 4.473. lagged impact of fairly aggressive monetary tightening tom: the 10 year yield rounded starting to bite. >> this is bloomberg up to 2.1 8 -- 2%. surveillance with tom keene, jonathan ferro, and lisa real strength may out of the abramowicz. jonathan: good morning, good early summer and 2.10 is the morning. alongside tom keene and lisa stunning statistic of our visit abramowicz, i'm jonathan ferro. to london. i cannot say enough how game it has been a rough couple of changing that is and it has got days in this market. accelerated tendency to it, biggest one-day loss on the s&p 500 in six months. convexity. where is it in the weeks and yields we have not seen since a months? decade. the trend is higher. jonathan: it's amazing to see. highs on the 10 year. the conversation continues. in asian trading we went through 4.50 on the 10 year, we come live from london, equities trying to bounce. this is bloomberg. ♪ back about one basis point. explore endless design possibilities. what a ride it has been. tom: i take issue with the doom to find your personal style. endless hardie® siding colors. and the gloom on equities. it is a pullback with the vix at textures and styles. it's possible. with james hardie™. 17.12. it has been resilient equity markets.

in the other areas, you are right. in foreign-exchange, it is interesting study. it is 10 or 12 pairs you can study. sarah vallas with us from deutsche bank. jonathan: let's pick up on the weakness. the resilience in the u.s. data and the lack thereof in the european data. we have had pmi's in europe. ♪ (captivating music) ♪ those pmi's are dreadful. (♪♪) i have used that word continuously to describe european data. they are not good at all. (♪♪) if you compare and contrast what we are witnessing in america, just resilience, resilience. in europe, breaks, breaks. (♪♪) lisa: it is getting worse. france coming in with the worst private sector activity back (♪♪) three years. there is a question. (♪♪) at what point is the u.s. not experiencing the pain it will

experience versus a completely the first law of thermodynamics states different story than europe. that energy cannot be created or destroyed. what has changed this week more than anything is which economy (♪♪) is most immune to hire for longer? which economy is going to be but it can be passed on to the next generation. weakest. tom: it is the united states. (♪♪) it has to be that with the dynamic. i want to note there is a surveillance adjustment to french gdp off the macron king charles soiree. jonathan: have you seen the pictures? tom: if you want to recapitulate a spielberg movie, at versailles they succeeded. jonathan: may be the king did not know he was in town. tom: will all run down to paris >> we've gotta to have these monday to take the euro start. jonathan: i was think those negotiations play out now found. banquets are so tone deaf at times like these. this is what i said in detroit. that is my view. the outcome has gotta be a good lisa: let them eat cake. deal for the workers. you will not see a contract signed that does not deal tom: like lisa's morning brief,

properly. there is pomp, there is that has to be around the four year plan to increase wages, circumstance. jonathan: equities on the s&p getting rid of tears, reestablishing pensions, and positive. yields lower. points are being made across the board that i think the american lisa: today fed speak does people are hearing. jonathan: representative ellie return. fed governor lisa cook. stevens, democrat from michigan speaking on balance of -- san francisco fed president mary daly and minneapolis fed balance of power. we will catch up with amh in the president neel kashkari speaking next hour. if you're joining us, big moves at 145. in the last week and this bond market, major moves in the following what we saw in europe treasury market. we do get manufacturing and yields we have not seen for a long time. services pmi. 10 year through 450 briefly, how big is that differential? yields coming back in about a how big of a surprise doesn't basis point, 44783 on a 10 year, have to be to cause further dollar strength? a two-year the last couple days pushing 520, absolutely at 10 a.m. we will hear from the unbelievable to see the 10 year, uaw. they are having a facebook live the highest since 2007. event in detroit. tom: does that for the public or i want to breathe life into the fx conversation a little bit. the uaw people? jonathan: or the automakers? the euro is heading towards lisa: or both? potentially a 10th consecutive week of weakness against the the idea is they are taking u.s. dollar which is phenomenal. control of the message and a

on a weekly basis, that is a surprise tactic. record losing streak. it raises the point of why is the euro negative by 0.1%. this time so different? lisa mentioned this above 50 why has the tactic been so meant to go, i think it is worth different at a time when auto going over again, pmi's in manufacturers say we are stepping to the table and he europe are dreadful. if you hear similarities between said we have not gotten our fair maybe some of the guidance from the federal reserve, high for share during the financial crisis, we've not gotten our fair share in the decade that longer, maybe we are done, bank followed. of ling -- bank of england, i we have to get ahead of this before all of the technology for longer, maybe we are done, changes. tom: fed speakers, what is the that is where it ends. compare and contrast the economies, jobless claims the difference when they speak now u.s., rocksolid, 201 k. since jackson hole? the answer is real rates have compare that to these, dreadful. moved. up to 2.11% on real rates. lisa: you can see it is positive that affects every single person in the u.s. albeit a bouncing listening and watching. round. jonathan: are we significantly negative in europe and this is restrictive? the question, how come the u.s. dan morris from bnp paribas is so much more immune to high joins us. rates and how long can it stay that way? are we sufficiently restrictive? tom: some people i would say dan: i think it is more of a question of a time than the early innings. that is baseball talk. jonathan: thanks for that, tk. level. no one is expecting big moves tom: i take the point but i from the fed. wonder if it is just getting does another 25 basis points

started. ease levels are shocking that we are at annmarie hordern and joe really matter? the message we wanted to give is mathieu know how to pick them we will stay here for longer and really pick the right person than the market thinks. with congresswoman stevens from we will go back and forth about that debate. detroit. wendy schiller joins us with when the pivot happens and how historical perspective on many quickly the pivot happens will topics, the shutdown and what is going on in detroit and determine whether this ends in a recession or a slowdown. tom: to bnp paribas and back to providence at round university. i thought the interview last night -- i was in my hotel room france excellence in the 20's and 30's, it has always been a early and bed early to rise, real rate study. professor schiller, and i was how does our world change with thunderstruck to hear the voice higher real rates and inflation of district -- voice of detroit adjustment rates back to year for detroit from another time. december 2008. in washington, our politicians dan: we get surprised by these looking at the uaw's strike as a strike of the present and indeed rates because we about seeing them for a long time. our manufacturing future or are they in the president -- and the free financial crisis this was normal. the u.s. economy did just fine president stuck in congresswoman stevens past in a royal oak with rates at this level. michigan where otter workers it is not so much the rates come made 120 to 150,000 per year? is the adjustment. we are getting a replay of that prof. schiller: i think now. once we get to what we hope to politically they have to live in

the present and in the present the democratic already is be relatively stable and a point closely aligned with labor. rates can start to move down i we have strikes across the think the economy will be able country. we have sag-aftra, hotel strikes to withstand it. lisa: when you point to that era in california for example, a little strike fever is kind of when the economy did just fine, it was at a time when this was coming to fruition right now, actually the rate being borrowed at. and when people get concessions, right now it is not for the vast when labor unions get majority of consumers and concessions, other industries corporations. and labor unions say maybe we in the u.s. they are not paying should do that too or we can do those rates. that. it is not a frivolous decision have we really felt the effects of the monetary policy tightening, or is it a long way but a strategic decision. away? i think right now the democrats dan: definitely have not felt have no choice but to go all in, even though there are the impact. significant ramifications for the challenge for the fed is them on the economy obviously. when will it, and how long will we don't know how far it will it take. spread outside the rust belt but corporations, there was quite on environmental and climate enough to take advantage of change, if you're going all in on electric cars, which the big rates when they were low. three seem to be doing an joe they consequently do not have biden is doing, you have to pay the sensitivity to the moves and rates he would have historically political consequences with the workers and unions that are which goes back to your point worried about those changes. about resilience. tom: that's exactly where wanted it will happen but i think it to go. we are seeing in real-time for will happen slowly enough we do those not up speed on the london not see that is a major risk. lisa: do you think the levels we ballet besides jon ferro's

are seeing now are the new interview. levels we will see for the there is a raging debate in this future? dan: probably not quite this nation about the broader esg. high but something with a four is that going to trip up the handle makes complete sense. democrats like it is tripping up if the u.s. gdp growth is 1.75 the conservatives and indeed some of labor here in the united or so and inflation is two or kingdom? prof. schiller: i think this is more it is 4%. a fantastic point and i do think it is a vulnerability for the what happened post the democrats. downgrade, levels now seem much this is the problem with having highly educated people who were more sensible than what we had when we were below for. about climate change but do not jonathan: do you since the fomc work in labor industry like autos and a lot, meaning is confused? dan: i did not know if i would thousands and thousands of autoworkers in key swing states use the word confused. that you depend on the industry why do you say that? for the livelihood in the same jonathan: did you get a party, the same political party. how you meet the needs of both satisfactory explanation? dan: if you want a perfectly major constituencies going to 2024 is coming -- testing right coherent story -- now today when we think about jonathan: you seem somewhat where the administration would democrats owe come down on this mystified by how resilient this strike and how long it goes and economy has been. whether there is additional they seem somewhat mystified. economic and outside the audit i think if you asked any of us industry and the rust belt 12 months ago what 5% interest states. lisa: this is splintering the rates would do to the u.s.

