a streaming service... movies and shows, live tv, more local sports. this is your big three that crushes cable. and he changed the batteries on all three smoke detectors. >> welcome. fubo! sonali: quick check on the markets, flat day, s&p 500 only up .3%. nasdaq 100, nasdaq composite fairly flat going into some big tech earnings. the day, vx below 20. we hit 23 just about 24 hours

ago. volatility cooling but the day is not over. treasury market is with the bigger action has been. we saw that to your auction can in at a lower yield than the previous auction, a sign of demand. two-year up at 5.08. you are watching the curve invert just a bit more. we are keeping an eye on those differentials. jon: earnings stories, we are knee-deep in them today, and doing a few key component. the dow a shining star on the market after that company got better than expected results, verizon as well. the perfect picture looking good. ge jet engine business performing right now. let's look at some of the other components of the dow that have been moving higher today.

3m, a company that had shown some struggles, but the outlook pleasing the market. some cost is help the bottom line. shares up. the pricing power at coca-cola, it is an uncertain environment when it comes to consumer demand but coco flexes some muscle. market responding with shares up about 2.5%. sonali: the future investment initiative is in full swing in saudi arabia, bringing together the financial world's biggest leaders. here is what jamie dimon had to say. >> does not make a difference whether rates go up 25 basis points or more. whether the whole curve goes up 100 basis points, be prepared for it. jon: let's dive deeper into the rate environment. liz mccormick joining us now. now is jamie dimon, made

headlines globally, but we are at this point, we saw it with bill ackman entering -- ending his short bet against the treasury market, there are concerns heading into the next year liz: i thought jamie dimon's comments were good in the sense that a p placing that. maybe we in the markets and coverage, that is our job, we are talking about changing the perception, we going to go up the order point four twice? what people like jamie dimon are getting at is one or two more hikes is not a big deal, but are we going to see a big jump in yields across the curve? we had ackman getting out of it short yesterday come along end rates have come down. but i think people are too nervous. nobody is going to say we've seen the peak.

we have a fed meeting next week where they have signaled they will do nothing. funding announcement where the treasury is supposed to announce another round of bond sales. there is still a lot of uncertainty for folks in the treasury market. even there we got a real read on the loan end with rate following , few are willing to say the worst is over. sonali: how much of people willing to take on duration risk at this point? at treasury funding announcement, i am excited to see what that number looks like. now begging there is a cost of war to foot. do people take on duration today? liz: i am hearing more people say i would rather be in the shorter end because there is less risk on that, just lower duration, but you have the long-term player is a saying in the long end, yields could go up more.

it is a good long-term investment. but if you look at the bloomberg indices, we're in the red again this year. this three years in a row. unprecedented for treasury markets. it has not been a rosy year but people do not want to lean in trouble hard to bring home duration, because that is where most of the pain has been. rates have gone up over 100 basis points in the last two months, troublesome for your portfolio. jon: there has been a lot of conversation about the factors that got the 10 year yield north of 5% once again. when you talk to the street and try to get a sense of where your -- where it yields ultimately go from here, what are you hearing? liz: there is a lot of focus --

is it term premium? people are adjusting where they think the fed's long-run rate will be. uncertain yesterday we are talking to people when the tenure went above 5% briefly. a bunch of investors say 6% why not? what if the company stay strong and we get a soft landing and inflation remains slow? there is other forces -- deficit numbers were just today, doubling the deficit. some people are saying we could see the 6% 10 year. i not know. if you look at our forecast page, it goes back under 4% i think they are more the minority. sonali: liz mccormick, thank you for your time. kkr is seeing opportunities in

high-yield bonds and selling some of floating rate debt as the federal reserve pauses interest rate hikes. what i do not understand is floating rate was the name of the game until now. what has changed? olivia: important and interesting question. thanks for having me. if you go back to the beginning of eer, people were talking about moving out of floating rate. they were expecting rate cuts by this point in the year. but that is not materialized. that longer duration trade and some of the fixed income trades have not done so well. what kkr is saying is now they think is the right time. earlier this year was too early. they stayed overweight back then. there is still overweight now, but this is the time where they are seeing that the fat is not going to move materially higher. this is where they want to meaningfully move into fixed rate debt. jon: let's build on that.

