scarlet: welcome to bloomberg markets. turnaround tuesday extends to wednesday for stocks. the s&p 500, the nasdaq and the russell 2000 posting back-to-back gains calling back some of the losses from their three-day selloff. when you look at treasuries, they are on yesterday's momentum. prices down. yields up. prices result in the red color. yields up is the red arrow going up. the 10 year is just below the 4%

mark. the dollar-yen and currencies. this is where the action is. the yen is the biggest decliner among g10 currencies after the bank of japan's dovish signal. first, we want to drill down into midday movers stocks are up but they are just near session lows. abigail: you are the reasons other stocks are down even though stocks are overall up. we are having lots of earnings come in. take a look at shares of cvs down 1%. they have launched $2 billion in cost-cutting but they have been having such a rough time over the last year and longer. disney down 1.9% as parks grew 2%. a slowdown in parks pointing to fatigue on the part of consumers offsetting some of the gains for streaming. novo nordisk down 7.9%.

revenue squeezed by the pharmaceutical benefit managers around will go v that drug pricing investors not liking with the stock down so much. airbnb down 13%. they missed sales. they missed bookings. this is a snapshot of some of the stocks that are not working. helping out some of the indexes. his is one reason we are off the lows. that is nvidia. women technologies up 30% -- lumen technologies. there is a 14% shortage. i expect that is some of the move. a bit of a relief for the beleaguered cybersecurity space. nvidia had been higher. this is one of the biggest boosts or drags given what direction the move is. the s&p 500, the nasdaq. given the fact it is lower, that is one reason we are off the high.

apple, this one has had a tough time coming out of the pit. up 2.4% today. the chart looks pretty weak. this tech islands not strong enough to think it is going to have real legs. the markets overall are higher. scarlet: apple the first gain this week after the today selloff. thank you so much with that fantastic summary. we spoke with an economist known as dr. doom earlier today. he believes investors are getting too estimate -- too pessimistic. >> the markets are often wrong with the economy and what the fed is going to be doing. there is some significant evidence of some slow down of the economy. i don't think the data suggests we are going to have a hard landing anytime soon. i am sure there are elements of strength in the economy. scarlet: so let's bring in quincy crosby. the lpl financial chief global strategist with a little bit

more. i want to start on this idea we have a recovery, a rebound for a second day. i'm wondering from you as investors catch their breath from the brutal three-day selloff, does this rebound look more fragile or more durable? >> it is looking a little more durable. however, we know when you have a selloff at the magnitude we had, the get out now and ask questions later and with the vix climbing that much higher, otherwise coming down today, edging lower. there were those who lost money and typically they will wait for a pocket in the market usually toward the end of the day. just like yesterday in order to get out. you always pay attention to that. you always have those traders. whether they are retail, whether it is institutional. they want to get out at a higher price. we are going to be cognizant of that.

you also still have the other questions that got the selloff going. that has to do not with the carry trade but whether or not the labor market is deteriorating at a faster clip. that is what started this last week and whether or not the economy was slowing. we still have to absorb the data tomorrow morning on initial unemployment claims and continuing claims. then we get to next week where there is a host of important data including the cpi and ppi. the point is these kind of selloffs don't usually recover that quickly unless the fed is involved. unless the fed comes in and does something. the market is doing it more organically. we got the easing of the global unwinding of the carry trade. that has certainly helped. now we watch whether or not this market wants to see and test if

yesterday was a bottom. normally it is not. normal you have to test. scarlet: thor 70 different threads to pick up on -- and there are so many different threads to pick up on. it is clear we are not getting an emergency rate cut. there is still a lot of pricing in of a 50 basis point cut come september. that will be data-dependent. the jobless claims tomorrow, that is the biggest data point for this week. are a lot of people waiting on it? what is your sense that is going to be a big catalyst for this week? quincy: because what you don't want to see obviously is it inches even higher. you don't want to see the continuing claims inching higher because it suggests folks are having difficulty getting jobs. if it is level, it stays where it was last week or comes down, that would be a positive for a market that has been worried about the economy and perhaps the economy was sliding too

