jon: welcome to "bloomberg markets." matt: let's get a check on the markets. we are seeing gains once again on the s&p 500 after a 1.2% climb yesterday. back up to 4180. we had a technical correction on friday, down more than 10% for the most recent high of 4588. we are now making back some of those losses.

the 10-year yield coming down as investors buy these bonds. we heard from treasury yesterday that the u.s. will need an additional $776 billion of borrowing this quarter because of the deficits we are running. we look at the schedule tomorrow in terms of the amount of auctions they will need in terms of notes and bonds. the bloomberg u.s. dollar index climbing about half a percent now. hovering around levels we have been seeing for the past couple of weeks in nymex crude. jon: time for crude. let's look at individual stocks. it is apple's week. earnings are coming up. one player, pinterest, had interesting quarterly results and they gained eight -- 18%. ge health business performing well based on the company's

outlook. shares up about 4.5%. those are standout stocks today. i want to flag the currency story. we have been watching some weakening for canada's dollar against the greenback for weeks. that tends to be the case again today as we have seen a situation where the canadian economy is slowing down. based on the latest gdp data we could arguably be talking about a technical recession. a lot of think people means that bank of canada is down with interest rate hikes at this point. interesting to watch. we are waiting for the fed decision. matt: i guess the loonie is a little better than the yen as we go over 1.51 to the dollar. it has been pervasive this year. hollywood studios and actors are scheduled to resume contract negotiations today. that follows the end of the uaw

six-week strike that cost the big three automakers supposedly $2.9 billion but got huge gains for the workers. at least i think they are huge. 25% is the headline figure the uaw will be getting from gm, ford and stellantis. really record-breaking wage hikes thanks to the strikes and the new leadership. let's talk about the state of labor with the former u.s. labor secretary robert reisch, currently university of california berkeley professor. great to get you on the program thank you for your time, professor. what do you make of the gains we have seen out of the uaw and the most recent negotiations with gm, ford and stellantis. sec. reich: this agreement has not been ratified yet. it is groundbreaking if not earth shattering. i say that because it marks a

really substantial increase not only in wages, cost-of-living adjustments, and a lot of other things that if you asked me six month ago i would say very unlikely it becomes part of the new bargain. yet there is. it has -- i would expect and we can get into this if you want that very soon we are going to see either uaw target tesla and the u.s. divisions of some of the foreign automakers like honda, toyota and bmw. matt: how do you think they are going to be seen by workers in those shops in the carolinas and california, in tennessee? are they going to want the same kind of gains and go to the union for help or the are those companies going to have to give workers raises in order to keep the unions out? sec. reich: what we have seen

historically is when unions make progress in an industry the nonunionized shops in the industry do tend to want to make defensive moves. that is provide wage increases and benefit increases to keep the unions out. i don't know what is going to happen. undoubtedly the pressure is going to be increasing on tesla and honda and toyota and bmw in the united states. jon: when it comes to productivity, an issue in the united states and certainly here in canada -- we talked to the head of the union that just represented the new automaker deals here in canada today who had a conversation with our head central banker about her opinion on the economic realities of productivity and how it is measured today. perhaps not fully recognizing the story of the worker. i know you have been thinking

about that as well in recent months. what can you tell us about your assessment on that front? sec. reich: just to stand back from the tome alter right now, productivity -- tumult right now, productivity has been increasing. a lot of the measures of productivity traditionally don't quite work in the internet age with a lot of the technology workers surround themselves with. i don't think there is any question workers, whether we are talking about autoworkers or production workers generally are substantially more productive than they were say 10 years ago. yet their wages have not really kept up. that statement could be not only the last 10 years in terms of relevance for the last 40 years. if you look at production workers and hourly workers generally, nonsupervisory workers, they have experienced relatively stagnant wages adjusted for inflation. i think that has generated a

kind of a strong built up desire on the part of workers and on the part of the public in general to increase the wages of these people. we see the wages have increased substantially, while, even -- well, even post-pandemic. there's been an increase in inflation-adjusted wages but no word it would be of wages kept up with productivity gains over the last 10, 30, 40 years. jon: against that backdrop at a time where we are seeing a fresh story line around workers getting their fair share, one of the big narratives this year that you commented on as well is this ai transition. we have new labor deals, yes. what does this ai story mean in terms of how many employees there are at businesses and how this conversation of productivity and worker pay will

come up in a world dominated by artificial intelligence? sec. reich: i'm not a future all just -- futurologist. i'm talking about everything from software to algorithms to new kinds of laborsaving devices all the way through it ai seems to promise, there is going to be a big issue not just for nonsupervisory workers, hourly workers, but all professionals. across the board in terms of their bargaining leverage. they will lose bargaining leverage. most of us, and i'm including myself, professors, everybody part of the knowledge economy, we are going to be replicated and substitutable by artificial intelligence. not immediately but certainly it looks like it is in the cards. ai is not staying static.