economy, would not have unemployment with the three democrats and we see a splintering in the republicans handle. around the government shutdown dan: i think that is pretty with rebellion. some people call it against widely shared and it is house speaker kevin mccarthy. present biden's viewing this as justifiable as we've have never had the scenario we have had an opportunity. it seems his team things this over the last three years. will be beneficial to him. jonathan: why is the consensus he tweeted out over the weekend or xed out, last time there is a view we are sufficiently restrictive when we are also mystified by how the economy is government shutdown 800 american responding? -- 800 million americans -- dan: it is more response to what we know. 800,000 americans were if rates are at a restrictive furloughed. prof. schiller: i don't think a level now. shutdown is ever a benefit but the basic principles of it does happen to be the case economics will still hold. it is just how quickly, that is that most of the time, not always, the president wins on where i think we have been much this or when you are a democrat more challenged in understanding. tom: bnp paribas has been so give or take or trump who won for little while and then caved good about nominal gdp at the last time there was a shutdown. estimates, taking the real gdp the counterexample is 2013, a and overlaying inflation numbers very long shutdown under obama on it. administration and democrats do you frame the united states lost the senate 2014. as a sub 4% nominal gdp? it is the most offensive dan: conceivably. political shutdown for the democrats and republicans shut the government down so people has the long run trend rate who remain in charge on the

wrote in the u.s. changed in a senate side, ted cruz and people like that, but the newbies in fundamental way closed -- post the house, they know they may global financial crisis, not pay up political price for post-pandemic. the shutdown because republicans we do not want to forget the in 2013 really shut it down for long time and did well. longer term trend issues the u.s. faces. so the jury is out for the time if there is an argument for the the executive branch wins growth rate to be higher, it because government fails. comes back to ai it does not work anymore and the fundamental challenge the constituents are harmed i that u.s. faces, europe faces, japan and they didn't touch with their local congressional office when they are upset about a shutdown. faces come is lack of labor. they don't reach the white house. in that sense, i think if this is a way to increase republicans can do this but not indefinitely and that is what productivity that is one way blinded is trying -- biden is that gets you to the 4% level. tom: i look at this as the arch trying to wait out. lisa: it's difficult to suppress issue. my frustration because i feel like we were just here, we were just here not that long ago and greg battle is more the more i read about the enthusiastic. mechanics of this it does not do you share his enthusiasm? seem like we will get any dan: we are more cautious. resolution anytime soon. how long could this potential shutdown last if it does go it is an assessment of how adept according to how it looks right is the fed going to be at now? prof. schiller: there are two knowing when to cut rates? scenarios that we are looking if we go back to inverted yield at, one is the shutdown lasts a little while and people come to curves saying a recession will the table and they resolve it come, that is fundamentally

because there are probably 150 votes in the republican party because the central banks have that want to see the government made a mistake and that can stay open. that do not want a shutdown. certainly happen again. the margin for the house majority is slim and the seats our concern is they will keep that are important to them are in callow and new york. rates too high for too long. that is a problem the republican already. the contest is -- the consensus kevin mccarthy, doesn't play this right, could be subject to estimates will not materialize. jonathan: the median projection oust the speaker movement and if that happens we have chaos. then the shutdowns will last if we were going to ascribe a longer and that is the nightmare narrative, they are telling us scenario. even if biden want to political we could get back to 2% with discord, he does not biden unemployment a little above 4%. dan: we are not quite that optimistic. jonathan: dan morris of bnp administration, they do not want to undermine mccarthy so much he paribas. collapses because then we have it is a nice story. chaos. tom: quickly here, professor, they are just projecting it out. obvious southern rest of the it is an objective, not the country is a generalization, baseline, so our projections are partition of republicans. not forecasts, their how in gods name do they hold a aspirations. lisa: it was not a coherent convention next summer? message, i think we can all how do you get them all into a agree. coliseum? the p question is where are they wrong? is it how much inflation will the gentleman of arkansas gives

six votes to jonathan ferro. come down or how much the republican discord right now unemployment will go up? a lot of people in the market -- how do you get to a seem to be saying it is the convention? strength and that is one of the prof. schiller: you don't have reason yields in the long end to have a convention. are rising so much more. that is a traditional thing the there is a question whether that parties do. is getting embedded in market you don't really have to have an expectations. tom: at one time and place there in-person convention anymore. politics has changed so much were aspirational smoke signals that it is unclear they won't coming out of his pipe. throw the whole thing out. if trump looks like the dominant all of it is predicated on candidate and he is winning massively by march, they might guessing and forecasting data just virtually declare in the dependent, and by definition is winter. daniel correct? they don't even have to go to milwaukee. lisa: you want less information? they go to milwaukee because they need wisconsin but generally speaking they don't tom: i would like them to be have to do anything anymore so all of us who are looking for more surgical about the too much these normal traditional party information. practices, with trump at the we have three fed speakers today? helm, i don't think anybody why not a fourth? should be betting on anything we used to do. jonathan: it is so true. jonathan: it is right to convey there is a debate in five days the appropriate dose of and i will be talking about it uncertainty that surrounds any and the former president is not forecast. going to be there. i think we need a sophisticated tom: it's the way it is. conversation about the jonathan: wendy schiller, thank underlying dynamics but we are staying confused and at the

you. cannot think of it single-story moment it seems they are confused by how much this labor that i get frustrated more about. market has stood up to the you wake up every morning and interest rate increases which you see the latest, i don't want makes me wonder why we have any to click on it, don't want to read it, don't email, don't want degree of confidence whatsoever. to research on it. that is the conversation we have i don't even know where we are in it. lisa: we are less than 10 days to have with yields where they are at 4.50 on the 10 year. out. libby cantrell things maybe this welcome to the program. time markets will wake up. tom: -- the surveillance i with equity futures positive .16%. coming up, sarah malik of new amh and joe mathieu, can you imagine in the given factory? been. -- of nuveen. lisa: with cheese hats. tom: that's why you go to amrita sen with that call on milwaukee. triple digit crude by halloween. the pabst blue ribbon museum. lisa: that is what that means. maybe that is the story just around the corner. max kettner of hsbc still super ♪ p inside? constructive and saying we need to focus on what can go right. ♪ when you see moves like this in discover the magnolia home james hardie collection. the bond market sometimes you cannot help but think what could available now in siding colors, go wrong? styles and textures. lisa: that is the reason you're curated by joanna gaines. seeing people's eltek. we're not writers, -- you are seeing people sell but we help you shape tech. your financial story.

♪♪ you strip those out and you are we're not an airline, but our network up less than 2% on the year. connects global businesses across nearly 160 markets. tom: i will look at standard ♪♪ we're not a startup, but our innovation labs deviation moves. use new technologies to help we are all addicted to normalcy keep your information secure. and up. ♪♪ we're not architects, but we help build the answer is you are allowed to stronger communities. collect -- you are allowed to ♪♪ we're not just any bank. correct 10%. we are citi. ♪♪ we have not seen any pain. what was it yesterday? the vix went 14 to 17, down 3%. that is another day at the races. jonathan: we have not had a move like that for six months. tom: dow jones industrial average like a rock. jonathan: it has been fairly newsy. mohamed el-erian said do not cot a banking crisis. tom: -- jonathan: annmarie hordern in new york up next. (aidyl) hi, i'm aidyl, and i lost 90 pounds on golo. we are citi. this is bloomberg. ♪ i struggled with weight loss and weight gain my entire life.

with all the yo-yo dieting i did in the past, i would lose 20, 30, 50 pounds just to gain them over and over again. thanks to golo, i've been able to steadily go down the sizes in my closet and keep the weight off. for the first time in forever, i feel in control. (announcer) change your life at golo.com. that's golo.com. i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app. can i sleep over at your new place? can katie sleep over tonight? sure, honey! this generation is so dramatic! move with the xfinity 10g network.

it's possible. with james hardie™. ♪ (captivating music) ♪ (♪♪) the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪) did we just get hustled? there's no way they were 70. -in hybrid. electric for short trips... gas for long. is bot ♪ pres. biden: the people of ukraine are steeled for this

struggle ahead in the united states will stand with you. i approve the next tranche of security assistance to ukraine including more artillery, more ammunition, more antitank jonathan: heading towards a third week of losses on the s&p 500, trying to balance, not to buy this morning. it is better compared to yesterday. equity features positive by 0.2% on the s&p 500. on the nasdaq, up by 0.4 on the s&p, potentially the worst week since march after the biggest one-day loss in six months on the s&p 500. andrew wise in the bond market, as it often is, two-year, 10 year, 30 year, to your pushing 520, tenure briefly today going through 450. yields back in a couple basis points, 4.4763 on a 10 year.