much. we will watch the bond market, the treasuries. the treasury yields were coming down just to fast. they came down telling us there is a scare. and economic scare. you have a market that loves to have lower treasury yields. not when it is worried about and economic scare. we will take that tomorrow. we will see. overall, the fed usually does not come in unless liquidity dries up. that is the primal fear for the fed. that liquidity dries up and somehow they have to get markets going again. that is not happening. scarlet: you have not seen anything in the last few days that suggests liquidity is drying up, have you? quincy: know, the only thing we have looked at because you have to respect with the credit markets are saying. we have seen spreads widen at the lower end. less quality racking of the

credit market. but no and normally when you get a vic's that hi, you would think we were all talking about credit default swaps. the north american credit default swap index because that tells you the real fear in the market about what could happen. we did not hear that. this is a little bit of an easing but what we know is sometimes in august -- everyone knows this -- the pockets of volatility continue. we will be looking end of today, are we seeing more selling in this market from those who need to capture some gains they lost yesterday? scarlet: we were describing forced selling, the disorderly price action that can overwhelm the market. what other costs do you look to as the best indicator for you? you mentioned bonds. is it bonds? is it currency? is a credit?

quincy: the currency market is beautiful in terms of sniffing out what is going on. whether the dollar was higher. whether the dollar moves lower. it is always there before everything else. we want to see the banks. the banks have been leading before all of this happened. we want to see the xlf gaining momentum and staying there. that would be a helpful sign that we are going to paris worry -- two pre worry about the economy. that is what we want to see. i am paying very close attention to the financials. scarlet: fantastic place to end it. xlf right now up 1.2% adding to yesterday's 1.6 advance. quincy crosby. she mentioned currencies. coming up, we are looking at the japanese yen weaker against all 16 currencies. the bank of japan signaling it will hold an interest rates. that is helping the relief rally

across risk assets. this is bloomberg. ♪

scarlet: this is bloomberg markets. japan is the epicenter of concern for global investors. today, you look at the yen. it is down sharply weakening against all 16 major currencies. at least half of 1%. in this after the bank of japan signaled it will not raise benchmark interest rates further if financial markets are unstable. let's talk about this with mark chandler. bannockburn global foreign-exchange managing director. it is good to speak with you. overnight, the deputy governor of the bank of japan says the bank will not raise rates as long as markets are unstable.

clearly an attempt to soothe global investors. is that what he meant or are investors interpreting that on their own? >> i think that it is important to note it is the bank of japan deputy governor. he spoke in the first person saying what he likes to see. here is the context i think that is important. when the bank of japan raised interest rates at the end of july,, the week of the yen contributed to the prices. the deputy said there may not be a need. he said -- he basically said it seemed to me he wanted to see policy remain accommodative. we are talking about a 25 basis point overnight interest rate. the fed is 5.25 to 5.5.

a much higher inflation so real interest rates remain negative. people talk about the federal reserve put as if when the stock market sells off the federal reserve is there to ease policy. i think that is a mistake. the litmus test is financial stability. in three days we saw bank shares, the topix index of bank shares fall 23% in three days. not a boj put but a small step in that direction. scarlet: i'm curious because the boj sneezes and the entire world catches cold. it is not like this is the first time this has happened. according to moody's, in 2000 and 2006, boj rate increases had to be reversed after it turned out the global economy stumbled. why is it boj rate hikes cause such consternation across global markets? marc: you made a good point. it is not just a boj. it is with the governor of the boj said too.

people think there is a bank of japan rate hike. we have right afterwards the federal reserve and a couple days later we had the u.s. jobs data. i think it is a twofold development here. the boj and the u.s. what happens i think is because -- japan is the world's largest net international investor creditor company. japan owns a lot of foreign assets. people think when the yen strengthens, interest rates rise in japan. japanese investors and we are talking about life insurance, trust banks. we're talking about large capital. they will sell foreign assets and bring it back into japan. it is not just japanese. people in the u.s. , the world really, the leverage ctas. they have done the same thing. they borrow the yen, sold the yen and bought something else.