ai is getting better and better. yet human beings, human brains with regards to the professional class are not necessarily keeping up. i would not be surprised if 20 years from now most of us were either working part-time or dependent on a universal basic income or working in ways that really made us vulnerable to a spot auction market in which are worth, what we were earning at any given time was dependent on the value we added at that moment. that in turn depended on artificial intelligence. we could find ourselves, most of us, working for what might be considered artificial intelligence. matt: great to get your insight. really appreciate you joining us

and hope you can get us back. robert reich, former u.s. labor secretary and professor at berkeley. coming up, jetblue shares take a nosedive after citing delays in its wider than expected loss this quarter. there was also problems with air traffic controllers. we will dive in and find out what the problem is as the airline is trying to take over spirit. 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™. jon: this is "bloomberg markets. " we are watching shares of jetblue.

the worst session and more than a year. the carrier forecasting wider than expected losses in the fourth quarter. headwinds from weather to air traffic control issues, not to mention there is industrywide concern right now there are too many seats for sale on flights in the united states has we head into a more uncertain environment for the economy. matt: if that were the case, you definitely would see prices come down. let's talk to brooke sutherland about this who covers the industrial sector for us here. are there too many seats in the industry? is everybody flying around for super cheap prices? i want to point out i have just moved back from europe. there is nothing here cheap compared to their. brooke: it is not quite comparable. if you're flying from the u.s. to europe for your summer vacation, prices will still be high. the recovery in the u.s. is looking a bit tapped out.

you have airlines trying to chase demand partly because they were struggling with supply chain constraints in the summer of 2022. looking to bring back the historical rates of utilization as costs rise. that dynamic is out of whack. you are seeing a lot of carriers having to discount pretty significantly to try to fill up the seats they have already flying in the u.s. markets. jon: when it comes to the business market in the business traveler, because i know you have written about this, what do we know about how much carriers can lean on that customer base right now? brooke: i don't think they can lean on it at all. ceos have been very optimistic, much more than i would say anybody else about the recovery in the business travel. we are stuck at about 25% below 2019 levels. i think that last 25% will be really tough. if you think about the lesson we all learn from the pandemic was that we could do a lot of things virtually. i know we are moving away from that if times get tougher companies it's an even easier

bucket of caustic out that it was for pandemic because of how successful companies were at moving to virtual formats. as businesses pullback and interest rates and inflation start to bite, travel will suffer. you will not see the momentum the companies have been hoping for. that usually is a backstab as we get past this peak summer travel season. airlines look to business travelers to fill seats and that is just not happening to the degree they certainly hoped for. matt: the weather part i get. i have been covering earnings for 20 years so i get the weather excuses. but traffic controllers. what is the story with air traffic controllers? brooke: this is legitimate. if you get stranded somewhere by jetblue or they cancel your flight it does not feel like that but there are not enough air traffic controllers in the u.s. specifically in the new york area markets. matt: why don't you just pay them more? hey people more and they will -- brooke: from your lips to

congress's ears but it is not that system -- simple with the political situation washington. especially with the new york market, that is a complicated air traffic control situation. matt: an exciting place to live. brooke: the elite of the elite air traffic controllers. the faa has asked a number of carriers to cut back on their schedules to try to ease some of the backups at the new york city airports. that did hit jetblue particularly hard because it is so dependent on the northeast. it did not have as much room to pivot and maneuver as some of the legacy carriers did. it was uniquely hard-hit by the air traffic controller constraints. there was an extension of that. they came too late for jetblue to be able to rejigger its cost base. they will be better prepared in 2024. looking at the fourth quarter, it is stuck with some fixed costs. matt: it's amazing to watch the shares down of these levels. they are trading for less than four dollars.

a couple of years ago they were trading for more than $20. thanks so much for joining us, brooke sutherland talking about jetblue and other company earnings. another story is caterpillar. shares tumbling after the company said it order backlog shrank in the third quarter by $1.9 billion over the same quarter last year. that shows a little bit of slowing of demand. it will deepen concerns of economic headwinds taking hold after years of strong sales growth coming out of the pandemic. joe covers the story from bloomberg. the reporting quarter looked fine. it's all about orders and the backlog shrinking. was it unexpected? joe: i think what was unexpected was the amount of the decline. $1.9 billion in order backlog quarter to quarter. that was the third quarter versus this year versus last year.