this was referencing the fact that it seems like some are getting wary of putting out projections on what the fed does from here on out but if they are literally putting their money where their mouth is, this is a strong call and belief on where we are in the tanning cycle. olivia: essentially what it is saying is we might see another 25 basis point hank aaron we're not know where the filling to going, but kkr has a stronger connection that the set is much closer to the end of that hiking cycle and then at the beginning of the year when other managers piled in too early and too long a duration of the fixed income. sonali: how much of this is a worry about default rates inching higher? olivia: the market has been resilient. we have seen bankruptcies, distress, defaults go higher,

but it has not been to the level of market was expecting a year ago. that is what has helped u.s. leveraged loan trade so far, i returns had a phenomenal year but at what point are we going to get the slowdown. when and where will it materialize? my sources point to the leveraged loan market as an area of weakness. sonali: next, brownsville joins us ahead of key earnings for microsoft. 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.

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hour, keeping an eye on technology. after the bow, numbers from -- after the bow, numbers from microsoft and also back. nasdaq higher. when it comes to these earnings, assuming the quarter itself is reasonably strong, it seemed like the market will be watching. netflix had an encouraging outlook. tesla a more next message, investors more cautious. then these specific stories, and we see strength in the cloud business for microsoft? sonali: brent thill joins us to discuss. if you think about the power the magnificent seven has had in the stock market this year, how vulnerable are they to these big tech earnings, particularly when we look at what is ahead of the bell today? brent: year-to-date returns have

been good, anywhere upwards of 100 plus percent. big returns and they are sensitive to the ai data points. lastly, oracle went down 6% saying there is no ai revenue. you saw the stock, the fact that they were saying no ai revenue caused stock to go lower, we are dealing with insulated ai expectations. that is the biggest concern, but the backdrop of demand is good. optimization is reaching someone today p -- is reaching somewhat of a peak. your seeing companies getting ready to embrace ai. they have to build a foundation and that is microsoft, amazon, google. oracle is on the outside coming in. ultimately the set up for microsoft looks good. stocks pulled back to 330.

the expectations have come off a debt. sonali: on that note, if it has come back down a bit, fine, but you hear one after another wall street titans having a negative outlook into what next year could look like. if the economy were to turn for the worse, what happens to clouds? brent: that is going down. to your point, ultimately, right now, we are seeing in q4 we think there is going to be a re-acceleration of cloud based on a z dynamics we are seeing. you've got to get ready for ai, get yard data to do because. to your point, if the economy goes south, everybody is forecasting text funds to increase. the ai wave may be put on the back burner, given what is happening with corporations

overall economic conditions. if you look at jefferies, there is areas we had to slow this year because of the macro overhang on our itc fence. hopefully, some of that will start to come back. if the environment does not come back, that will be on the back burner. this year looks reasonable for the rest of the year. next year, it is more murky but ultimately every cio and ceo in america and globally is talking about ai. it will require an investment. if you do not make those investments, you will be late. we have covered many technology shifts. ai has got boards and executive management teams changing the way they're thinking. all you have to do is look at jamie dimon. he read about it full-time start

-- multiple times. they have to invest, have to be ahead of the wave. we think that will bode well for the backdrop of software as we go into next year, even if we had a slightly difficult economic environment. results are not great. decon spend will be delayed. -- the log spent will be delayed. these headwinds continue. things are picking back up if they do, the stock is going higher. if they do, we are seeing continued optimization from last quarter. stops going more. simple is that, nothing to do at the numbers. it will be there outlook for jon: the other part of the economic story with tech companies is advertising. that is maybe more than alphabets story.