foreigners are unwinding too. one way to see this would be in the currency futures which has unwound. that is the short position. speculators have covered almost $7 billion of shoring yen positions in the last three weeks. tomorrow the ministry of finance releases from japan the latest weekly portfolio flow data through the week of august 2. watching that closely. how much of that is japanese repatriated money and foreigners covering their shorts? scarlet: that is a nuanced way to look at it beyond this is the carry trade being unwound. having said that, jp morgan said we are about halfway through this unwind of the global carry trade using the yen, borrowing the yen to buy high-yielding assets will elsewhere -- assets elsewhere. what specific carry trade's have

the ability to carry markets the most? could you generalize or is that not possible? marc: it is hard to know the whole size of it be partly beca -- probably because there a lot of hedging going on. two parts of the equations. the funding currencies. you have seen the swiss -- there's a lot of discussion about how china manages its currency. were the things i find it is the correlation between the offshore chinese currency and the yen is about a 70% correlation. suggesting to me the same forces are at work. even a chinese currency offshore as a funding currency. we think people have been buying tech u.s. stocks. we also know in the currency market the australian dollar was a big beneficiary of the yen carry trade as was the mexican peso. as the yen has strengthened, both currencies got crushed.

the aussies felt the new lows for the year. now that the yen has stabilized, those currencies are bouncing back. scarlet: so big tech, mexican peso and aussie dollar were the beneficiaries of the global carry trade and are in the process of being unwound. final question. to you to what extent is assets in a japan key driver for markets going forward? for fx, for bonds, for credit. you mentioned the ministry of finance report. is that the one thing to watch for and from there on you can see the ripple effect? marc: we are watching that. we are watching the commitment traders report that comes out on friday. almost a week lag time. we can get a better sense of market positioning. things will come down for japan. we still have the other side of the equation. . that is what is going to happen in the u.s. the market tries -- the market is moving back against that.

the market is moving away from a 50 basis point cut in september. this would seem like a panic to me. the fed do a tracker. they revised it up. the idea the fed has to respond to some kind of emergency seems exaggerated. we will be watching those to see if the markets do stabilize and to see those flows. scarlet: mark chandler. appreciate you joining us as always. panic burned global forex managing director. coming up, we are going to take a look at one of the indicators for the health of the u.s. economy. that is consumer spending. looking at shares of shopify soaring following better sales and profit in the last quarter. this is bloomberg. ♪

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scarlet: this is bloomberg markets. outside of the big tech stocks come this earnings season boils down to one thing. how well is consumer spending holding up? shopify gives us a read. shares of the canada based e-commerce company are of the most in 15 months, up 26% right now. here with more is jon erlichman. jon: the story of the consumer is very much in focus ahead coming into this quarter for a

company like shopify, we had heard from big players in e-commerce, amazon, wayfair would be good examples where the stage seemed to set for the possibility of a message for this company they would be navigating some headwinds and they come out with revenue numbers that definitely pleased wall street and in outlook that in many ways left some of the analysts breathing a sigh of relief. earlier this year you might recall the stock was feeling some pressure because they shared some guidance for the first quarter -- the current quarter that was leaving people wondering about the consumer story in the first place. maybe they got the message during the quarter they could find some levers to poll to make the numbers better. not just the fact there is the consumer aspect. there is the merchan aspect. here is a business that grows as more companies use shopify. we could be a small business using their e-commerce platform. could be a big partner. they have a new partnership with

target. every time they sign them up for more services, that helps to grow their business. that is as much a part of the story. the health of the consumer at least viewed through the e-commerce business with shopify's growth would be a bit of a breath of fresh air to the analysts who were concerned about the outlook. scarlet: they are exposed to consumer spending but their customers are other companies. one thing and you mentioned the reduced outlook shopify had given and given people reason to worry about. competition was a source of concern. i'm thinking about teemu and she had as competitors for the shrinking dollars consumers are willing to deploy. john: if you are shopify and you are looking to get more merchants that may be competing with other e-commerce players out there for dollars, certainly