a lot of analysts had been warning you would probably see some weakness in the order backlog and inventories. that would spook the markets. clearly that has happened. i go back to the amount they saw. the last time we actually saw the order backlog actually decline was third quarter of 2020. one those are the kind of comps, the last time it hit and that is when caterpillar was going through the pandemic related shutdowns across the globe, i think that has a lot of people worried about the peak. have we actually hit a cycle peak here? jon: when i was reading your story, if you are working through supply chain issues and that gives dealers more flexibility on when they place orders, is that ultimately a terrible thing? i only raise that question because i spoke to an investor. he loves caterpillar stock. he thinks when the early innings

of a new commodities boom. we talked about the inflation reduction act. people might have demand for this machinery. is this a short-term pickup or truly something maybe we'll give people pause longer-term on cat? joe: that is something i got into in my story. we might see this play out a little differently in the stock. management was all the call pointing out what you were saying. listen up. this is a normalization of the backlog. we have all the issues of the supply chain hangups, the long lead times that were giving us problems. everything they had been facing for the past three years are finally getting worked out. things are finally normalizing. we pointed this out in the story. customers who need their machines don't have to worry about getting them on time the way they did a year ago. management was pushing this on the call to the analysts who kept asking over and over. the way we are seeing the stock move today maybe there is more

the bears coming in here saying we think this might be a demand issue. management did repeat again and again this is not an unusual problem. 2024 will probably start looking good. they noted construction was higher-than-expected. most people were expecting construction to be down. that is something investors look at moving ahead. matt: two questions about big earthmoving manufacturers. maybe i shouldn't say plural because they don't really have, at least in this part of the world huge competition. komatsu is the other big one and that's it. the ira money, $1 trillion, it takes a while for that to get into the economy. has that been spent? is that on their books? if we start to boost military spending and get on war footing in some parts of the world you need to move earth around there

and i'm sure they use caterpillar products. joe: on the ira, specifically infrastructure, we have seen a trickle through this year but we will see a lot more of it in 2024. that is something they are hanging their hat on and investors could be expecting to come through in a bigger way next year for caterpillar. as for the second question, i don't really know. that's not a question they were asked. they did address what's happening in the middle east at the top of the call but did not say anything other than they are hoping people are all right. they did not address anything in terms of the business and how that might be impacted. jon: good to get your take. thank you for breaking it down from us. joe deaux. the cost of living increasing around the world. and housing price records. this is bloomberg. ♪

an ever-changing landscape comes with challenges. from our vantage point, we see opportunities. as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt. our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested.

jon: this is "bloomberg markets ." time for today's for what it's worth. how about seven? coming months we have seen u.s. home prices rise according to the latest data from august. mortgage rates are at a two-decade high. that impacts demand but it's keeping inventory at historically low levels. at the shortage of homes available seems to be keeping some competitive pressures in the market for existing properties right now. matt: absolutely. with rates this high, let's say 8% for a mortgage, if you're in the market and you have a 3% mortgage or a 4% mortgage, chances are you don't to give that up to move to another house unless you absolutely have to.

sales of preowned homes, used homes have pretty much grounded to a halt. if you can find one it will be expensive to try to convince the seller to get out. your only other choice you are left with is newly built homes. they have to finance those as well. they can offer you a few points but they will do not do too much for too long. jon: we started the half-hour with the weakness in canada's currency. a lot of people think essential bank here is done with rate hikes. we have a shorter duration cycle for mortgages. it is based off of a five-year plan rather than 30-year plan. you are starting to see some of that play out in the housing market in this country. we will see how it plays out in the u.s. as well. if you're locked in for 30 years and you are hanging tight for now that does impact the supply story. matt: we are seeing very high prices, low affordability, high rates and more countries than

just the u.s. and canada. this is a global phenomenon. for jon erlichman, i matt miller. 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. so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience in the comfort of your own home. a kohler walk-in bath has one of the lowest step-ins of any walk-in bath for easy entry and exit. it features textured surfaces, convenient handrails for more stability, and a wide door for easier mobility. kohler® walk-in baths include two hydrotherapies— whirlpool jets and our patented bubblemassage to help soothe sore muscles in your feet,

legs, and back. a kohler-certified installer will install everything quickly and conveniently in as little as a day. they made us feel completely comfortable in our home. and, yes, it's affordable. i wish we would have looked into it sooner. think i might look into one myself. stay in the home and life you've built for years to come. call... to receive $1,500 off your kohler® walk-in bath. and take advantage of our low monthly payment financing.

>> live from studio 2, i'm scarlet fu. katie: we are kicking up the closing bell on this halloween and looking at a little bit of a rally on her hand. swinging in the positive territory. s&p 500 by about half a percent. nasdaq 100 still up about .4%. you see a little bit of money come back into the bond market. the look at 10-year yield, currently down three basis points.

486