we saw that digital advertising downturn already started to impact with these companies had been saying. what are you going to be watching on that front? brent: add spent has been good. it goes back to the macro environment. it is like the stereo in your car. you can turn it up and down in a nano second. companies continue to spend. the other trend is consolidation. you are seeing safety spend going to be bigger platform stories. you are seeing continued good movements of the advertising side. nomic jitters in the numbers. even at the, there analyst who

deals in marketing, advertising content set in the fourth quarter they have seen very good trends. you could turn adobe off if you are working about your marketing and ad spend. those are great data points. all the reseller data points and partner data points in advertising instead things could continue to eclipse. the road question is going to be more about q1 for advertising spend. for the rest of the year, we see a good backdrop. google is taking market share, met and taking market share over others. jon: i look at longer-term target prices you have for stocks like microsoft and eltham that, higher than where the shares are today. you talked a lot about the ai component. if you were to break down the upside, is that the opportunity for earnings outperformance versus valuation? or does not include some of the

ai story that you mention a lot of companies have to protect against? brent: you will see a combination of numbers going higher because pricing is going higher. microsoft is effectively more than matching or doubling the price of the copilot seat. you are seeing natural price lift. that will help numbers and also the multiple because investors will pay up for that certainty of a price lift and future revenue. right now, a lot of ai bots have yet to launch. it will be more the 24 impact then 2023. the stocks will look ahead. you see a bigger price hike and more stability. there is a fear of missing out from cios. they want to be in this box. they want to enable their employees to become more productive.

it is a general one product but they want to make sure they are enabling employees to be as productive as they can. pretty good talent can help revenue. jon: good to have you back. some of the tech trends. we will be watching microsoft and alphabet numbers later. coming up, the uaw intensifies its strike, thousands more walking out of the factory. second escalation this week. this is bloomberg. ♪ (adventurous music) ♪ ♪

♪ be ready for any market with a liquid etf. get in and out with dia. >> given that we do not want to

speculate where the next plan might be, we thought the prudent thing was to withdraw guidance, despite the fact that the underlying business was performing at the top end of our range prior to this.

we are still focused on making sure that we execute every day. jon: that was paul jacobson earlier today. they had quarterly results but also uaw realities in focus right now. we just saw that expansion in the strike for the second time this week. 5000 members walking out of the gm plant producing some of the most profitable vehicles. yesterday we were talking with stellantis that lucrative truck plant. now we are talking about a facility in arlington, the kalanick escalade? >> that is correct. another cash cow plant the uaw is targeting. they started out taking hits, but now they are going for deeper hits, trying to move the

automakers to give up even more. that is what shawn fain telegraphed last friday. he said we have seen a lot of progress, especially from stellantis. he wants to move gm further on economic issues. he said we will hit harder in a surprise attack and waving. that is what do these deeper hits mean for gm at the end of the day when it comes to their ability to operate with thousands walking out? gabrielle: they still have decent inventories of a lot of these vehicles. it is not like you will see tomorrow, oh my gosh, you cannot get a cadillac escalade at all. they still have these in inventory. the financial hit, they talk about it. maybe earnings estimates the third quarter even though they took a $200 million hit from the strike. going forward, we are looking at

$250 million a week in losses, estimate from wells fargo, with this arlington plant taken down. hopefully, it will not last long enough that people will not be able to get these cause, but it is causing them financial pain in an effort to get them to give up more at the table. jon: thanks. a lot to continue watching. gabrielle has been tracking the latest on the auto story. you have paul jacobson saying they are not going to do a deal that ultimately does not make competitive sense for them that everybody is trying to figure out what that means. also on this earnings day for the company, we continue to track earnings stories across north america, which have been getting attention, along with the bond market will on where interest rate policy goes from here. s&p 500 looking up for now,

about .4% higher. as we move into the are of the day, we will continue to track headlines out of the middle east. then we get technology earnings. this is bloomberg. ♪ you're probably not easily persuaded to switch

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earnings party. >> picking up the closing bell, you have a rally, s&p 500 up about .4%, nasdaq, big tech up about .5%. we are headed into the heart of earnings season. alphabet and microsoft taking the stage after the