shopify talked about investing more in marketing spent. the big thing we have learned about technology companies during earnings season is the message around what they are spending on the return on that investment. a lot of times it is through the ai lens. . the return investment you are getting is important. and other key part of the shopify story is they have cut a lot of costs over the last year. . they cut a lot of jobs. they are focusing on growing through certain investment in technology which wall street seems to like. if that limits the number of employment growth. if technology can do more of the business. also if they are spending more on marketing to grow the business as well. the bigger thing with this company is not that long ago they were going to make a bigger push into more head to head competition with amazon and logistics. they backed away from that plan which was looking costly over time. if you think about the way a lot

of these technology companies have different levers they can pull, it felt like shopify was ready to pull a few levers this quarter. scarlet: shopify gives is a window into consumer spending not just in the u.s. but globally. it has exposure to europe. it has exposure to asia as well. john: that is an important point. when you are may be feeling a little tapped out on the growth story in the more traditional markets, where can you look? we spoke to an analyst today about what he liked with the shopify business. one of the things he pointed to was overseas growth. europe was a great example of that. if they can sign up more of those merchants in newer markets, maybe that gives them a better growth story over the longer-term. scarlet: bnn bloomberg's john erlichman. coming up, why former u.s. treasury secretary steven mnuchin says it is time to end the 20 year treasury note which

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scarlet: welcome to bloomberg markets. we are at the 30 minute mark. let's give you a snapshot of the market action. u.s. stocks extending their gains adding to a global recovery in equities. this is after the bank of japan's deputy governor soothed investors nerves by vowing not to raise rates if markets are unstable. you're looking at advances of 1% for the s&p and nasdaq 100. treasuries under pressure again. certainly less demand for safe

havens. there is a lot of supply this week from the government with auctions including the 10 year in 30 minutes time as well as the private sector. 17 companies including meta looking to sell u.s. investment grade debt. the overarching theme across financial markets is less volatility in these last two days. let's welcome bloomberg intelligence rates strategist ira jersey. was the rally in the bond market not just friday to monday but over the last two weeks simply overdone? ira: we got overbought conditions in treasuries particularly short-term treasuries. not a huge surprise the rally we have seen has slowed down. we are probably going to find a new range especially since we have broken through a lot of key technical levels in the 2-year note and 10-year note. once we settle into that range, i suspect we will be there in 20

to 25 basis point trading range until the september meeting or jackson hole. jay powell can certainly throw a wrench into whatever we are in at that time. scarlet: we talk about treasuries, we quote the two-year, the tenure. we never mentioned the 20 year. the most read story is former treasury secretary steve mnuchin talking about the 20 year note. saying it is time to kill it. he said i would not keep issuing them. it is costly to the taxpayer referring to the interest the government needs to pay on holders of the debt. it has always been an outlier. when you look at the yield curve, the 20 year sticks out from the rest. why is that? ira: it is a sector not natural for people to buy. the profile of the maturity and the duration. the risk per unit -- the price move per unit of yield change does not fit anyone's profile. i was a little surprised and skeptical it was going to work way back when. the treasury department one

today new instrument to be able to issue a lot of the debt they knew they were going to have to roll over. they were expecting large deficits when they introduced the 20 year. the other option was a 50 year. the problem with a 50 year even though conceptually a lot of people liked it is they were not sure they were going to be able to issue enough to make a difference. at the end of the day, 20's have traded cheap forever but there are estimates of how much interest it costs the taxpayer. not as much as some of those bad estimates. instead of issuing 20's, they would have issued more 10 year and 30 year debt. yields would have gone up incrementally. it has cost taxpayers some money. it is a failed part of the treasury curve. scarlet: another the biden administration is looking to get rid of it, but if it does or any future administration does get rid of this 20 year note, would