tom: this correlates over to everything including the equity market or commodities. brent is taking a breather. ed morse was fascinating about how he reaffirmed to the lower oil price with lisa the other day. i will go when there is tension like this, whatever the tension is you have this we can, whether you are a student or not, you have to look to the foreign exchange market. that is the deepest market. jonathan: yields up, stocks down, dollar stronger. let's pick on the euro, the euro 10638. not a big move today, -0.2% but we are heading towards, poised for a 10th consecutive week of your weakness. the data is not on course for either side of the lente. on the u.s., strong, in europe not decent not strong. lisa: it's u.s. story, both sides but it is u.s. star because you can see this going to the strongest levels, bumping up against there and you can see it is broader than just a

european story. everywhere else seems to be seeing weakness as the u.s. is sort of -- we are doing great, we don't see the problem. jonathan: let's talk about central bank decisions, three hold across the board for major central banks this week. the boj, haven't talked about it yet, during the boe and fed leaving rates unchanged. the governor saying a you to rate hikes speculation because we are not in a state where inflation accompanied by wage growth sustainable and stable inflation is insight. we are patiently continuing with monetary easing under the current framework. so no change there at all. lisa: even though a little bit before they put out the statement, cpi in japan came out, hotter than expected at 3.2% versus the expected 3% year-over-year so at a certain point it is creeping higher, they also have the yen that is getting weaker, the import inflation, they say it almost reached a peak. at a certain point, nobody believes many more. will this be a massive credibility issue as people game on intervention? tom: we will do an entire

discussion on bank of japan what i notice is the meeting comes out in london. i can't remember what time it is like they are coming out and then i see formula one in tokyo start to like 11:00 p.m. or 1:00 a.m. in the morning. what is that about? jonathan: i was watching some of the times. tom: yeah, coming from singapore. jonathan: i'm sure last week hurt. i'm expecting a dominant effort from staff as we can. as a biden pledging more aid to ukraine after meeting with president below 300 when he $5 million aid package come from funds already approved by congress. more funding to ukraine is becoming a sticking point as speaker mccarthy looks to strike a deal to avoid a government shutdown. lawmakers are leaving town for the weekend as the september 30 deadline approaches. if i sound frustrated it is because generally i am. lisa: which aspect of it, the questions over --

that we are always shutting down. jonathan: you know? lisa: that it is held out a political football. 800,000 people had to get paid and we might not get economic data to discuss or parse through. this is a concern for a lot of people, particularly the federal reserve. if they are data-dependent and do not get data, what to they do? jonathan: we have great guests around the table. rupert murdoch stepping down as chairman of fox news cop and his son will take over as head of the media empire. elder murdoch is not leaving completely, he will serve as chairman emeritus of both companies. is that kendall royale and roman gets the job? tom: i don't know the politics of it. jonathan: do you want succession? tom: i watched where they called up and said you were on it and it was like the tv is six rooms back. jonathan: you did make an appearance. tom: it was just great. i'm sure all of surveillance did as well. the answer is ok, there it is

and can we just stop and say this it's maybe the transaction of modern financial history? him rupert murdoch -- i am rupert murdoch and i want to jettison this dog to disney for 70 billion plus transaction of our lifetime. lisa: it's interesting because it is succession and locklin is getting it for now but when rupert passes on, there is a question about the rest of the family, especially because they disagree with the politics. james is, and then really adamant in his claims against it. it raises a question at a time where it has been stripped back to just news and sports and so the news part of it will be interesting. jonathan: did you watch succession? lisa: i did not. jonathan: i can't believe. lisa: i don't want anything. jonathan: great story on surveillance. thanks guys. tom: joining us for the most important news of the day, jordan rochester, strategist at

amera. i have one basic question. i'm told i can knock it back in a plane and go back to new york unless i get a 119 print on sterling. how quick is the prime minister going to get me to a 119 sterling? >> that is something that can happen before year end. the moves are not as rock 'n' roll as last year. we don't have a moment to get you that move lower but we were at 1.18 in march so it is possible at 1.19 we could talk the next six weeks. jonathan: euro, a call early this week on this program, jane foley said maybe. where are you on that now? jordan: is that the call? it is deftly maybe but that requires the next guest to tell us about oil, christian, and if oil goes to 100, we get to 105, maybe one of four in europe but to get down to parity we need the energy squeeze that will hit the trade because the euro area has a lovely count once again thanks to lower natural gas so we need a cold weather forecast for october. jonathan: so things need to go

wrong in europe. we have done enough in the europe's -- u.s. side. jordan: in the next two cpi prince, oil is up 7%, gasoline futures are down so we will not get a hot cpi rent that we got for last month. we have not .6 month x month and next month could be not .2 for headline. if gasoline futures were to spike back, we have another hot cpi for the u.s. and another if oil goes to 100 area did then you could be talking parity in europe from a u.s. perspective. lisa: when we talk about dollar strength, is it a dollar story or everything else story being week? jordan: it is both. the dollar is strong because we had basically inflation, not just energy prices going up but these uaw strikes were interesting, seeing signals car inflation could come back so it is hard for the markets to look for a dovish fed right now, especially continuing claims falling lower once again. we not seeing any material job layoffs in the u.s. and then that is the u.s. side, in europe

it is around us in terms of growth. u.k., we had one of the biggest falls in the employment index and the pmi today so it is quite clear unemployment is rising in the u.k.. we see softness in german labor markets as well so it is always both because currencies. the european data for growth and employment. lisa: what is the level of strength for the dollar where it becomes disruptive? jordan: in terms of destruction, we are already getting close to those levels. that will be a disruptive level for sure. jonathan: oil, i want to talk about crude and the move we have seen. you said maybe if something goes wrong with gas, what about brent and wti? what about that? we are in the 90's on brent. doesn't that change things for europe? jordan: it already has. the first half of this your when energy was week, i thought we could zero -- euro finish higher. that is completely changed. i did not expect and above 90. jonathan: you change from 115 to

105? jordan: because a brent for sure. macro has had a tough first half in the year because euro has been a yo-yo. everyone gets excited at the highs and lows and gets out chasing their tails i think we will see of proper breakout. affects lacked a trend in the dollar and now we get a trend thanks to the energy story. last year it was things to vladimir putin we gotta be trend in the euro and this year it is thanks to nbs and saudi arabia. lisa: why isn't the end labor today? jordan: because you haven't had a hawkish move from the bank of japan peered without the forward guidance would change and the forward guidance says potential additional easing could be used. that was odd given what we thought it would shift a little more hawkish with his article from two weeks ago and then the may problem from dollar-yen is it is easy to say cost of carry is expensive to be on the and so don't buy it but he of the ministry of finance threatening affects intervention risk and we even had softer words from u.s. treasury secretary ellen about

maybe japan can hit its peak. she did not say that exclusively but she has softened. lisa: so we could look at the end and say no one wants to bet against the central bank and foreign intervention that they are likely to deploy but it has nothing to do with the differential at this point between the monetary policies. jordan: it has everything to do with differential and if the threat of intervention was not there would be close to 150. if the idea of the boj turning hawkish was not there, we would be close to 150 but because of that threats, we would be reluctant to get into that trade but if you look at the cost of carry, it was higher than last year when we were at the same levels. it is deja vu. i was september, and new york hours, the ministry of finance came in and intervened at dollar-yen around 150. if you like deja vu as people are reluctant here. tom: you and i are in the same page. first thing the morning i look at different pairs to four dozen points to see where swiss franc is an signal strength.

you say switzerland stock is chf is a trade to play for long swiss frank. start with that. jordan: we always have our main sterling views within you have to talk about rv. long switzerland, short sweden. switzerland has seen massive appreciation of its currency over the past year but i think that is a trend that carries on. we go for a period of adjustment for switzerland. last year, before they started raising rates, it was -75 basis points. we are now around the 150 and 175 on the front-end. you are getting paid for holding swiss were last year you were charged. the banking repatriation flow back into switzerland, though swiss banks for lending to american corporate's, european corporate's. they are not going to do that next year because they have nice yields at home so we see a lot of the money come back into swiss, boosting the currency in the second reason is when growth slows down, you go longer swiss.

tom: s&p to me is almost a sovereign wealth fund and the equity ownership they have, particularly the position on apple as well. does their equity stub within the central bank, does that preclude usual strong swiss dynamics? jordan: i think that some be is taking the view that we are happy to take a loss on our reserves. they are selling their foreign holdings as well so they are consistent sellers of -- they are 18% bonds, 20% equities of the largest part will be in the fixed-income space but we see 11 billion of intervention per month on the swiss. tom: give me a level on euro swiss, the current pair, .95 4.94? jordan: it's easier to trade the swiss talkie then euro swiss. euro swiss i've stayed out of it because of non-macro currency pairs. jonathan: euro swiss, swissie stuckey, the most london thing i've heard all week. tom: we've gotta bring these

people in. i've got jordan rochester here and we've got a bring our ethics people in. they stop me today and they're watching in singapore every evening and there watching and popping ethics trades and single or off what we are blathering about so i have to go to rochester to get romance in it. jonathan: can we just finish here? that is sweden versus switzerland. on the swiss side, the haven currency on the growth slowdown, using money will go back there. who else is in the bucket because it used to be japan. what else is there? jordan: euro. that is why the euro has not been thrall. we have better trades, sterling versus the dollar is a better trade. the way we play euro is short bro -- short euro versus cad area we are having banking repatriation for a long time. german banks in france banks had negative interest banks in american corpus asking for money, let's lend abroad and

let's -- that is reversing. tom: do you have a level in dxy where you wake up and say dxy 107-110. what is the prism you have with dxy where things change? jordan: for the fed to have an impact -- tom: for us, people in the market. jonathan: you have 10 seconds to give us a number. jordan: 1.10. jonathan: thank you. jordan rochester there. coming up, on the committing market, global head of strategy at jp morgan, that conversation up next. ♪ explore endless design possibilities. to find your personal style.

endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

weapons, next week the first u.s. abrams tanks will be delimited to ukraine. jonathan: joe biden speaking in a meeting with ukraine's president. annmarie hordern from new york in just a couple of moments. equities trying to bounce positive .2% on the s&p.

yesterday the biggest one-day loss going all the way back to march. we moved on from that pretty quickly. if i told you in early march that cycle highs on bond yields were in our future i'm not sure what you would've said back to me. 5.20, got close to it. 4.50, a little look at it. 4.4864. yields almost unchanged on the day. lisa: ben carlsen pointed out that the pandemic road -- the pandemic close for treasuries -- the pandemic lows for treasuries -- he says it is kind of crazy nothing has broken yet. when does something break or does it not break because this is the new normal? jonathan: something to break back in spring. the banking system started to break, intended? lisa: which was quickly remedied.