that cause unintended consequences in the bond market? would it create disruptions we don't fully appreciate? ira: i don't think it would create disruptions because i don't think you can do it cold turkey. you you would shrink the size a little bit or even get rid of some of the reopening's. they issue a new bond. there issuing a new bond next week. they are reopening it in september and october. you can start by getting rid of the reopening, still having enough liquidity to have it be somewhat of a benchmark instrument. you would have to wind up issuing more seven-year notes, 30 year notes to replace the issuance they have been doing in the twenty-year. the challenge is how do you shift that issuance from one to another? you're not going to be able to go cold turkey because you have to increase everything else too quickly so it is possible. scarlet: thank you for explaining all of that. bloomberg intelligence rates strategist ira jersey with the latest on the 20 year note which

for now is still sticking around. coming up we are going to go back to company news and dig into disney as the mouse house offers a mixed picture in the really earnings report. it is our stock of the hour. this is bloomberg. ♪

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scarlet: here is some of the notable equity movers. shares of rivian on down as the company says it is maintaining its full year vehicle target. or beyond plans to close a factory in 2025 to prepare for a new vehicle launch. over one day it is down 3.5%. over two days, 80% decline. airbnb tumbling after the

company issued a forecast for sales in nights booked to that missed analyst estimates and warned of slowing demand from u.s. travelers. this forecast positions airbnb for its slowest pace of growth since 2020. that brings us to the stock of the hour. disney. it is down following mixed third-quarter results. . the u.s. theme parks business missed wall street estimates for sales and profits which offsets the company's first ever profit in streaming. disney looking for a mid-single digit profit decline in the fourth quarter. here is hugh johnston this morning on bloomberg. >> lower income consumers are a little bit stressed and shaving a little bit off of their time at the park. higher income consumers are tending to trevor overseas a little more. we see this as a few quarters of slight perturbation in the numbers. i think we are going to be back as we get into the middle of next year. scarlet: joining us for more on disney as chris palmeri. he is bloomberg news team leader

for media and entertainment. let's start with parks because that is what hugh johnston was talking about. parks has become a much bigger part of disney that it had been before. how much of this is by design? does this say more about the parks growth or does it say more about the other businesses weaknesses? >> the second part. they certainly want to grow the parks. they have been doing a great job in recent years. raising prices. expanding. the other business, the traditional tv channels have been really weak. the streaming business has not made up profit wise. that is why you are seeing the outsized dependence on the parks. where it has been a star in recent years, it is starting to sputter at the time when things seem to be improving in streaming. scarlet: when we say that parks missed sales and etf estimates, how much of this is because of difficult comparisons versus

true softness in demand from a challenged consumer? >> attendance they said was flat. at a time when inflation renewed union contracts with parks workers. costs are up and their demand is not growing at pace and that is the issue. has been concern is they said last quarter things were owing to get after a rough spot under the parks things were going to get better later this year. they are now saying that is not the case. it could be another couple of quarters. it is working off that huge post-pandemic boom the theme parks saw. when it ends is not clear. scarlet: chris palmeri, appreciate you giving us a quick snapshot of what is going on with different businesses within disney. i want to focus on the media business. the streaming business within disney. porter is managing partner at mediatech capital partners. one-time investment banker when it comes to media businesses.

porter, before disney reported earnings, we did hear that it had announced double-digit pricing hikes for its different streaming channels as well as its bundles. it is not alone because it did this last year. we also heard from netflix. from peacock which is owned by comcast and max which is owned by warner bros. discovery. my question to you is de services have this level of pricing power or is this something we can only answer in time? they are increasing prices because they have to. porter: bob iger calls this the slowdown in the parks demand moderation. he can use that term for everything disney owns and is operating today because the streaming side of the business, yes, it eked out a little bit of the prophet. it is going to face ongoing rate hikes going forward to keep

those profits coming in. bob iger who was probably the best manager in the media entertainment world in the 20th century, he is not handling the 21st century uncertainties and this membership of the media entertainment industry with any facility or success. he has 18 months in his contract with disney before he can turn things around. i'm not sure he can because he is going to be obsessed with who is going to be his replacement. scarlet: that is a big task and it has been a big task for a while. they have not executed that well on it. when it comes to the streaming business, the goal was to be profitable at the end of the year. it did turn a profit in the last quarter. does its profitability rely on continued price hikes like the kinds we saw announced yesterday? porter: i don't think price hikes -- all of us who lived

during the 20th century in the world of cable which is now called live tv watched the price hikes occur every other month. if you wanted to watch hbo, you had to pay extra over your cable monthly fee. the difficulty disney has right now is it is the 20th century entertainment world for the 21st century. bob iger is sitting on a gold mine he does not really want to touch and that is espn sports which represents just under $5 billion of revenue right now. that is chicken feed compared to what it could be doing if you would separate espn from the disney universe and make it an independent spinoff company because espn could dominate the 83 billion dollars sports betting world that they are

basically not touching at all right now. maybe a tiny bit of espn's revenue comes from sports betting. scarlet: we know espn was a little late to the sports betting part of it. in part because of the disney brand and the discomfort with wrapping betting gaming into that. i want to move ahead because you mentioned hbo and warner bros. discovery is reporting earnings after the close today. the big story is whatever it says about losing the nba media rights after next season. talk a little bit about the damage from using -- from losing the nba games that extends to other parts of her brother discovery portfolio. i read it is other networks lose leverage over the other rights that they charge. porter: i think david is probably thanking his lucky stars he did lose those sports rights because it is helping deliver the the huge still

significant debt burden warner bros. discovery is working under. they are now part of this new bizarre company called venue which is espn, wonder brothers discovery and fox where they are combining their resources to buy sports rights and sharing them and broadcasting them. i cannot figure out how that is going to work. i'm not sure the public is going to pay the 40 or $45 a month fee that they are asking. scarlet: i'm glad you bring that up because it is not just wondering if the public is going to pay for it. you have political opposition. opening to the athletic, senators warren and sanders are asking the department of justice to investigate and potentially block this venture. the issue is whether it violates antitrust or telecom walls. very quickly, when you look at that, does it seem like it would have monopoly power over live

sports? porter: i don't think venue is going to work. locklin murdoch is happy with it. he said $40 is the price point he chose. he is happy his partners are going with that. it is hard for me to see how any significant amount of sports fans are going to pay 40 or $45 a month to watch what they used to watch for next to nothing on cable television. scarlet: that is a good reminder. porter bibb, always a pleasure speaking to you. we will be breaking down warner bros. discoveries earnings after the close today. novo nordisk sees a major setback in the obesity drug competition. this is bloomberg. ♪

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scarlet:scarlet: this is bloomberg markets. we end the hour with a look at the health care space. over door nest -- novo nordisk posted sells the disappointed investors. the ceo telling bloomberg shareholders should look at updated guidance rather than the stock move. >> the second quarter is a quarter where will goby came in short of consensus. that is linked partly to adjustments to how we accrue rebates. not just looking at the putter and isolation but our confidence in the rest of the year. we are bringing because that is a sign we are continuing the trajectory we saw in the first quarter i terms of achieving many more scripts in the u.s. market. we double the number of scripts during the first six months. we are confident in the outlook. >> do you think actually what you have been hit by were

one-off factors any cat -- and can you reassure the market on that or is it too soon to say? >> if you look at the development in the u.s. market, we started the year with a script count of 100,000. we ended the first half doubling that to 200,000. when you look at the individual quarter, you will have quarters where you have positive rebate adjustments and quarters where you have negative adjustments. this is one where we had a negative impact on wegovy and that explains a good part of the shortage. i'm confident in our ability to compete, to grow with wegovy and ozempic in the u.s. that is baked into our guidance. >> the price of ozempic and

wegovy has taken on a political issue in the senate. how do you anticipate the outcome of the u.s. election changing your life in the u.s.? >> in parallel with the focus on the price of medicine, we are building the case of stronger evidence for using it. if you look at what ozempic and wegovy are bringing to patients, and only glucose regulation, weight loss, kidney safety, we are starting -- liver disease. the body of evidence you can say becomes stronger and the value of the medicine becomes stronger. if you look at what is the cost to society of obesity, there estimates that make that cost