what we have felt the effective policy makers had not stepped in to ease the fissures that happened during the banking crisis. jonathan: i always go back to torsten slok at apollo. he has delinquencies and bank lending. all that stuff in there. you are seeing that tightening start to come through. you're not seeing it in the mortgage market. we can talk more about it. this is the reason the likes of andrew hollenhorst at citi says the housing market does matter and that could contribute to inflation. that is why the federal reserve has so much uncertainty because there is the risk those things materialize and they do not want to entertain any conversation about rate cuts anytime soon. lisa: at the same time there's not a lot of discussion about raising rates further. there is a tacit understanding they have gone as far as they go. jim bullard was saying he does not believe in lag of facts.

if he does not believe in that you have to assume rates should be higher if we have unemployment rates so low and jobless rates lower than people have said. tom: that was an incredibly important statement, the idea of taking a model from the 50's and 60's from a goods and services america and bringing that monetary timeline up to the modern age. jonathan: credit to bill dudley for writing that column in the summer about a month before jackson hole he was raising the question, raising the question whether we had already seen the policy come through. tom: we will do the shutdown but we need to look at something shopping. margaret collins in washington reports in conversation with mr. zielinski that there may be a winter war in ukraine. annmarie hordern is very familiar with continental european seasonality. i was shocked by peggy collins

story. the idea of auto, i will take it , but we will have a winter war in ukraine? annmarie: what you see from bloated near zielinski is that he wants -- what you see from president zelenskyy's he wants to make the point that they will not stop in this counteroffensive and they want to continue to retake these cities regardless of how difficult it may be with the harsh winter you see, especially in eastern ukraine. peggy collins, our bureau chief in washington, d.c. was part of a group of reporters that got to speak with him. i was more taken, and i know they were pressing him with the conversation with you and speaker mccarthy, and the quote was in their private meeting house speaker kevin mccarthy said they will be on our side, according to president zelenskyy when he sat down with these reporters. jonathan: this is a wartime leader in ukraine and i think we

have to say that upfront. from purely an observational standpoint, not a judgment, do you sense a degree of frustration with the leadership of president zelenskyy within certain nations in europe and across washington, d.c. beyond the obvious places? annmarie: i would say this goes beyond europe and washington, d.c. anyone who has been giving this individual help in the meetings they have had, there is frustration for how much the ukrainians asked and also the fact that these leaders are dealing with an electorate that is growing uneasy. there is a sense of war fatigue that they are all dealing with. many are also dealing with upcoming elections. this is a difficult one for zelenskyy and a difficult line for him to walk, especially as we know what vladimir putin wants to do. putin wants to keep this going

until the u.s. election of next year. president zelenskyy knows he wants to keep the pressure up when it comes to the aid he is asking for. when you are not making a tremendous amount of progress in terms of the counteroffensive, the messaging becomes very difficult. lisa: how much is eight ukraine part of the debate factoring into the shutdown in d.c.? annmarie: it is factoring in a lot. yesterday one of the key things to watch out for was the vote at 10:30 and this was just a vote to then allow the defense bill on the floor to debate at. our kailey leinz spoke to marjorie taylor greene who voted no and she said this was because of ukraine eight. she said it is because of ukraine aid and if you take the ukraine aid out i would be ok with debating the bill. that vote was going to show how

united mccarthy's party and his caucus is when it comes to keeping them together. they cannot even get a bill on the floor to debate so you can see how far apart the centrists are in his conference and some of these hard right members. ukraine aid is one of those sticking points. tom: you -- lisa: do you expect there to be a vote of confidence with kevin mccarthy. it is yet risk of losing his speaker role? annmarie: potentially. you have the likes of matt gaetz who says he wants to begin the day with a prayer and a motion to vacate. this will become clearer depending on how the continuing resolution plays out. likely there will be a government shutdown. likely you will have to pass a clean cr and then that will be a moment where you see individuals on the hard right say you've not delivered for us so we do not

want you as our speaker. tom: that is an important distinction. you are stating that you frame a shutdown as a likely occurrence now? annmarie: yes. speaker mccarthy has sent lawmakers home. they are not even in d.c. to vote. some of them have left. they are home until next week. the government runs out of funding september 30. jonathan: amazing. amh, thank you. lisa: he loves talking about this. that is sarcasm. jonathan: i really don't. lisa: i am right there with you. jonathan: it drives everyone crazy. maybe they do shut down. maybe you slam the brakes on a solid u.s. economy. tom: i grew up in a house where there were hysterics about the debt and the deficit.

a shutdown is not the same as an argument about the debt or the deficit, trillions of dollars, we are all going to die. a shutdown affects people who do not have the luxury of going to a font of savings to get through whatever. millions of people, and some in medical. jonathan: some people going to work and not getting paid. tom: i want to petition this over to a shutdown, which is absurd. jonathan: let me get you the next 35 minutes. george sarah bellows of deutsche bank will be joining us. dollar strong against the euro. interest-rate policy. the difference between growth in europe. growth in america solid. then we will catch up with the capital economics founder. a good friend of this program. that is in the back half of this

hour. tom: you think he drives in ev? jonathan: equities trying to bounce. from london, this is bloomberg. ♪ ♪ is it possible to fall in love with your home... ...before you even step inside?

♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. hi, i'm jason. i've lost 228 pounds on golo. so when my doctor told me i needed weight loss surgery, styles and textures. i knew i had to make a change. golo's helped me transition to a healthier, sustainable lifestyle. i'm so surprised just how crazy my metabolism has fired up. i have a trust in golo 'cause i know it works. golo isn't like every other program out there, and i'm living proof of it. (announcer) change your life at golo.com. that's golo.com.

jonathan: potentially the worst week since march. heading towards a third week of losses on the s&p 500.

equity futures up .2% on the s&p. what are you two talking about? up on the nasdaq. futures doing a little bit better. lisa: just because the market is down does not mean someone saying it is down is gloomy. they are just reporting the facts. tom: we all fly on different airplanes. jonathan: let's turn to the bond market. two year pushing 5.20 earlier this week. the 10 year pushing 4.50, coming back by a basis point. these are yields we've not seen since 2007. a 30 year yield now looking at 4.60. big moves this week. cycle highs on bond yields. resilience in the u.s. economy, no resilience in europe. the euro is negative against the

u.s. dollar for 10 weeks. the euro 100 639 down .2%. the data out of europe, ugly, brutal, not nice. different shades. maybe there are different stories. the answer is they do not have the dynamism of the united states. where are they in november? where are they as we drift into winter? jonathan: this is what we were talking about with jordan rochester. you get the pickup and gas prices, that is a toxic brew. three holds across the board. the boj joining the boe and the federal reserve in keeping rates unchanged. governor saying we are not in a state where inflation accompanied by wage growth, sustainable inflation is insight. we are continuing with monetary easing under the current framework. the boj.

i thought he made some comments that if wage growth remains buoyant they will have a look at moving away from negative rates. what happened to that? lisa: jp morgan thought by the end of the year they could be back to negative rates and by next year they can abandon yield curve control. how much are they getting covered from the fact he does not have to say anything and people are just quavering under the fear of some sort of foreign exchange intervention? tom: there are different inflation metrics and other ways to slice it. the answer is when we say 3% or 4% inflation it is not the same as 3% or 4% inflation in america or europe. that is a whole new world for the people of japan. that is high inflation. behavior and politically. jonathan: should we say that is like six? tom: i have not done the work

but you can make that study. you can do it on the bloomberg if you would do a double chart over light. jonathan: let's get your update on the big three automakers bracing for more walkouts as they remain far apart from the uaw. the union president expected to make an announcement through facebook live at 10:00 a.m. eastern time. the deadline is midday. the deadline of the uaw is never midday. there was a midnight deadline and a 10:00 news conference. if you don't have your stuff together by midday -- tom: where the automakers? am i surprised i have not heard massaged statements from various automakers? lisa: they have talked about how

it is unaffordable and the 30% wage increase is not affordable. what wi-fi -- what i find interesting is it is not about the salary, it is not about the take-home money. it is about job security. we need to keep jobs in this country. they are taking billions in tax incentives but when it comes to keeping jobs they will not guarantee anything and that is at the crux of the debate. jonathan: job guarantees. stakes are higher. the ev transition will not be straightforward. apple's newest iphones and watches went on sale in about 40 countries including australia and china. sold-out preorders and long lines. we are still doing long lines? lisa abramowicz will get a new iphone 15. lisa: only because i cracked my existing phone. i will not be waiting in line. jonathan: why are they still doing that? lisa: it generates excitement.

jonathan: why do you want to do it as a consumer? lisa: you can hang out. you're the first adopter. jonathan: does that still cool? it is pretty sad, isn't it? lisa: if you're with your friends and you were talking it gives you something to do. i am making a pitch. tom: i've been in that store, now that you mention it. i'm just taking it in because i think what dan ives would say as a bull on apple is it is not been 1100 or $1300 or $1600 transaction because you are slipping into it for 36 $.42 a month -- $36.42 a month. i take issue with the snob is him of a lump sum purchase. it is not --

jonathan: this is paid, we are done and dusted. tom: then he can slip into a new one. jonathan: i am not upgraded until they ruin it. tom: george's about to walk out of the room. should we get to our guest? joining us is george saravelos, global head of foreign-exchange research. we had jordan rochester. you take a starkly different view. selected firms saying swiss franc dominant. you go the other way. why will the swiss franc weekend and other currencies will prosper in this time? george: thank you for having me. we did just publish our outlook for the end of the year and we have been very bullish on the swiss franc for more than a year. this is the first time we switched. there is a couple of reasons. the most important is the central bank.