$1.7 trillion around half a trillion direct linked to cost to the health care system and economic activity. this has to be factored in but does not change the fact the u.s. has a health care system we need to contribute to and make sure patients get access to the medicines picked scarlet: that was the novo nordisk ceo. stateside, shares of cvs are falling after the company lowered its 2024 earnings outlook for a third straight quarter and announced $2 billion in cost cuts. let's take into cvs with jonathan palmer. what is driving this revised outlook? ? as of the pharmacy met offense manager business? >> it is actually in the aetn business. and has been based on the medicare advantage book of business. the latest revision downwards while substantial in size has not had that much impact on the stocks had the bigger step down

was last quarter when there was a bigger surprise around the revision and guidance. investors expected today's downward revision. scarlet: it has been six years since cvs bought aetna. has this business worked out for it? these latest results indicate no. has this been a good purchase? jonathan: there been this trend in the health care space toward vertical integration. we have seen a number of people copy the strategy. . it started with united health care. cvs and aetna followed. generally the market was moving in that direction one way or another. cvs had to do something. there is the competition from amazon. there is pressure on the pbm. buying the insurer may the most strategic sense. over the long-term it will. scarlet: it is something every insurer is going through i terms of these rising medical costs. which kind of insurer is best positioned to deal with this? jonathan:jonathan: the issue right now is in medicare advantage. the players who have the biggest

position in that space are united health care but that is a far more diversified entity. humana is heavy into medicare advantage. cvs has made a strong point increase its medicare antigen membership over the last couple years. that is why it has had such a significant downturn. scarlet: cvs has lower ratings on the quality scale from medicare. is this a big deal? jonathan: it is because that is how they get paid in the medicare advantage market. there is what they call medicare stars ratings. they come up every year for the year ahead. for this year, their star rating went from a four to a three which means they lost a billion dollars in payments. the good thing for cvs as they were able to recapture the rating. it is not going to effect until next year. scarlet: it sounds like when you put this together, these are structural headwinds or cyclical headwinds the company is facing. unless something cvs can manage around, would that be a fair assessment? jonathan: for some things they can do on the margin. the rising medical utilization

is cyclical in nature. it is impacting all players. how cvs prices their book of business and manages the business is within their control. they have some levers they can pull like the savings plan they announced for 2,000,000,002 compensate for some of those headwinds. scarlet: is the ceo in trouble? is our job in trouble? jonathan: i would think so. she is from aetna. they replace the head of the benefits unit today. the cto and cfo -- cfo ncr taking over management of the unit. the buck stops with her now. scarlet: we will see how she manages through this. it might be a bigger cyclical issue she has no control over but it is now an execution challenge for her. jonathan: she has to execute like you said. scarlet: thank you for giving us of the basic rundown on cvs. that does it for bloomberg markets. we are continuing to see stocks give up some of their gains. the s&p 500 has paired its vans

to half of 1%. the nasdaq is the best performer of the bunch beginning 6/10 of 1%. we will continue to monitor whether the downward drift continues as we head toward the close. this is bloomberg. ♪ how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now. (jennifer) the reason why golo customers have such long term success is because we focus on real foods in the right balance you've got more options than you know. so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss because it supports your blood sugar levels between meals so you aren't hungry or fatigued. after i started taking release, the weight just started falling off. since starting golo and taking release, i've gone from a size 12 to a 4.

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>> from the world of politics to the world of business, this is balance of power.

live from washington, d.c. joe: dueling campaigns hit the rust belt. welcome to the fastest show in politics as the new harris walz roadshow rolls through wisconsin and michigan today the same day j.d. vance visits the same two states. thanks for being with us. the race to identify each other is officially on. kailey: it is not a coincidence each will be attempting the identification within the same swing states. that could play a role in deciding the election today. something else that could play a role is the labor vote. that is what in part today is about for the harris walz ticket as they have endorsements from any in labor including the uaw. it is the uaw workers that will be rallying with. joe: workers who rank-and-file in many cases have gone for trump as kamala harris t