they came out yesterday and said inflation is below target and they think they are done. the fundamental reason why the swiss franc has been so strong is because of the central bank supporting it. it is starting to look more attractive as a funder, it is looking expensive, that is why we are changing the view. tom: in the last 72 hours, real yield in america but many other indicators, is that the ultimate fake out rally in yields setting us up for a general global disinflationary trend? george: this has been the big question. when does the u.s. low? the key question is why isn't it happening? there are theories around exceptionalism, ai, but if you look at the data is the fed rate hikes are not being passed through. corporate interest payments are

going down because everyone is on a very fixed term borrowing in the housing sector. fixed mortgages. the slowdown will mathematically come, but it is taking a very long time. jonathan: are you seeing a cleaner quicker transmission of monetary policy in europe? george: absolutely. if you look at average mortgage rates in the u.s. they are up 20 basis points since the rate cycle started. if you look at sweden they are up 10 basis points. what is going on in the market is quite different to the real economy, and this key question of transmission is what has affected this currency divergence and will matter a lot going forward. jonathan: my observation it is -- my observation is it is quicker and cleaner. can you help me understand why it is not bringing down

inflation? it comes out of the central bank then his growth. inflation falls. that is not happening. why not? george: inflation has actually been surprising to the downside. in the u.s. inflation is doing better in terms of deceleration and that is because the supply side is improving. in europe there is a lag, but if you look on the month on month numbers, and the u.s. everyone reports inflation numbers in month on month terms. month on month inflation europe has also slowed down. it is coming down. i would say that is one reason we have the ecb topping out in the ecb sees that as well. lisa: why are you bullish on the euro? george: and the peace we just published we are neutral. the reason is the u.s. exceptional list story because of delayed pass-through. if you look at europe increases are being passed through very quickly.

most corporate have their loans against banks. that is what is impacting growth. the question is when does that catch up with the u.s. we do not have high confidence. you are about to go into a very soft landing or a hard landing. therefore we are pretty neutral europe. lisa: why wouldn't you be negative? why what you see more dollar strength ahead? george: if you look at relative data surprises they are quite extreme. the market is pricing u.s. exceptionalism versus europe. the pmi numbers surprise to the topside excluding france. potentially the market is getting a bit too pessimistic on europe. if you look at rate pricing, it looks extreme in terms of the divergence. jonathan: speaking to that issue , being neutral sounds bullish. lisa: that is exactly what it is. george: i would give you one example.

people talk about part exports and how china is taking market share and everyone has this chart of china's car exports going through the roof and no one has european exports, they were up 20%. if you look at the euro weighted index it is at record highs. the point it is not the euro that is weak it is the dollar that is strong. the euro is actually strong. jonathan: within 24 -- tom: within 24 hours of the invasion of ukraine it was said there will be a fiscal stimulus in europe. it is the austerity mindset still within europe or are we going to see a fiscal renaissance in europe? george: it is definitely changing. this year you are seeing the peripheral economies, italy, spain, doing better because of the fiscal stimulus. fiscal is one story that is supporting growth everywhere. to answer the point on inflation

, inflation is coming down from supply-side but growth is holding in because you are still seeing delayed fiscal. given the growth slowed down i doubt we are going to austerity anytime soon. jonathan: this was awesome. it was always a clinic. should we move back to london? lisa: is this the royal we? we will all go to london? the timing works a lot better. jonathan: doesn't it? don't you feel rested. wake up, have breakfast. tom: for those of you in america , the polarity between new york and london has never been greater. jonathan: we will talk more about that. welcome to the program. equity market positive .2%. in the bond market yields unchanged. through 4.50 briefly early on this morning. we love our audience writing in. people standing in airports

lines to make money in the resale markets, selling them into other countries. thanks for writing in. tom: a lot of people writing in on your interview. i think we will play a little bit of this and the 8:00 hour. why did that make global headlines in 60 plus entities? jonathan: because he rarely talks. tom: how did you get him to do that? jonathan: we worked on this for a long time and we finally made it happen. tom: did he give you seeds? jonathan: i don't get anything in return. the interview was the gift. tom: the fact that he never -- i did not know what to expect. i had never seen the guy. it was fascinating. jonathan: i think he was pretty open about what the club has gone through. he is in a more happy place to talk about the football club because they're doing so well. tom: wright went mental.

he saw what you did and it is like who is this guy. let's get jonathan ferro, match of the day. tom: i got some feet -- jonathan: i got some feedback, they wanted the blazers next. we will try to figure that out. ♪ it's possible. with james hardie™.

>> the community left the additional rate hike this year in the dot plot. i think that may be a good thing to do as insurance to make sure core inflation continues down. the risks are building that inflation could hang up at a higher level or you will go higher based on the idea of avery acceleration of the u.s. economy. jonathan: that is the risk of jobless claims in the last day or so. that was jim bullard, former st. louis fed president sitting down with michael mckee earlier this week.

the moves off the back of that risk of hire for longer and every acceleration inflating story in the united states lifting yields higher on the 10 year. getting really close earlier in the week to 5.20. dollar stronger. equities down yesterday. futures positive .2%. in the fx market, talked about this number a few times, 10 consecutive weeks of your weakness against a strong dollar. the euro against the dollar 1.0 639. tom: when we invented surveillance it is all about what we just witnessed. the raging market debate that is out there. jonathan: constructive europe. the word neutral is constructive relative to the bearishness we have had all week about the apartment, particularly off the

data we saw earlier today. tom: this is an important part of rescission whatever your politics. roger bootle joins us now, founder of capital economics. he is a conservative voice in the united kingdom. we talked to him now big time, going to rip up the script of what we have observed in the london battle of the conservative party, may be in ascendant labour party. tony blair talking up labor to a great extent. do you drive an ev? roger: certainly not. i do not drive. i do not need to. tom: for our american audience, london is under a debate encapsulating 2025 united states, is that where we are heading? explain to our global audience how psg and the timeline -- how

esg and the timeline of the distribution of electric vehicles has been crushed by the conservative prime minister. roger: this is really interesting. a succession of conservative governments following on the mission begun by labor lay down a very tight schedule for a series of green anti-climate change measures including electric vehicles, heat pumps in houses. it has been an extraordinary episode. we know the ambition is fine. we want to get to net zero. getting from here to there has always been difficult. it was not clear we could do that with existing technology and it was not clear what the costs were. i think british politicians have played fast and loose with the public. jonathan: jon ferro has been way out front on this talking about the virtue signaling. the telegraph mentions rob henderson talking about the elites and how they look at

luxury belief and lecturing. this translates the western world. we know what we are doing, trust us. is that under threat right now politically? roger: absolutely. i think it is very interesting what the prime minister has done. i think he has been late. plenty of people in the conservative party have been urging this. he has realized what the electoral penalty might be. labor has taken exactly the opposite tack. we are beginning to see the emergence of clear green water between the two parties. jonathan: i think this is important. this is not about denying climate change. this is not about that whatsoever. this is about being transparent with the public about the cost of the transition and i think the point you are making his we are not being transparent enough about how costly this might be. can you help us understand how hard this will be? roger: i cannot put the numbers on it.

what ordinary people are being asked to pay as an extra $5,000, 10,000, 15,000 pounds. the dollar amount is not much larger. for well-off people this is chicken feed. for plenty of people this makes all the difference between a livable life and penury. it has been not a very edifying episode. politicians living off hope and promise and aspiration rather than getting to grips with the nitty-gritty. this is not denying the climate change. there is another aspect that is very important. a lot of people do not realize britain has been in the forefront of cutting emissions. they have cut them substantially. the big emitters are elsewhere in the world lisa:. maybe there is uproar from the financial situation the united kingdom has found itself in. people in the back rooms are saying is because of brexit and

importation of a lot of inflation and the lack of trade deals. used off. -- you scoff. roger: if you did not know i was a brexiteer but even if i were not i would find it tiresome the number of times people trot out brexit as the inflammation for everything that is wrong in this country. there is plenty wrong in this country and there has been wrong for a long time. i think it is clear, even though brexit has had a disadvantageous effect on the british economy which i do not find surprising, i thought that would happen, the scale is minimal. look at the trade figures. look at how we stack up against other countries. germany has done far worse than the u.k. and has not left the eu lisa: some people argue the lack of labor is tied to some of the immigration barriers that have sprung up from that affair. you are shaking your head again. there is a question of what are those effects and how much does

that factor into the uniqueness of the inflation and slow growth the u.k. is in? roger: i do not think very much. the fact is last year we had record levels of immigration into the u.k.. absolutely massive. the differences now these people are also coming from outside the eu. there could be something to the idea that eu workers were particularly prominent in the hospitality sector and there is not a direct substitution. that is possible. there is something else. during this period where some sectors have been suffering a shortage of workers, public sector employment has gone through the roof. you might as well say the problems have been created not by brexit but by the over of the public sector. tom: 75 years, i am looking at a column of a given paper and the doctors are on strike at hospitals.

the nih -- the nia's -- the nhs is completely busted. what can americans learn from this? roger: the nhs is not the only health system outside the american system. i am not a great admirer of the nhs nor mi and admirer of the american system. australia has good system. france has a good system, where you are asked to pay to visit a doctor. if you are against your limits you can reclaim that amount. the idea is you are asked to pay. i think the british system, not having to pay for anything from is bonkers. tom: australia is the model. jonathan: the thing people outside the u.k. do not understand is you can still have

a private health care plan in the united kingdom. you can have access to the nhs and have a private plan. you will have private health care on top of your access to the nhs. tom: on a percent of gdp the u.s. is 60% or 18% and the u.k. is 10% or 11% or 12%. some might say the u.s. figure is too high. roger: one good thing about the nhs is it has helped to keep down health care costs. the problem with the u.s. system is you get massive inflation. tom: can you come back and talk about capital economics at some point. jonathan: we will start the conversation there next time. always a pleasure to see you. roger bootle of capital economics. taking the tension of things in the united kingdom. tom: i will be blunt. the newspaper debate, bloomberg

news, financial times, 47 other newspapers, it is so much richer. there are more units. mr. murdoch retiring. he invented it. jonathan: i would say this about the u.k. papers. i think they're far more transparent about their politics. far more transparent. tom: i look at page three of the sun and i learned about the british system. jonathan: saira malik is coming up. from london, good morning. ♪

♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. nice footwork. sman, you're lucky,. watching live sports

never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on thedear moms and dads,k. what you have achieved here today is going to help us and our futures. it is why we're coming up on stage to collect your diplomas. mom, love you always. vo: when you graduate, they graduate. visit finishyourdiploma.org to find free and supportive adult education centers near you.

>> think we roughly know what the impacts of monetary policy is so far. >> i think the real core question hunting markets is, what is the mutual rate? >> we are much more dovish then the fed and much more dovish on growth. >> we need a recession to really correct some imbalances. announcer: this is bloomberg surveillance bank with tom keene, jonathan ferro -- "bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning.

it is friday. things after three central-bank meetings. it harkens back to november 2000 eight. john, you are hot, then cold, yes, then no, in, then out. we are back to yields back when katy perry was telling us, you are hot, then you are cold. jonathan: did you just want to sing katy perry? tom: katy perry this week sold a publishing catalog to david rubenstein. that is what triggered in my head. and i thought, what was she doing in 2008? we are back to 2008, 2007, 2006. jonathan: i'm sure david pushes -- appreciates that. it has been phenomenal to see the two-year yield pushing 5.10

and the pushing 4.50 -- the 10-year yield pushing 4.50. neil dutta thinks maybe we are not. maybe the economy could re-accelerate. tom: george sare bellows making the idea of the granularity of month over month or three month annualized statistics is talks over there being disinflationary trends in place. he suggests disinflationary trends also in europe. lisa a: how big are they? are they enough to keep the ecb from hiking further? i think the big change this week is longer-term yields going higher. it is not being driven entirely by the front end and i will have katy perry in my head the rest of the day. cannot move past that. [laughter] jonathan: we have a bloomberg terminal in front of us and tom

keene is scrolling through the need -- through the lyrics. trying to figure out what song and what verse he will you -- will use. [laughter] do you have any more? tom: we are going to interrupt the show really quickly. there is a great photo on my bloomberg's with sir paul. one thing we do is to go to the newly opened national portrait gallery and say paul mccartney's black and white images of 1963 -- 1964. and when you are over there, she loves you. [laughter] lisa a: please. tom: saira malik is going to walk off the set. jonathan: equities positive by 0.3%. crude is in $90. $90 and $.67, up by more than

1%. and the dollar is stronger against a weaker euro. tom: saira malik is with us. chief investment officer at nuveen. prices down, yields up. should we be in the sense of frenzy or panic or caution or is this a normal adjustment we will survive? saira: the economic soft landing narrative is definitely being challenged and markets have started to price that in. and rates, of course. interest rates higher for longer and inflation higher for longer. long-term, a lot of cash still on the sidelines and so i don't owe market is over but short-term, be cautious. we like technology stocks and dividend growers. technology stocks are less

correlated to growth. they tend to perform well in markets that are going down. they have less downside capture. those stocks are cheap -- are cheap and could protect revalue income. lisa a: what you said is incredibly controversial today. you are going against everything everyone is saying at the time when you have time going down to such a degree and leading the declines. how is tech defensive at time when they could be interest rate sensitive and have exploded the big seven. interest rate stocks have driven everything we have seen so far in terms of the equity market. saira: september tends to be there seasonably worst month so not surprised to see that. they pizza in july but if you look at the tail winds for semiconductors and software.

first, artificial intelligence is a real trend and i think it will last many years. inflation has been increasing because of energy prices which we think will moderate after the age of swing have been. then consumer services spending continues to monitor the tailwind. we see the fed basically one and done. one where rate hike. it's got price out of the market next year was two rate cuts. we did not expect the rate because for 2024, but after fed pauses again -- two that come in the next month. also, looking at portfolio managers, they were underway some meta-cap tech stocks so you can see a lot of people stepping in and catching up. clients are holding still 25% of their portfolios in cash which needs to come back into the markets. lisa a: does it?

if you are earning 5%, maybe it looks pretty good. there is a question of whether we have seen rates that are now the highest going back to thousand 7, 2006 or 2008, depending on what you look at. are you saying we have seen the effects and they have not been too bad? saira: there is an opportunity especially when the inflation levels are where they are in the markets have done what they have done. markets are still well above cashier today. there is an opportunity for holding onto the cash and i think clients are feeling that out. for percent is a headwind for the market for the 10-year yield it depends. they need economic growth to stay strong. tom: this discussion on technology is so absolutely critical. a huge body of retails taking the story of institutional is not.

the gloom is rates are up and there is the arguments about technology. where in the income statement where you -- will you see text superiority? will they outperform in revenue growth or are you surprised with a better marginal free cash flow? saira: the answer is all of the above. the good news for software companies as they do not need to rely on pricing hour. rings will continue to moderate and software companies are affected by having to lower their prices. meta found this out when they were ahead of the curve in cutting their costs and other companies have followed. then strong free cash flow borrowers. look at broadcom with strong ability to buy back up to $9 million in shares. all of the above for these companies. tom: lisa is buying the new iphone today.

she also be acquiring apple shares at the margin? saira: apple is a company we have not been as bullish on. number one is the post-covid return to their growth. i am an iphone person myself apple has been pretty incremental recently. they are not as exciting but i am glad lisa is excited. these can be struggles for apple which has premium multiples as people have been a consensus holding for many investors. lisa a: i just want to set the record straight. i am not a line leader. i am not a rabbit enthusiast. i cracked my phone. tom: people are going to get online and go, oh my god, it is lisa abramowicz. can i get a selfie? lisa a: is 60/40 still profoundly challenged at a time when we are sitting selling all?

saira: i think 2023 had a better return for the 60/40 portfolio but it taught us a lesson about diversification and areas we like outside the 60/40 and tends to be resilient to economic slow down. that is important. owning areas are less susceptible to economic slowdowns that continue to rope. i had one more weston. talked about katy perry. are you in the katy perry camp or taylor swift? tom: i have to go with katie but i love what taylor swift has been doing with the national. her in check and to not have been extraordinary. can olivia rodrigo go and move the same needle? lisa a: you are asking him. jonathan: i am not engaging. [laughter] was i question for saira malik? tom: it was for you.

he is ignoring me. jonathan: took us around two hours and 10 minutes to ask a serious question this morning and it was bramo. [laughter] tom: the 60/40 work? jonathan: everyone sits down with a financial advisor and gets told to do this. tom: you are 100% correct but also disagree. jonathan: they will look and save i thought you said when this happens then this happens by taking not at all. tom: even over the last 10 months, 60/40 has tanked. what is important is what sarah mali --saira malik said. they bought stocks and are not selling them. the memory goes back three years or five years or 10 years and says keep apple, own it and buy more.

lisa will be out there over in covent garden and will get up and shake the glitter off your close. that is what you get for waking up in london. that is what lisa will be doing. jonathan: ok. tom: a huge tradition. we pull the strip and lisa is going back in the gulfstream. jonathan: very cool. the s&p 500 is positive by 0.3%. coming up shortly in about 15 minutes, we caps off with henry from ecb -- janet henry from hsbc. there is one thing we talked about what is the boj. they are not a part of the conversation because they are looking at inflation in a completely different way. lisa a: because they are not saying anything. they are not saying what people want to hear which is, when are you actually going to move?

they are saying, we are not going to give that to you, so we are. john: for them, it is a code. tom: this has nothing to do with modern monetary theory. the institutions are in place. they make the rules and these are the rules. lisa a: can i say one thing in terms of clarifying all the missed speaks we have this morning. you say i will be on the gulfstream. when we were coming home from jackson hole, the guy at the security counter said, why are you not on the gulfstream. jonathan: did you tell him you had the g6? [laughter] lisa a: yes, i explained that you drew the straw. tom: in the old days, francine

nonstop was jetting around and doing the leaders with lacqua thing but now it is a more equitable distribution. jonathan: democratize. communist even. ♪ s. textures and styles. it's possible. with james hardie™.

at ameriprise financial, our advice is personalized, based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

>> a little bit of striped fever is coming to for wishon right now. and when people get concessions and labor unions get concessions, other labor unions say, maybe we should do that too or we can do that. it is not a frivolous decision but a strategic one. jonathan: wendy schiller on the uaw strikes. the conflict between those with gm, ford and stellantis. there is an event today at 10:00 a.m. eastern time. we have a facebook live, are we

calling this a press conference casco a facebook live address with the uaw president. let's get you to the weekend as quick as we can. equity mark on the s&p 500 positive by 0.4%. that is the biggest one-day going back to march with the banking difficulties we had in the first couple weeks. i don't think the call was ever to see cycle highs after the tension with issues in the banking system in spring. but to see cycle highs after the back of that is phenomenal. the 10-year yield is down -- the two-year yield is down to 5.12. if you have been on vacation or hiding under a rock the last 24 hours, the two-year yield is close to 5.20 and the 10-year yield getting to 4.50. tom: we are in a day when we are completely jaded by it.

the two-year yield up. you get off the plane in new york and was the first thing you think about? what is the 30 year mortgage rate going to be? jonathan: i think the number one question we asked is the right one. what is going to get mortgage right now? how many will get mortgage right now? you have the price of money and the price people are actually paying given what they promise to the left few years. tom: it permeates for me down to a real yield and inflation-adjusted yield. that's remember to pointx -- remember 2.x%. jonathan: tons of uncertainty about inflation. if they are seriously higher for longer and have taken away all the cuts for next year, and you will see disinflation continue

to make improvement, then the real rate gets even more destructive, doesn't it? tom: absolutely. no question about it. we go into residual map of that will be the huge theme in october. go to tim not to find out what modern uaw strategy is. if you are weaned on walter reuther or george meany of the afl-cio, it is a whole new world to provide wisdom with huge perspective. he's not -- keith naughton, what have you learned about the new negotiation of 2023? keith: it is a road guerrilla tactics. they are trying to keep companies off guard and guessing. you will get today is the uaw president sean fain will

announce the next round of strikes. they have one at each company right now and will probably strike three more. the question is, which plants will they be? will they take down the big pickup truck plants? tom: each of these companies has a different character. i think that is underplayed. he saw it with the immense support of the detroit lions. each company are you watching? which culture in detroit will give you signals about a successful outcome? keith: the company in the lead is ford. they traditionally have had the best relationship with the united auto workers. they have made four offers so far and where the first to give an offer. the executive chairman, great-grandson of the founder, so up to make a proposal in

person. their most recent proposal. sean fain stood him up. lisa a: is it really the salary as the holdup? is it the mix of products being manufactured? is it the sense of guarantee workers at a certain level and number of plants? keith: it is all the things. they are far apart on wages. the union has come down from a 40% request to a 36% request and the best companies have offered is 20% so far from george and still in -- gm and stellantis. they are hanging over these talks. the electric vehicle transition and battery plants that all these automakers are building the are not yet organized by the a w. they want to make sure future battery workers will get the same benefits as existing autoworkers. lisa a: when you say they are

far apart and talked of the distance, i think about how inventories will start wind down some dealers and auto manufacturers as well. how much do we ask auto prices to increase atco health -- to increase? how far will it have to go on before we see the impact? keith: right now, industrywide, the day supply is 58. what is considered ideal is 50 so right now, there is a good inventory situation. the longer this goes, then it starts hurting. tom: what is your timeline? the one thing i cannot get out of experts. people are so informed. the median in london is somewhat in the game. what is the bloomberg timeline and your best guesstimate of this strike? keith: we spoke to one analyst who thinks it can run to the end

of october. it is hard to know. there is some text from union sources that looks like they want to make this go for a long time to infect plane -- to inflict pain. it does not feel like we are close to a resolution. jonathan: are we talking s-150? are we going that far? tom: they will go to pickup trucks. i will go all three as an amateur. jonathan: to make it simple, is that the last thing they reach for the next thing? keith: it could be the next thing if they want to inflict maximum pain. you take out the most powerful. you take down the chevy silverado and the ram pickup truck. those will cause pain immediately. lisa a: the big hang up is how much money they have left at the uaw to keep paying people there strike. will they try to use it up?

do they have a limited amount of time for a run? keith: they have $835 million in there strike fund and are paying $500 a week. so far there are only 12,700 strikers because of the target approach. however, the companies are laying off people because there is a ripple effect when plans go down. and the union agreed to play -- to pay those people as well so that will deplete it faster. jonathan: thank you for the update. keith naughton. looking ahead to this facebook live event at 10:00 a.m. eastern time. i suppose they have until midday eastern time to make sufficient progress. i sound like fed chairman jerome powell. tom: i am glad you brought this up. the pickup truck thing is very emotional. based on my knowledge, i think

uaw ought to go after the pinto. jonathan: do you want me to explain what the pinto is? tom: the pinto and javelin to foreigners like you is when we started buying autos that were so bad. lisa a: you cannot say he is a foreigner in u.k. or london. tom: but seriously, when do we started buying foreign automobiles and why? it was because detroit invented and engineered these monstrosities that were all glass and weighed a ton and could not go around the corner. we 70 wanted to buy a -- said we wanted to buy a renault. the rich kids fathers have that. and the rich art students had a bmw 2002 -- jonathan: are you going to stick

with us at home? i hope so. janet canary -- janet henry of hsbc is going to join us. live from london, this is bloomberg. ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

jonathan: he never stopped for what it is worth.

there was a break for three to four minutes but the conversation continued. s&p 500 posited by 0.4%. the nasdaq is up by 0.7%. going back six months to the month of march in the bond cycle highest. the two-year yield pushing 5.20. to see a 30 year in the four 50's -- a 30-year yield in the 4.50s. a 10-year yield at 4.50s is phenomenal. the fed has signaled their. hiking but perhaps it will be longer. tom: in the last 30 minutes, they published their outlook into the end of the year and every shop has to do that. how do you publish an outlook with yields moving like this.

you have to go, what if higher or lower? jonathan: you have to tell me for the federal reserve. how did that go on wednesday? it had a bucket of freezing cold water. lisa a: it -- there is one logical conclusion we can have and i think people are dancing around this. no one in the u.s. is paying the rates being quoted except the u.s. government. basically the new bonds being issued, and even only on the margins. how are we really saying we are seeing the effects of this how do we say we will ever see the effects of this until 10 years later when the bonds mature? at this point, is this an economy that is completely immune to rates and they will have to go higher? why is that not part of the discussion? jonathan: they will have to pay it. if you want to buy a new car right now, you will not pay in cash.

you have to pay it. it just going to take longer than we expected. housing is its own the. if you are holding onto a 2% mortgage, you are not letting it go. whether you need to wait or go further is part of the conversation. in this quarter, we are hearing the same story. that is the problem i have with the fourth quarter. it is the cry for recession and no one believes them anymore so we are stacking up issues like student loan repayments and no one is buying it anymore. lisa a: that is why we are seeing yields get to such highs even though everyone was saying, it will definitely go back to something normal. tom: five days into this trip in london and after our great credit conference, we haven't even talked about jim zeller. you guys were going with him as bonds people and i was actually listening to the strength of the industry which i never think about.

but was cool. thank you for the comments on that. the julian memorial credit conference we did there, i thought it was very good. we needed a voice at the end of our sojourn to provide balance and moving forward. there is no one in london that can do this like janet henry. for the hsc --hsbc. you have a lovely view and then there is china. what does hsbc with all your context say about the stability and economic recovery of china? janet: hsbc has a perhaps more balanced view of china than some of the hysteria that hit the market's not so long ago. i think we are not going to get any quick answers one way or the other on china and we need to learn to live with that.

we need to know with certainty where things will be in two years time. in china, what we have seen recently, is some signs of stabilization in the economy. industrialization showed improvement. retail sales showed improvement. are there still major challenges in the property sector? yes and we are seeing a gradual rollout of policy stimulus that is now being reflected in economic data. is there debt stocks? yes but are we providing liquidity? yes. this is a multi-global story. then there will be multi-structural forms to deliver the highest quality of growth. tom: we see a disinflationary tension. that dovetails with steven major's's long-term conviction of price up and yelled down. that has been tested the last

few hours. do you stand with a tendency which filters into lower yield? janet: for the last two years, i have been talking about a deterioration in the growth inflation trade-off. a different mix of lower growth and higher inflation which requires a different policy rate level that we used to in a pre-pandemic era. yes we have some inflation but there are plenty of risks out there. even the goals with the fomc and the level of uncertainty around that, they are admitting it is quite high. you have already highlighted everyone was forecasting a recession in the first half of last year and that the second half of this, but now a soft landing. why does the market keep going with the idea this will be a very ordinary downturn with a very ordinary federal bots? jonathan: has anything changed?

the relationship between the market and price pressure? based on this forecast. chairman powell has attempt to prescribe a forecast to the medium term. they are saying we can get inflation down to 2% with unemployment not climbing above 4%. what have we learned from that? janet: they are extrapolating what has happened so far. jonathan: right now? [laughter] janet: you are right. it is remarkable. we have never been in the recession camp. he have been in the rolling slow down. but now the fed has overtaken us. we stop -- we thought unemployment at 4% by the end of this year and 4.5% by the end of next are but the fed does not have that. the recent progress has been a bit slower and everyone is talking about the strike.

we don't know. it could be that there are other areas in the economy where, because of collectivized wage bargaining in europe, public-sector pay in the u.k., and strikes in the u.s., that it is not a linear story and is a bit rocky on the way down and the disinflationary process is not continuous. we have other areas of inflation volatility and the markets have to accept they are willing to keep interest rates higher for longer. jonathan: if we go on the fed rate website, so they view these as forecast restorations? what are they? janice: they should review them at every central bank, given their inflation targets and priorities, that is their primary goal and they will do what is required to get there. we got in the dead projections, and to some extent in another

central banks projections, that they are always willing to take a little longer. the fed is willing to wait until 2026. they said their central scenario is they can get there by being more patient without a traditional recession when the economy has a deep contraction. but as you know, reaching page two, question four, question five, what is your certainty about this forecast? it is still very high. lisa a: are you saying that what we are seeing this week in markets is a sea change about understanding the fed? that they will tolerate it for longer which means it will become more entrenched in a way people previously did not act? janet: i am not saying they will tolerate it at these levels.

it will certainly not tolerate any signs it is coming back. they need to be confident the progress will continue. obviously, financial markets at the first sign may be a financial bank is done will signal downwards. the more financial markets do this, the more likely a financial bank trying to tighten conditions. raising rates. they are telling us is they are determined to drive it lower and might be patient to back to thailand they get but will not take any risks it becomes entrenched. lisa a: the game. you just laid out, does this mean the yields we are seeing and actually create and foster the credit conditions necessary to get to the fed and other central banks goals? do you think these are sustainable and what we need to get lower? janet: i think how financial markers react will be a function

of what central banks obviously do. but the central bank is trying to tighten financial conditions. it is trying to slow demand. they think by slowing demand, they can impact inflation and ensure inflation continues to slow. we keep talking about all the uncertainties that are still out there. you have to bring inflation volatility not just for oil and food. still have necessities in the labor markets. they don't know what they will have to do which is why they say we are ready to raise rates higher and ready to keep them on hold for a long time. it is still about the data dependency. they are still watching all these factors as long as they can progress whether it is consequences of high-yield or the consequence of what is happening with spending behavior. as long as they see inflation data coming down, that will be

enough to become more confident on the medium-term. tom: i have to ask this question for tremendous respect with what hsbc went through during covid. you want out of the bloomberg building in hong kong and go across the historic tramway and there is one building. your place, the foundation of hong kong finance. what is the stereotype right now that we must get wrong about the new hong kong? janet: that is a very broad question. tom: it is a friday. janet: it is. as an economist, i always think sometimes we about countries -- as an economist, i love when people want to talk about countries and want to talk about central banks. but a lot of the things that happen whether in hong kong, dubai, new york or london, is

more about sectors. whatever you have in london is about the true macro story. but where things really lie in coming years and lot is in tech knowledge he. there is still a lot of money. jonathan: you are trying to cost some trouble. janet: as someone that lived in hong kong for five years, i am still a hong kong tourist. tom: i think it is important. hsbc. steven major, janet henry. we do our steve engle. jonathan: i miss david blum. he was great. janet henry, thank you ofm. yields lower by three basis points.

4.4681 on the 10-year yield. in london, before you head out to new york. lisa a: it has been quite a week. my big take is people are pricing in higher for longer and the site it will longer to get listen under control. suddenly there is a question about what this does to the fundamentals in the market. if rates are higher, you suddenly get things when -- tom: i am listening to people pushing away from this like janet henry and saira malik. she was starkly opposed to the kosice outcome. jonathan: that was the first time in the past couple days where we started to hear the high-yield hit risk. lisa a: exactly. jonathan: because they have not been at all. they are still some 400. still pretty tight on historical

basis. equities posited by 0.4% on the s&p 500. wrapping up our week in london next with semma shah. this is bloomberg. ♪ ♪ explore endless design possibilities. ♪ to find your personal style.

endless hardie® siding colors. textures and styles. it's possible. with james hardie™. welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

>> my feet are firmly on the ground. we played five games and started out well but it is how you end that counts jonathan: the move seems to have changed. has he changed? >> he had a very big impact. we need to go back in time to our real dna and we need somebody that understood that. there is no easy fix to win. you are very much about the belief in the academy that is producing players that can become hopefully superstars. we cannot buy success. that is the reality.

we have to understand that. we needed a manager that was aligned with our philosophy. jonathan: that was daniel leavy, the tottenham chairman talking about the impact of the new manager and what he had -- and the impact he had on the club. you can watch the full interview on the bloomberg page on youtube and bloomberg.com. tom: for those of you that do not follow this bullishness, this was the most -- interview in football for ages. i looked at one article that talks about you and two other outside sources. daniel levy with no government funding and a lot of big loans built a -- up loans built an empire.

and he is sitting here, poor, crying that he needs a team. is he one of the guys like the saudis or is he just poor? jonathan: i would not use the word poor but i would not say he is as rich as the saudis. competing with a whole country is difficult. the pitch could go away and then you can have a music concert. he was talking about the numbers. a hundred million sterling is not just for football. beyoncé might want to seeing there. we will see if that sells out. he wants to make the club a lot more sustainable financially and put it on a big path. the questions whether he is open to a state sale. he says he is. he says to leave the club for the best interests of the stakeholders and the fans. you just get a sense of openness

and conversation. a lot of people reading between the lines. tom: is he looking for a minority sale? a stake sale of 10%? or sale jonathan: of the franchise? jonathan:i don't know -- jonathan: i don't know. i cannot throw a number out there. it is close to $7 billion or $80 billion from manchester united. they were not getting the number they wanted so that it be close to 3 billion or 5 million active -- $5 million? tom: who is your next interview with? jonathan: there is a list. tom: look for david hillier and all our english football covered with bloomberg news.

is this what i showed up for? seema shah is with us. as we finished strong in our week in london. what have you learned over the last 72 hours of central bank football? what is the summary for the principal group? seema: that the conclusion of the london derby is clearer than the -- tom: do you have tickets? excuse me. seema: i don't. i think central banks don't really know what is going on and are really unfounded. powell is confused and talked through the conference. he gave very unclear answers, i think. tom: seema shah in the same territory as jonathan ferro. lisa a: what is were takeaway? right now, higher for longer seems to be the theme. do you think we are finally

seeing rates at levels are strict enough to bring inflation and create weakness? seema: i don't think rates need to go further than where they are today. we talked about lies continuously and i think at some point, they will come in. timing is difficult to call. if you do another hike, you are risking a bit of an error. higher for longer makes sense in light of the 1970's experienced which inevitably will be fresh on their minds. that keeps them from cutting rates longer than they should do. we are pushing it out for the second half of 2024 for the fourth rate cup because of the concern for inflation. lisa a: taking a step back, argue more pessimistic on risk or less pessimistic on risk after what we saw over the past week? seema: i am actually nowhere on this one. which is unusual.

i will explain. i think the markets can be very bound through the first half of next year because there is no clear activity. if you have high growth, then you have higher offset. if you have low growth, it is offset by interest rate cuts. until you get to a point in the second half of the year where you get economic downturn, but then it is clear the downturn is shallow, that is when we can read the market with conviction. tom: i have 22 years of belief and conviction on this trip. you get to q4 before your painful 2023 outlook. what a short conviction on equities? seema: that they are range bound. i think the u.s. will outperform europe, certainly the u.k.. there is still an element of u.s. exceptionalism. i want to be a long-term

investor. tom: so you want to capture growth. as simple as that. seema: yes, we are thinking income at the moment. tom: we are talking about pinto and javelin. referred shares? seema: the other thing is a lot of investors, even as things came back, investors felt like they have been permanently damaged by the bank events and loss conviction. but we have seen them start to creep back. i think prefers could be on a decent rally. tom: file i am in england or london -- i feel i am in england or london. lisa a: the fact that everyone who is cautious and of having real regret and then saying, we should not be too cautious and we cannot predict recession. does this make you fearful of doing the same thing again? there is so shot you feel across

the street. seema: i think everyone is confounded by what is happening across the economy and with central banks. as you look at your calls, you worry that everything will start coming through so you have to have fundamentals. we still believe in the likes of monitoring policy that i believe will come through but it will take longer. jonathan: thank you for being here. seema shah of principal asset management. you have two minutes left. have you found more songs? tom: thank you, henry, for watching. the surveillance teams speaking this morning has been worth more than the cost of a subscription. they have been invigorating. sia in late november. jonathan: is that your account

or is that real? tom: after thanksgiving, in time for holiday shopping. you can do another interview with daniel levy. jonathan: testing for interview on our youtube page or bloomberg.com. on monday, conversations coming up and the promo crisis, the latest with mohamed el-erian, gordon brown and michael spence. all three. tom: fascinating particularly to see what gordon brown says about new labor and what they say it and respond to what the consumers are doing. jonathan: that title in and of itself. perma-crisis. lisa a: speaking to my two. the whole thing is we have been speaking about crisis to crisis. and if we don't have fun, what are we doing? tom: mohamed el-erian will push

against crises. he is an optimist. jonathan: thank you for coming to home turf a little bit. actor new york. i am pleased you did not insult to many people, tom. just try to get him on a plane out of london unscathed. [laughter] thank you for being with us all week and thank you for the hard work of the team and producers who put this together for us. good morning. ♪ ♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, styles and textures.

i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works.

>> from new york city for our viewers worldwide, i am matt miller in for jon ferro. equity indexes futures rising. the count down to the open starts now. ♪ >> everything you need to get

set for the start of u.s. training. this is "bloomberg: the open" with jonathan ferro. ♪ matt: futures edging higher at the end of a bruising week for investors. the bond rout taking a breather after yields touch multi-decade highs and the clock is t